Web3 technologies in service of Ukraine
Web3 technologies have become a powerful weapon in the hands of Ukraine in its fight against Russia. And the global Web3 community has become the country’s powerful ally. Ukraine is winning the war on the physical battlefield while on the digital front the Eastern shield of Europe also leaves no chance for Russia to reach “the special operation targets”. The tech sector in Ukraine is the foundation of the country’s resistance and, with no doubt, the driver of its future innovative economic recovery.
Web3 community support for Ukraine
The global Web3 community has provided vast financial and informational support for Ukraine since February 2022. The biggest crypto exchange Binance made a $10M immediate donation and Binance charity created the Emergency Relief Fund to provide support to Ukrainian refugees away from conflict zones. Also, Binance has allocated $1.2M in BUSD for direct donations to 5K internally displaced individuals in Ukraine from among the most vulnerable categories.
For Ukrainians who have moved abroad, Binance has released the Refugee Crypto Card allowing people to make daily payments with their crypto. Also, the holders of this card have received 225 BUSD within 3 months (75 BUSD each month). Binance has also worked with the Ministry of Digital Transformation of Ukraine in launching IT Generation courses for Ukrainians who have decided to switch their profession. To this end, the exchange has transferred $1M in the form of scholarships.
The most influential crypto leader and co-founder of Ethereum Vitalik Buterin donated $5M in ETH in early April this year to support Ukraine. Also, Vitalik has been repeatedly expressing his open support for Ukraine in the war against Russia. For example, Vitalik has expressed his strong satisfaction with the liberation of Kherson by the Ukrainian Armed Forces.
In September this year, Vitalik Buterin came to Ukraine to attend the Kyiv Tech Summit, the conference bringing together prominent tech leaders from worldwide as well as public officials of Ukraine such as Mykhailo Fedorov, the Minister of the Digital Transformation of Ukraine.
In March 2022, Ripple made a tweet to support Ukraine in which it also announced the allocation of $1M in donations for displaced people in Ukraine and the neighboring countries.
In August 2022, the parent company of Cardano, Input Output Global, entered into a partnership with The Giving Block, the platform facilitating nonprofits’ receipt of donations in crypto. Thanks to this partnership, ADA holders can now donate their tokens to humanitarian relief causes in Ukraine.
In March 2022, the co-founder of Polkadot Gavin Wood donated almost 300K DOT tokens valued at $5.7M to the official DOT wallet of Ukraine. Also, prior to Wood’s donation, the Polkadot ecosystem had also contributed $210K to the official DOT wallet of Ukraine.
Soon after the beginning of the Russian invasion of Ukraine, the decentralized exchange Uniswap launched the interface allowing users to directly convert their ERC-20 tokens to Ether (ETH), and after that these coins are sent to the official crypto wallet addresses of the Ukrainian government.
As we can see, leading crypto projects have expressed their support for Ukraine and, apart from tweets, they have also made financial contributions to support Ukrainian refugees and the Ukrainian Armed Forces.
The company Hacken would like to express our great honor to the pro-Ukrainian crypto coalition. By contributing to defeating the Russian army, you contribute to protecting the borders of the Web3 technological transformation with Ukraine being its Eastern hub.
Blockchain technologies helping Ukraine
Ukraine is actively utilizing blockchain in its war against Russia. The country’s government has created the official crypto wallets of Ukraine to which people worldwide can donate the most popular tokens such as Bitcoin, Ethereum, Tether (TRC20), Polkadot, Dogecoin, Solana, Cardano, Algorand, and Stellar. The Cyberpolice of Ukraine and the Ministry of Health of Ukraine have also created their own crypto wallets.
Apart from the government sector, Ukrainian charitable organizations such as The Come Back Alive Foundation and Prytula Foundation also collect a significant share of their donations in virtual assets. These organizations make some payments in crypto thereby ensuring fast speed of transactions and reducing the bureaucratic burden.
Also, crypto has allowed Ukrainian refugees to get payments from their homeland without violating the restrictions imposed by the country’s Central Bank (National Bank of Ukraine).
The Ukrainian government has used blockchain technologies for land registries and government records. This technology ensures the preservation of data without regard to physical events taking place in the country.
NFT technologies also enable secure and permanent storage of immutable and authenticated images and accounts of Russian war crimes. The startup vendor used for secure and persistent NFT storage Arweave reports that there are already 10 million images stored within its system.
Ukraine has also used NFT technologies to create Meta History: Museum of War, the NFT fundraising initiative. The Museum sells NFTs to raise money for the Ukrainian government. The Museum has become the National NFT platform approved by the Ministry of Digital Transformation of Ukraine.
The sale of the NFT Ukraine’s flag by UkraineDAO, the initiative backed by a member of the Russian anti-government activist group Pussy Riot, raised $6.7M The sale attracted more than 3.2K contributions in 72 hours with a total of 2,258 ETH raised. The funds were then transferred to the Come Back Alive Foundation.
The role of The Ministry of Digital Transformation of Ukraine in crypto efforts to support Ukraine
The Ministry of Digital Transformation of Ukraine led by Mykhailo Fedorov has actively favored crypto donations to Ukraine in the form of direct transfers of virtual assets and NFT sales. In cooperation with Binance and the Lviv IT cluster, the Ministry has launched the national IT Generation project to provide Ukrainians with high-quality IT education free of charge with a focus on making digital technologies the driver of the country’s post-war recovery. The project will allow people who have lost their jobs due to war to find new well-paid employment opportunities.
In November 2022, Minister Mykhailo Fedorov participated and had a speech and press conference at Web Summit 2022, the biggest crypto and technological meetup that took place in Lisbon. The Ukrainian representatives sought the support of the tech community in the fight against Russia. Web Summit 2022 brought together around 2.3K tech startups and the active participation of the Ukrainian tech sector in this event is a great demonstration of the power of Ukrainian Tech Diplomacy.
The primary focus of the Ukrainian side during this event was made on digital security. Mykhailo Fedorov and David van Weel, Assistant Secretary General at NATO had discussed the options of cooperation whereby Ukraine would be able to deal with russian brutal aggression, both physical and digital.
In this context, the Hacken team is extremely proud to be a powerful actor in the IT Army of Ukraine. And the great confirmation of our success in fighting against Russia in cyberspace is our appearance in the blacklists of pro-russian hacker groups.
Regulatory framework of crypto adoption in Ukraine
On 15 March 2022, the president of Ukraine Volodymyr Zelensky signed the Law of Ukraine “On Virtual Assets” that has legalized the virtual assets market in Ukraine. The law determines the rights and obligations of the participants of the virtual assets market as well as outlines the fundamental principles of state policy in this sector. The law will enter into force only after amendments are introduced into the Tax Code of Ukraine. So, the law itself does not govern the taxation of transactions involving virtual assets. This law has been developed by the Ministry of Digital Transformation of Ukraine in cooperation with industry representatives including our CEO Dyma Budorin.
The fact that the law integrates the key considerations of leading Ukrainian crypto market players is the prerequisite for its future successful implementation.
Mass adoption of crypto in Ukraine: future or present?
During the Web Summit in Lisbon, the Ukrainian side was firmly stating that Ukraine would become the European IT Hub with crypto being the factor of Ukrainian tech prevalence. And, generally, it is just a matter of time.
According to the recent data provided by Chainalysis, Ukraine has ranked 3rd in the Global Crypto Adoption Index (1st and 2nd positions are held by Vietnam and the Philippines). Thereby, the share of crypto in the economic activities in Ukraine is higher compared to all developed economies. Transaction volume steadily increased from the beginning of the war. The government eased controls in June 2022, such as limitations on cash purchases of USD/EUR and international transfers. Since then, Ukraine shows the highest growth in crypto adoption at 143.17%, with a massive increase in P2P exchange trade volume.
According to the other study on crypto adoption conducted by Merchant Machine, Ukraine ranks 2nd (the USA ranks 1st) based on the overall index score integrating such data as the number of crypto owners, the number of businesses accepting crypto, the number of Bitcoin ATMs, and the average search volume for a range of cryptocurrency-related keywords.
As of now, 6.5M people (15.7% of the country’s total population) in Ukraine own crypto.
Successful Ukrainian Web3 projects
Ukraine has already become the Eastern European Web3 center. According to Clutch, there are 136 blockchain development firms in Ukraine. These companies operate in a wide range of Web3 areas such as fintech, NFT, DeFi, big data, cybersecurity, etc. We are proud to note that Hacken stands among the top 15 Ukrainian Web3 startups and companies.
The voice of the Ukrainian Web3 sector makes difference in the global arena. Ukrainian tech companies were among the invited participants of Web Summit 2022. Ukrainian experience of becoming the European Web3 big center has become a must-to-learn case study for the global tech sector.
Overall, Ukraine has great potential to experience unprecedented growth of the Web3 economy in the coming years. According to the Ukrainian Tech Ecosystem Overview, the number of tech talents in Ukraine will grow to 450K specialists in 2024 from 240K today. Even in spite of the active war, the export of IT services from Ukraine has grown by 23% for the first 6 months of 2022 reaching $3.74B. Thereby the Ukrainian tech sector has become the main supporter of the country’s economy during the most difficult period in the modern history of Ukraine.
Support Ukrainian Army
- National Bank of Ukraine
- UNITED24 (also supports crypto donations)
- Charity foundation of Serhiy Prytula (also supports crypto donations in USDT, BTC, ETH)
- Come Back Alive (also supports crypto donations in USDT, USDC, BTC, ETH, SOL)
Donations for Humanitarian Aid
- Humanitarian Aid Account of National Bank of Ukraine
- UNITED24 (also supports crypto donations)
- Helping to Leave (also supports crypto donations in USDT, USDC, BTC, ETH)
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