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Coordination and Crypto Charity

What 100,000 transactions on Ethereum mainnet reveal about the coordination of charitable giving in blockchain

Crypto can evoke a curious contradiction. First, there is the sovereign individual, a concept that some see at the core. But there is a seemingly opposing force, processes of coordination and consensus. This contradiction is illusory. You cannot have the sovereign individual in this technology without trust-minimized coordination. These are two sides of the same coin. And while self-banking and self-custody and so on are often at the center of discussion, there is emerging focus on the rich forms of coordination that the cryptocurrency space makes possible.

An inspiring case of coordination is charitable giving. Crypto is a natural medium for charity. Crypto minimizes intermediaries, boundaries and borders that might limit giving. Donations arrive in moments. They can be made anonymously, or they can be proclaimed on public ledger for all to see, as “proof of giving.”

Because charities sometimes have public addresses, the blockchain can be mined for patterns of coordination. I assembled a modest dataset of 100,000 inputs to about 20 public addresses on Ethereum mainnet (see appendix for the full list and important caveats). It is only a subset of overall crypto giving, focused on a sample of data using the Etherscan API. Despite this incompleteness, this on-chain record of donation reveals the power of coordination, its speed and efficiency, and its varying forms.

In canvassing this sample of data, I observe four clear coordination patterns here, and I summarize these in the conclusion: viral, initiative-based, automatic, and spontaneous. These features are especially important for humanitarian action, when resources are needed quickly and there is global concern. So before summarizing these patterns, here are some important examples.

Some Major Examples

Consider two very clear examples of this coordination. The first happened in 2021, when the biggest wave of COVID struck India. Many in crypto felt something had to be done to further support a humanitarian response. A major initiative began with a tweet from Polygon co-founder Sandeep Nailwal.

When news got around, hundreds of donations rolled in, eventually leading to about 1,200 donations total. The India COVID relief multisig wallet is the largest recipient in this dataset, with over $1.5 billion inputs (early April 2022 USD prices; see caveats in endnotes).

VB’s large donation in May; most donations small, most cumulative amount from whales

A now famous donation caused this contract’s balance to increase tenfold. Vitalik Buterin was given an unsolicited gift of Shiba Inu tokens (an ERC-20 on Ethereum). He decided to donate 50 trillion SHIB tokens, at the time amounting to almost a billion US dollars. He sent it directly to the India COVID Relief address. Here’s the transaction on Etherscan. It may be the largest single charitable donation in crypto history.

2021 coverage by Tech Crunch

Another very recent example is charitable giving in response to war in Ukraine, affecting the lives of millions of Ukrainians who have been displaced (or worse) by invasion of their country. A number of Ethereum community members established UkraineDAO in collaboration with the band Pussy Riot. From conception and plan to near-instant funds for humanitarian effort, it is a further striking example of how nimble crypto-coordination can be. In barely a few weeks, the fund received over $10,000,000 in over 1,000 transactions. This is only UkraineDAO and only showing Ethereum mainnet alone. With another official Ukraine wallet and other chains, initiatives to help Ukraine probably approached or exceeded one hundred million dollars.

UkraineDAO inputs across a few weeks; large NFT sale visible in early March

This initiative added an NFT approach, too — an NFT of the flag of Ukraine raised a further 2,258 ether. This amount was raised by coordinating over 3,000 smaller donations through PartyBid.

Overall, across these 20 public addresses, donations spanning the past few years come to about $2,000,000,000 (April 2022 USD prices). And this is only Ethereum, and so only a subset of this giving. There is wide variance of support across these initiatives. In addition to addresses I had already identified, I also used Etherscan’s “charity” and “donate” labels, so some of these are public wallets for supporting a project or creator (such as Chico Crypto on YouTube). Most are charities, and one is a large project with multi-initiative distribution like Gitcoin.

Donations per initiative in sample analyzed here (USD, approx.); number of inputs shown above each bar

Interestingly, over 75,000 of the 100,000 are into Ukraine’s official wallet (shown numerically above each bar in the bar plot above). Many initiatives were advanced to help this official wallet of Ukraine, including from Uniswap and thousands of transactions directly from exchanges (e.g., together Coinbase wallets contributed over 3,000 transactions into Ukraine’s wallet).

Patterns and Principles

When assessing the distribution of these donations, we see a pattern very familiar in crypto: massive influence of whales. About 95% of all individual donations are less than $1,000, which together amount to only about 1% of the total value of crypto giving in this dataset. The top 100 donations account for over 95% of the amount alone. This is mostly due to Vitalik’s donation, but if we remove his, the top 99 alone account for over 90% of the rest, too. This kind of pattern is common in many systems, including socioeconomic systems. But it can be pronounced in some metrics of crypto, though this has been changing in recent years.

About 90% of senders donate a few times or less. But several wallets have hundreds and some even thousands of donations. Zooming in on these frequent donors reveals some important initiatives. Here are some examples:

Crypto facilitates programmable giving. This may be unique because it is baked into blockchain. Projects like Art Blocks and Colorglyphs automate where initial minting royalties go. When a sale is made, the contract is coded with a charity recipient that receives this portion. There is no human in the loop. (In fact, Art Blocks gave much more than this, distributed across other charities, as described here.)

