Most Ethereum donors to Ukraine were airdrop profit-seekers

Protos Artwork Airdrops Ukraine
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The vast majority of Ukraine’s Ethereum donors sent funds in the short window when officials were promising rewards via a governmental crypto airdrop.

After Ukrainian officials canceled it, donations dwindled to a trickle, reports Mashable. Most transactions to Ukraine’s Ethereum wallet occurred during the first three days of March.

On those particular days, donors believed they were going to receive a potentially lucrative airdrop, either of an undisclosed amount of a newly Ukraine-backed cryptocurrency or a potential commemorative NFT.

Ukraine initially announced that it would snapshot Ethereum donations on March 3 at 6:00pm Ukrainian time and release an airdrop reward soon thereafter. During the 24 hours following the announcement, Ethereum donations rose to a staggering 33,600 transactions. On March 3 alone, Ukraine received another 25,600 donations.

Ukraine promised an airdrop on March 2.

Ukraine rug-pulled Ethereum donors

However, Ukrainian Minister of Digital Transformation Mykhailo Fedorov announced the cancellation of the airdrop later that day and said Ukraine would release NFTs to support its armed forces instead.

Ukrainian officials told media that profiteers sending tiny donations were the reason for its decision to cancel. By sending even the smallest amount, donors would still have a chance to receive rewards — a common tactic known as airdrop farming. A deputy minister called such behavior “unethical” in the wake of Russia’s still-ongoing invasion of Ukraine.

Some unhappy donors who were looking to seek a profit have called Ukraine’s decision to cancel the airdrop the world’s first sovereign rug pull.

Ukraine started accepting crypto donations on February 26 with the publication of its Bitcoin and Ethereum addresses. The country also began accepting Polkadot on March 1 and received $5 million in the crypto from founder Gavin Wood.

Fedorov then added support for Tether donations on Justin Sun’s Tron blockchain.

In total, Ukraine raised $42 million in crypto asset donations within six days. It also received some donations of Ethereum-based NFTs potentially worth hundreds of thousands of dollars if liquidated.

The orange line shows number of transactions, while the black line shows the USD value of Ukraine’s Ethereum wallet. Tiny transactions spiked hard around the airdrop.

Some questioned how much difference the donations would make. “You can’t buy Javelins with Bitcoin,” said former Federal Reserve senior associate Lee Reiners in an email to Washington Post, referring to a Javelin missile. Although Ukraine might not have access to purchase scarce weapons in the midst of war, it was able to buy food and bulletproof vests for its military in crypto, among other non-lethal items.

Donations may continue to trickle in now that Ukraine has displayed the functionality of crypto to help during a crisis. However, blockchain analysis shows that donors were far more profit-oriented than philanthropic.

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