Vitalik Buterin, the 27-year-old founder of Ethereum, on Wednesday donated cryptocurrency worth $1 billion to support covid-19 relief work in India, possibly the single-largest philanthropic contribution to help covid-stricken Indians from any country or individual.
Buterin, the billionaire wunderkind who founded the second-largest cryptocurrency in the world after Bitcoin, made the donation to the India Covid Crypto Relief Fund, run by Indian crypto entrepreneur Sandeep Nailwal.
And in doing so, he brought together the disparate worlds of emergency medical relief and meme coins. How the donation will play out and reach the intended beneficiaries over the next few weeks will also be watched keenly by the crypto community around the world.
The bulk of Buterin’s donation is in the form of cryptocurrency Shiba Inu (SHIB), which is part of a growing number of meme digital currencies. If you are unfamiliar with internet culture, the millennial propensity for irony and the topsy turvy world of cryptocurrency, the idea of a currency based on a joke or meme might seem bizarre. But at the intersection of these volatile forces, such currencies are par for the course.
Shiba Inu, named after the Japanese breed of hunter dogs, is a meme coin, like its more famous rival Dogecoin, which was originally created as a satire or joke on the crypto-mania. In 2021, the currency has risen more than 17,000%, proving to be a solid, if speculative, bet for the coin’s fans. Dogecoin’s rise has partly been due to the patronage of billionaire inventor Elon Musk, who also likes to partake in and perpetuate memes. Shiba Inu appeared on the scene as a rival to Dogecoin. Such coins have often been criticized by those in the crypto community, who feel that they harm the credibility of the entire crypto industry.
Incidentally, shortly after the donation was announced, Shiba Inu’s price crashed by almost 30%. At the time of going to press, Coingecko showed that 50 trillion SHIB, the quantum of coins Buterin donated, was worth about $989 million.
Russian-Canadian programmer Buterin, best known for founding the Ethereum blockchain project in 2015, also co-founded the Bitcoin Magazine, one of the first publications in the world dedicated to covering cryptocurrencies. According to public data, Buterin’s net worth was around $21 billion when the price of Ether (the cryptocurrency based on the Ethereum blockchain) reached $3,000 around 10 May.
His net worth was further inflated by rallies in meme-based cryptocurrencies such as Shiba Inu, which were sort of gifted to him when these coins were created. According to a white paper, 50% of the Shiba Inu (also based on the Ethereum blockchain) supply was transferred to Buterin’s public wallet when the coin was created in order to create an “element of scarcity”. According to crypto watchers, Buterin re-gifted these Shiba Inu coins to the India Covid Crypto Relief Fund.
Nailwal took to Twitter to thank Buterin and assure SHIB holders that the relief fund would act responsibly with the donation. “We will not do anything which hurts any community, especially the retail community involved with SHIB. We will act responsibly! Please don’t worry SHIB holders,” he tweeted.
The fund will have to be cautious about selling the coin as it now holds a vast chunk of its supply. The fund will be responsible for converting these funds to fiat currency and transfer them to the organizations concerned.
Nailwal told Mint that the India Covid Relief Fund has set up an entity in the United Arab Emirates (UAE), to convert the crypto into fiat currency. This entity converts the currency through various exchanges and brings it to a bank account outside the country. The funds are then transferred to Foreign Contribution (Regulation) Amendment Act (FCRA)-compliant non-governmental organizations (NGOs) in India, who in turn will oversee disbursal.
India does not view cryptocurrencies favourably and is expected to bring legislation to ban them and introduce a central bank-backed digital currency.
The total value of donations in the fund will depend on the price of cryptocurrencies at a given time. According to public data from the fund’s website, donations have come in Ethereum, Bitcoin, Ripple, Litecoin, Dogecoin and more.
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