The possibilities are endless, but before you explore these possibilities, which are opportunities, you have to first cross the bridge. You need to move from L1 to L2 by getting some asset on there. If you have already bridged, good for you, if you haven’t, this article is especially for you.

Crossing the Bridge.

There aren’t many onramping route in Africa so what we will demonstrate in this article might apply to many African countries. In countries where it doesn’t, the process might still be similar.  We will spotlight Optimism to represent most of the L2s out there.

Prerequisites

1. Make sure you have non-custodial wallet such as Taho or Metamask or any other of the numerous wallets out there.

2. A p2p account - there are  many out there but Binance P2P is popular in lots of African countries

3. To use a centralized exchange like Binance, kucoin, or bybit, which are used on a lot of places across Africa,  you need an account, so make sure you have signed up and KYC too.

Bridging time

Bridging in Africa usually takes the following routes

1. P2P/CEX purchase ➡️ Centralized Exchange ➡️ L2

2. P2P /CEX Purchase ➡️ Crypto Wallet ➡️ L2 bridge ➡️ L2

Action time

P2P/CEX purchase ➡️ Centralized Exchange ➡️ L2

Most major CEXes in Africa such as Binance and Kucoin have direct bridges to some L2 networks such as Optimism, Arbitrum and Polygon(sidechain, as most like to refer). From your CEX wallet you should be able to see the various chains you can withdraw funds to either directly or at the network selection section. Follow the steps below to bridge using Binance. Note, Kucoin has the same interface as Binance!

• Use Binance P2P to exchange local fiat to crypto, mostly USDT

• You can either bridge USDT directly to L2(Optimism) but we don’t recommend this, especially for first time folks who do not have gas

• Rather, use the Binance convert feature to convert your USDT to ethereum

• Now head over to your Binance wallet

• Click on withdraw

• Make sure you are on the crypto section

• Search for Eth and click on it

• Choose “Send via crypto Network”

• Enter your L2(Optimism address)

• Select your network -> make sure you select the Optimism network

• Enter the amount

• Select where to send the fund from. You have the option of a “spot wallet” or a “funding wallet”, if you used P2P, your funds is in the “funding wallet”. Select that

• Click on withdraw

P2P/CEX purchase ➡️ Centralized Exchange ➡️ Crypto Wallet ➡️ L2 bridge ➡️ L2

Not all exchanges provide bridging services directly to L2s. There are also certain times that existing CEX L2 bridges like Binance doesn’t work. In this situation you will have to send your crypto from your CEX wallet to your web3 wallet in order to bridge using a L2 bridge such as bungee bridge, hop bridge, layerswap bridge or the myriads of L2 bridges out there.

Transferring from your p2p or CEX wallet to your web3 wallet is pretty straightforward

1. Follow the same procedure above, instead of your L2 wallet address, enter the respective chain address instead, in this case ethereum or polygon(if available).

2. Proceed to bridge using any other web3 bridging protocol.

Bridging via web3 native bridge

Ethereum to L2

Head over to https://www.bungee.exchange/

Connect your web3 wallet. E.g Taho or metamask

Make sure you are on the right chain.

Select the token you want to bridge, in this case Eth

Select the destination chain/L2, in this case Optimism

Click review route

Check to make sure everything is okay. Once you are certain. Click on bridge.

Sign the transaction in your wallet and wait for the token to show up on the respective L2!

Viola, welcome to the other side!

General Advice on Bridging

1. You want to avoid the Ethereum mainnet as much as possible. There are great bridges for moving funds around L2s. Most of the CEXs have withdrawal to Polygon. So instead of Ethereum, withdraw to Polygon and then bridge from polygon to any other L2 such as Optimism.

2. When bridging first, always bridge in Eth since most of the networks gas fees are denominated in Eth. this way you won’t get stuck without gas fees.

