[Music]
hello everyone good to see you all today
uh I want to start off by asking who is
here from the continent of Africa can
you please raise your hand can you guys
please stand up can you guys please
stand up let's give this guys a big
round of applause because like many of
our folks
have gone through crazy lengths to get
themselves here with visas and
everything and this is the Defcon that
has the largest uh African Builder
concentration in one place um and my
talk today is around what can we expect
over the next 10 years in terms of
crypto Innovation and is very much
inspired by a lot of what I have learned
from all these folks and many more of
what are the things that have been built
today and what can we expect coming up
so two years ago at Defcon we
established the fact that it's actually
the crypto ecosystem that needs Africa
to reach its full potential of reaching
Mass adoption and utility driven
building to scale it to billions of
people and we covered the fact that we
are the most populist part of the world
and we're growing really fast that is
going to be where all the young people
in the world are going to be based at
even today we have about 600 million
Africans who are the under the age of 14
that's out of 1.5 billion people and we
also discussed around the technology
rails that exist that have allowed us to
basically skip generations of innovation
such as mobile phone skipping landlines
or mobile money where that has close to
trillion bill trillion dollars worth of
transactions a year um and we're jumping
traditional banking with
crypto um two years ago when we
discussed a lot of this what was the
reality is that mostly many of us were
doing cryptopia transactions doing
payments savings and storing resources
or investing using predominantly
centralized exchanges and a lot of
centralized exchanges are actually not
made to be Banks they're trading
platforms but we kind of figured a way
to do that by having various liquidity
providers like people like you and I
providing liquidity on peer-to-peer
exchanges to drive a lot of a lot of the
value for normal people to access
traditional forms of banking that we
need so where are we today two years
from from then well the one reality is
that in the traditional World we're
still in the same place that we're
communicating value over walls that the
internet as amazing as it's been at
connecting us and letting communication
flow communication of value which is
through mon systems are actually very
much gated the internet continues to be
very gated the same way back in the days
you would have an operator basically
connecting two calls by manually calling
the other side and seeing can we trust
the other operator that's the same
process that we have today so we are
still working through walls in the
traditional
system the other aspect of where we
still are today is that a huge part of
our economy is happening in the informal
sector that includes our GDP of like our
predominant GDP is backed by uh uh
microenterprises uh a huge part of our
employment is in the informal economy a
huge part of our GDP is also drived uh
by by the informal economy and also a
lot of our money movement happens
outside of the banking system this is a
very important context for us to
understand why crypto is thriving so
much on the
continent another big also lenses that
we have a systemic US dollar problem
some of these numbers are a bit outdated
but we're importing more than what what
we're exporting we're taking a lot of
debt a lot of African countries debt has
doubled in the last 10 years and we're
paying that debt plus interest in
dollars and we're trading with each
other as neighbors using dollars um and
when our currencies fluctuate so much
then we move our money to Dollar so that
creates a demand Supply and and and on
the uh supply pressure we have have a
lot of exports remittance people sending
money there's a thing called brick some
of you guys might know about it around
some countries deciding to settle
outside of the dollar system which is
creating a bit less pressure on the
dollar and there's a lot of Aid and
loans that come in do dollars so what is
the consequence of this is that
basically the US dollars are being
rationed by the central banks the demand
for dollars is higher than what they
have there so what you end up having is
the bifurcation of the bank rate and the
black market rate or how I call it the
actual market rate um and in worst
economies you see that being very large
in well-managed economies it's very
small but we're living in in parallel
systems and also that makes the dollar a
commodity so people do unnatural things
in order to access dollars because the
upside on trading the dollar is higher
than the the trade on the commodity
itself which creates very you know weird
dysfunctions in in in our in our system
um and some countries have also created
rules of how who can own dollars and how
much you can transfer it until very
recently the Ethiopian government
actually made it illegal meaning you can
go to prison for it for holding more
than $500 with you at any given point
many of my friends and family's houses
were raid just people looking for
dollars and that's because the central
banks don't have enough dollars and what
that means we borrow more money and then
just rinse and repeat so we have a
systemic dollar problem and so you look
at that and say okay well what is crypto
doing well fundamentally what crypto has
provided us is basically a digital
version of the dollar US dollar stable
coins that allow for large scale
liquidity coordination mechanism in the
informal economy where a lot of dollars
have been circulating physically or
through uh various networks like the
haala networks that call each other and
basically move numbers around what do
that as last does is basically for early
stage startups to be able to aggregate
more liquidity than what a bank can in a
