In this tutorial, we will explore the transcript of the Celo Connect Salon at EthCC Paris, titled “Empowering Local Communities through DeFi.” The panel features two remarkable women in tech, Jessica and Gabriella, who lead projects focused on bringing technology and decentralized finance (DeFi) to underserved and marginalized communities. This tutorial will delve into their projects, the approach they take, and the challenges they face. We will also discuss the importance of community-centric development and the lessons learned along the way.
The panel begins with Angelo from the Celo Foundation introducing the panelists, Jessica and Gabriella. Angelo acknowledges the significance of their work in leveraging technology, particularly DeFi, to reimagine existing systems and empower local communities. Jessica represents Impact Market, a human empowerment protocol that implements unconditional basic income (UBI) mechanisms in underserved communities. Gabriella represents Ethic Hub, a platform that connects unbanked farmers, primarily coffee producers, with investors through DeFi.
Jessica explains that Impact Market focuses on poverty alleviation through UBI. They provide UBI to 50,000 beneficiaries in 260 communities across 35 countries, primarily in Latin America and Africa. Their approach involves distributing UBI to individuals via smartphones, utilizing the Celo blockchain. The currency received is Celo dollars, ranging from 50 cents to $1.50 per day, based on regional poverty lines. Impact Market aims to empower individuals and provide financial services to those excluded from traditional systems.
Gabriella introduces Ethic Hub, which enables anyone worldwide to invest in smallholder coffee farmers. By connecting DeFi with the real-world productive economy, Ethic Hub focuses on empowering unbanked farmers who often face high interest rates and limited access to finance. Through their platform, they have facilitated almost $2 million in microloans with less than 1% default rate. Ethic Hub’s crowd lending platform utilizes blockchain and crowd collateral to provide secure loans. Gabriella also announces that Ethic Hub is now live on Celo, allowing investments in farmers using Celo dollars and collateralizing loans with Celo ethics.
The panel discussion emphasizes the unique approach of both Impact Market and Ethic Hub in prioritizing communities in their platforms’ development. Traditional web-based acquisition models often focus on individual users, but these projects take a community-based approach. The panelists discuss the reasons behind this approach and the lessons they have learned.
Jessica highlights that Impact Market’s community-based approach stems from their belief that community leaders and members are best suited to determine what is best for them. They aim to empower individuals and avoid intermediaries. Jessica cites examples where communities have come together to support each other using their UBI, such as providing food or purchasing smartphones. The panelists agree that the community’s involvement is crucial for sustainable poverty alleviation.
Gabriella explains that Ethic Hub builds trust by connecting investors with farmers and highlighting their hard work and honesty. The platform helps investors see the potential in these communities, rather than focusing solely on their lack of financial resources. Language barriers, understanding of DeFi, and access to technology are challenges faced in bringing these communities into the world of DeFi. However, the panelists note that the communities often adopt the platforms and adapt to new currencies, such as Celo dollars, to access financial services quickly.
The panel emphasizes the importance of inclusive design and understanding the context and needs of the communities being served. They discuss the role of designers in building impactful products and services and share their insights on designing for communities and users.
Understanding the Context and Needs
Jessica stresses the importance of understanding the context and needs of the communities they work with. Impact Market conducts extensive research and engages with community leaders and members to gain insights into their unique circumstances. By understanding their challenges and aspirations, they can design solutions that truly meet their needs.
Gabriella adds that Ethic Hub also takes a similar approach. They invest time in visiting the communities they work with, living with the farmers, and experiencing their daily lives firsthand. This immersive experience helps them understand the challenges faced by these communities and design solutions that are relevant and impactful.
Inclusive Design Principles
The panelists emphasize the need for inclusive design principles when building products and services for communities. This involves considering factors such as accessibility, language barriers, cultural nuances, and usability. Designers need to be mindful of these aspects to ensure that the platforms are accessible and intuitive for all users.
Gabriella mentions that Ethic Hub faced language barriers when working with farmers in different countries. They had to invest in translating their platform into multiple languages to ensure that farmers could easily navigate and understand the information provided.
Iterative Design and Continuous Feedback
Both panelists highlight the importance of iterative design and continuous feedback from the communities they serve. Impact Market and Ethic Hub constantly gather feedback from users and make iterative improvements to their platforms. This approach allows them to address any issues or limitations and ensure that the platforms evolve to better meet the needs of the users.
Jessica emphasizes that the feedback loop is crucial for sustainable development. By involving the community in the decision-making process and listening to their feedback, they can build trust and foster a sense of ownership among the users.
Education and User Onboarding
The panelists discuss the challenges of introducing communities to DeFi, which often involves complex financial concepts and technologies. Education and user onboarding become essential components of their work.
Jessica mentions that Impact Market focuses on providing education and training to help community members understand the benefits and opportunities offered by DeFi. By simplifying the information and providing practical examples, they empower individuals to make informed decisions and actively participate in the financial ecosystem.
Gabriella adds that Ethic Hub also invests in educating farmers about blockchain technology, cryptocurrencies, and DeFi. They organize workshops and training sessions to familiarize the farmers with the platform and its functionalities. This education plays a crucial role in building trust and confidence among the users.
The panel concludes by discussing the challenges they face in their respective projects and how they overcome them.
Regulatory and Legal Challenges
Both projects encounter regulatory and legal challenges in different jurisdictions. Jessica explains that navigating the regulatory landscape and ensuring compliance is an ongoing effort. They collaborate with local partners and legal experts to address these challenges and operate within the legal frameworks of each country.
Gabriella agrees that regulatory challenges exist but believes that DeFi has the potential to revolutionize the financial landscape and influence regulatory frameworks positively. Ethic Hub actively engages in conversations with regulators, sharing their experiences and the impact they are creating. They aim to contribute to the development of regulations that are supportive of inclusive finance initiatives.
Infrastructure and Connectivity
Access to reliable internet infrastructure and connectivity is another significant challenge faced by both projects. Impact Market and Ethic Hub work in regions with limited internet access, making it difficult for users to participate fully. To address this, they collaborate with local partners and leverage technologies that work effectively in low-connectivity environments.
Sustainability and Long-Term Impact
The panelists acknowledge the importance of ensuring the long-term sustainability and impact of their projects. They focus on building scalable and sustainable models that can continue to empower communities even in the absence of external support.
Jessica mentions that Impact Market is exploring mechanisms to incentivize community leaders and members to actively contribute to the platform’s growth. By aligning the incentives with the long-term success of the platform, they aim to create a self-sustaining ecosystem.
Gabriella agrees and adds that Ethic Hub aims to create a decentralized system where the farmers themselves can participate in the governance and decision-making processes. This ensures that the platform’s direction is driven by the community’s interests and priorities.
Designing for communities and users in the DeFi space requires a deep understanding of their context, needs, and challenges. It involves adopting inclusive design principles, gathering continuous feedback, providing education and onboarding, and addressing regulatory and infrastructural challenges. By putting the community at the center of the design process, projects like Impact Market and Ethic Hub strive to create sustainable and impactful solutions that empower individuals and foster financial inclusion.