Nigerian startup Xend Finance uses decentralized finance (DeFi) to address currency devaluation. DeFi aims to bridge the gap between decentralized blockchains and financial services.
Currency devaluation is a common economic nightmare faced in most African countries and other developing countries worldwide. It has become imperative for organisations like credit unions to hedge their collective funds against their local currency’s devaluation.
“We’ve experienced three massive currency devaluations in the last three years in Nigeria, and this is similar to different economies in the world with unstable economies,” Ugochukwu said to TechCrunch. “My mother and I belong to different cooperatives where we save and make monthly contributions to help one another in the cooperative. Realizing that despite saving regularly, we were losing more value for our money. This gave birth to Xend Finance.”
Today, the company announced its mainnet launch, opening up the ability for credit unions to access DeFi for their members by using decentralized stablecoins such as DAI and BUSD.
Not only is Xend Finance trying to protect credit unions from fluctuation, but it is also changing how they operate. In these unions, groups of individuals contribute to informal savings for their different mutual benefits.
However, they are often limited by three factors. One is in its size — only a small knit of people in a particular locale can access the service. The second is lack of insurance which means people don’t have the confidence to join saving cycles. The third has to do with how credit union members default in payments, affecting how much is paid down the line.
Xend Finance is plugging these gaps using blockchain technology. The platform allows credit unions to have over 1,000 members who don’t stay in the same geographical location. It also employs smart contracts to lock each member’s contribution and enable flexible payouts when a payment cycle is due, which reduces default payment rates. The company also says it offers decentralized insurance to protect members against any form of asset loss that results from contract failures. However, this isn’t a traditional insurance contract from an insurance company.
Besides, the company says credit union members can earn interests in their savings by exchanging their crypto or fiat currency for stable cryptocurrencies and locking crypto assets on lending platforms. According to the company, there’s a possible 15% available annual percentage yield on the platform.
The company claims to be the world’s first decentralized finance (DeFi) credit union platform and the first DeFi company to launch out of Africa. Its technology is built on Binance Smart Chain (BSC), a blockchain for developing high-performance decentralized applications.
In 2019, the startup based in Enugu, Nigeria, took part in the Google Launchpad Africa accelerator and the Binance Incubation Programme. It has since secured $2.2 million from Binance, Google Launchpad, NGC Ventures, Hashkey, and AU21 Capital, amongst others.
From December 2020 to January 2021, Xend Finance executed a testnet with over 1,500 participants in 75 countries. This helped them find product-market fit, and last week, the company did a beta launch of its mainnet where it received over $500,000 in deposits. They also signed a credit union partnership with a software service provider, TechFusion Africa and its 5,000 members.
The company intends to onboard a lot of customers now and focus on revenue later, Ugochukwu says. And when it does, the play will be to charge a commission (not more than 5%) on the return on investment when members of cooperatives or regular individuals save or perform contributions on the platform.
Having run some tests and passed several iterations, Xend Finance is fully going public today, and Changpeng “CZ” Zhao, CEO of Binance, expects the platform to show what can be built on BSC.
“Africa is one of the most important continents, representing the future and emergence of DeFi and blockchain capabilities,” said Zhao. “We are very excited about the mainnet launch of Xend Finance, with a team we backed early on that has a strong foothold in Africa and have been strong advocates for what Binance Smart Chain can accomplish. With their platform, they can bring stable currency and DeFi investment opportunities to those who normally wouldn’t have them.”
Along with the mainnet launch, Xend Finance will introduce the $XEND token through a Token Generation Event (TGE) on Balancer. The company says the token will reward users for performing different operations in “the protocol, as well as allows a decentralized governance of the Xend Finance ecosystem.”
For Ugochukwu, Xend Finance presents people with the opportunity to channel their savings into stablecoins without worry that their money will devalue overnight and earn higher interest rates through DeFi. “We are very excited that blockchain will have a positive impact on the people of Africa,” he said.
Bureau De Change Operators Urges CBN to Discourage Cryptocurrencies as a Diaspora Remittance Channel
The fast-growing acceptance of cryptocurrencies as a means of payments, money transfers and investment vehicles in Nigeria and other emerging economies has started having a direct impact on diaspora remittance, according to the Association of Bureaux De Change Operators of Nigeria (ABCON).
In its Quarterly Economic Review for the first quarter of 2020, ABCON urged the Central Bank of Nigeria to introduce measures that will counter the advantages of cryptocurrencies as a channel for diaspora remittances.