The redeeming power of Layer 2s

Before diving into Layer 2, it's essential to understand Layer 1. Layer 1 refers to the base layer of a blockchain network, such as Ethereum or Bitcoin. It represents the fundamental protocol and defines the rules and structure of the blockchain. As indicated earlier, these layer 1 blockchain struggle greatly in the face of real and high adoption. For instance, Bitcoin processes 7 transactions per second while Ethereum can only process thirty (30) transactions per second. Meanwhile, gas fees can spike to $62 and $83 on Bitcoin and Ethereum respectively, making these chains unusable. Blockchains need to evolve for faster transaction processing which will positively affect user experience, be scalable (can accommodate new users without breaking), facilitate rapid and frequent transactions without delays or bottlenecks, and integrate with systems, applications, and payment processors without causing disruptions or slowdowns. And this is what L2s do!

Layer 2 is a supplementary layer built on top of Layer 1. It operates independently but relies on the underlying Layer 1 for security. The purpose of Layer 2 solutions is to alleviate the burden on the main blockchain, enhancing its scalability without compromising security. 

Using Off-chain scaling and State channels techniques, Layer 2 solutions can move transactions off leading chains like Bitcoin and Ethereum and process multiple transactions at a time. This helps de-congest layer 1, improves user experience, and significantly reduces transaction costs.

This reduction in transaction costs is perhaps why Layer 2 solutions are revolutionary, especially for adoption in developing countries in Africa. They make blockchain tech more accessible and affordable, empower local entrepreneurs to build more cost-effective solutions for consumers, and enable more financial inclusion in the region. 

While there are many L2 solutions for different blockchains such as Lightning for Bitcoin, Arbitrum, Polygon, Zksync, and many others for Ethereum, Optimism has emerged as one of the most useful and promising L2s in the crypto space.

Optimism L2

Optimism is a Layer 2 scaling solution for the Ethereum blockchain that aims to address the scalability limitations and high transaction costs of the Ethereum network. It achieves this by leveraging an approach called Optimistic Rollups. Let’s look at the various composition of Optimism.

Optimistic Rollups: it is the core technology behind Optimism. This technology allows multiple transactions to be executed off-chain and then rolled up into a single batch. This batch is then submitted to the Ethereum mainnet as a single transaction. This drastically reduces the amount of data that needs to be stored on-chain, leading to lower transaction fees and higher throughput.

Execution and Consensus Separation: Optimism separates the execution of transactions from the consensus mechanism. In traditional Ethereum, every transaction is executed on every node, which is a time-consuming process. Optimism, however, allows transactions to be executed off-chain on the Optimistic Ethereum network, while the Ethereum mainnet (Layer 1) only stores and manages the consensus data.

Fraud Proofs: Optimism uses a system of fraud proofs to ensure the security of transactions. When a batch of transactions is submitted to the Ethereum mainnet, it goes through a challenging period. During this period, any observer can challenge the validity of the batch by providing proof that a transaction in the batch was executed incorrectly. If a batch is successfully challenged, it is rejected, and the party that submitted the fraudulent batch is penalized.

Smart Contract Compatibility:
A unique feature of Optimism is its compatibility with Ethereum smart contracts. This means that developers can deploy existing Ethereum smart contracts on Optimism without modifications. This is a significant advantage as it allows for the easy migration of DApps to the Optimistic Ethereum network.

Ethers Phoenix - an optimistic future for Africa

One unique thing that differentiates Optimism from other L2s is its vision and attempt at solving large-scale coordination problems by retroactively funding projects and public goods with the most positive impact for the collective good. It’s a concept that has evolved into a movement.

Imagine a world where everyone is awarded profit proportional to their positive impact. Distribute your software package for free, and get paid proportionally. We can call this powerful equation the “fairness ratio,” where impact = profit.

Ethers Phoenix is a lore on what it means to exist in worlds where mutual and early cooperators who contribute to and create better public goods systems get rewarded. In Ethers Phoenix, cooperation and coordination for the greater good can be a reality, as long as we remain optimistic. 

This is Ether’s Phoenix: the angel who rewards you for summoning it, a kind of reverse Roko’s Basilisk. It is an algorithm that rewards the early cooperators who created the conditions for public goods funding to prosper.

