Not just for artwork, NFTs are being used by political candidates to raise money, attract young supporters

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While political candidates are starting to embrace the phenomenon of cryptocurrencies known as NFTs, from giants to celebrities, some experts say that transparency concerns are a political funding tool. It states that it may affect the use of.

Non-alternative tokens (digital assets that cannot be duplicated and can be used to represent real-world items) slowly sneak into the political world and some candidates have already used them to raise thousands of dollars. ..

“NFTs are drawing more people into our movement,” said Max Reimer, a digital consultant to Dr. Scott Jensen, a candidate for Republican governor in Minnesota.

The Jensen campaign saw an opportunity for NFTs to be a low-cost way for people to engage with candidates and receive valuable rewards for donations, Lymer told ABC News.

Through the sale of NFTs, “we have added 2,500 new people to support future campaigns,” Rymer said.

Blake Masters, a candidate for the Republican Senate in Arizona, has also adopted NFTs.

“I was thinking of a creative way to raise money, and I thought of NFTs. [they] It can give people a sense of ownership, “said Masters, co-author of the best-selling business book” Zeroto One, “published in 2014.

So the Masters sold a limited edition NFT depicting the cover of his book to supporters, raising nearly $ 575,000.

Like collectable artwork and rare baseball cards, the value of NFTs comes from their uniqueness. In this case, it is a unique digital token in a distributed database called the blockchain. Digital tokens are stored on the blockchain via a digital wallet and can be held as an asset (as a digital souvenir) or sold and traded for investment purposes.

Many NFTs also come with real perks and exclusive access to the event, making them attractive as a campaign offering.

For example, for those who purchased the Master’s Digital Token, the perks include receiving a signed copy of his book and Peter, a tech billionaire who helped develop the NFT collection with him and his co-author. It included the opportunity to meet Thiel.

“There is at least one token holder party,” the Masters told ABC News. “It’s like Willy Wonka’s golden ticket.”

Joseph Argiro, CEO of digital asset hedge fund IronKey Capital, said this type of involvement would make NFTs a good way for candidates to build a community of supporters.

“”[NFTs] Probably a better way than accepting donations. Because donations symbolize your beliefs, “says Argyro.

For those who purchased from her first NFT collection, former First Lady Melania Trump provided an audio recording containing a “message of hope.” Part of the proceeds from her collection released last month helped her BeBest initiative, a campaign against cyberbullying, focusing on children’s issues.

Associate Professor Joshua White of Vanderbilt University said: “Therefore, NFTs can build a community with this positive feedback loop.”

According to White, in the case of the Masters Senate campaign, NFTs can attract young voters who have never voted for the Republican Party, but we want young, tech-savvy candidates to represent them.

NFT was also a breath of fresh air for political campaigns and fundraiser looking for new ways to appeal to grassroots supporters, and online funding working to launch a new NFT funding platform. Brian Forde, co-founder of the funding platform Numero, states that it is called electables.com for the campaign.

“We conducted a survey of more than 14,000 grassroots donors. One is fed up with hyperbolic emails and two want to be recognized and connected by other grassroots supporters in the campaign,” Forde said. Says. .. “Therefore, with NFTs, the choices allow us to connect with other grassroots supporters and recognize their contributions.”

Forde said supporting NFTs is similar to supporting sports teams. That’s why NFTs are used in so many leagues.

“What surprised me most about NFTs was how quickly and powerfully we could build a strong community of supporters,” Forde said. “The professional sports league is part of what we first understood, and in many ways the campaign is a lot like a sports team. [an NFT], You feel that you belong to the community in a stronger way than before. Sports teams are pioneers and the campaign will follow in their footsteps.

Also, while the number of political campaigns that have launched NFTs remains small, interest is growing. According to Forde, electables.com, which makes money by providing an NFT funding platform to campaign clients, currently has more than 300 campaigns on the waiting list ahead of its planned launch in March.

At present, there is little or no official guidance on NFT funding from the Federal Election Commission, says FEC Commissioner Ellen Weintraub. There are also no campaigns or committees seeking formal advisory opinion from government agencies.

“The authorities haven’t asked a lot of questions, and certainly there was no formal request from the entire committee to consider this,” Waitrough told ABC News. “In my sense, it’s still not that common.”

As a result, both the Masters and Jensen campaigns sought legal advice before launching the NFT collection.

“We have performed all the legal analysis,” said the Masters. “I was very diligent legally, and we paid attention to our language … we confirmed that all interests were allowed.”

“This is a whole new area for many of these regulators,” says Rymer. “So we essentially partnered with the Campaign Finance Commission and treated it like a supporter wearing a donation hat.”

NFTs can usually be purchased using regular currencies such as credit cards or cryptocurrencies, which are virtual tokens that allow buyers to remain anonymous. However, most political campaigns that report to the Federal Election Commission or state-level election agencies need to report the identity of the donor-and authorities say it can raise transparency concerns. ..

“I think we need to investigate the transparency aspect of whether we can determine where the’valued’NFTs are coming from,” Wait Laub told ABC News.

White said transparency is not an issue if cryptocurrency users are linking their virtual wallets to personal information. But he said that using cryptocurrencies for political funding in general makes it easier to “don’t know where the money comes from.”

To comply with funding regulations that set out donation restrictions and other restrictions, some campaigns offering NFTs turned to platforms such as electables.com and the recently launched Front Row. It was launched in the fall as another Democratic NFT marketplace.

“We built this platform because we found that progressive organizations, campaigns, and movements with some of these compliance regulations were needed to participate in this ecosystem,” FrontRow said. Co-founder Parker Butterworth told ABC News. According to Butterworth, the platform will allow political organizations to collect all the information they need from NFT buyers, including name, address, age, and US citizenship status.

The platform provided the first NFT collection from the Democratic Party of Texas and is currently in discussions with several new clients, Butterworth said. He said the world of NFT funding is a “very fast-moving space” that is expected to expand the world of digital campaigns.

“NFTs don’t go anywhere,” Argiro said. “I think the community is just beginning to use these NFTs to drive community formation and capital formation.”

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