very short period of time and then
settle that payment in a much shorter
period of time and this has been a
fundamental value proposition of crypto
so as a result of that crypto has been
thriving it's been growing even in the
bare Market crypto transactions have
been growing in on the continent chysis
says we've had $125 billion worth of
transaction last year when I talk to the
analyst and the builders it's that's
just the tip of the iceberg there's
there's much more dollar that's been
transacted be be behind that Nigeria of
course is the second most uh popular
place for crypto and Nigeria Ethiopia
Kenya we search crypto on online because
it is solving fundamental problems for
us and so but this is not just
centralized exchanges this is happening
in other rails that have been built so
actually some of the builders here in
this this room I've buil some of these
stacks these are from the builders in
magma from wallet infrastructure so
actually making like SDK wallets that
you can embed into your fintech
application or your crypto application
so you can use crypto and Fiat
aggregating liquidity onchain and
offchain which is actually not very easy
to do and and simplify the on andof run
process through that different types of
wallets that are being created um and
all types of payments from B2B b2c B2B
Toc serving like small businesses medium
large mediumsized businesses oil and gas
companies and even Banks and payment
service providers who are now using
these startups to facilitate
International payments and people even
issuing debit cards on top of your
digital wallet in order to be able to
pay online without having any
limitations because some of our banks
say I'm so sorry you can only pay $10 a
month well if you have some resource you
want to buy a book from Amazon how can
you buy it with $10 Amazon is more
expensive than that so you you're
actually using crypto projects in order
to do that and so some of these projects
are like way advanced than where I see a
lot of on andof Rams and so bluntly
speaking if Devcon was held in one of
the countries that were mentioned in
Africa the Defcon organizing team can
pay all their bills using crypto all of
us would basically be using our crypto
to make payments with Fiat without even
needing a Fiat wallet paying directly
just using the applications that I've
been built today so there's been a lot
of work that has happened in terms of
making the user experience a lot easier
and if you're curious about it just talk
to many of the builders who are in this
room so with that in mind what can we
expect in the next 10 years what are
some of the innovations that we can
expect to have well fundamentally I
think the most interesting part of
crypto to me is bringing whole economies
and empowering them by decentralized
systems part of that is basically
changing the foundations of our existing
economy and part of it is like opening
up new economic activities that we did
not know existed before um and this is
where I think ethereum comes in because
that's the most robust and the most
resilient decentralized system that we
have right now so it's it's it's a
beautiful merge
here and when we think about re writing
a lot of the foundations of our
economies we got to think about both
hyper globalization and Hyper
localization we talked a lot about US
dollar stable coins right so the answer
is not let's dollarize the entire
African economy everyone uses dollars
dollars for everyone that's not the
answer I don't think that helps us and
it doesn't help the global economy so we
got to also think very locally and one
idea I love to dive deeper on is this
idea of actually local currency stable
coins at the moment when we think about
stable coins it's kind of synonymous
with US dollar stable coins how about
actually having our Kenyan Nigerian
Shillings Kenyan shillings Nigerian
naira Ethiopian Burr a lot of our local
currencies having a digital version of
them onchain what does that allow well
onchain Forex that makes it a lot more
efficient we'll double click on that
cheaper local payments in a crazy way
today with blobs it is cheaper to run uh
transactions on a layer two at least
four five to 10 times than it is on
mobile money or banking which is quite
crazy well that doesn't mean blobs will
scale infinitely but it's just an
interesting data point of what we can
even do today and the last part of the
value here that we can think of at this
stage is that it gives us programmable
money and that opens up a whole lot of
opportunities and innovations that can
happen I really want to double click on
the onchain Forex well today k and
Tanzania are neighboring countries right
next to each other we even speak similar
languages and both our currencies are
called Shillings but in order to make a
payment from Kenya to Tanzania you
actually have to convert it to the
dollar dollar has to go through the Str
system it has to floor through London or
New York or somewhere it can take a few
days and depending on the volume it can
take even weeks it's a very long process
and long system it's it's it's it
doesn't make sense that we're having to
do this as neighbors right with local
stable coins you could potentially move
from the Kenyan Shing stable coin to a
Tanzanian Shing stable coin both
denominated in value against the dollar
but not actually touching the dollar so
this helps us move the US dollar from
just being a medium of exchange to being
a unit of account which is a very
interesting use case for it so one way
that can work is pre building a pair of
of liquidity where some an importer is
putting money uh into the the pool from
the Kenyan side and Export is pulling
money out of it and the person does the
exact same thing on the Tanzanian front
and because every trade does not fully
balanced you use dollars to basically
rebalance the pool by adding local
currency on the other side this is just
one model I am sure we can come up with
