5 ways Web 3.0 is enabling the fight against poverty

Kotani Pay
7 min readJan 9, 2023

Poverty is a big challenge that affects all societies regardless of their geographical location but at different scales. The consequences of poverty affect all people living in it. It’s with this understanding that Web 3.0 challenges this problem by providing solutions to one of the greatest causes of poverty, inequality, and financial inclusion. As the world marks the 35th anniversary of World Day to Overcome Extreme Poverty, let’s have a look at how Web 3.0 is at the forefront of this fight.

Let’s start with the numbers

According to the World Bank, 736 million people across the world live below the poverty line struggling to earn less than $1.90 or less in a day. Out of this, 84% of people living in extreme poverty live in sub-Saharan Africa or South Asia. One of the most concerning groups of people affected by poverty are children who account for half of the world’s poor with 1 out of 5 children experiencing extreme poverty. Studies show that child poverty has devastating consequences such as high school dropout, malnutrition, teenage pregnancy, unemployment, and the likelihood of them ending up as poor adults. Another group of people most affected by poverty is the rural dwellers as studies show that globally, poverty is three times higher in rural areas than in urban cities.

Absolute, relative, and extreme poverty

Poverty is a social exclusion on the basis of failure to meet a particular threshold that is measured on the basis of economic and social indicators. Poverty is recognized as absolute, relative, or extreme.

In 2015, the World bank came up with a globally recognized definition of extreme poverty based on its international poverty line metric that termed those living on less than $1.90 a day as extremely poor and those living on $1.90 to $3.10 as moderately poor.

Absolute poverty is defined as when an individual does not meet the minimum amount of income needed to meet their basic needs such as food, shelter, clothing, and clean water over an extended period of time.

Relative poverty is when an individual lacks the least amount of income required to maintain a normal standard of living in the society they belong to. The word, relative means poverty in comparison to the societal standards that are considered normal or ordinary. These groups of people cannot afford anything beyond the basic necessities.

Web 3.0 eradicating poverty

Web 3.0 gives a new approach to corporate governance, value creation, decentralized data, and AI-driven services. Blockchain technology sits at the core of decentralized technology and with it comes features such as transparency, immutability, autonomy, integrity, speed, and individual control of data. This technology use case has expanded to address social challenges such as financial exclusion, poverty, and inequality and is now being increasingly used by organizations to tap into digital cash and the opportunities that come with it.

One of the biggest causes of poverty that Web 3.0 speaks to is financial inclusion. According to the Global Findex report 2021, 1.4 billion people in the world still remain unbanked. By leveraging blockchain technology, financially excluded groups can access financial services that contribute to poverty eradication.

Here is the challenge, despite the many benefits that come with the technology, blockchain technology has been predominantly accessed by smartphone users. This locks out many Africans who have no access to the internet and can neither afford it. Then again, more than 600 million Africans have mobile money wallets. Leveraging on this knowledge, Kotani Pay uses the familiar interface -USSD, to connect both smartphone users and feature phone users to blockchain technology and an off-ramping solution to their mobile money wallet.

Here are some 5 use cases of Web 3.0 eradicating poverty in Africa.

  1. Crypto Philanthropy

This is the donation of digital assets such as crypto, and NFT to charities, foundations, or protocols receiving donations with a bid to fight against poverty. These crypto donations are channeled toward development projects, specific causes, and others in providing Universal basic income to people living in absolute poverty.

UBI is a great source of poverty alleviation strategy as it provides people living in absolute poverty an income to meet their basic needs, invest or improve their living conditions. UBI has also been linked to the physical and psychological well-being of the recipients.

At Kotani Pay, we work with Impact Market, a human empowerment protocol to distribute UBIs to refugees, communities, and special groups in Africa. The user journey starts with Impact Market which identifies the communities that require UBI. Once identified, Kotani Pay does the KYC of the community. Once cleared and verified, Impact Market distributes the digital assets in form of stablecoins to the beneficiaries’ Kotani Pay wallet. Using our USSD code, they can easily access their funds on their Kotani Pay account and withdraw directly to their mobile money wallet.

