If you want to go quickly, go alone. If you want to go far, go together. ~ African proverb
Anyone who has spent time in Africa knows it is a continent of entrepreneurs. In fact, according to research by management consulting firm Roland Berger, Africa has the highest percentage of entrepreneurs overall and the highest percentage of female entrepreneurs of any continent.
Yet despite a vast pool of talent, small- and mid-sized enterprises have trouble reaching their full potential. Lack of support can stymie these enterprises and cause them to stagnate, but future-thinking African entrepreneurs are looking to stimulate growth across the continent and globe through new pathways. One of the most promising is the adoption of the Decentralized Autonomous Organization structure, which has seen startups build communities and connect with markets in a way few could have dreamed.
What is a DAO?
Put simply, a Decentralized Autonomous Organization, or DAO, is a type of entity structure where power is distributed across token holders who participate in the management and decision-making of the entity.
A DAO does not have a centralized governing authority, such as a board of management; instead, token holders cast votes about the management and decisions of the entity in a bottom-up approach.
This process is dependent on smart contracts — logically coded agreements that dictate decision-making based on underlying activity on a blockchain. Smart contracts are created and executed by token holder votes. Each holder has voting power proportional to the number of tokens they hold, and their votes are cast via the blockchain and therefore publicly viewable. This has two distinct advantages; users who are more monetarily invested in the DAO are incentivized to act in good faith or risk their holdings, and because all votes are public, voters are disincentivized from acting against the community.
Through decentralization, DAOs encourage participation from anyone, anywhere, allowing for a globally distributed community to align and act with a single vision.
How can DAOs help Africa?
As any entrepreneur will tell you, the hardest thing to build is support for your vision, whether that’s monetary, practical, or even just mentorship. Pivoting to a DAO structure can help entrepreneurs connect to others who share their vision and want to work to make it a reality.
Here are two examples of Decentralised platforms built for Africans:
Afriguild is a blockchain gaming guild-turned DAO with a big dream: onboarding 100 million Africans into Web3 over the next five years. Since its launch in late 2021, Afriguild has been actively driving its mission through gaming, deploying Web3 learning programs, as well as creating IRL blockchain communities across tertiary institutions in Africa. With a goal to drive financial inclusion and empowerment, Afriguild has made a significant impact across nine cities in Nigeria with plans to expand into four African countries by 2022 Q4.
Afriguild will complete its transition into a DAO in the near future, using its Cardano-based $AFRI tokens as its foundation. Afriguild co-founder Toyosi Abolarin says the switch to a DAO structure makes sense for the organization.
“At Afriguild, our strength lies within our community, and this has been the driving force behind all we do,” he said.
“Cardano has one of the most vibrant communities in the blockchain industry and will play a crucial role in achieving our goal of putting Africa on the map. Cardano’s technology is an innovative protocol that provides a robust infrastructure for Afriguild to develop an ecosystem of impactful and reliable products.”
Adaverse announced its investment into a seed funding round for Afriguild in late July 2022, allowing the startup to not only draw on Adaverse’s funding but also its 1:1 mentorship program that will help Afriguild carve out a slice of what’s projected to be a $314 billion GameFi industry by 2026.
Named after the African continent’s ubiquitous food staple, Cassava Network is a blockchain infrastructure that connects developers and users to Web3. Through its native $CSV token, Cassava transforms any web application into a crypto-enabled app suitable to reward contributors and end-users for their activity.
Their product offering consists of token rewards networks, digital identification systems, user-controlled data profiles, and a crypto and NFT wallet specifically designed to empower content creators.
Essentially, the $CSV token enables projects, content creators, and content consumers to earn rewards in innovative ways through play-to-earn, create-to-earn, and engage-to-earn models. $CSV holders will also gain access to a range of other benefits, such as voting rights in platform governance when Cassava transitions to a DAO. Through this, Cassava hopes to further leverage the Web3 economy to drive crypto mass adoption across Africa and beyond.
Adaverse joined over 40 other investors in the seed funding round for Cassava Network in late May 2022, with founding partner Vincent Li saying the organization was excited about the partnership which will help fund the “revolutionary DeFi tool”.
The future of DAOs in Africa
By 2028 Africa’s blockchain market is expected to be worth some $135 billion, representing almost a third of the entire blockchain market. The potential for this growth can be seen in this continent’s entrepreneurial spirit among its young and fast-growing population, as well as its growing need for innovative income streams connected to the global market.
DAOs are just one part of the larger picture. But their ability to connect physically distanced communities across continents in a paradigm that encourages working together towards a collective goal makes them an incredibly powerful tool.
In order for them to flourish into the future though, hard work producing strong results needs to be done now. The complexities of creating and expanding a DAO to reach its full potential are immense, but entrepreneurs needn’t start from scratch.
Adaverse, through its funding programs, technological infrastructure, and mentorship partnerships, can help you navigate these complex challenges to launch a strong and secure, community-focused DAO that will help you pair your vision with like-minded people across the globe.
So far, we have concluded strategic investment in 15 promising startups across Africa, offering them access to our network of mentors and tech support. Our accelerator program is open to applications all year round for African startups with a crypto-native edge and a proven concept.
To apply for the Adaverse accelerator program, click here.