To raise Ether's vision from the ashes, Optimism commits 100% of profits made from its centralized sequencer towards the development and funding of the Ethereum Protocol. Not only is Optimism making decentralized solutions like Ethereum more affordable and accessible within Africa, but it’s also the main layer 2 network committed to regenerative economic ideals, an idea that could be very beneficial to Africa’s prosperity and future.  

How does it do this?

• Through retroactively funding projects and builders who build contribute to the growth of the network

• Through retroactive airdrops

Since it first announced its mission toward retroactively funding public goods in 2021, Optimism has undertaken two RPG funding rounds and retroactively funded hundreds of projects and builders who have contributed to the development and usage of the network. In its first round, about 10 million OP (Optimism's native token) were successfully allocated to builders. Thanks to its governance mechanism and community members, 

Learn more about how the network is governed

By embracing Layer 2 solutions like Optimism, Africa can unlock its vast potential, allowing its people to participate more actively in the global economy and building a brighter, more optimistic future for the continent. As long as the vision of cooperation and contribution to public goods is nurtured, Africa can embrace blockchain technology to foster inclusive growth and make a lasting impact on its socio-economic landscape. The journey has just begun, and the road ahead is filled with immense possibilities for Africa's economic vibrancy and resourcefulness to thrive in the global landscape.

Article by ThinkDecade | Reviewer Abidemi

“In the vast landscapes of Africa, where innovation aims to meet opportunity, a revolution is unfolding—one that holds the power to transform lives, reshape economies, and unlock the continent's boundless potential. At the heart of this revolution lies an emerging force that defies borders and challenges conventions: cryptocurrency. With its decentralized nature and disruptive technology, crypto carries within it the great promise of rewriting Africa's narrative, transcending barriers, and propelling the continent toward a future of unprecedented possibilities.

Imagine a world where financial inclusion is not just a distant dream but a tangible reality, where individuals who were once excluded from the traditional/global banking system now have access to secure and affordable financial services. Picture a landscape where entrepreneurship flourishes, innovation thrives, and wealth is democratically distributed. Envision a transparent governance system that ensures accountability, reduces corruption, and empowers citizens to participate in decision-making processes. This is the transformative power of crypto in Africa—a force that transcends traditional boundaries and embraces the limitless potential of technology” - The Great Crypto Promise for Africa!

Before Bitcoin, there was no hope. Africans had to grapple with being cut off from the global financial system. As it turns out, this exclusion was not due to difficulty but rather deliberate design. The fiat system has played a significant role in perpetuating this state of financial exclusion and economic disparity.

Crypto aims to liberate Africans from the woes of fiat. While there are many areas to explore with respect to the great promise of crypto for Africa. Three areas stand out and affect everything else.

1. Fix the Money, Fix Africa.

2. An Internet of boundless value

3. A cultural/philosophical evolution!

Fix the Money, Fix Africa - Bitcoin offers better money, hard and sound!

Money is both a social and economic coordination tool within all societies. Unfortunately, Africa's inheritance of the fiat monetary system post-independence rendered it helpless and dependent on the West. For a developing continent, Fiat money presents many insurmountable challenges such as inflation, devaluation, and manipulation. Inflation robs people of their purchasing power as more and more money is printed into circulation. This erodes the value of people’s savings, income and makes goods and services more expensive. Most Africans don’t have enough savings because they live on meager salaries. The very little they save too is wiped out by increasing inflationary rates. This has created a perpetual poverty cycle that is inescapable, leading to a dysfunctional society where all manner of social ills are perpetuated in desperate attempts to survive. fiat money also gives too much power to central banks and governments, who can manipulate the money supply and interest rates for their own political or economic interests. This leads to corruption, mismanagement, and financial crises, as well as interference with the sovereignty and autonomy of other countries. For example, many African countries have been forced to adopt the US dollar or the Euro, which limits their ability to control their own monetary policy and exposes them to external shocks and fluctuations. Fiat money has crippled Africa. This has been the nightmarish reality until Bitcoin!

