Africa summit insights Mento Labs.jpg

“Onboarding Millions of Users Across Africa to Web3” Panel Insights

March 28th, 2024Behice Uzun

Featuring Markus Franke, CEO at Mento Labs, during Africa Tech Summit and Africa Money & DeFi Summit

February, 2024, Nairobi

This article includes highlights from the recent panel discussion titled "Onboarding Millions of Users Across Africa to Web3" at the Africa Tech Summit and Africa Money & DeFi Summit held on February 14 and 15 in Nairobi. The panel featured Markus Franke, Co-Founder and CEO of Mento Labs, alongside Isha Varshney, Head of Strategy and Innovation at Celo Foundation, and Tosin Onikosi, Web3 Product Marketing Lead at Opera. The session was moderated by Felix Macharia, CEO of Kotani Pay.

What Web3 use cases can effectively tackle the pressing challenges such as high inflation, limited accessibility to financial tools, and high fees associated with cross-border payments in Africa?

There are different use cases that Web3 can bring to the challenges of emerging markets, like remittances, savings, lending, and payments, all of which represent remarkable opportunities for the adoption of Web3 technology. A great example, as mentioned by Felix from Kotani Pay, on the Celo blockchain, is the Opera MiniPay wallet, using Mento stablecoins, optimized for mobile phone use. This optimization means that regardless of whether someone has a high-end or low-end device, they can access the wallet and the stablecoins efficiently and securely. The accessibility of decentralized finance (DeFi) solutions on mobile phones really underscores the transformative capacity of blockchain technology.

Remittance use cases should be highlighted here as they stand out as a prime example of how open-source, permissionless technology can support cross-border transactions. The beauty lies in its permissionless nature; anyone, anywhere can tap into these services seamlessly, transcending international boundaries. This opens up immense possibilities for cross-border use cases, as blockchain technology fosters inclusivity and accessibility on a global scale.

Another very important use case is giving people access to stablecoins - especially in countries that undergo high inflation. With this technology, like the Opera MiniPay wallet on Celo, users can get access to Mento stable cUSD, a dollar stablecoin that is highly secure, overcollateralized, and very transparent. People can use this stablecoin, for example, to save in US Dollars and avoid being impacted by high local inflation. But, there are also lending and credit use cases, and here local currencies can be made available on the Mento Platform. At Mento Labs, we are working on building the Mento Platform for many different local currencies. If entrepreneurs in Africa, for example, want to get a loan, they would prefer to get that loan in their local currency, because their revenues are most probably in local currency. If the loan would be in a foreign currency and the local currency is losing value, then the loan would become really expensive to repay. Therefore, we need to give users access to both local stable currencies and, access to a Dollar stablecoin in an easy and permissionless way.

What level of stability do stablecoins offer? When evaluating stablecoin stability and security, what framework should we employ as a business entity or an individual in this space?

The answer is indeed a complex and multifaceted one, because there are many different aspects that make a stablecoin stable and every asset has different risks. While no asset can claim absolute safety, stablecoins significantly mitigate risks. Stability in the context of stablecoins encompasses various factors, ranging from the underlying collateral assets, to the mechanisms employed to maintain stability. Different stablecoins, be it USDC, USDT, Celo Dollar (cUSD), Celo Euro (cEUR), or Celo Real (cREAL), utilize distinct stability mechanisms, including collateralization and supply management. Some stablecoins, for instance, are backed by credit - meaning they are backed by fiat money deposited in a bank. So, the major risk here could be the credit risk or the counterparty risk of that bank. Stablecoins can also be backed by assets that live on-chain. For instance, the Mento stable cUSD, is backed by a diversified pool of stablecoins and other blockchain-based assets for transparency. The stability mechanism prioritizes transparency and over-collateralization to mitigate risks. However, assessing stability goes beyond asset backing; it involves evaluating supply-demand dynamics and liquidity. Ensuring sufficient liquidity, in other words, how easy it is to access the stablecoin, is crucial for stablecoin usability and accessibility. Therefore, when considering funding or utilizing stablecoins, it's important to scrutinize the underlying assets, stability mechanisms, and liquidity to make informed decisions.

To watch the recording of the roundtable discussion:

Get in Touch

Interested in launching stablecoins and digital assets?
Don’t hesitate to reach out: