Can DeFi Help Zimbabweans Complete Economic Jailbreak?
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DeBankView (ID: DeBankView)
, Author: Jorge S, reproduced by Odaily with authorization.
Helping people living in countries with hyperinflation protect their wealth, replace the irresponsible banking system, and build a healthier financial system has always been the dream of the blockchain world since the birth of Bitcoin, and it has always been Appears in all the grand narratives related to DeFi. However, limited by the reality that the blockchain is still in its infancy, this dream is still far from being realized.
Recently, Team Toast, the development team of DAIHard, released the white paper of the ZimDai project, hoping to make the above dream land in Zimbabwe, an African country, through a series of decentralized projects. In their own words, it is to use cryptocurrencies and DeFi to help Zimbabweans complete Economic Jailbreak.
When Zimbabwe's current legal currency was issued in 2016, the exchange rate against the U.S. dollar was 1:1, but the current exchange rate is between 1:12 and 1:17. The handling fee for bank transfers is as high as 10%, and the limit for withdrawing cash from the bank per person per week is only 23 US dollars. In order to protect their wealth, almost everyone in the area trades dollars on the black market.
Team Toast proposed a plan to promote DAI in Zimbabwe, hoping that through a series of efforts, DAI will replace the fiat currency that has been spammed and help Zimbabwe build a healthier banking system. There are three key elements in this plan:
The first is the stablecoin DAI. Zimbabwe currently has a cryptocurrency market, but the high volatility of bitcoin prices is not very attractive to locals suffering from inflation. Stablecoins anchored to the U.S. dollar are more likely to be popular.
The second is the decentralized OTC marketplace DAIHard, which is also the previous project of Team Toast. To really promote the widespread use of DAI, the first problem to be solved is OTC. Due to the particularity of the project, centralized OTC solutions are not feasible, because Zimbabwe officials can shut them down at any time.
DAIHard is a peer-to-peer OTC market, which removes the centralized components through a game mechanism. Briefly introduce its mechanism design:
1. Only sell the stable currency DAI, and you can use any fiat currency for payment: the seller places an order to sell DAI, and the buyer buys DAI with fiat currency. 2. To place an order to sell DAI, the seller needs to put DAI into a smart contract; when the buyer buys DAI, he also needs to put a part of DAI into the contract as a deposit, which is one-third of the seller's amount. For example, if the buyer wants to buy 300 DAI, the buyer also needs to deposit 100 DAI, so there will be a total of 400 DAI in the contract. 3. The buyer pays the seller legal currency through bank transfer, online transfer, cash, etc. 4. Finally, regardless of the final transaction result, the seller has only two options: either destroy the 400 DAI, or release the 400 DAI to the buyer.
If the buyer does not pay but clicks "transaction complete", the seller will destroy the 400 DAI after being cheated, and the buyer will also lose 100 DAI. If the buyer paid up, the seller could also choose to destroy the 400 DAI, but doing so would not actually do him any good. In other words, both buyers and sellers will try their best to make the transaction successful for their own benefit.
The third and most important one, is to recruit a network of agents in Zimbabwe. These agents can initially be any locals who are comfortable using cryptocurrency services, and they can use this to provide other people with bank-like services, such as transferring money between cities in DAI, using DAI to exchange cash for foreign remittances, depositing DAI in On-chain DeFi wealth management projects, access to South African bank accounts, and more. Agents will charge a certain percentage of commission, but the commission percentage will be much lower than that of local banks. These agents will also undertake the work of educating users and developing markets.
Team Toast hopes that driven by economic interests, this proxy network can expand spontaneously and penetrate the entire country of Zimbabwe in a decentralized manner. After enjoying the convenience provided by the cryptocurrency, the local people can also spontaneously spread and promote it, and begin to accept and hold DAI for a long time, eventually realizing the replacement of the banking system.
In this way, the above three key systems can all operate in a decentralized manner, and cannot be shut down by any external force.
Now the project is considering a potential token sale to raise startup capital from the cryptocurrency community to bring the plan to life and start recruiting agents.
