Five Things We Learned at Celo Connect 2022

And why DeFi still needs design to make an impact with last-mile users

What does Web3 have to do with cash-in, cash-out (CICO) systems?

From the early looks of it — lots.

At Last Mile Money (LMM), we’ve been exploring how to bring the digital economy to the last mile, connecting merchants at the fringes of internet connectivity with tools and services that are designed to meet their needs first. We believe that emerging Web3 architectures, like blockchain ecosystems and DeFi, hold incredible potential to build a more equitable future for people at the last mile.

That’s why we decided to attend Celo Connect, a conference hosted earlier this month by Celo, a carbon-neutral blockchain designed explicitly to promote financial prosperity. We wanted to get a hands-on feel for what’s happening in this nascent space, meet its players, and start to consider how design (and LMM) might play a role in propelling promising pilots to the next stage. Here’s what we learned during our time there.

1. Creativity is booming at the intersection of Web3 and impact

To start, we were inspired to see so many teams building innovative tools and services at the intersection of blockchain and financial inclusion. Though Web3 technologies are still largely in their infancy, builders and other stakeholders are already starting to create and test products for those at the last mile.

“I was impressed by the number and range of experiments around finding use cases that benefit low income people in emerging markets.” — John Won, LMM Program Co-Lead

One promising Web3 organization that we met is Impact Market, which enables communities to implement Unconditional Basic Income. Senior Design Lead Tolu Odusanya explained, “What made them stand out to me was the fact that they thought about their ecosystems so holistically. They considered a lot of angles: how urgently recipients need cash, how they’re onboarded to the platform, who’s being compensated for that work, how people cash out, and more.”

2. Fractionalization and ownership will revolutionize financial access

Two of the most exciting possibilities of Web3 and DeFi in regards to our work at Last Mile Money is the ability to fractionalize finances and to turn customers into owners.

“This is going to be a moment where we redefine what capital means to the last mile beneficiary. With decentralized finance, people who previously didn’t have access to capital are now able to borrow money not just easily, but also more affordably and more efficiently.” — Kanika Kumar, Senior Partnerships Lead

Fractionalization can enable people to move past high barriers of entry for investment and other financial products that were often reserved for wealthy people. This is yet to be proven at scale, but there is early evidence of its promise. For example, Ejara, a woman-led fintech in Cameroon is enabling small scale retail investors to invest in government bonds through fractional investments built on the blockchain. Fractionalization can play a role in other use cases like enabling micro-work for gig workers in Kenya, making it easier for them to receive small payments quickly and efficiently and for platforms to pay a flexible workforce at scale.

Ownership is also turned on its head in the world of blockchain — from being able to earn in tokens to participating in the governance of the protocols that power the financial products you use, Web3 and DeFi is in many ways democratizing control.

3. User experience is still an afterthought

That brings us to our next point, which is that there’s a massive opportunity for design to impact how these new products and tools are built. Since proving the technology is still a primary focus for Web3 development, the user experience often comes second.

John explained, “The technology today is largely being built by and for tech-forward, super users in the first mile. Yet the same experiences are unlikely to make sense for first time users in the last mile — there’s a lot of context knowledge needed to get us there.”

For example, there’s recently been a big push to make Web3 experiences mobile-first, which is crucial for low-income users. Today, most Web3 experiences are web-based, i.e., requiring a desktop computer or laptop with a high-speed internet connection, which is still not accessible or even relevant to many underserved people around the world.

This leaves a major opportunity for design to bridge the gap — finding the common ground between what users need, and what’s possible given the technology. We are excited to see innovative crypto wallet apps like Valora and Node Wallet improving on key UX pain points of the past.

As Tolu explained, “It reminds me of the typical Venn diagram we reference, with overlapping circles for feasibility, viability, and desirability. At LMM, we’ve got a proven record of really understanding desirability from the user standpoint. We also have an understanding of viability within these target markets. Our next step is understanding the feasibility angle — which breaks down to two things. How feasible is a prototype from a technological standpoint? And how feasible is it in the context of partnering with users at the last mile?”

4. CICO is critical

Getting money into and out of Web3 is still a challenge. Today, converting fiat to crypto currency typically demands a bank account, a computer or smartphone, and a lot of digital confidence (not to mention patience and persistence). A person’s experience and what is required of them varies by which country they live in, if their country even allows it legally.

At LMM, we carry insights from mobile money’s adoption in Africa, India, and other markets. Namely, it’s hard to ask low-income people to keep their hard-earned wages using a new technology if there’s no easy way to access it (especially in an emergency). Networks of agents enable cash-in/cash out (CICO) for mobile money, and we’ve seen how human agents build trust with customers in order to enable the consistent adoption of mobile money, often serving as front-line customer support and even promoting other financial services.

For Web3 to truly be adopted by and make sense for low-income people, we believe both on/off ramps and CICO will be needed.

At Celo Connect, the Celo team announced Connect the World, a $20 million initiative to incentivize providers to build better on/off ramps in 100+ countries. At LMM, we’re excited to partner with teams who are bringing promising solutions around on/off ramps and CICO to scale.

“Our next step is understanding the feasibility angle — which breaks down to two things. How feasible is a prototype from a technological standpoint? And how feasible is it in the context of partnering with users at the last mile?” — Tolu Odusanya, Senior Design Lead

5. Navigating from experiments to reality

This leads us to our remaining questions. As Kanika explained, “One thing to be cautious about is because there are so many pilots happening, so many great people who have ideas, and a lot of money backing this space, there’s a lot of hype. How do we validate the right ideas, and how do we support them beyond validation?”

At LMM, here’s what we’re asking next:

• What do the right partners for us look like in this space?
• What’s the right way to measure impact and success in such a nascent space?
• Blindspots and second order impacts may not always be obvious. How might we design ways to protect users in potential pilots?
• How do we take our experience moving pilots from idea to scale, and continue that within the emerging Web3 space?

Want to work with us? Get in touch through lastmile.money.