Africa increasingly dominates the list of poorest countries in the world

Built on the principles of hard/sound money, bitcoin is money crafted to solve the horrors of fiat money.  Bitcoin is a digital currency that operates on a decentralized network of computers. It has a fixed supply of 21 million coins, this means that the monetary inflation of bitcoin, which is the increase in the number of bitcoin(money) in circulation, is predictable and transparent. Unlike fiat currencies, which are controlled by central banks that can print more money at will, bitcoin(money) is immune to such manipulation and dilution of value/wealth.

Some argue that bitcoin is the purest form of hard money ever created because it has zero elasticity. This means that the production of new bitcoins does not depend on the demand or price of bitcoin, but only on the mathematical programming of the network. Eventually, the production of new bitcoins will stop completely, making bitcoin the scarcest and hardest form of money in existence. It’s not surprising then, that Bitcoin has been the best-performing currency in the past decade. With bitcoin serving as a sound monetary base for many Africans, a new wave of financial opportunities and freedom unlocks. Imagine being able to send money to anyone anywhere - boom, frictionless cross-border transaction is unlocked. Think of all the benefits. E.g, Remittances play a vital role in supporting families and driving economic growth in Africa, the high fees and slow processing times associated with traditional remittance channels have been a significant barrier. Bitcoin, with its decentralized nature and borderless functionality, offers a faster, cheaper, and more efficient way to send and receive money across borders. It’s already happening!

Additionally,  Bitcoin has enabled new opportunities for trade, investment, innovation, and entrepreneurship in Africa, by lowering the barriers to entry and increasing the efficiency and transparency of transactions, offering a more resilient and diversified economy, that is less dependent on external factors or shocks

As we witness the transformative power of Bitcoin in fixing money in Africa, it becomes clear that this digital currency has the potential to revolutionize the way Africans transact, save, and build wealth. It offers a pathway to financial autonomy and economic empowerment, liberating individuals from the limitations of the traditional banking system.

But 👇🏾

An Internet of Boundless Value: Web3, Ethereum and the EVM Ecosystem

In the realm of crypto, Bitcoin may have paved the way for a decentralized and borderless financial system, but Ethereum and the Ethereum Virtual Machine (EVM) ecosystem have taken the concept to new heights. They embody the vision of Web3, a paradigm shift that goes beyond just cryptocurrencies and encompasses a whole new internet infrastructure.

At its core, Ethereum introduces the concept of programmable money, where individuals and organizations can create and deploy their own custom tokens and smart contracts on the blockchain. This opens up a world of possibilities for financial innovation, enabling the creation of decentralized exchanges, lending and borrowing platforms, prediction markets, and much more.

Ethereum's true power lies in its ability to serve as a foundation for a decentralized, autonomous, and interconnected web. It provides the tools and infrastructure for the development of decentralized applications (dApps) that operate without central authorities, censorship, or single points of failure. These dApps run on the EVM, a virtual machine that executes code across a network of computers, ensuring trust and transparency.

Image source

Through the Ethereum ecosystem, developers can create decentralized applications that leverage the power of blockchain technology to solve real-world problems. From decentralized finance (DeFi) protocols that enable lending, borrowing, and yield farming to decentralized governance systems that empower communities to make collective decisions, Ethereum has become a breeding ground for innovation open to anyone to build on top of. We have begun to see how Africa is leveraging this infrastructure to build custom solutions that address real-world problems.

Moreover, the Ethereum ecosystem has spurred the development of innovative concepts like yield farming, liquidity mining, and decentralized lending protocols. These concepts incentivize users to contribute their assets to liquidity pools, earn additional tokens as rewards, and participate in the governance of these protocols. This unlocks a global pool of capital and means by which Africans can deploy capital to build wealth.

By creating a borderless financial layer of finance Legos, Ethereum has not only revolutionized the way financial transactions are conducted but has also laid the foundation for the Web3 vision. A future where the internet is decentralized, where individuals have control over their data and digital identities, and where peer-to-peer interactions and trustless transactions are the norm.

The Web3 vision is especially powerful for Africa, a continent that has long suffered from the limitations of traditional systems. It holds the promise of financial inclusion, transparent governance, economic empowerment, and technological innovation. By embracing Web3 technologies, Africa has begun to leapfrog traditional barriers and tap into the vast opportunities presented by the decentralized internet.

