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Monday, June 21, 2021

Crypto genius gives a billion dollars worth of joke coin for India covid relief

Crypto billionaire Vitalik Buterin on Wednesday donated cryptocurrency worth a little over $1 billion towards covid relief in India, in what is likely one of the largest philanthropic gestures in terms of value for the ongoing pandemic.

Buterin, the 27-year-old founder of Ethereum, the second largest cryptocurrency in the world after Bitcoin, made the donation to the India Covid Cypto Relief Fund, run by Indian crypto entrepreneur Sandeep Nailwal.

The bulk of his donation is in the form of meme-based cryptocurrency Shiba Inu (SHIB).

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 $986 million.

Russian-Canadian programmer Buterin, best known for proposing the Ethereum blockchain project in 2015, also co-founded the Bitcoin Magazine, one of the first publications in the world that was dedicated to covering cryptocurrencies. He won the $100,000 Thiel Fellowship in 2014, which helped him develop the Ethereum blockchain.

According to public data, Buterin’s net worth was around $21 billion when the price of Ethereum reached a whopping $3000 around May 10 this year. The cryptocurrency crossed $4000, continuing the bull run that coins such as Bitcoin and others have been seeing since the end of last year.

His net worth was further inflated by rallies in meme-based cryptocurrencies such as Shiba Inu, which, which were sort of gifted to him when these coins were created. According to the whitepaper on Shiba Inu, 50% of the Shiba Inu 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 claims to have raised donations worth $1 billion, according to its website. It is responsible for converting these funds to fiat currency and transfer them to concerned organisations. “We’re working with several credible organisations and initiatives to ensure impactful disbursement,” says the fund’s website. The community around the fund, which is being run on instant messaging platform Discord, has over 1000 members right now.

Nailwal told Mint that the India Covid Relief Fund has set up an entity in the 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 send the money to vendors.

The fund also publishes open account information, to allow anyone to track donations and other transactions. It received donations from Balaji Srinivasan, former CTO of Coinbase on April 25, while Australian cricketer Brett Lee donated 1 Bitcoin to the fund on April 27.

The fund claims to have transferred ₹7.4 crore to startup-driven ACT Grants on April 30. Its website claims to have made donations to the Masoom Charitable Trust, Rajeev Memorial Academic Welfare Trust and more as well.

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.

This is the fourth time Buterin has donated to the fund, according to Nailwal. The Ethereum founder had sent $600,000 in Ethereum and MakerDAO coins in his first donation, followed by $3 million in Dogecoin. Wednesday’s transfer was accompanied by a 500 ETH donation, which is equal to just under ₹2 million.

What are meme coins?

The Shiba Inu coin was part of a growing number of joke digital currencies being spread on the Internet. The coin was originally positioned as a Dogecoin killer, another joke currency, which gained importance after billionaire Elon Musk tweeted about it. Musk was also responsible for bringing Dogecoin’s value down recently, after he called it a “hustle” in an appearance on Saturday Night Live on May 8.

“In the crypto world, Buterin is as serious a person as they come. So I think it’s another effort at converting a joke coin into serious crypto. It’s how Elon Musk put his credibility behind Dogecoin, and led its rally,” said a crypto expert who has been involved in covid relief effort in India, under the condition of anonymity.

According to the crypto expert, while the donation is good, its actual value to covid relief effort is “debatable”, since it will fluctuate sharper than more serious coins like Bitcoin and Ethereum.

Joke coins like Shiba Inu and Dogecoins aren’t backed by tangible value and don’t have serious investors behind them, which makes them less valuable than Bitcoin or Ethereum. They have often been criticized by those in the crypto community, who feel that rallies in the price of these cryptos negatively affect the credibility of the entire crypto industry.

Courtesy – Livemint.com

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