2. Decentralized Finance (DeFi)

These are financial services and products such as credit, savings, lending, and investing that are accessible to anyone in a blockchain database. Financial transactions using DeFi are peer-to-peer and executed by a smart contract. By removing intermediaries and the central authority, DeFi is accessible to anyone, anytime, and anywhere in the world. Users have full control of their digital assets to transfer, withdraw or transact without going through a third party. One of the key benefits of DeFi is that it is inclusive. Anyone can access its service without bias. Users are known by their wallet address and not their gender or their geographical location. DeFi credits are given to users based on their ability to post collateral and not credit score.

Small and Medium enterprises (SMEs) such as Cinch Markets, Pezesha, and Kwanza Tukule can access DeFi loans and redistribute them to their users with ease. Through DeFi loans, SMEs tap into the global liquidity pool provided by DeFi.

In the Cinch Markets employer-based lending use case that was done by Mercy Corps Venture together with Celo, Moolah Market, and Kotani Pay, farmers using feature phones and smartphones were able to access DeFi credit directly to their mobile money wallets. To access these DeFi credits, Cinch Markets posted collateral in the Moolah Market, and in response, they received their DeFi credit in form of digital assets. Kotani Pay through the Celo protocol created blockchain wallet addresses for all beneficiaries to whom the digital assets were distributed. The beneficiaries could easily dial the Kotani Pay USSD code and withdraw their funds to their mobile money wallets in their local currency.

3. Climate action

Families living in poverty suffer more from the consequences of environmental destruction. Due to their exposure and vulnerability, those living in poverty are unable to cope with the effects of climate change and its extremes such as prolonged drought, hurricanes, floods, and landslides. These further increase economical inequality throwing more people deeper into poverty. Climate change also threatens food security with food supplies becoming scarce and unaffordable.

Web 3.0 has found a unique, affordable, borderless approach to contribute to climate action through protocols such as Treejer. The blockchain-based reforestation platform provides incentives for businesses and individuals to stop climate change with the help of local communities. What makes Treejer stand out as a climate action solution is the use of smart contracts to execute transactions and its open and transparent approach for donors. These farmers who lived in underdeveloped countries are paid in digital assets and Kotani Pay enables them to access these funds on their feature phones and withdraw directly to their mobile money wallet for use.

4. Gig work

Unemployment is one of the factors that lead people to fall into poverty. Lack of income makes it hard for people to access basic necessities. The situation is further aggravated when individuals lack access to public transportation, low-quality housing, and underfunded schools which eventually reduces the chances of individuals finding employment. Unemployment is caused by a reduced labor force, workforce fluctuations, and technological change.

The gig economy has changed that by allowing more people to work remotely anywhere in the world. A gig worker has the flexibility to work multiple jobs on a contract basis. Gig work has increased employment by increasing job opportunities. A big challenge faced by the gig economy is the high transaction fees that consume a chunk of the gig workers’ earnings. Web 3.0 is able to solve this challenge as seen with the digital microwork study done by Mercy Corps Venture, Kotani Pay, Appen, and Celo. The study discovered that micro workers who earned in digital assets and were able to cash out their earnings using Kotani Pay were able to save 93% of their transaction fees.

5. Financial access for all

Financial inclusion faces a lot of barriers such as the high cost of financial services and access to these financial services. This can be problematic for people living in poverty as accessing these services becomes costly for them when they can barely afford the basic necessities.

The Kotani Pay wallet is a unique blockchain wallet address that can be registered using a user-friendly USSD code with either a feature phone or smartphone. The Kotani Pay wallet address acts like a bank account where users can store their digital assets, transact and invest conveniently. Users are not charged for storing their funds in their wallets. By tapping into these financial services that come with Kotani Pay, users can access alternative ways to improve their living standards.

The fight against poverty is not one way and it requires a multi-sectoral approach from all industries. As more people innovate and build on Web 3.0, it is important for developers to take the challenge and find innovative ways their products can eradicate poverty.

At Kotani Pay, we are committed to ensuring financial inclusion for all by linking your clients to accessible DeFi services. Let’s talk more.



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