The African Digital Asset Foundation has launched an open source platform to establish unified standards for blockchain development in Africa.
The African Digital Assets Framework (ADAF) platform will seek to ensure that the use of blockchain stimulates digitised pan-African economic integration.
Several factors are opening local start-ups to the opportunities blockchain promises including limited financial infrastructure, fragility of some African currencies and raising capital after ideation.
Going forward, more African start-ups' interest could be particularly drawn to the blockchain-backed crowdfunding mechanism known as the initial coin offering (ICO). The ICO model is open and direct but has been widely criticised for a lack of regulation.
Many ICOs broke out in 2017 with claims that start-ups raised over US$15-billion globally in the first half of 2018.
EY's analysis shows that the top ICOs that represented 87% ICO funding in 2017 had high risks of fraud, theft and major problems with the accuracy of representations made by start-ups that sought funding.
By 2018, when the firm did a follow-up study with the same set of start-ups, 86% have gone below their listing price, while 30% have lost much value. Only 29% (25) had working products or prototypes and seven of them accept payment in both traditional fiat currency (dollars) as well as ICO tokens, a decision that reduces the value of the tokens to the holders.
ICOs could benefit African start-ups hugely in their strive to tackle societal issues. The ADAF's platform aims to ensure that proper community-driven standards are instituted to avoid problematic beginnings as African start-ups embrace blockchain-based digital assets and distributed ledger technologies.
"Yes, some of the first standards we will be working with the community on are consumer protection standards for ICOs to make them safer, more inclusive and easier to manage and create," says Marvin Coleby, a co-trustee at the Foundation. "It is a very difficult process, we intend to demystify it and provide legitimacy to existing ICOs."
The Foundation's central research team, which includes advisors and ambassadors like the chairman of the Kenyan Blockchain and AI Task Force, Bitange Ndemo, will provide pan-African research and transnational/cross-border consulting for each of the standards that pass through it.
The framework is similar to Github's distributed and open space for developers to propose and edit code. The community which consists of members like BitPesa and the Botswana Blockchain Association can freely own, share and create information for others to use and operate.
Coleby adds: "One of our main metrics for success is the flow of a standard created/input by the community that will be accepted/considered by government agencies around the continent."