Crypto Terms: Letter P

What is Proof-of-Donation?

Proof-of-Donation MEANING:
Proof-of-Donation - is the inclusion of charitable donations into the functionality of a blockchain.
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Let's find out Proof-of-Donation meaning, definition in crypto, what is Proof-of-Donation, and all other detailed facts.

The incorporation of charity donations into the operation of a blockchain is known as Proof-of-Donation. Typically, this refers to the routing of cash toward a philanthropic goal, which is established by a smart contract and activated with each transaction.

The charitable donation can be given to a wallet owned by a charity or a separate fund in which funds are controlled by a DAO or other party.

For instance, Hermez Network uses Proof-of-Donation, so administrators compete for the privilege to execute transaction volumes using the HEX token. 40% of each winning bid is given to Gitcoin to finance Ethereum public goods, 30% is burnt, and another 30% is reassigned to the network.

As a result, Proof-of-Donation is a variant of the original Proof-of-Burn that focuses on bringing clarity and stability to the blockchain transfer paradigm. Since blockchain activities scale due to systematic reassignment of funds, charity gifts also scale and contribute to the network's long-term development.

Besides, since charitable contributions are frequently tax-deductible, taxpayers must provide documentation of the transaction in the shape of an official dated receipt from the recipient organization or some other legal documentation of the transaction.