One concern in the above is that the distribution of charity is heavily weighted on a handful of senders and recipients. How might we expand the range of giving, from many to many? One way is to devise a program of giving that rewards donors with matching funds when they give to many of their favorite projects, as a kind of “vote.” Projects with more unique voters secure more matching funds. This is the goal of Gitcoin’s grant funding rounds, which distributes millions of dollars to hundreds of projects.

Gitcoin’s GR13 distribution, from their results post

Gitcoin just finished their 13th round of these grants, which include projects related to web3, social and community initiatives, and charitable activities too (such as several new grants for Ukraine).

The dataset analyzed here collapsed these donations into the single Gitcoin wallet. But we can break these inputs up into their individual Gitcoin donations. We can infer which grants get funding on a donation by using the input field in Etherscan’s API (account transaction endpoint). Doing so reveals some striking contributions. For example, one user gave to 451 Gitcoin grants in a single transaction, sharing $2.85 in DAI for each of them. Gitcoin co-founder Kevin Owocki donated to over 50 initiatives in this transaction. To get a sense of how these donations shake out, let’s take the top 50 such donations and plot them on a network. The green dots are donors, and the open dots are the projects they donate to:

Green nodes are Gitcoin donors giving widely; open nodes are recipients

Like the prior observations, there remains a some-get-most pattern. Some projects (like Rotki and ether.js and other leaders) get more donations than others. But in general the range of giving is spread out more widely, and many projects enjoy some attention as there is encouragement through the voting mechanic to support many of one’s favorite projects. There are still “winners,” but the diffusion of support spreads out more widely, with the possibility of increasing support on grants that are “undiscovered gems” or ones just getting started.

Summary

Some clear patterns emerged above. There are familiar ones. For example, whales are a major presence. More interesting is a schema that emerges from these patterns. We can highlight four coordination patterns of crypto giving:

Viral. These tend to be time-restricted charity drives motivated by some major events of interest, such as COVID or the war in Ukraine. Their coordination dynamics tend to be simpler, such as direct crowdsourced giving, but some nimble projects have been built on top of them, such as drawing more attention through NFTs and so on. Crypto may help charities tap into our social drive, by drawing attention to an important initiative and revealing transparently who and how many are participating. This may encourage others to help.

Intiative-based. Giving can also come from careful fine tuning of the coordination dynamics, such as Gitcoin’s use of quadratic funding to encourage the support of many projects, and to balance the “rich-get-richer” effect by rewarding projects that get many donations (or “votes”). This type may present the most elaborate coordination possibilities. With emerging interest in DAOs, it may be possible to experiment widely on mechanisms that facilitate donations.

Automated. With public charity wallets, it’s possible to program contracts to automatically donate to them. Colorglyphs and Autoglyphs did this with their minting, Art Blocks did this across many projects. In my own recent The Mesh project, owners can interact with the contract and make small, automated donations to charities. The coordination tends to be simple here, but it is correspondingly simple to donate: mindless automation.

Spontaneous. I reserved this final category for many of the remaining donations that could not be “explained” by these other three. Maybe there is an undercurrent of giving in these data representing traditional charitable activity — end of year giving, a spontaneous desire to give back, or responding to information on a charity’s website. But even here crypto has something to offer. There are few boundaries between you and a charity when they accept crypto donations. If you wish to avoid revealing your identity, you can send directly from an exchange or from a wallet unconnected to your other wallets. I describe these features in a prior post here.

I recognized this would be a limited dataset, but had hoped to find these sorts of patterns. The blockchain often delivers in spades, with on-chain data revealing patterns that can be isolated even without prior knowledge of them. Another reason this dataset is limited is that charity services like The Giving Block help donors remain anonymous. The Giving Block helps charities and donors by creating one-time addresses for use through their web interface. See details here. Obviously, I don’t have access to data on these donations.

Still, despite the limited data, $2 billion dollars in giving to these charities seems impressive to me. And while whales account for most of it, even the smallest donations, thousands of people donating, raised tens of millions of dollars to help other people.

Caveats, Disclosures

The summary above should not be considered an endorsement of any donor or charity. I have donated to many of these initiates. My visualization projects in the form of NFTs have largely been charitable fundraisers, such as Ethstory. Feel free to follow me on Twitter.

This data exploration is based only on a subset of data, specifically direct, internal and token transactions on public wallets (see below). I used Etherscan’s API to extract these data. USD amounts are approximate based on April prices, and they only paint part of the overall picture of crypto giving.

Here are the 20 wallets used to explore Etherscan’s data, resulting in over 100,000 transactions in the batch. Several of these were found on charity websites, and I kept those on Etherscan labeled with “charity” or “donate” that had some volume. This means some are donation wallets for creators or other projects, but most are public wallets for charities.

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