Ukraine’s Crypto Lifeline | Cracks In Web3

CRYPTO COMES TO UKRAINE

Amidst all the hostilities is the growing presence of digital assets in the war between Ukraine and Russia. More than $50 million of bitcoin, ether, solana, polkadot, dogecoin and tether has been donated to the country. The funds came through many sources, but a large portion of it started to flow in when the Ukrainian government itself started to solicit donations by posting public wallet addresses on Twitter.

The government leaned into the community even further on Wednesday, when it announced a token airdrop or giveaway, which would provide donors with free tokens. However, less than 24 hours later the Minister of Digital Transformation Mikhailo Fedorov announced via his personal Twitter account that it would not go forward. Although no reason was given, the cancellation may have stemmed from technical challenges and fears that scammers were trying to take advantage of the promotion to steal funds.

Source: Forbes Digital Assets, powered by Nomics.  Prices as of 4:00 p.m. on March 4, 2022.

BITCOIN SPUTTERS AT WEEK’S END

Earlier in the week bitcoin and other digital assets broke free from mainstream assets to post 15%-20% gains. Bitcoin reached an intraweek high above $45,000. However as other asset classes started to catch up, crypto began to lose some steam. The drop was catalyzed by wild fears on Thursday night that a fire at a southeastern Ukrainian nuclear power plant could lead to a meltdown or radioactive leak in the country. Almost immediately when news broke out about the fire, bitcoin fell 4% to approximately $41,000, and ultimately went on to test $40,000 before slightly recovering. Most major assets remain positive for the week, but 50% down from their mid-week highs.

WEB3 ≢ WEB FREE

As much as Web3 proponents highlight the potential of an internet free of data silos and manufactured walls, it is important to remember how much of the blockchain industry still relies on some of the centralized internet companies and business models that it is trying to replace. For example, yesterday OpenSea, the world’s largest NFT marketplace, which saw $5 billion worth of trading volume in January and recently achieved a $13.3 billion valuation, has reportedly cut off Iranian users from its platform.

Additionally, many Venezuelan users of MetaMask, one of the most popular wallets used to engage with digital applications were suddenly unable to access their accounts. The restriction stemmed from a software platform called Infura that it uses to connect to the Ethereum blockchain inadvertently adding the country to its prohibited list. The issue was rectified, but both instances made punctures in the illusion of a truly decentralized Web3.

BLOCKCHAIN 50 SPOTLIGHT

Allianz: The insurance giant ($164 billion, 12-month sales) uses blockchain to streamline cross-border auto insurance claims in Europe. Different teams and incompatible databases used to mean lots of back-and-forth emails. Claims could take months to settle. Now there’s a single source record of each claim. Processing time has been reduced to minutes, and costs have fallen 10%. So far, it’s being used by 25 Allianz subsidiaries to settle 850,000 claims.

ELSEWHERE

Ukraine Plans To Issue NFT Collection To Fund Armed Forces [Financial Times]

Coinbase CEO: We’ll Comply With Russia Ban If U.S. Government Tells Us To [Decrypt]

How Bitcoin And A Crypto Exchange Became Part Of Ukraine’s War Effort [WSJ] 

Steven Ehrlich
Editor 
Forbes CryptoAsset & Blockchain Advisor

Nina Bambysheva
Reporter
Forbes Money & Markets

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