Ethereum founder Vitalik Buterin donated $ 1 billion in Shiba Inu coins to India – fr

0
33
Ethereum founder Vitalik Buterin donated $ 1 billion in Shiba Inu coins to India – fr


A cryptocurrency billionaire appears to have made one of the biggest contributions to saving lives in India from the coronavirus pandemic: over $ 1 billion.

But as there is so often in the cryptocurrency world, there is a massive catch. And it’s an issue that over the next few years is likely to come back again and again as crypto billionaires become major players in the world of philanthropy.

Here’s what happened: Vitalik Buterin, the 27-year-old programmer who founded the Ethereum cryptocurrency, revealed on Wednesday that he had contributed around $ 1.5 billion in coins to nonprofits. , some of which came from its own (and relatively stable) Ether. .

But $ 1 billion of that was from a donation of a more… unusual type. He donated it in the form of a meme digital currency called Shiba Inu Coin – yes, after the dog breed – that Buterin was given away for free. (Like the popular DogeCoin, which also features the dog as a mascot, the Shiba Coin has a lot of hype but questionable underlying value.) But then, as it tends to happen in the upside down world of assets memes, Shiba Coin proceeded to tank in value immediately after the disclosure of Buterin’s donation – possibly because buyers and sellers expected the billionaire to liquidate his holdings soon.

The saga highlights how unexplored the territory is in the world of crypto-philanthropy – and perhaps the need to find new vocabulary to describe these gifts as a whole. Should donating a cryptocurrency meme be considered equivalent to donating a listed stock? What is a “real” donation, what deserves an asterisk and who can make this call? And how can billionaires protect the value of their crypto donations – while ensuring that nonprofits can actually use their money?

This all matters, as there is a new generation of philanthropists who have built massive fortunes not only in traditional cryptocurrencies like Bitcoin, but also in more original coins like those inspired by Dogecoin, the digital asset meme pumped by. Elon Musk. Nonprofits want to welcome these donors, but must figure out how to manage assets that can accumulate value overnight.

What happened with Buterin is instructive. Some of his Wednesday contributions came in Ether, the widely traded cryptocurrency and the relatively old coin he founded in 2015. $ 50 million worth of Ether went to GiveWell, for example, a middleman that distributes money to nonprofits that have proven to be the most effective based on rigorous data analysis. The price of Ether was relatively stable after its donation.

But the bulk of the overall value of the donation – and perhaps also the tax deduction that accompanies it, depending on the structure of the gift – came from memecoin, not Ether. Buterin received around 50% of the coin’s total supply last year, which is believed to be a Dogecoin impersonator. But as soon as Buterin’s donation became public, the coin’s value dropped by around 40%.

This meant that the nonprofit, India Covid-Crypto Relief, suddenly had less money on its hands than when Buterin made the donation moments before. And because of the fears that he might fall further, the head of the association had to make it known that they would “act responsibly” not to hurt the price of the Shiba coin. This could mean not selling large chunks of currency both to convert them into cash and concrete Covid-19 aid.

This sensitivity could mean less cash for the relief fund intended to help India overcome the humanitarian crisis in the country. The country suffers from an oxygen shortage and is the world’s most worrying hotspot during this phase of the pandemic, with more than 4,000 deaths reported within days.

Granted, this isn’t the first time a billionaire has donated hard-to-liquidate assets – whether rare art or shares in state-owned companies owned by current C-leaders. -after. But the rise of cryptocurrencies in recent years has posed unique accounting and logistical challenges for institutions like the Silicon Valley Community Foundation, a favorite philanthropy of the tech billionaire class.

But it is clear that this problem, so to speak, will only get worse. As many mature nonprofits today accept a digital asset like Bitcoin, what new volatile coins will the ingenious billionaire look to donate in the future? And that’s increasingly a marginal assumption, given that crypto billionaires are everywhere on the list of the richest people in the world.

There is real money at stake, whether the donation is in Bitcoin or Shiba. And the world will have to adapt to these crypto billionaires if it wants to see their wealth put to use.



LEAVE A REPLY

Please enter your comment!
Please enter your name here