What DAOs Can Do: $6.75M in Ethereum for Ukraine

As of Saturday morning, Ukraine has received $57 million in cryptocurrency donations to aid its defense against Russia, according to blockchain tracker Elliptic. The New York Times and others have called that amount “a drop in the bucket in the context of the conflict,” but it is no small amount in any context, and it is $57 million Ukraine is happy to receive.

Of that total, $6.75 million in ETH came from Ukraine DAO, a decentralized autonomous organization formed by the founder of the band Pussy Riot, which raised the funds by selling a simple NFT of the Ukrainian flag.

I can’t imagine a better argument right now for the power of DAOs and NFTs.

DAOs in particular could use the reputation help. After mainstream fascination last fall around ConstitutionDAO, which raised more than $40 million but failed to get its prize, the more recent press treatment of DAOs has turned mocking after one DAO purchased the “Dune Bible,” a script for a “Dune” film that was never made, and mistakenly thought that owning the physical document would give them IP rights to the content. Sneering tech press gleefully covered the group’s confusion with headlines like this one from Kotaku: “Crypto Losers Buy Copy Of Jodorowsky’s Dune, Have Played Themselves.” The Verge this week had the more judicious take: Spice DAO is “more interesting, and maybe more earnest, than a deluge of Twitter dunks suggested.”

DAOs certainly have their design flaws. They have been described as internet groups with a wallet, which is accurate (if imprecise) and also helps convey why it’s hard to believe they are the future of companies, as advocates insist. While cryptoland loves the ideals of leaderless organizations and group decision-making, some organizations (and certainly companies) need leaders, and a hierarchy, and a board of directors.

And “decentralized autonomous organization” is a misnomer: DAOs aren’t decentralized when they first start (because someone has to create them, and then it can “progressively decentralize” later on), and they aren’t autonomous (quite the opposite: they operate from human beings voting.) As Erik Voorhees, the ultimate DAO believer who turned his company ShapeShift into a DAO, said on our gm podcast last month: “The ‘a’ [in DAO] is problematic… but I don’t know a better term, and that term has stuck so well that I don’t know if it’s going to change. ‘Autonomous’ should really be reserved for the realm of smart contracts themselves.”

DAOs are at their best when they harness crypto people around a legitimate cause, and that’s what Ukraine DAO did: it raised money quickly, then sent it to the cause quickly. It had immediate impact. Alona Shevchenko, a Ukrainian activist in England who created Ukraine DAO, told Decrypt: “This is exactly what DAOs are for, making change offline in the real world harnessing the power of blockchain.”

Read that quote again: harnessing blockchain to make change offline, in the real world. That is what crypto has done for Ukraine, as the world discovers the benefits of digital money that can be sent dramatically more quickly and cheaply than bank transfers.

Amid the flood of crypto donations, many news outlets have predictably focused on the negative: that crypto could help Russia avoid sanctions. But as we wrote in this column last week, crypto can help the good guys or the bad guys; the tech is agnostic. Ukraine will happily take your Bitcoin, Ethereum, Dogecoin, Polkadot—it doesn’t care.

The charitable giving industry, and the crypto-skeptical mainstream business press, should be taking a lesson from all of this. And the lesson is not that crypto is evil.

This is Roberts on Crypto, a weekend column from Decrypt Editor-in-Chief Daniel Roberts and Decrypt Executive Editor Jeff John Roberts. Sign up for the Decrypt Debrief email newsletter to receive it in your inbox every Saturday. And read last weekend’s column: Ukraine, Bitcoin, and the ‘World’s First Crypto War’.