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. 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 <u>streamline and strengthen the ISA deployment and recollection process, we suggest building ISA mechanisms on-chain and tokenizing them. </u>
Below if the theory of change of the proposals:
Our objective with this proposal is to:
- Fully understand the ISA value chain and deployment in emerging markets and assess its efficiency
- Explore the latest development in the on-chain realm to best build tokenized ISAs
- Kindly note this proposal is the related to the work of our proposed PoC
Our unique reason for doing it this way is:
- To ensure we capture as many on-the-ground realities around ISA deployment
- Understand the current and forecasted chain developments
- Build the best-suited ISA tokenization workplan
The initial workflow can also be found here.
Our audience is:
- Education providers equipping talents with 21st-century skills in emerging markets
- Income Share Agreement providers targeting emerging markets
- Talents using/opting/signing up for income share agreements
- Players trying to enable the tokenization of real-world assets
- Developers
The impact will be:
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Research on ISA value chain in emerging markets
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Key research questions
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Who are the ISA providers in emerging markets (EM)?
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Who are ISA providers in emerging markets financed by?
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What are the key characteristics of ISA provider recipients?
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What education providers do the ISA signatories attend?
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What type of jobs do they secure after their education?
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Which emerging market geographies are most familiar with income share agreement?
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What are the current strengths, weaknesses, and opportunities of ISA models currently being operated on EMs?
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What are the most critical assumptions linked to the deployment of ISAs in EM
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What type of underwriting methods are used for ISAs?
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Research on tokenization of ISAs
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Key research questions
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What is the optimal tokenization work flow?
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What is the best technical implementation?
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What are the legal obstacles?
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Who are the best players to work with on the various aspects of ISA tokenization?
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What are the best mechanisms to scale the solution (e.g. charitable stake-pools, etc)?
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What governance functions are required and what infrastructure is required to fulfill them? For example: what voting mechanisms should be used to accept new ISA, EP or talent stakeholders?
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What repayment model could be adopted? (i.e. underwriting, tracking of talent remuneration, links with mobile money and banks, etc)
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How can users connect their Atala PRISM identity wallets with Cardano wallets? What are the best technical standards linked to token creation in the educational sector?
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Underwriting and risk assessment of an ISA? At what stage does this happen and is it integrated into the token?
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Example of assumptions to be validated:
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An Atala PRISM credential can have a token binded to it and vice versa.
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Users will use a PRISM credential to interact with the parties (smart contracts and issuers/verifiers) in the Seedstars ecosystem.
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Seedstars web/mobile app will handle token flows.
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Users will call Cardano mobile wallet from Seedstars web/mobile app and Proofspace mobile app through the WalletConnect-like standard adopted for Cardano wallets.
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ProofSpace App will handle verifiable credential flows and enable parties to issue both tokens and creds to the corresponding apps(wallets)
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In addition to SSI verification, the token ownership verification will take place.
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Seedstars and ProofSpace may call each other through deep linking to build a complex flow consisting of token transactions and VCs interactions, that is experienced as a seamless flow by the end user.
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Research on the creation of a new asset class
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Key research questions
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What are the main blockers for traditional debt and equity investors? What opportunities are there to lift roadblocks?
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What are the main blockers for crypto investors? What opportunities are there to lift roadblocks?
Synergy with other proposals
- this proposal operates in complementarity with the proposal on the proof of concept of the tokenization of income share agreements and the creation of a CIP (Cardano Improvement Proposal)
- 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
The proposal also includes other key areas related to the challenge setting such as:
- DeFi - Borrow & lending mechanism for students
- Marketplaces . for investors and students
- Nation governance systems - New governance systems for nation-states that provide new education finance practices
This project will benefit the Cardano ecosystem:
- Creation of new technical standards linked to education-linked tokens (https://cips.cardano.org/).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 attract 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:
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Ensuring the next generation of well-trained talents in 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.
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Education providers in emerging markets will interact with on-chain financing mechanisms and we assume it will increase the adoption of crypto in legacy systems
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Testing and proving the model will de-risk the adoption of the model for crypto investors thereby unlocking a new asset class for them
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Education courses for students about blockchain technology and Cardano will support the next gen of developers and entrepreneurs
What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?
Risk: Education providers, income share agreement providers and crypto investors do not free up time for interviews with us.
Mitigation: Seedstars is already in touch with a considerable amount of these stakeholders through previous work and can leverage its network across emerging markets (250+ stakeholders on CRM) to get warm introductions.
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: 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: Given the level of prior expertise invested into the proposal concept, the risk of us discovering a set of challenges that entirely block the project are low. 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. By discovering the challenges and adapting our approach, we increase the likelihood of success in the implementation.
Risk: Approaching the challenge from a theoretical angle and facing very practical challenges that could hinder the implementation.
Mitigation: We are committed to having as many preliminary discussions with players already operating on the ground in order to try and frame the practicalities that need to be taken into account.