way multip way more complex and more
interesting models to structure this but
bringing Forex on chain is one of the
most interesting problems for us to
solve using local stable coins now when
we think about that we can think you
know in a few million dollar value or we
can think about half
economies and I think the most important
thing that we keep missing in the space
when we like look at the full potential
of crypto is that we're not always
looking at like how can have an economy
run on what we're building and what
needs to be true for us to get there and
the reason why I'm saying that is
because you know many of you know Mesa
right Mesa is one of the best best
success stories that has come out of
Kenya half the Kenyan economy runs on
impesa what impesa is is just a private
Ledger it's a spreadsheet where this
they put some fat in the bank and the
numbers move from different account
names and at the end of the day it's
basically settled at the bank layer
that's somehow a version of what we're
talking about but what we're talking
about is putting that on chain and a
much more open transparent system right
for us to get to that level of scale at
a much faster Peri period we got to
think about from different principles
and and one lens that I can think of is
using government bonds to back our local
stable coins you convert the local Bond
into a real world asset that can either
be coll fully collateralized through a
CDP or a better model that we can come
up with and by the way if you do I love
to chat with you um and basically use
that to uh distribute local currency
through existing and new rails around
the Forex on chain is one of the much
like lowest hanging fruit examples of
where we can go but we can bring so many
other values to that and in the future
it doesn't just need to be uh government
bonds to do this we can bring other
types of assets like local land
productive land or protected land or
gold and silver and precious metals
we're generating so much of that from
Africa at the moment or we can do other
types of Commodities like this is such
an open book in terms of what we back
our local currencies with
with another pillar after local C coins
that I love to chat about is simple
Finance as a stack now here in the
ethereum world we talk about
decentralization a lot well for us on
the continent decentralization is is
actually a very practical solution to a
very practical
problem we have a lot of banking rails
to build for hundreds of millions of
people and many of them have not been
born
yet to do that try to build that in a
monolithic way as a centralized company
as one piece like alipe or witchat or
grab for 54 jurisdictions and scale that
in a very short period of time is almost
impossible to execute so the best way
for us to do that in my view is just to
build a connected web of
tools different pieces of the Lego that
form a financial stack that come
together that offer users a better
experience and better options right I
think building this in a much more
decentralized way it to me is like the
only way we can get to the level of
scale that we need to achieve so for us
it's actually a very practical solution
a practical way of getting there and we
can build interoperable monies with
network effects remember the walls the
operator we can just bypass that and
keep moving value across different
populations and people in that way
create cash apps with simple user
experience
powered by crypto but we don't even have
to know that it's crypto today we have
startups that are doing that but we can
scale that to
infinity and on the hyper localization
lens um there are many ways we can build
around existing trust
structures across many African countries
We have basically cooperatives and
little communities of people we call
some of them some of us call them table
banking some some of us call them Chamas
where basically people pull money
together to save and lend to each other
there's a strong trust infrastructure
that exists to enable things like that
we don't have to reinvent Trust From
Scratch we can leverage those existing
trust structures to build very resilient
hyperlocal economies and I think that
should be part of our road
map and Beyond you know so ultimately
it's just two people or two companies or
two agents having normal Financial
transactions
right no complexity not much we're not
talking about crypto at the front end
this is all enabling that other areas of
innovation that we can think about is
like around credentialing identity
reputation credit scoring building
bringing things that don't exist on
chain to create Trust on chain is are
some of the more interesting areas for
us to experiment on we don't have time
to dive deep into many of these and
there's a lot more than other areas of
innovation that we can build in the next
years but talk to the builders around
the table um and the other area bringing
assets on chain such as real estate we
talked about bonds earlier but different
types of Commodities Energy power
generating uh structures that we need to
fund and and and are actually Revenue
generating we can experiment with so
many of these that actually Powers the
fundamentals of our
economies so with all these ideas and
directions that we can go you might be
wondering how do I help how do I connect
how do I participate in this well the
first is uh it's an invitation It's
actually an invitation because there's
there's a lot of building happening on
the
continent whether we have a lot of
Builders coming to defon or not so it's
an invitation for you all from
infrastructure from research from
different ecosystems and chains from
Capital allocation from mentorship and
support from actually like working with
some of the smartest people on the
planet
there are many ways you can plug in into
the movement that is happening in
Africa and of course why not bring defon
to Africa in two years
time who Who's down for something like