The Individual Sovereign African: Signaling Awareness Socially, Culturally, and Philosophically

Crypto's impact in Africa extends beyond the realm of finance and technology. It is signaling a profound shift in social, cultural, and philosophical paradigms, empowering individuals to embrace sovereignty and challenge existing systems.

Culturally, crypto nurtures and celebrates Africa's diverse heritage. Blockchain technology facilitates the creation and trading of non-fungible tokens (NFTs), which can represent unique digital assets such as artwork, music, and cultural artifacts. This opens up opportunities for African artists and creators to preserve their cultural expressions, assert ownership rights, and monetize their work directly, bypassing traditional gatekeepers.

Philosophically, crypto challenges conventional notions of trust, authority, and power. It encourages individuals to question centralized institutions and reevaluate existing social structures. The principles of decentralization, transparency, and individual sovereignty embedded in crypto align with Africa's rich communal values and self-determination history. By embracing crypto, Africans are redefining their relationship with money, governance, and self-governance, fostering a philosophical transformation grounded in autonomy and empowerment.

The great promise of crypto in Africa goes beyond financial and technological advancements. It represents a transformative force that is reshaping social dynamics, preserving cultural heritage, and catalyzing philosophical shifts. By embracing crypto, Africans are signaling their readiness to challenge existing systems and forge a path toward greater sovereignty, empowerment, and self-determination. This is why crypto persists despite external attacks. But there’s an existential threat.

The Biggest threat to crypto is crypto

Despite the many challenges faced by crypto suggest as regulation, infrastructure deficit, government pushbacks, lack of proper education,  and more, the biggest threat to crypto is crypto itself. As the value and popularity of cryptocurrencies increase, so do the challenges of maintaining a decentralized and secure system that can handle large volumes of transactions. One of the main challenges is scalability, which refers to the ability of a network to process more transactions per second without compromising on speed, security, or cost.

Currently, most cryptocurrencies suffer from scalability issues, which result in high transaction fees and slow confirmation times. For example, Bitcoin can only process about 7 transactions per second, while Ethereum can handle about 13 transactions per second. These numbers are far from sufficient to meet the growing demand for crypto transactions, especially in the decentralized finance (DeFi) space, which involves various applications that offer financial services without intermediaries. High transaction fees and scalability issues pose a significant challenge to crypto widespread adoption. While cryptocurrencies promise a decentralized and efficient financial system, the reality of high transaction fees often undermines this potential. For instance, Bitcoin, the pioneer of cryptocurrencies, has been plagued by escalating transaction fees, making small transactions impractical. Similarly, Ethereum, known for its smart contracts, has seen gas fees skyrocket during network congestion.

*From Vitaliks’ “The Three Transitions” *

These fees create a barrier to entry for many users, particularly those in developing regions who stand to benefit most from these technologies. Moreover, they contradict the very essence of cryptocurrencies - to provide a low-cost, inclusive financial system, making this the biggest threat to the Great Promise of Crypto for Africa!

But.. there’s hope! The Calvary is here, they are the Rescue chains, and they promise to scale, cheapen transactions and see this promise to the end!

Shifting our focus to Africa's unique financial landscape, less than 50% of the populace, as of 2021, had access to a bank account and an even smaller percentage to credit facilities, according to World Bank data. This scenario presents a substantial financing gap for small and medium enterprises (SMEs), crucial economic players yet often lacking the collateral required by traditional banks. Goldfinch, however, with its decentralized platform, is set to significantly transform this narrative. By eliminating the need for crypto collateral and leveraging a 'trust through consensus' approach, Goldfinch extends credit to those most in need, promoting financial inclusion and propelling the continent towards a future of greater economic development and prosperity.

Goldfinch enables financing for sustainable & innovative businesses across emerging markets

Why does this Matter?

