Please describe your proposed solution.
Contextual background:
- <u>Seedstars</u> is very active with entrepreneurs’ education and collaborates with institutions like 01Edu, We Think Code_ and others to open 5 Seedstars Academies, tech entrepreneurial education schools, in the next 3 years reaching 2500+ talents. The first Academy was launched in South Africa in 2022 followed in September by one in the Ivory Coast and India in 2023. Our goal is to unlock entrepreneurial talent equipped with adequate tech skills. The talents will also acquire blockchain technology and development skills.
- <u>Problem</u>: Tertiary Education in Emerging Markets does not Match the 21st Century Job Market, and access to quality education - meaning education leading to decently paying jobs - caters to those who have the financial means to attend private institutions in Africa that is only 8% of the youth population. Education financing options are limited for talents and investors see educational debt as a non-attractive asset class
- <u>Solution</u>: We propose to unlock access to education financing through Income Share Agreements (ISA). With an ISA, a talent agrees to pay for their college education, or a portion of their education, by making pre-determined payments after graduation based on a percentage of their income. Our ISAs will go towards talents attending transformative entrepreneurial educational journeys and acquiring 21st-century skills. In order to streamline and strengthen the ISA deployment and recollection process, we suggest building ISA mechanisms on-chain and tokenizing them.
Below is the theory of change of the proposals:
Our objective is to:
- Build on the learnings of our preliminary use-case testing proposal to raise to launch a PoC and prepare for the scaling up of it.
- PoC of tokenizing income share agreements that enables us to provide talents on emerging markets with access to 21st-century skills tertiary education thereby unlocking access to economic empowerment (decent-paying jobs on the formal market).
- Scaling of the PoC through an ICO.
Our unique reason for doing it this way is:
- To fast-track the adoption of ISAs on emerging markets
- Understanding of current and prospective trends
- Adoption of best practices from pre-existing players
- Push for on-chain to be the cornerstone of ISA adoption on emerging markets
- Transparency of the talent selection and ISA deployment system
- Automation of repayments
- Verifiable identity for all key stakeholders in the transaction (talents, ISA providers, education providers) enables for strong quality control on the quality of the education being financed.
- Use of Self-Sovereign Identity for:
- Increased stakeholder privacy
- Improved stakeholder satisfaction by giving them ownership of useful and portable credentials.
- Increased capacity to create a scalable ISA ecosystem with consistent governance and data standards.
- Enhanced efficiency with interoperation of verifiable credentials, tokens, and smart contracts for fulfilling ISA operations.
- Creation of a new impact-related asset class
The initial workflow can also be found here.
Our audience is:
- Talents at the tertiary education level in emerging markets
- Education providers in emerging markets
- Income Share Agreement providers are ready to deploy funds to emerging markets
- Investors (legacy and crypto) targeting impact-linked return on emerging markets
Synergy with other proposals
- This proposal is the continuation of the research proposal Tokenization of Income Share - Use cases presented under Fund 9 as well.
- And operates in complementarity with a CIP proposal also submitted under Fund 9.
- Seedstars is a large organization composed of more than 80 team members. It is to our understanding that other teams are submitting proposals unrelated to the activities of our team. For more information, you can visit the IdeaScale handle seedstars.
Additional Ressources
Please describe how your proposed solution will address the Challenge that you have submitted it in.
The proposed solution addresses the challenge in the following ways:
- The overall question to be addressed by the challenge is: What dapps, products and integrations can be implemented to bring impactful use cases to the Cardano ecosystem that help drive more adoption?
- One of the areas of focus of the challenge is: the tokenization of real-world assets
- The project is highly relevant to the key metrics for the challenge: Number of products tokenized as a native asset, Number of people using physical solutions
This project will benefit the Cardano ecosystem because:
- Goodwill and positive associations to Cardano as a technology as it will be seen as a technology that can facilitate real-world positive projects as opposed to being a vehicle for speculation.
- Through charity staking pools, a successful donation platform that increases willingness to donate in full transparency, traceability and cost-effectiveness. This has the potential of increasing the adoption of Cardano in new communities and hence attracts positive media attention, developers, and researchers to the ecosystem.
- It can draw the attention of public, private, and crypto organizations who seek better ways to transfer money to people in countries with little access to quality tertiary education.
- Building bottom-up incentives for Cardano adoption. All recipients will need to have an ADA wallet to receive their rewards. As the Seedstars Academy scales up, broad-based adoption will follow naturally.
The relevance of the project lies in the fact that quality Dapps, products, and integrations will increase the utility & adoption of Cardano:
- Ensuring the next generation of well-trained talents on emerging markets have interacted with Cardano on matters as important as their education and first salary will increase the adoption of Cardano amongst well-trained working professionals.
- Education providers on emerging markets will interact with on-chain financing mechanisms and we assume it will increase the adoption of crypto in legacy systems
- Testing and proving the model will derisk the adoption of the model for crypto investors thereby unlocking a new asset class for them
What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?
Risk: Income Share Agreements do not gain traction as a viable education financing solution on emerging markets where the solution is not widespread yet.
Mitigation: Seedstars will market the initial ISA in controlled environments - Seedstars Academies - where it is taking part in structuring in the educational framework.
Risk: New actors with the ability to add value to the project arise between the research and implementation phase and slip out of our radar.
Mitigation: installation of web alerts based on keywords.
Risk: One of the project objectives is to increase the adoption of Cardano. The adoption might be slowed down by the fact that providing DIDs to institutions (education providers, incomes share agreement providers, etc) will require institutional approvals that are lengthy to obtain.
Mitigation: During the obtention phase the players will already be familiarized with Cardano thereby increasing the adoption by their legacy stakeholders (boards, etc) upon reception of the approval to trigger their dID.
Risk: Realize that the ecosystem is not mature enough.
Mitigation: Build a knowledge base open source for actors who will kick in as the market matures.
Risk: As with every R&D project there is a risk that technical, design, business, regulatory, operational or other challenges will be discovered which may hinder or block part of the assumed approach.
Mitigation: The risk of discovering challenges that require us to adapt are approach is high, and discovering those challenges is part of the value proposition of the “research” phase (linked proposal). By discovering the challenges and adapting our approach, we increase the likelihood of success in the PoC.