A lot of efforts have been put into ensuring that financial transactions are more stable across the globe. Africa is not left out as a means to ensure that cross-border transactions are faster, easier and cheaper. This makes cryptocurrency an attractive option for financial transactions in Africa. With a vision for rebuilding financial services across the globe, Wanchain aims to connect and exchange valuable assets between blockchains. The end goal of Wanchain is to seamlessly blend other blockchains and enable the interchange of assets. How exactly can Wanchain transform Africa’s financial landscape?
Although the Wanchain mainnet was launched in January 2018, it had quite an impressive background of work to it. Wanchain was created by Chinese firm Wanglu Tech, a firm founded by Jack Lu. Wanchain is a fork of the ethereum code, however, it is not a fork or the blockchain. In 2017, Wanchain joined the Blockchain Interoperability Alliance (IOA) with the sole aim of promoting interconnectivity among individual blockchain networks. Wanchain aims to be the digitized version of a traditional bank for blockchain assets. Considering the fact that the crypto space is filled with a lot of digital coins and tokens there isn't an efficient solution to enable the decentralised exchange between these tokens. Wanchain aims to provide this solution.
The African Financial Landscape
When we look at the continent of Africa, we see a financial system that adequately suits cryptocurrency. Financial inclusion is largely lacking and cryptocurrency aims to provide financial inclusion, banking the unbanked. There is an increase in African merchants utilising cryptocurrency, an indication of the financial gap in the continent. The growth in the use of cryptocurrency is due to several factors including monetary crisis, expensive payments and inflation.
In 2017, Nigerians in diaspora remitted a total of $22 billion back home. This was the highest amount remitted to sub-Saharan Africa according to the World Bank Migration and Development Brief. For many Africans in the diaspora, the cost of sending money into Africa through banks and wire services can be such a chore. Transaction fees are incredibly high usually in the range of at least 10% while intra-country payments within African costs even more and can be as high as 17 per cent. This high cost makes cryptocurrency a great choice. In addition, most African countries are not listed on international payment platforms, so cryptocurrency comes to the rescue.
High Banking Cost
Cryptocurrency is making headway in Africa where bank charges can be incredibly high for moving large amounts. There are bank charges on deposits and withdrawal and transactions on the Automated Teller Machine (ATM) isn't spared. Cryptocurrency is already gaining rave in countries such as South Africa, Ghana, Rwanda, Uganda and Nigeria among others.
Africa has the highest inflation rate in the world. Zimbabwe, a country in Southern Africa has an inflation rate of 786%, Sudan has a rate of 81.6% while South Sudan Has a rate of 40.4%. These inflations are as a result of terrible monetary policies, civil war or unrest and sometimes heavy reliance on importation. Africa is not alone in battling inflation as Venezuela has a hyperinflation rate of 2,296%. The country's currency is almost useless and it's citizens now rely on cryptocurrency. The country has its own cryptocurrency called Petro hinged on its natural resources, crude oil.
While it is true that Africa battles numerous financial crises, it is beginning to warm up to cryptocurrency. Countries such as South Africa, Nigeria, Kenya, Ghana, Botswana, Zimbabwe, Morroco, and Uganda are topping the cryptocurrency charts.
Wanchain's Decentralized Solutions
Wanchain provides more than a platform to transfer assets between blockchains. It also has numerous use cases that can be powered with its privacy protocols, smart contracts and the Wancoin (WAN) token. At its core, Wanchain functions as an independent blockchain that connects the accounts of other independent chains to create a network through which digital assets can be exchanged. While it is true that Wanchain is a fork of the Ethereum code, its token WAN isn't an ERC20-based token.
Wanchain enables cross-chain communication, a protocol which enables the transfer of data from Wanchain to other blockchains. The cross-chain communication protocol utilises smart contracts to enable the transfer of exchange assets between Wanchain and the other chains. The cross-chain communication is enabled using three modules. The registration module which records the chain from which a transaction is coming from and the transferred asset. There is also the cross-chain transaction data transmission module which ensures that the legal transaction between the validator node and the original chain is a success or not. Finally, the transaction status query module just monitors the status of transactions on the network.
Integrating Wanchain into the African financial framework
Since Wanchain aims to become the digital blockchain bank, it will enable the ease of inter-country transactions in Africa. Usually transferring funds within the continent costs more than sending funds outside the continent. Wanchain will enable users to send funds from blockchain to another at a reduced cost. We can deduce the benefit of Wanchain to the African financial infrastructure to include;
- Cheaper transaction rates
- Increase in transaction speed and volume
- Anonymity during fund transfer
- The ability to accommodate multiple parties in a transaction
- Safe and secured transactions as the Wanchain "Locked Account Generation Scheme" enables the parties involved to hold keys broken into smaller parts to execute the transactions.
- Funds are safe during transactions thanks to "the locked chain generation scheme" which ensures that assets of the original chain are locked during the transaction process.
The African crypto space is still growing and its financial infrastructure needs the help of more crypto-based solutions. An integration of Wanchain to the intra-country trade system will do the continent a whole world of good. Countries with less than stable monetary systems can utilise WAN token in their transactions and cross comments can be made with the token as well. As more solutions are created, the financial situation of Africa will begin to take shape.