The Emerging Crypto Space In Africa: The Journey So Far
In the last year, cryptocurrencies have made their way to the front pages of numerous African publications. In 2021 alone, crypto usage increased by 1,200 per cent across African nations. From the implementation of a blockchain solution in the Ethiopian education system to the launch of Nigeria’s first Central Bank Digital Currency (CBDC), the African crypto ecosystem is fast expanding and becoming popular beyond its shores.
Crypto Startups Are Sprouting in Numbers
Although the regulatory environment remains harsh following the implementation of a blanket ban, one significant trend is the increased creation of web 3 based solutions among the very entrepreneurial youth population. African crypto startups raised approximately $5 billion in January 2022 alone, with projects spanning DeFi, NFT, GameFi, focused on financial inclusion. The African digital economy is booming with a new fervour and we love to see this.
As this recent economic revolution spreads across Africa, Cardano, a third-generation blockchain software company, has positioned itself to support the launch of powerful decentralised solutions through Adaverse. By bringing together entrepreneurs, strategists and mentors, we aim to foster a dynamic innovation ecosystem in the region. As such, we are happy to share a few highlights of promising sectors in the African crypto space.
To begin, it is important to understand why blockchain and cryptocurrencies are taking root at the core of African innovation.
🌟The African Population Is Young
With a median age of 19 years across the continent, there is a great interest in digital technology and innovation. The increased usage of mobile wallets as a result of the banking system’s flaws also drives the development of innovative and interoperable fintech solutions. In this aspect, blockchain technology and cryptocurrencies enable a rethinking of how transactions are conducted by removing the impediments posed by financial middlemen and bypassing centralised control of finances.
Blockchain innovation is also supported by local and regional initiatives. One of such is SMART AFRICA, an alliance between 24 countries in the African continent to create a single digital market, which is one of the many great opportunities to unlock the potential of this region. Even the Nigerian government, despite an initial complicated relationship with tech companies, has recently introduced the Nigerian Startup Bill (NSB) that will enable an environment for start-ups to flourish.
Within this context, the cryptocurrency ecosystem has begun to emerge organically yet rapidly. The diversity of its applications, ranging from fintech to art, can be grouped in the following categories:
1. DeFi Services
In the crypto space, DeFi stands for Decentralized Finance. As Africa is one of the most dynamic markets for FinTech solutions, it’s no surprise that blockchain has taken over this sector. For example, the adoption of smart contracts in e-commerce makes transactions between African businesses and their customers safer and easier.
Loans are of the most explored applications of DeFi. The lending landscape in Africa is highly informal with potential calling for automation. Lending platforms can now enable lenders and borrowers to interact without intermediaries at a low cost, empowering grassroots businesses and the unbanked. Charles Hoskinson, CEO of IOHK and father of the Cardano project, has also announced the creation of a financial operating system that will give Africans admittance to DeFi Loan Services by Q2 2022. Keep your fingers crossed!
2. Token-based applications
Tokenisation on the Blockchain has also taken root in Africa. Many mobile apps with end-user products are incorporating tokenisation as the in-app economy, to incentivise user participation. This has cut across various businesses including media platforms and supply chain management. By introducing a decentralized verification system to a supply chain, it is possible to reduce roadblocks at customs, lower compliance costs and ensure the product’s quality and provenance.
Following this trend, Ethiopia has been studying the implementation of a blockchain solution to monitor the supply chain of coffee, the country’s largest export.
Non-Fungible Tokens (NFTs) need no introduction, as they have become one of the most trending topics in the crypto space. Through their unique keys, NFTs allow art to be sold and shared online without the traditional barriers of art galleries. Digital art collections like Afrixx NFT launched on Cardano blockchain are getting popular with their utility as a means to tell the African history. Similarly, artists like Osinachi have turned to NFTs to share their art and reimagine the African identity through digital illustrations.
ART X Lagos also embraced the NFT revolution and hosted the first exhibition of African Digital Art. The Art Fair showcased artists from Nigeria, Morocco, South Africa, Ghana, Rwanda and Senegal, and their use of NFTs as a tool for empowerment.
Another recent and growing trend in the African crypto space is GameFi. As a combination of DeFi and NFTs, these online games offer economic incentives through tokenization. While this market is still in its early stages, a notable mention is the Nigerian NFT game Minaland ready to set the pace for Play-to-Earn (P2E) games.
2022 Promises More (The reward for work well done is more work)
The growth potential for Web 3 applications is limitless. Cardano through its investment arm EMURGO Africa will drive the growth of African crypto-native projects with investment support while harnessing the highly scalable and environmentally sustainable blockchain.
If you want to be a part of Africa’s crypto revolution, Adaverse Accelerator can help. Whether you’re interested in building a new business with a crypto-native edge or creating a tokenised use case for an already existing platform, we’ll ensure you have all the resources necessary to launch, reroute, boost, and scale your business beyond the continent’s borders.
Apply for the Adaverse Accelerator program today. and become the next big success story.
We are a Cardano ecosystem accelerator providing funding and investment support to impact-driven crypto startups with game-changing projects across Africa. We assist startups to establish and grow sustainable web 3 based businesses on the continent, overcoming historical obstacles, fostering a dynamic and innovative ecosystem to cater to the global market at large
We are open to applications all year round from African-based startups with a crypto-native edge and a proven concept.
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