'Absolutely Surreal': Inside a Fund Raising Millions in Crypto for Besieged Ukraine

The Unchain fund has raised $1.8 million and plans to launch a DAO this week, even as team members live with sirens, explosions and artillery barrage following the Russian invasion.

AccessTimeIconMar 1, 2022 at 8:18 p.m. UTC
Updated Mar 30, 2022 at 2:51 p.m. UTC
Layer 2

Anna Baydakova is an investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC and an NFT.

After Russia invaded Ukraine, Andriy Velikiy would look out his window at night and count the lights in the windows of nearby buildings. Around 90% of them stayed black.

The cryptocurrency entrepreneur‘s apartment building faced Kyiv’s Maidan Square. Normally full of people, it’s empty and silent now, except for the sirens blaring from time to time.

Some of his friends chose to leave the city when they could. Others are now fighting the invading Russian forces on the frontlines.

“I chose to stay somewhere in between. I’ll stay here in my apartment and protect my family here,” Velikiy, a member of a local shooting club, told CoinDesk on Monday. “And if things get worse – [I] will go to the frontlines.” On Tuesday, he posted on Facebook that he had left Kyiv with his family.

Velikiy wears several hats. He is the CEO of Apyswap Foundation and co-founder of Allbridge, a startup working on cross-chain integrations and building bridges between blockchains. Many of his employees have moved to the western part of Ukraine, a bit farther from Russian tanks and rockets than Kyiv.

He’s also a key member of the team behind the Unchain fund – a vehicle raising money to buy food, clothing, medicine, evacuation and repairs for civilians and everything but weapons for the army. Unchain accepts donations to multi-signature wallets on the Ethereum, Binance Smart Chain, Polygon, Harmony, Avalanche, Near and Celo networks.

The project is one of several ways the Ukrainian crypto community has spontaneously coordinated fundraising attempts during a conflict that has killed hundreds of civilians and stoked fears of a new Cold War between Russia and the West.

Parallel efforts include UkraineDAO, formed with the help of Russian art collective Pussy Riot, and the Ukrainian government’s own crypto fundraiser. UkraineDAO has raised 1,570 ETH ($4.6 million). Official Ukrainian government addresses have received over 200 BTC ($8.7 million) and 1,639 ETH ($4.8 million). Come Back Alive, a group supporting the Ukrainian army, raised over 195 BTC ($8.5 million). According to an estimate by Forklog, a Russian-language crypto news outlet, various organizations raising crypto for Ukraine have received over $58 million in donations over the past six days.

This week, the Unchain fund is planning to launch a distributed autonomous organization (DAO) to make decisions about how to spend the funds. Things progress slowly but surely, Velikiy said. “Because everything is so secure and decentralized, it’s very slow,” he said.

Despite such drawbacks compared with traditional fundraising methods, crypto has benefits, too – such as a public audit trail of the donations.

“It’s a matter of our reputation that the funds raised transparently with blockchain technology are used for things we declared to fund,” said Alexey Bobok, a сo-founder of Unchain.

Multi-signature wallets

The Unchain wallets’ signers include, along with Velikyi, Gitcoin co-founder Scott Moore, Near Protocol co-founder Illia Polosukhin, MetaCartel community lead Peter Pan, Harmony community manager Nick Vasilich and others. There are nine keyholders in total.

“Our goal is to break the chain of war and scatter its links far away from each other. So that they could never meet again,” the organization’s website says.

Each multisig wallet is going to be configured so that five or six out of 10 signatures would be needed to spend funds, Velikiy said. The development work is still ongoing, but the donation addresses have already received over $1.8 million in crypto, according to the website – CoinDesk’s own analysis of the wallets confirms that.

The funds raised will be used to support several non-governmental organizations, including Voices of Children, International Medical Corps and People in Need, the website says.

Rev Miller, co-founder of a metaverse project Atlantis World, says there are hundreds of volunteers now helping Unchain with everything from tech support to physically evacuating people from unsafe locations. Some of them are in Ukraine, including Miller’s own family.

The first $1.3 million in crypto flew to Unchain’s wallets in less than 12 hours, Miller said, adding that the Near community was the most active to contribute.

Bobok, who is also сo-founder of Weld.Money, said he started Unchain with co-founder Alexey Meretskiy in January, when the war hadn't yet started. However, he, as well as many Ukrainians, would tell you that the war actually started eight years ago in 2014, when Russia annexed the Crimea peninsula and sent unmarked troops and weaponry to the breakaway region of Donbass in the eastern part of Ukraine.

