Akropolis Q1 Update

Mar 15, 2019 · 9 min read

From An Institutional Approach to Finding Insights in Informal Networks

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1-Minute Summary

  • As a project, our mission is to give people the tools to save, grow and provision for the future safely and without dependence on a geography, a central counterparty, or falling prey to predatorial financial practices of multiple intermediaries.
  • What we set out to build is not about social impact or “banking the unbanked”. It is not about technology per se, though it plays an important part. It is about how we see meta-trends affecting our lives, lives of our (future) children and peers regardless of geography. There are multiple attack vectors to focus on. We chose financial security, due to our asset management expertise, institutional pension fund experience and innate empathy to the scenarios when a nation-state purposefully fails its most vulnerable citizens.
  • We believe that on a sub-10-year timeframe, many a state pension and social security plans will face bankruptcy. Western consumers by and large won’t be prepared, accustomed to the dependency on the nation-state and its institutions. Technology on its own is not and will not be the answer.
  • We see an incredible amount of promise in enabling a mesh network of digital equivalents of informal savings circles, socio-economic archetypes used by millions of people for centuries and therefore by far the most robust socio-economic primitive in human history. We carefully take those centuries-old constructs and make them scaleable, fraud-proof, and geographically agnostic using the blockchain technology. Our product therefore is a protocol that enables creation of scalable robust decentralised p2p alternatives to pension/social security funds.

Our Vision

  • The Akropolis project was conceived from a thesis that the global economy is on the verge of a long overdue global financial crisis with global pensions deficit crisis (meaning total outstanding pensions liabilities to people, incl all asset classes) currently stands at $78 trillion and is expected to reach 4x global GBP by 2050 [1]. A 7.0–8.0% return assumed in actuarial models of Western pension funds is long a subject of fiction due to multiple injections of liquidity into the monetary system through quantitative easing. “At some point, the bubble will pop”, indeed.
  • Ask yourself a question: how did people use to save and prepare for the future before there banks, insurance companies, etc? Informal savings communities or circles of trust is the centuries-proven solution, that still forms a dominant part of the emerging markets economies, contributing to substantial share of the GDP in countries across Africa and South-East Asia.
  • However, trust-based communities have a natural cap, not unlike a , and therefore they cannot easily scale. We address that, along with the two main daily pain-points of our target audience: accounting fraud and misappropriation of funds. More on this in our next update.

Our Place in The DeFi Ecosystem

DeFi is by far the most promising area of blockchain application, with a number of promising the future of transparent, fully auditable, efficient peer-to-peer interactions, based both on existing financial primitives and creating novel ways to generate and exchange value.

Yet due to the nascent nature of the ecosystem, DeFi is still very much looking for its product-market fit beyond the immediate community of developers and sophisticated speculators. In our research, we turned to the good old “painkiller vs vitamin” metaphore and over a number of months researched and identified a product-market fit, that, in Kayvon’s words “speak to a mass audience” and address a basic need in financial terms and a real pain point: (in)ability to save and grow one’s savings safely and effectively.

It all starts at the bottom of the Maslow’s pyramid

Mass adoption of the technology will not happen until it is unnoticeable, abstracted away as a part of the solution addressing people’s essential needs. Majority of the population do not care about or have the knowledge to trade, take a synthetic position on an Apple stock or engage in the mental acrobatics of margin trading. Let’s get to the basis of the Maslow’s pyramid and adapt it for the DeFi ecosystem. What “billions of users” care about is to be able to:

  • Earn: preserving ability to earn a living (attack vectors: inflation in all its guises)
  • Save: being able to save safely (attack vectors: inflation in all its guises, reliance on centralised financial institutions as custodians, liquidity controls, hidden or poorly understood fees in financial products & services, etc.)
  • Grow: being able to grow their savings safely and reliably plan for future uncertainty (attack vectors: psychological difficulty of saving alone, difficulty growing wealth as a group sustainably and safely; when co-investing in groups).

Without imposing new behavioural patterns on users who have already been operating like this for years, we carefully recreate these centuries-old constructs as digitally-enabled DAOs, make them scaleable, fraud-proof, and geography-agnostic using the blockchain technology.

Finding a Product-Market Fit [PMF]

The search for the elusive product-market fit starts with an understanding what it stands for and when it doesn’t exist, despite our best intentions (“confirmation bias is strong with this one”). Marc Andreesen of a16z loosely product-market fit as:

You can always feel when product/market fit is not happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of ‘blah,’ the sales cycle takes too long, and lots of deals never close (Marc Andreesen, [2])

So we did a bit of reading, and a lot of face-to-face customer research to understand the secret of longevity behind informal savings groups.

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Our internal research database

For centuries, well before the industrial and early financial revolution, and before any concept of government provision for its subjects, trust-based communities were the only source of security, whereby economic transactions were rooted in trust and social reputation. In the West, they evolved into co-ops and then mutuals and banks. In many an emerging market they still form an essential backbone of what is known as “informal economy”. Its main unit is a savings group, which is a member-owned institution, typically <20 members who save together and take small loans from the common savings pool. The names for the savings group phenomenon vary by country: it’s chamas in Kenya, ekub in Ethiopia, susu in West Africa and the Carribean, stokvel in South Africa, paluwagan in Philippines, pandeiros in Brazil.

Geographic and cultural differences notwithstanding, these socio-economic archetypes have proven to be remarkably robust. They all have a common goal: to create an alternative financial structure where they can save, invest and lend together, as well as borrow money they need without long procedures, official documents for loan applications, and oftentimes without using a bank. This day, they remain a competitively-priced source of credit. As member-owned organisations, there is no external cost of capital return to factor into the economics — all the capital is internal and can be sourced through the network.

