Fundraising

NFTs are cryptographically unique tokens linked to digital and sometimes physical content, providing proof of ownership, membership to an exclusive club, or other potential perks. They are often used to represent digital goods such as photos, illustrations, and collectibles. NFT drops are inverting the venture model and becoming better versions of fair launches. Drop NFTs to early adopters (discord snapshots). Raise capital via auctions, and build products and services with and for the community.

NFTs as a ‘fundraising mechanism’

As the price of Moonbirds continues to soar in the secondary market, with nearly 70,000 ETH, or $205 million, in volume traded on NFT auction site OpenSea, some see this as a “turning point” for the NFT market as a means of startup fundraising.

“Moonbirds is one of the first majorly successful (so far) projects that is unashamed about what it is. Kevin [Rose] and Ryan [Carson] have been very clear that they're raising money, that they're not ‘selling art’, that they'll treat the money as funds to build a product, etc,” Daniel Tenner, founder of startup funding service Grant Tree, wrote on Twitter.

Of the 10,000 Moonbirds total, 7,875 were allotted for those who won the raffle; 2,000 for Proof Collective members; and 125 for distribution by the Moonbirds team.

Any member of the public was able to enter a raffle to be guaranteed access to mint, or create, Moonbird NFTs upon their launch. One mint was allowed per raffle winner for 2.5 Ether, or about $7,500, according to the Moonbirds website.

Interest in the collection of 10,000 birds was high partly because of the people behind it: the Proof Collective, a group of 1,000 NFT collectors. Members include well-known NFT figures, including artist Mike Winkelmann, known as Beeple, and investor Gary Vaynerchuk. Proof Collective’s cofounders, Kevin Rose and Justin Mezzell, are also highly visible in the NFT world.

Those who hold Moonbirds can also “nest,” or stake, their NFTs to “accrue additional benefits as total nested time accumulates,” its website says. This means that NFT holders can get upgrades like “enhanced drops and rewards” over time. To Proof’s founders, the success surrounding Moonbirds is the beginning of a company.

NFTs Have Raised Millions for Non-Profits

In March 2021, Twitter CEO Jack Dorsey sold his first ever tweet as an NFT for $2.9 million. Then, he donated all the proceeds to GiveDirectly’s Africa COVID-19 response. In April the same year, Edward Snowden auctioned off an NFT titled Stay Free which raised over $5.4 million for the Freedom of the Press Foundation. However, Dorsey and Snowden aren’t the only ones using NFTs to raise funds for charity. Some of the biggest NFT projects, such as the Bored Ape Yacht Club and Cyberkongz have also donated sizable portions of their NFT sales to various non-profits.

With all the money flying around in the NFT market, it’s heartening to see some go towards supporting great causes, yet non-profits don’t have to rely on external donations. They can harness the power of NFTs to transform their own fundraising efforts.