that here right well yeah I think
that'll be super cool and you guys will
have a blast joining Devcon there but
but it's actually not about having
another big event on the continent it's
actually it gives you a much deeper
context to go and see this in practice
it is very very hard to explain how
broken the world Gardens are until you
actually go and experience it in person
or is very hard for me to explain to you
like what seamless using experience for
crypto looks like without actually going
and experiencing and making a whole lot
of payments in living your life using
your crypto wallet without touching
physical bills right so it's an
invitation for you to actually be part
of the movement and work that that we
have and lastly because all the ethereum
events that have happened around the
world have happened in places where it's
just very hard to get visas right so to
get 177 folks here man that was like a
lot of work and it's been a lot of
collective
effort and there are hundreds and
thousands of more that you would
absolutely enjoy connecting with and
learning with and learning from and so
you're invited home welcome
guys all right that was awesome
presentation you guys we have is a next
session so anyone want to put question
that's a QR right there just scan it and
put a question there we have a lot for
you brother yes let's take a look which
you want to answer first uh we can talk
about the non-financial use cases we
talked about them later on yeah this
talk focused a lot on finance because
it's just a lot to unpack and each topic
that we talked around credentialing
around bringing assets on chain uh and
credit scoring and like gaming and
communication there's like there's a lot
to unpack there um I will actually
invite you guys to talk to some of our
Builders here to understand a lot of the
nuances but I mean at the moment like
500 million Africans don't have any form
of legal ID right and the best that some
of our countries are doing is basically
having a a data center in one location
or two location and putting the entire
population's data there it's like a
honey pod of sovereign data right that's
not the most secure way to do it in my
opinion so I think there's a lot lot of
ways we can innovate around that kyc is
one that really came up like
transferable kyc across multiple tools
um so the list goes on so the invitation
is to actually talk to the builders in
the
room any question you want to answer we
have a lot more here right uh what do
you see Africa
becoming what do you see Africa becoming
a well coordinated road map I want to
talk about regulation all right let's
because that's that continues to be a
Hot Topic and it's really important to
us because many of our Innovations are
interfacing the traditional world with
the crypto world because that that door
needs to be very fluid it needs to allow
money to keep moving back and forth for
a long period of time and until we bring
it on chain um and I think that's a
that's a very important problem so I
talked to a bunch of regulators many of
the builders here talk to many
Regulators there's there's some
curiosity there's some fear because
crypto can be a path for Capital flight
a lot of value to live in a short period
of time right and that's a that's an
actual risk um and some of them don't
even understand the fundamentals of this
technology so what we end up having is
some countries like South Africa saying
crypto is legal it's a commodity we will
allow it and so we have a lot of
Builders working there some countries
creating uh um uh
uh environments for experimentation like
sandboxes uh and actually um this a bit
of a controversial view but I think
creating some sort of tax revenue from
crypto transactions for governments is a
is a potentially positive thing if it's
done well because it moves this category
from a a risk basis to an income
generating category um and bringing
local stable coins on chain is I think
one of the biggest value props for
governments because what it does is it
creates a much more efficient Capital
markets for dollars and bonds it brings
dollars in and helps reduce the pressure
for local trade that can happen so they
have an incentive to see something like
that but there's a lot of people here
doing the hard work of actually
informing regulators and we keep
building like we keep building even with
gray area we keep building like the show
doesn't stop um and I think that's
something some of us in like the Western
World find it hard to kind of navigate
around is because like even when Nigeria
makes crypto
illegal like we still have close to 15%
of the country's GDP like proportion
transactions happening in crypto right
so yeah it makes you kind of Wonder um
like what what what some of those kind
of guidelines can can actually have an
effect I think we have about one or two
question more let's let's see what you
want to
answer am I hiring are you
hiring uh I mean the I I don't know guys
uh we can jam outside after this and uh
recruit more more folks to help answer
the question but yeah I guess like what
needs to happen before a Defcon happens
there is like there's a lot we got to do
on the continent we have many
communities doing real work uh they need
a lot of support and engagement so I
think that will bring a lot of value we
need to have more hackathons and
Builders but like I think our Builder
Community like the startups that we have
there are
from a user experience perspective in my
opinion or like way ahead from what we
keep talking about around usability
making crypto usable for daily life um
like whenever I'm in many African
countries like I don't use my card I
don't use cash I'm just like paying all
types of bills using my crypto account
um and I think I think that's super cool
and that's amazing so like even the
Builder Community alone is enough uh to
host you all all right keep that
Applause for the speaker thank you