Reflections From DevConnect 🇹🇷 : Unveiling Opportunities for Financial Inclusivity with Ethereum
A few months ago, I came across a link for the Ethereum Devconnect Scholars Program through one of the local communities I’m part of. Initially, I was unsure about my chances, but as with many opportunities, you never know until you give it a try. Following an interview and a few weeks of anticipation, I was selected as one of the scholars from Africa.
The program commenced with insightful sessions where we delved into the core values of Ethereum and had the chance to connect virtually before meeting in person in Istanbul. My focus for DevConnect centered around enhancing the user experience on Ethereum to empower the financially unbanked. Specifically, I was intrigued by the state of wallets and account abstraction, envisioning a future where marginalized communities can access the open, decentralized financial system facilitated by Ethereum.
During my time at Devconnect, I encountered Mohsen, a fellow scholar who shared his story of living in Iran, unable to access a traditional bank account due to his immigrant status. His experience mirrored the challenges faced by many Africans excluded from the traditional financial system. It became apparent that Ethereum’s blockchain technology has the potential to be a transformative force, offering financial inclusivity irrespective of race, ethnicity, or economic background.
However, in certain parts of the world, low internet penetration remains a hurdle, inhibiting access to technologies like Ethereum. Reports indicate a 43% internet penetration rate in Africa as of December 2021. Some SMS-based wallets in Africa have addressed this challenge by providing blockchain access without the internet, but they still lack some functionalities. Initiatives by grassroots organizations like Grassroots Economics and companies such as Kotani Pay have introduced SMS-based wallets to enable marginalized communities to enter the digital economy,essentially banking the unbanked. The main usecase of these SMS based wallets so far has been to deliver UBI to unbanked and underbanked communities, allowing them to cash out their crypto UBI to fiat.
These existing wallets have limitations, such as reliance on externally owned account (EOA) structures with complex seed phrases and the requirement for users to pay gas fees for transactions. At Devconnect, I engaged with companies shaping the future of wallets and refining account abstraction, including Argent, Blocto, and Clave. Their development of smart accounts in line with the ERC-4337 standard, which features alternative social recovery and batch transactions, has significantly improved the user experience.
The introduction of sponsored gas fees is a promising feature, enabling users to transact without worrying about gas fees. This is achieved through PayMasters smart contracts that allow you to potentially sponsor user transactions. Users can choose to pay for gas fees using debit cards or potentially pay for gas fees using other ERC-20 tokens. Leaving Devconnect prompted me to contemplate how these advancements could benefit unbanked communities back home, especially refugees in Kenyan camps and underbanked populations. Smart accounts on USSD rails could offer seamless access to blockchain technology without the internet, potentially unlocking new use cases beyond the existing universal basic income model. The unbanked could possibly gain access to yield on their stablecoins using protocols such as AAVE, enabling them to invest their idle funds. A common use case, especially in Africa, could be ROSCAs, whereby the pooled funds could be set aside to earn a yield for the savings groups. Smart accounts on USSD rails could essentially allow all this to happen seamlessly, thus opening the door for the millions of unbanked people locked out of the traditional finance system.
While challenges like on-ramping and off-ramping persist for the unbanked, innovative companies like Fonbnk are addressing these issues by providing alternative approaches, such as converting prepaid airtime to stablecoins.
In conclusion, Devconnect transcended being a mere event; it evolved into an immersive and enlightening experience where I not only learned from industry leaders but also connected with like-minded individuals shaping the future of Ethereum. I extend my sincere appreciation to the Next Billions team for providing this invaluable opportunity. As I reflect on the transformative potential of Ethereum, I earnestly hope that more Africans can participate in similar events, contributing their perspectives and insights to the inclusive evolution of blockchain technology on the continent.
