As the NFT market moves beyond profile pictures without utility, can good reason fill the gap?
Public perception of NFTs fell during 2022. Not only did consumers’ opinion of them fall as an investment, but they also thought less of the companies that decided to launch them. As the bubble and subsequent crash fade into memory and the haze dissipates, most industries are asking what the hell they are doing.
One answer is a good reason. The desire to collect something unique and tradable is deeply human, and the NFT boom of 2020 has seen a raft of projects taking advantage of this fact to do more than design envy-inducing profile pictures.
Metacraft co-founders Gustavo and Elvia had the exact idea. Six years ago, their three-year-old son was suddenly diagnosed with leukemia. Guatavo and Elvia were lucky enough to be with their son, Antonio, while he was being treated. Other parents who were less fortunate had to go back to work.
This sparked the idea for MetaCraft, an NFT project that pays for children’s medical expenses. MetaRaft wants to give parents of children going through the same process the ability to be there for their children instead of going to work.
The project launches 10,000 NFTs every month, each based on a different theme. Funds raised will be split between the Bill Me Foundation and holders, who will enter a sweepstakes to win USDC prizes. “All NFT purchases are 100% tax write-off,” says Gustavo Muñoz, one of the co-founders. “When you mine Metacraft NFTs, you are essentially donating to a charity.”
Changing the World One NFT at a Time
Amanda Terry, COO and co-founder of Metagood, believes that NFTs could be the future of impact investing. For him and Metagood, NFTs make it easy to invest in a project or good cause. “By buying an NFT, holders get an asset they can sell in the future. And, in our case, know that their funds are going to a cause they support or going to a DAO where Funds can be used for impact projects.
“We funded The DAO Treasury with a portion of NFT sales, creating a DAO exclusively for our community of holders, and then allowing our holders to suggest businesses, creative endeavors, or impact projects and fund those proposals. Created the infrastructure to vote to deliver.” For that project, Metagood received an honorable mention in Fast Company’s World-Changing Ideas in 2022 impact investing category.
When endorsed by celebrities, the sale of NFTs can raise a significant amount of money for a good cause. In April 2021, Edward Snowden auctioned an NFT on the Foundation, which raised 2,224 ETH ($5.4 million). Proceeds went towards the Freedom of the Press Foundation, where he has served as president since 2016.
The NFT itself – called ‘Stay Free’ – links a portrait of the famous whistleblower with a court decision ruling the NSA’s mass surveillance illegal.
Good Causes: More Than Fundraising?
The work does not even have to be particularly meaningful or have artistic merit. In 2021, Ellen DeGeneres sold her first NFT to raise money for World Central Kitchen, a non-profit organization that provides food to victims of natural disasters. Despite only being on sale for 24 hours, her collection sold on Bitsky Bazaar for a semi-respectable $30,955.
While these dips are a low-effort way to raise money for a good cause, do they really hurt investing? There are arguments against it. After all, by definition, an investment generates an expectation of some kind of return. A limited edition NFT by world famous activist Edward Snowden? You can see why someone would buy it at the inflated price. “Stick Cat” by Ellen? Making it is a difficult matter.
Where the case becomes stronger is when a so-called “blue chip” NFT is tied to a cause (or fundraising).
When Yama Karkai launched Women’s World of Warcraft (WoW), she and her partners weren’t just looking to raise money. At the time (and arguably since then), the NFT space has been incredibly male. (scratch that, technology Space is incredibly male.) That was something she and her team wanted to improve.
Climate change activism is a growing trend in the space
“WoW supports women and underrepresented groups by supporting charitable work, offering educational opportunities, and community-driven engagements,” says Karakai. “To date, WOW has allocated more than $2 million to charitable causes, driven in part by primary and secondary sales of the WOW collection, as well as other charity auctions.”
There are other better ways than earning money. Last year, World of Women became the first blue-chip NFT collection to offset its entire carbon footprint. (At the time, the Ethereum network used Proof-of-Work, a much more energy-intensive consensus mechanism. Since switching to Proof-of-Stake, Ethereum’s carbon output has dropped by more than 99%.)
There is a lot of money in the blue-chip NFT collection, and Karakai told BeInCrypto that they are doing their best to give back. WOW has also donated to the program Too Young to Wed, which helps end child marriage. Additionally, WOW supports climate justice initiatives, including major environmental projects such as the Great Green Wall, renewable energy and ocean conservation, through our recently launched WOW Emergency Fund, which is used to support humanitarian and natural disasters. Works.
For many, a major advantage of NFTs is their relatively low barrier to entry. You don’t need a portfolio manager, and the nature of blockchain makes these investments transparent as well. Nihar Nihar Neelkanti, CEO and co-founder of Ecosapiens, an NFT collection with an environmental ethos, believes that NFTs can bring more people together than other methods. “We believe that if users are given an accessible opportunity to create positive environmental change, they will.”
“NFTs were, for us, an obvious entry point. Yes, this technology enables investment in environmental change, but it also encourages community building, which we hope will create more opportunities to do good in creative and social ways. Will meet.
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