Coin Metrics' State of the Network: Issue 145
Tuesday, March 8th, 2022
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Ukraine Receives over $45M in Crypto Donations
By Kyle Waters and Nate Maddrey
Amid the tragedy of war in Ukraine, the crypto ecosystem has served as a critical lifeline for Ukraine and its citizens. In just under two weeks, donors have sent over $45M in crypto assets to Ukrainian-government controlled wallets for relief and supplies.
The significance of open financial networks powered by public blockchains like Bitcoin and Ethereum has arguably never been more acute. Globally accessible 24/7/365, crypto is proving to be an important tool for activism and mobilization of resources.
The transparency of public blockchains also allows blockchain data observers like Coin Metrics to verify and analyze the flow of funds to the Ukrainian-government addresses.
As of Monday, March 7th 19:00 UTC, $18M of ether (ETH), $10M bitcoin (BTC), $7M of Polkadot (DOT), and $10M of USD stablecoins composed of Tether, USDC, and DAI had been received by Ukraine. The flow chart below shows the breakdown of total funds sent to Ukraine’s public BTC address
357a3…Doa1P, Ethereum address (for ETH & selected ERC-20 USD stablecoins)
0x165…45e14, Polkadot address
1x8aa…e33Hv, and USDT (Tether) to Tron address
Many different types of crypto assets and networks have been used to help fund Ukraine’s defense efforts and humanitarian relief. Last year, Ukraine was ranked one of the top countries adopting crypto on a per capita basis. Ukraine’s crypto fluency and broad knowledge of various blockchains and native currencies has likely contributed to the success and speed of the fundraising.
Most contributions have been sent using the largest crypto assets BTC and ETH. But other crypto assets and dollar-backed stablecoins have been used. Even blue-chip NFTs have been sent including 1 of the 10K CryptoPunks, worth ~$150K. But the most liquid crypto assets have so far been the focus, as they are more likely to be accepted as a means of payment or readily exchanged for fiat currencies.
Data from Coin Metrics’ ATLAS blockchain explorer shows that the Ukrainian government has moved most of the donated funds out of its wallets, with only ~$9M held in the balance of the wallets as of the time of the analysis.
The analysis above shows the breakdown of funds that have moved from the Ukrainian wallets versus the amount that is still being held. Most of the funds are being sent to the Ukrainian exchange, Kuna, that helped set up the addresses. Note this does not necessarily mean the assets have been sold yet and might be held on the exchange still. However, the government has confirmed that it has spent at least $15M of the received funds and has found some suppliers that are willing to accept crypto as payment for items such as food packages, night-vision devices, bandages, and bulletproof vests.
Looking at the addresses’ balances over time, the most liquid assets are being tapped the fastest.
BTC and the US dollar stablecoin Tether (on Ethereum) are being spent the quickest (though big portions of the ETH and DOT have also moved). This is likely due to these crypto assets’ good liquidity profiles, or ease of trading and converting to fiat currencies. Demand for Tether in Ukraine has especially appeared strong recently. As Ukraine’s local currency, the hryvnia, has fallen versus the US dollar, demand for US dollar backed assets like Tether has increased with daily volume rising in the USDT-UAH market on Binance.
Sources: Coin Metrics Reference Rates and Market Data Feed
The Ukrainian government has expressed a goal of doubling the total amount of crypto raised to $100M in the coming days. Looking at the cumulative data, there is still a steady stream of donations coming in, albeit at a slightly slower pace.
However, there have been some big jumps with large donors making considerable contributions over the last week. For example, Polkadot founder Gavin Wood donated $5M worth of DOT on March 1st.
The number of ETH donations accelerated on March 2nd with the announcement of a potential token airdrop but have slowed since the plans were reconsidered for an NFT project instead.
Despite the spikes in the data, the average contribution size has been relatively low. The average BTC donation sent has been 0.016 BTC (~$650) while the average donation of ETH has been 0.01 ETH (~$250). The large number of donations and modest average donation size suggests that the funds are coming from smaller contributors in addition to large crypto holders or so-called “whales.”
Crypto-financial rails together with an active crypto populace have undoubtedly helped facilitate a fast and successful Ukrainian fundraising and aid campaign. The example of Ukraine’s crypto campaign is further evidence that as crypto adoption grows, so will its role in society as a medium of coordination and value transfer around meaningful causes.
Network Data Insights
Source: Coin Metrics Network Data Pro
Activity on Bitcoin picked up last week with active addresses rising over 9% week-over-week. Bitcoin fees, which have been particularly low over the past few months, increased slightly. The average fee of $4.31 on Bitcoin last Wednesday, March 2nd was the highest single day average since last December. However, this is still far below levels from spring 2021. Meanwhile the Ethereum fee market showed signs of cooling last week. The average fee on Ethereum on Saturday (March 5th) was $9.29 – under $10 in a single day for the first time since last August.
Coin Metrics Updates
This week’s updates from the Coin Metrics team:
Check out our market-data focused newsletter State of the Market, featuring weekly updates on market conditions.
On February 17th, Coin Metrics hosted a community workshop with our Python API Client. You can find the sample notebook we walked through uploaded on GitHub here!
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