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Algorand in Africa – Can ALGO Conquer the Continent?

Africa is currently leading cryptocurrency and blockchain adoption globally because most of its population (over 1.3 billion) are either not connected to centralized banking systems (60% in sub-Saharan according to World Bank 2021 estimates) or are entirely dissatisfied with the continent’s banking inadequacies . Some of these crypto-savvy Africans are also involved in crypto trading with the help of a crypto currency broker.

Algorand, created by award-winning innovator Silvio Micali is a Pure-Proof-of-Stake (PPOS) consensus mechanical blockchain technology and is described as the world’s most potent and sustainable blockchain. Algorand has shown great interest in Africa by heavily supporting blockchain education, innovation, financial systems, and decentralized technologies solving problems within the local African ecosystem.

Algorand and FlexID Partnership

Founded in 2018 by Zimbabwean serial entrepreneur Victor Mapunga due to his displeasure at the Zimbabwean central banking setup, FlexID is the first Zimbabwean startup to be selected as a World Economic Forum Technology Pioneer and uses blockchain technology to create verifiable identity records for people unable to access centralized banking systems due to unverifiable identity documents.

FlexID has been backed by Algorand, although the size of the funding investment remains undisclosed. According to FlexID CTO, Kudzai Zharare (an MIT-trained engineer), “The startup will perform credential issuance and verification on-chain, allowing a completely decentralized Layer 2, which puts the user in control. Algorand blockchain allows FlexID to achieve this feat because the chain is the only one that has truly solved the blockchain trilemma challenge and has experienced zero downtime since its main net launch in 2019”.

African Blockchain Institute Receives Algorand Foundation Grant

In March 2021, the Algorand Foundation announced a research grant award to the African Blockchain Institute. According to Algorand Foundation CEO Sean Lee “We are delighted to support the Africa Blockchain Institute on this initiative to provide exploratory research on blockchain activities in Africa. The Algorand Foundation Grants program is the perfect platform to help provide education on blockchain technology, use cases, innovation, and adoption in Africa and supports our goal of global blockchain education, inclusion and participation”.

Blockchain adoption in Africa includes both the usage of crypto for day-to-day transactions and crypto trading. Many traders do not just trade crypto but also trade other financial instruments like metals or binary options. South African traders are the center point of the financial market in Africa and options trading is probably the riskiest financial market to trade in. Some of the best options trading brokers south africa are popular brokers that also operate worldwide.

Algorand-UTC Financial Innovation Hub Partnership

Based in the University of Cape Town in South Africa, the UTC Financial Innovation Hub, in partnership with Algorand Foundation, is creating a local ecosystem that brings academics, students, and entrepreneurs together through in-depth academic research, innovation, and thought leadership.

In 2022, the UTC-Algorand Fintech Innovation Hub actively supported Algorand in developing Central Bank Digital Currencies (CBDC) with global central banks and developed an open-source CBDC dashboard for the Algorand ecosystem.

Algorand Partners with African Lending Disruptors – Fidelis Loans

In May 2022, the Algorand Foundation gave a grant to Fidelis Loans, a lender seeking to disrupt the African loan shark lending market of crazy interest rates (30-50% per month) by providing non-collateral-based loans by staking trust points from trusted backers of borrowers.

According to Jason Lee, CEO Algorand Foundation, “For so many Africans, the only option to pay for unexpected expenses like medical bills or funerals is through loan sharks who charge exorbitant interest. With Fidelis, we have an opportunity to offer much-needed credit but also provide financial literacy and planning guidance. We see a great unmet need for so many in Africa. Fidelis provides a more affordable and humane credit option to those who need it the most”.

Nigeria Launch Crypto Project on Algorand

In May 2022, it was announced that the Nigerian government had signed a 3-year exclusive intellectual property agreement with Developing Africa group, a regional software development company to create a nationwide wallet and an IP exchange platform. This lets all owners of IP rights, including trademarks and patents, receive royalties in their personal wallets. These also include copyrights of songs, music lyrics, videos, shows, lectures, podcasts, and all content that can be streamed, uploaded, traded, sold, and exchanged.

Koibank which is a renowned Latin American asset tokenization and blockchain financial infrastructure company will be constructed on the Algorand blockchain network protocol, this means all tokens will be launched on Algorand.

According to Ben Oguntala, CEO of Developing Africa Group, “Algorand’s protocol not only provides the performance, scalability, security, and functionality required to implement such a large scale project but is also environment-friendly which is important for the Government and has a huge philosophical match with the creators economy industry we’re targeting here”.

Algorand and Decentralized Umoja Bounty Hack

Together with Reach and Africa Blockchain Alliance, Algorand is supporting the Decentralized Umoja Bounty Hack – a hackathon lasting six weeks where participants comprising teams and individuals are taught how to create applications on the blockchain network (Dapps). The first and second editions of the bounty hack have been held, while the third edition is currently in progress as of November 2022.

The benefits of participating include: the top three prizes of $3000, $2000, and $1000; all participating teams get $1000 dollars upon project completion; the Community Choice Award of $1000; $250 for the creation of a proposal outlining piece; $300 for participating on call after hack when the project team is briefed. Also, the team’s project can be converted into a Reach workshop for $500 (with a pull request) or a Reach tutorial for $750 (with a pull request).

Does Algorand Stand a Chance to Dominate Africa?

The first significant advantage of Algorand is its Pure-Proof-of-Stake (PPOS) consensus mechanism (the first within the crypto universe). Also, the low stacking requirement of just one ALGO token makes the network highly decentralized and democratized. The breakneck Algorand transaction speed of 1,000 transactions per second (TPS), the affordable transaction cost of $0.001 per transaction, and its newly updated intelligent contract abilities make the Algorand blockchain network highly capable of playing a massive role in Africa.

Conclusion on Algorand in Africa

Algorand is serious about transforming Africa with its blockchain technology, multiple simultaneous innovative projects, and strategic partnerships across Africa. The question at hand is ‘will Algo go ahead to dominate Africa?’ The answer is still being determined. However, if Algorand continues at this pace, it is likely Algo will be the dominant blockchain technology on the African continent.

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