Last month, the tensions around the Ukrainian border intensified, and in mid-February, the founders convened a working group and started reaching out to the NGOs and Ukraine’s Ministry of Defense, Bobok said.

Velikiy said that there is also a smaller wallet with only one signature needed to spend: It’s being used by participants to fund some immediate needs.

For example, he just cashed out $1,000 to send to a local baker who is baking fresh bread and giving it away to people living around his place in Kyiv, he said. In a few other instances, funds were spent to buy things like clothes, socks and medical supplies for the army and buses to evacuate people from the city of Kharkiv, which is suffering heavy shelling by Russian artillery.

About $50,000 has been spent so far in total, he said. Unchain is already speaking to the International Committee of the Red Cross about helping the humanitarian organization evacuate people who are in danger, according to Bobok. The Red Cross didn’t respond to a request for comment from CoinDesk by press time.

But the bulk of the funds raised will be held in the multisigs, with some of the key holders outside Ukraine.

“Our thinking was that we need to invite reputable people who will take responsibility in front of the crypto community and no one of them would have access to all funds at once. Then if things get worse, some people with access would still be around and we won’t lose the funds,” Velikiy said.

And things indeed can get worse.

Evacuate Ukraine or stay and fight?

On Feb. 24, Velikiy’s wife drove to the grocery store and brought home a car full of food, he said. That was a good call, because the family had enough food to go for several days, and food has become harder to buy: When there is no curfew, people rush to the stores and sweep all the food off the shelves.

Before the Russian military assault on Ukraine started, Velikiy spoke of his friends’ plans to evacuate from Kyiv with sarcasm. Back then, few people in Ukraine or Russia believed there would be an invasion and bombshelling of all major Ukrainian cities.

“We had been going back and forth on whether we should evacuate people or not, and ended up choosing not to, unfortunately, because until last week we didn't believe that this would happen,” says Anatoly Kaplan, founder of Forklog. Kaplan himself lives outside Ukraine; half of his team, or about 20 people, are in the country.

Only a few of his Ukrainian employees left the country during the past several days, he said, all of them young women.

“Guys decided to stay so that they can, if needed, grab their guns and go into the battle,” Kaplan said, adding that one of his staffers is now a fighter in the territorial defense squad in the city of Zaporizhzhia.

“At some point in Kyiv, there were fewer weapons than [civilian] people willing to fight,” Kaplan said.

According to his estimates, around 10% of the local crypto community left Ukraine in anticipation of the war, especially those who are closely working with partners or clients in Western Europe or the U.S. Velikiy said he believes the number could be as high as 20%.

Ukraine has been a significant tech hub for the global blockchain and cryptocurrency industry, with multiple developers and validators either coming from Ukraine or physically based there. For example, a notable number of Tezos validators, Solana developers, and developers and validators for Near protocol had been based in Ukraine, Kaplan said.

Polosukhin, Near’s founder, said the news about the war hit as he was about to come back home from the ETHDenver conference in the U.S.

“Our folks mostly managed to get out of the hot spots and move to the West. Many validators took their servers out [of the country] in advance as the tensions were rising,” Polosukhin told CoinDesk. He said he decided to support Unchain as it has been the only fund not raising money for buying weapons.

Kyiv under fire

For six days Velikiy, his wife and 1-year-old son lived in the heart of a besieged city, along with other civilians. Every day, their background noise was artillery barrage, explosions and sirens. When the sirens went off, the family would go downstairs to the underground parking lot serving as a bomb shelter.

He said that by the fifth day of the war, he didn’t care to spend too much time underground and preferred to sleep at home. Fortunately, cellphone and internet service were still good in the city, and the payment infrastructure stays functional, as well.

The Unchain fund’s idea has always been to fund humanitarian aid, like food, clothing and medicines but not weapons. Some participants are very particular about not helping the armed forces at all.

“There is a discussion ongoing if we should be spending funds on [military] equipment like thermal imagers and collimators – different people view that differently,” Velikiy said.

The peace negotiations that started on Monday brought a bit of hope, Velikiy said. Everyone was hoping that the war would stop soon and life would go back to normal. With the shelling intensifying in Kharkiv and Kyiv on Tuesday, however, that hope is fading.

“What’s happening now is absolutely surreal,” Bobok said.

Sage D. Young contributed reporting.


Read more about

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Anna Baydakova is an investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC and an NFT.

CoinDesk - Unknown

Anna Baydakova is an investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC and an NFT.