Goldfinch provides a decentralized marketplace for lenders and borrowers and empowers entrepreneurs and businesses that have been dismissed or overcharged by traditional banks. It delivers a more inclusive, expeditious, cost-effective and globally diverse lending experience, bolstered by the transparency of on-chain credit history. As a sustainable model with tangible real-world benefits, it represents a powerful use case for blockchain technology in the financial sector within African and has a book of over US$100m loans to businesses across Africa and emerging markets

Some Benefits;

Enhanced Lending Experience: Goldfinch offers a faster, cost-effective, inclusive, and global lending solution. Goldfinch achieves this by utilizing blockchain technology and smart contracts, which significantly expedite loan processing times compared to traditional banking systems, reduce administrative costs, and provide universal access regardless of geographic location.

Real-World Impact: The platform provides crucial financial access to underserved regions, empowering businesses where it is needed most.

Sustainable DeFi Yields: Goldfinch supports reliable DeFi returns, backed by actual businesses and profits, while efficiently managing risks and incentives through smart contracts.

How Goldfinch Works

The goldfinch protocol efficiently connects borrowers and lenders and takes 10% from the interest earned. In the image below, “Fees” are total interest income and “Revenue” is the portion paid to the goldfinch protocol.

Goldfinch is a decentralized lending platform that eliminates the need for crypto collateral and relies on an efficient method of risk management called “trust through consensus” to determine borrowers' creditworthiness. The key advantage is twofold; the protocol allows more potential borrowers to access crypto loans and helps investors gain exposure to the market.

As a lending protocol, it features three main groups of stakeholders:

• Borrowers

• Junior lenders

• Senior lenders.

  Borrowers naturally receive loans from lenders. Junior lenders assume higher risk and receive higher interest rates. Senior lenders, on the other hand, enjoy lower risk and receive lower interest rates. The protocol's smart contracts efficiently manage risks and incentives for all stakeholders.

An example illustrates:

1. Borrowers propose deal terms for credit lines (Borrower Pools) to the protocol.

2. Investors (Backers and Liquidity Providers) supply capital to these credit lines, either directly or indirectly.

3. Borrowers draw down stable coins (USDC) from their Pool, convert it to fiat, and provide loans to end-borrowers in their local markets.

4. Trust through consensus is used to allocate capital from the Senior Pool, relying on the collective actions of Backers and Auditors.

5. The protocol features junior and senior tranches in the Borrower Pools, with repayments first going towards the senior tranche and then the junior tranche.

6. Backers receive NFTs representing their deposit, while Senior Pool LPs receive FIDU tokens.

7. The platform uses two native tokens, GFI and FIDU, for governance and representing Liquidity Provider's deposits respectively.

8. Key borrower repayment incentives include maintaining a positive on-chain credit history, avoiding a halt in borrowing, and potential off-chain legal agreements with Backers.

9. Goldfinch is governed by a decentralized, community-driven DAO.

10. To ensure unique participation, Borrowers, Backers, and Auditors must pass a "Unique Entity Check," currently done through the Unique Identity (UID) NFT.

In the context of Africa, where access to capital is often severely limited due to stringent banking requirements and high interest rates, Goldfinch's protocol offers a beacon of hope. African entrepreneurs benefit by being able to propose credit terms suitable for their unique business models, bypassing the traditionally rigid loan structures imposed by banks. This level of flexibility can prove crucial in markets where interest rates are often prohibitively high.

How Goldfinch Aligns Stakeholders to Mitigate risk

Goldfinch aligns the interests of the three stakeholders’ efficient smart contracts.

Borrowers Why do borrowers seek loans from Goldfinch? Traditional banks often reject loan applications or impose high interest rates. What motivates borrowers to repay loans on Goldfinch? Junior lenders can enforce legal contracts and secure borrowers' assets as collateral. Borrowers have a permanent, public credit record on the blockchain. Delayed repayments hinder borrowers from obtaining new loans.

Junior Lenders Why are Junior Lenders diligent in assessing loan quality? Since Junior Lenders are repaid last, they face the greatest risk, which strongly incentivizes them to thoroughly evaluate loan repayment potential. What motivates Junior Lenders to lend money despite being paid last? Junior Lenders receive a significantly higher interest rate, compared to Senior Lenders, which rewards Junior Lenders for the higher risk they take.