Our analysis turned to one of the most interesting fintech markets in Africa: Kenya. What we saw was that clearly articulated goals and mutual member support are major contributing factor to co-op growth from 10 members to 25,000+ members and multi-million-dollar treasuries accumulated by its member base. Indeed, most successful chamas have grown from 10-person village groups into banks or mutuals that uncannily remind DAOs.

When you superimpose that on a 91% mobile penetration rate, high mobile money adoption rate, young population with the average age of 20, and existing centuries-old behavioural patterns that belie savings circles with relatively weak legacy financial infrastructure, you get a fascinating market that in respect of familiarity with digital financial infrastructure is more advanced than what we have in the US and Europe.

Other surprising factoid include 300,000+ registered chamas in the country controlling more than worth of assets [3] and ca.1,000,000 unregistered chamas. , remittances to Sub-Saharan Africa reached US$38 billion in 2017 [4], of which a large part is formed by diaspora remittances. Continent-wide AuM estimates for informal savings circles vary from $90 to $100 billion worth of assets.

Our market analysis, fintech/web3.0 opportunities review and PMF process and how we are thinking about building a consumer-facing product on top of a protocol will be covered in our later updates.

Progress to Date

  • Core protocol logic defined, portable across a number of blockchains
  • We researched Polkadot/Substrate for the purposes of our build. Akropolis node on Substrate launched by Alex Koz, our blockchain R&D specialist:
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  • A core financial primitive “Commitments to Future Cashflows” designed by Ana, shaped and put into code by our hero CTO Alex Maz and Product Manager Ilgiz, has been shipped to the Ethereum mainnet whilst on the train on the way to . The whole team worked exceptionally hard to deliver not only our financial primitive but the dApp, , built with 0x+MakerDAO. Alex, Ilgiz, Eugene, Dima, Misha and Dima — thank you!💪 The work has been awarded a second place at the 0x+Coinlist hackathon out of ca.700 submissions:
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Our friends at Zerion took the first place. We are not even bitter. Honest!
Cheers, Andy:)
  • Product-Market Fit [PMF] identified and validated through 250+ hours of deep customer research advised by leading fintech EM product specialists from a $800mm NASDAQ-listed company. This produced valuable insights in other exciting areas, e.g. practical DAO governance, which we presented to a full audience at Full Node in Berlin tonight.
  • Kate, our Head of People, has been putting in exceptionally long hours leading the customer research process in Kenya with our customised 70-item long questionnaire. Special thanks are extended to our advisor Ian Grigg and Tayo Akinyemi of The Rockefeller Foundation
  • Partnership with MakerDAO for our Use Case №1. We will be using DAI and their interest-bearing savings accounts in our MVP testing it with real people. Exciting times!
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How Does it All Fit Together? A Retrospective

When we first embarked on the Akropolis project, our mission was to research and prototype a viable alternative to the broken pensions system that addresses our admittedly rather dark 10-year vision. The path to identifying it, learning from our mistakes and assimilating new findings into a product has not been a straightforward one. To put things in perspective, leading researchers have been publicly battling this very topic for over 35 years! However, it wasn’t until now that a confluence of the technology enabled p2p networks, openness to alternatives and emergence of viable challenger models, that a scalable solution was possible.

We believe that by now we have the right building blocks in place.

What’s Next?

Tech and Product

  • Protocol-level work continues. Documentation is pending. As always you can monitor the progress on our Github, and we will be announcing our roadmap to the mainnet in our next update.
  • A detailed article on the search for the elusive PMF, methodology, mistakes, qualitative and quantitative research methods that we found to be applicable
  • New improved token model, now with no artificial additives and fully organic


  • March: we will be presenting our solution with MakerDAO Head of Product in Oslo at the end of this month
  • April: EDCON in Sydney is on the cards
  • [TBD]: a field research in Africa with our local beta-testers is being planned as we speak.

Product, Distribution and Technology Partnerships

  • We _may_ be cooking something up with the incredible Austin Griffith and his
  • Some big fintech names, some lesser known names, all in the name of building stuff that (a) works and (b) can be productised.


We would like to leave you with this quote by a much respected Andy Rachleff, a co-founder of the $10bn AuM Wealthfront and Benchmark Capital. His 500Startups is a classic. Rachleff’s analysis of the product-market fit decisions made by the prodigious Sequoia founder Don Valentine led him to the following observation:

“If you look at the most successful startups, they actually didn’t have the world’s best management teams in the very early days. They happened to have conceived, or more likely pivoted into, an idea that addresses an amazing point of pain around which consumers where desperate for a solution”.

Yours truly,

The Akro Team.


[1] Citi GPS Report (2016) ‘The coming pension crisis: recommendations for Keeping the Global Pensions System Afloat’, Actualité financière et économique — Information finance avec l’AGEFI, No data [Online]. Available at: [Accessed: 14-Mar-2019].

[2] a16z Crypto Blog (2017) ’12 Things about Product-Market Fit’, a16z Crypto Blog, 18 February [Online]. Available: [Accessed: 14-Mar-2019]

[3] Kenya Association of Investment Groups (2016) ‘The Chama Handbook: third edition’, Kenya Association of Investment Groups, No data [Online]. Available: e-version.pdf [Accessed: 14-Mar-2019].

[4] Kenya Association of Investment Groups (2016) ‘The Chama Handbook: third edition’, Kenya Association of Investment Groups, No data [Online]. Available: e-version.pdf [Accessed: 14-Mar-2019].


The Financial Protocol for the Informal Economy

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