This, the association said “It is noteworthy that public acceptability for cryptocurrency exchanges are rising which could be quite accountable for the wide drop in diaspora inflows to Nigeria. Insecurity in the country is giving it greater prominence as investors and citizens are finding cryptocurrency a safe haven for their wealth in case of any eventuality.”
Bitcoin transfers surged in 2020, according to ABCON. The association attributed this to the COVID-19 pandemic that exposed cheaper and more efficient digital remittance services.
“Migrants sending money across borders to their families prefer the minimal transaction costs of cryptocurrency exchanges against the exorbitant costs of traditional money transfer companies like Western Union.
“These exchanges override the political complications of official channels.The global reach of cryptocurrencies avoids the inflation risk inherent to official currencies, especially in politically unstable countries reliant on fickle foreign investors.
“Thus, while we commend the efforts of CBN in introducing the package of Five Naira for One Dollar transfer, it can be seen from the analysis above that the challenges exceed just non-payment of foreign currency by the International Money Transfer Operators (IMTOs) and the exchange rate.
“Strategies that satisfy the most sensitive of these advantages of cryptocurrency exchanges must be introduced to redirect flows to the official channel,” it said.
The Central Bank of Nigeria banned banks from facilitating cryptocurrency payments and exchanges in an attempt to discourage people from the largely unregulated fast growing crypto space.
A position the apex bank clarified a week later following the criticism that trailed the decision.
While the apex bank later said Nigerians can trade cryptocurrencies but banks can be tools for such unregulated industry, many Nigerians continue to dump their money on several unproven cryptocurrency projects.
Every Fifth Corporate Network Faced a Cryptomining Malware Attack in 2020
Data acquired by cryptocurrency trading simulator Crypto Parrot indicates that cryptomining malware accounted for the second-largest corporate network attacks at 21% between January 1, 2020, and December 31.
Botnet took the pole position during the same period at 28%. Infostealer ranks third with a share of 16%, followed by mobile at 15%. Banking malware attacks rank fifth with a share of 14%. Ransomware accounted for the least form of attack at 5%.
In terms of regional distribution, cryptominers accounted for 19% of corporate malware attacks in the Americas. Europe, Middle East, and Africa (EMA) region saw cryptomining malware take up 21% of attacks. The Asia-Pacific region accounted for the highest cryptomining malware attacks on corporate networks at 26%.
Surging crypto sector value contributes to rising in cryptomining malware
The report overviews some of the contributing factors for cryptominers to occupy a significant share among corporate malware attacks. According to the research report:
“In 2020, digital assets remained resilient amid the economic meltdown occasioned by the coronavirus pandemic. The value of cryptocurrency began rising from the third quarter of 2020, led by bitcoin in return bolstering the amount of money hackers can rake in. In general, attackers took advantage of the price trend and increasingly spread malware to exploit other people’s computer resources for illegal mining activities.”
Cryptomining hackers are also advancing their act by focusing on anonymous digital assets, like Monero.
In general, they are going for assets that can hide transaction parties and amounts that cannot be linked to previous transactions and are designed for mining on ordinary computers.
Electronics Retailer Newegg now Accepts Dogecoin As Payment
After debuting Bitcoin payments back in 2014, online electronics retailer Newegg added a Dogecoin payment option.
American online electronics retailer Newegg has added Dogecoin (DOGE) as an official payment method amid the ongoing parabolic surge of meme-based cryptocurrency.
Newegg announced Tuesday that the company added the option through the crypto payment platform BitPay.
The firm said that the new feature was introduced in conjunction with Doge Day — a community crypto holiday pushed by DOGE proponents to be celebrated on April 20. According to online reports, Dogecoin advocates apparently hope to see DOGE hit $1 today.
Newegg’s senior brand manager Andrew Choi said that the growing momentum around cryptocurrency is “undeniable.” “The recent surge in Dogecoin value underscores the need to make it easier for customers to make purchases with this popular cryptocurrency,” he noted.
Newegg became one of the first major online shopping stores to accept Bitcoin (BTC) when the company partnered with BitPay back in 2014. Initially debuting the feature in the United States, the firm subsequently expanded the payment option to more than 70 countries.
“We’re committed to making it easy for our customers to shop however works best for them, and that means letting them complete transactions with the payment method that suits them best. To that end, we’re happy to give Dogecoin fans an easy way to shop online for tech,” Choi stated.
Newegg’s move into Dogecoin payments comes amid a catapulting DOGE price rally, with the altcoin gaining more than 480% over the past seven days at the time of writing. On April 19, DOGE market capitalization hit $50 billion for the first time in history, with the token hitting an all-time high of $0.45.
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