Senior Lenders What drives Senior Lenders to provide loans? They receive competitive interest rates from real-world businesses while diversifying their portfolio beyond traditional lending markets. Why are Senior Lenders willing to accept lower interest rates compared to Junior Lenders? Senior Lenders benefit from not having to spend time evaluating loan quality, as Junior Lenders handle this task. Additionally, their loans are prioritized for repayment and automatically diversified across all lending pools, resulting in significantly lower risk.

Achieving a Balance: Low Interest Rates for Borrowers and Attractive Returns for Lenders

Goldfinch has an elegant solution to achieve balance between low interest rates for borrowers and high interest rates for lenders by combining senior debt (low interest) and junior debt (high interest) in a 3:1 ratio. This composite interest rate satisfies both junior and senior lenders while keeping borrowing costs low for borrowers.

Each loan is built using many parts (tranches): -

• Senior debt, which has a low interest rate

• Junior debt which has a high interest rate

  These tranches are put together in a ratio of 3:1 (3 parts low interest, 1 part high interest). This makes the total interest much lower for the borrower – while still satisfying both Junior & Senior lenders.

An example illustrates

A borrower can afford a loan with an interest rate of 10%. The loan is made using 4 parts:

• 3 parts Senior debt, with interest of 7%

• 1 part Junior debt, with interest of 19%

  When we add these 4 parts together (to make up the loan), we get a composite interest rate of 10%, which the borrower can afford.

Is this model more efficient than traditional bank loans?

Goldfinch doesn’t have the scale of traditional banks, which would make Goldfinch more resilient and allow for potentially lower interest rates. But Goldfinch outperforms traditional banks in several other ways:

• Speed: The lending process is expedited through the use of smart contracts. Cost

• efficiency: Reduced middlemen lead to lower costs for all stakeholders.

• Global diversity: Goldfinch sources and allocates funds globally, diversifying risk.

• On-chain record-keeping: Public, transparent credit histories enable better lending decisions.

• Inclusivity: Personal due diligence and on-chain credit history enable access to loans for previously excluded borrowers.

How Goldfinch impacts African entrepreneurs

Goldfinch has facilitated loans to a diverse range of businesses within Africa, each of which has used this funding to catalyze unique initiatives.

• One such example is Tugende, an East-African asset-financing fintech. Tugende helps fill the credit gap for small businesses in Africa, enabling informal entrepreneurs through credit and asset ownership. Through their partnership with Goldfinch, Tugende has financed over $50M worth of assets that generate income. They've used these funds to support motorcycle taxi operators, significantly boosting their daily profits. With a growing client base and a robust staff presence in Kenya and Uganda, Tugende is a compelling example of how Goldfinch can support local African businesses.

• Goldfinch is also supporting Cauris, a company aiming to drive financial inclusion by assisting small and medium businesses in the Global South. With its mission to extend credit access to 100 million people through fintech partners in Asia and Africa, Cauris is currently expanding its lending operations in several African countries including Ghana, Nigeria, Kenya, Uganda, and Rwanda.

• Goldfinch and Almavest are making a significant impact on African entrepreneurship by providing a $4.875 million borrower pool to finance a loan for the Ghana-based micro-lender Oya Group. This initiative supports access to credit for small businesses, particularly benefiting the 82% of Oya's borrowers who are women, often facing more barriers in obtaining financial services. Through this strategic partnership, Goldfinch and Almavest are not only driving economic growth but also promoting financial inclusion across Africa.

These examples showcase how Goldfinch's blockchain lending protocol is making a significant impact by facilitating loans to businesses in Africa, supporting entrepreneurship, sustainable development, and financial inclusion.

Conclusion

Goldfinch is revolutionizing the lending industry by leveraging blockchain technology to provide a more inclusive, efficient, and cost-effective solution for borrowers and lenders. By aligning stakeholders and offering a competitive alternative to traditional banks, Goldfinch is poised to make a significant impact in the world of lending, starting with entrepreneurs in Africa and emerging markets.

