Posted by Griff Green, on 31 Mar 2020
We, Grassroots Economics, are currently supporting dozens of blockchain-based local currencies, balanced by bonding curves, to give aid directly to Kenyans in remote villages.
Each Community Inclusion Currency (CIC) lives on the xDAI blockchain, and anyone with a sim card can use a standard feature phone (or a smart phone) to transact within the community.
Every direct donation to this Gitcoin Grant will be converted into xDAI and sent to the reserve of a bonding curve creating 4x the amount donated in CIC. This is possible because we maintain a reserve ratio of 25%. Also because the currencies are not accepted in the larger cities, they tend to pool and circulate within the local community. We estimate that each DAI donated to this Gitcoin Grant will have the impact of $10-20 worth of direct cash donation in Kenyan Schillings.
We will use the matched funds awarded to maintain and advance the platform, as there is much work to be done!
How Community Inclusion Currency (CIC) based Aid works as a cash distribution method during a crisis:
With unstable food systems and deteriorating markets and supply chains, knowing how to target aid is crucial to providing relief and building more resilient communities.
Sarafu, a Community Inclusion Currency (CIC) in Kenya, has a rapidly growing distribution network with 11k (mostly very small) businesses in some of the poorest regions. Users form markets to trade goods and services using the vouchers and the data is stored on the blockchain. Using the blockchain transaction data we can target specific health and food related businesses to receive aid based on how connected they are to their community. These businesses can convert their CICs to donor funds using Mpesa with local community groups.
Farming, Food/Water, Health would be primary targets for CIC Aid. Grassroots Economics, the Sarafu CIC manager, processes data minute by minute on the most important parts of these networks and can focus in a way that can show tangible results - in terms of targeting cash distribution to hubs and promoting specific circulation, supply chains and markets.
Since 2010 Sarafu transactions have been reviewed and deemed an acceptable means of transaction by the Government of Kenya without violating any Kenyan Laws. The system works over USSD so that anyone in Kenya with a sim card can use it - No Internet or Smartphone required.
Parameters: Anyone with a sim card can sign up for Sarafu and receive an initial 400 Sarafu The weekly CIC Aid amount is determined by the amount of available aid funds and crisis projections. CIC recipients will get additional CICs proportionally to how many people they trade over 20 Sarafu to on a weekly basis. Users in specific business categories (Farming, Food/Water, Health) and deemed as hubs will receive double the Sarafu aid. Users can refer other users for an additional 100 Sarafu. Anyone can use Mpesa to buy Sarafu at a discount rate (based on how much Aid fund there is in total) and the current supply of Sarafu in circulation. We are giving out 2x the Mpesa sent to us in Sarafu for the next 90 days.
Outcomes: Aid funds are distributed and targeting fairly using parametric triggers based on market centrality and business type. CIC circulation – not being cashed out is ~10x times larger than the Aid funds being used. CIC Circulation data helps identify: current and future targets for aid avenues for trade, sharing and social cohesion Reporting and Dashboarding: GE provides weekly reports on targets, distribution and impact measurements. A public dashboard shows the various effects.
Next Steps: Begin on data analysis and targeting Inform existing key hubs Begin test distribution on Monday Monitor results: Increased trade frequencies and volumes Increased market size and density Surveys: User Feedback collected User Stories
Current Statistics: (pre COVID-19) In January this year we tracked roughly 18 Million Shillings worth of transactions among over 10,000 Sarafu users in what would normally have been the hardest month of the year.
Newsweek- Blockchain for Social Impact Award
Bloomberg – Closing the Cash Gap:
Closing the Cash Gap With Cryptocurrency:
Frequently asked Questions: https://docs.google.com/document/d/1FUPAM1dRY9TFP0c-LAh3WRP4NiBtDGBSlDF3GzFjRe0/edit?usp=sharing