Crypto Rewards in Fundraising: Evidence from Crypto Donations to Ukraine

Crypto-enabled charitable fundraising scales globally, yet the value of crypto rewards and how its effect is moderated by blockchain-based features at the transaction and wallet levels remain underexplored. Leveraging the crypto donations to a Ukrainian fundraising plea that accepts Ether (i.e., the currency of the Ethereum blockchain) and Bitcoin (i.e., the currency of the Bitcoin blockchain) over a seven-day period, we analyze the impact of crypto rewards on fundraising performance. Crypto rewards are newly minted tokens that are usually valueless initially and may appreciate if the cause gains traction. Using a modified difference-in-differences model at a blockchain level, we estimate the ordered treatment effects and find that the crypto rewards lead to a 731.5% stronger donation counts increase on Ethereum relative to Bitcoin, given that the crypto rewards are more frequently issued on Ethereum due to its higher programmability to support smart contracts. Conversely, the donation amounts decrease 30.56% more on Ethereum than on Bitcoin; this decrease is significant only for small donations (<=$250), not for large donations (>$250). The reduction in donation amount persists in a transactional analysis after we matched Bitcoin and Ethereum wallets on pre-treatment transaction characteristics using Coarsened Exact Matching (CEM). Within Ethereum, we further document positive moderating effects of (1) Ethereum Name Service (ENS) adoption, (2) intermediary platform (e.g., Coinbase) usage, and (3) NFT asset holdings on the relationship between crypto rewards and donation amount. We discuss the implications for the crypto community, fundraising organizations, and policymakers.