This is why Blocscribe exists.

What we will publish

At the moment, Blocscribe is an internal publication. This means we’ll mostly be publishing articles and research reports produced within the Bankless Africa community but, we’re working towards opening Blocscribe up to the wider African community in the future.

Here’s what we hope to explore in the future;

We’re looking to publish articles and essays that sit at the intersection of cryptocurrencies, decentralized finance, Decentralized organizations/governance, and non-fungible tokens and poke at them until we find instances or truths on how the technology/ philosophy around these tools can help solve the world's problems, primarily Africa’s.

Here are some ideas/prompts to get your writing juice flowing;

“The most helpful quality a writer can cultivate is self-confidence – arrogance if you can manage it. You write to impose yourself on the world, and you have to believe in your own ability when the world shows no sign of agreeing with you.” - Hilary Mantel

Decentralized communities;

The African continent is ripe with young people with interest and experience in forming online communities some of which have led to various movements. Writing that explores what DAOs are, analysis of strong decentralized communities, how they can spur political and social change and movements, DAOs vs trad organization, DAO governance models, challenges, and IRL applications. DAO tokenomics, security, and scalability are duly welcome.

Blockchain basics and their applications within Africa;

Analyses of high-performing blockchains within the African market, African blockchain startups, wallet security, distributed ledgers, EVMs, exploration of IPFS, consensus algorithm and use cases within Africa.

Going bankless (DeFi);

DeFi has succeeded in democratizing access to financial services and removed the need for middlemen, especially Tradfi. Going Bankless is something many within the DAO have written about, but there’s very little on how it applies to the African content. We encourage articles and essays that help Africans understand what going bankless means, financial and portfolio management, everything from DeFi as alternatives to Tradfi, lending and borrowing, global and African defi regulation and risks, defi tools and exchanges, cross-border payments and remittances, financial inclusion for underbanked regions within Africa.

Token engineering

Introduction to Token Engineering: Principles and Concepts, Role of Tokens in Decentralized Systems, Token Design: Understanding Tok zd enomics, Token Curated Registries: Building and Managing Lists with Tokens, Token Bonding Curves: How They Work and When to Use Them, Token Distribution Mechanisms: ICOs, Airdrops, and Beyond, Governance in Tokenized Systems: Balancing Centralization and Decentralization, Game Theory in Token Engineering: Incentive Alignment and Mechanism Design, Token Engineering for Sustainability: Environmental, Social, and Governance (ESG) Factors, Security in Tokenized Systems: Threats, Vulnerabilities, and Best Practices.

Web3 culture and philosophy

Exploring the core beliefs and values behind the decentralization movement, and how they impact web3 culture. The ethics of blockchain: ethical implications of blockchain technology and its impact on society, particularly in terms of privacy, security, and transparency. Crypto-anarchism: Examining the political philosophy of crypto-anarchism and how it relates to the web3 movement, particularly in terms of decentralization, individual sovereignty, and economic freedom. The role of trust in web3: Exploring how trust functions in web3 environments, and how it differs from traditional trust models in centralized systems. Web3 and identity: Examining how web3 can transform our understanding of identity, particularly in terms of self-sovereign identity, pseudonymity, and anonymity.

Builder focused.

We’re looking to help more technically skilled folks understand what blockchain projects they can experiment with and build on. Introduction to Web3 development (basics), Building decentralized applications (dApps) using Web3, understanding blockchain technology and its role in Web3 development, building smart contracts with Solidity, Web3 development using Ethereum, building decentralized finance (DeFi) applications on Web3, NFTs, and Web3: How to build and deploy Non-Fungible Tokens, Web3 infrastructure and deployment options, Web3 development with Polkadot Cardano, Binance Smart Chain, Tezos, Avalanche, optimism, Arbitrum, and other African blockchains. Public goods funding and Venture capital topics also fit into this category.

We’ll also be open to essays outside of those listed above so feel free to also explore them as long as you’re confident in your understanding of them.

Super stoked to explore the immense potential of Blocscribe with you all!