Is Africa the New Frontier For DeFi Adoption; What Has it Done for Africans?
The buzz on the revolution of finance ‘DeFi’ is still fresh and on the rise, most especially across Africa.
Thank you for reading this post, don't forget to subscribe!
Decentralized Finance (DeFi) is the new revolution of finance which is quite synonymous with countries across Asia and Africa.
According to the upcoming September 2020 Chainalysis report, Africa makes up the largest share of retail crypto volumes of transfers under $10,000 than any region globally.
African Crypto Hotspots:
Africa is a very hotspot for crypto globally. We have Nigeria at the fore-front of cryptocurrency adoption in Africa, followed by South Africa, Kenya, Ghana and others.
In Africa, instability of the fiat currencies against purchasing power of the citizens, especially in Nigeria, South Africa, Egypt, and Ghana are driving crypto remittances.
The higher the level and rate of currency devaluation per country, the higher the P2P trading volumes in those countries. Binance accounts for almost 70% of this trading volume according to Chainalysis.
What did #DeFi do for Africa? Obviously nothing, one Eth transaction fee is an average African salary.#DeFo is coming.
— Sasha Ivanov (@sasha35625) September 15, 2020
What Did DeFi Do For Africa
One of the most common reasons for the recent drive and increase in the volume of cryptocurrency trading across Africa is;
- Unstable Economy
- Reduced Fee for Remittance
- Alternatives to Savings and Investments
The adverse effects of coronavirus have devalued the fiat currency of these regions. In Nigeria, the rate of one dollar to Naira has drastically reduced devaluating Naira across the international markets.
Read Also: How Crypto Savings Account Interest Beats the New CBN Policy on Bank Savings Account Interest.
Business Day Analysis report shows a 12.82% increase in the Consumer Price Index commonly known as Inflation for July 2020. Most Nigerians prefer utilizing foreign currency (USD) for businesses of which cryptocurrency have made it possible and easy for citizens to access.
Alternatively, the fees for this crypto transactions are low compared to most banking fee charge per transaction. Then again, there comes the DeFi buzz which offers a better return on savings for investors offering a better alternative to Bank Savings.
Arguably, if DeFi hasn’t done anything for Africa, it will do more than expected. There are very many areas this will be possible. Many projects in Africa are already on top the list aside Binance.
We have very many other projects offering crypto to fiat on-ramp aside DeFi based services. Projects like Bundle Africa App, Quidax, Cash App, ABiT Network, Paxful, Luno, LocalBitcoins amongst others.
ABiT Network currently offers 3% Return On Investment for its users who stake Tatcoin for a particular period of time. An idea that has attracted more user to stake their tokens and hold for long-term.
We might have not have seen a lot of projects from Africa at the moment, though we have SaBi Exchange that listed 18 DeFi based tokens on its exchange.
Also Bundle Africa App added LINK to their pool of market for it’s users. At present, the crypto social payments app have only listed Nigeria Naira (NGN) as the only fiat currency on its platform.
Breaking news: LINK arrives on Bundle!🔗🚀
Get the latest Bundle now on Google Play or the App Store to buy and sell LINK.https://t.co/kHdw31UFll
— Bundle (@BundleAfrica) September 16, 2020
While we await more projects to build DeFi based services for the ecosystem, we believe that Africa is the new frontier for DeFi adoption.