The following is an update of Member of the Ethereum Foundation AM frame.
Hello 👋, my name is Marcus and I am a researcher and builder from Guatemala, and a EF Scholar. An optimist at heart, I am motivated to take advantage of social, cultural and technological innovation to build better societies, a conviction that I have had since I was very young.
Guatemala: a country of challenging opportunities
As a child, I would spend weekends accompanying my father to visit many of the most desolate towns in Guatemala. At the time, he was running a non-profit organization whose mission was to provide last-mile medical care and establish educational programs. The community that we visited the most was the town of Puntarenas.
To get to Puntarenas, we would travel up to three hours by boat through dense mangrove forests to reach a town deep in the jungle. When we began visiting, the Puntarenas community had limited access to clean water, no educational or healthcare infrastructure, and minimal economic activity.
Established during the civil war, the people of Puntarenas sought refuge from the violence and massacres that claimed the lives of more than 200,000 innocent civilians throughout the country. For now, I’ll spare you the harsh reality of US intervention in Latin America (and beyond) during the Cold War, but if you’re interested in learning more on the subject, I highly recommend Schlesinger and Kinzer’s book. bitter fruit.
Over the years, we have worked with the Puntarenas community to conduct medical and dental campaigns, establish a health care clinic, build housing, and raise funds for infrastructure investments, including a community-run school.
Fast forward a couple of decades and Puntarenas is now a self-sufficient town, where families have access to education, healthcare, water, and energy (delivered by solar panels that even power some computers at school). What is happening in Puntarenas is a reminder that access to decent basic services can have a great impact on a community, even in the most dire situations.
The history of Puntarenas describes the reality of Guatemala: a beautiful country, full of culture, rich heritage and stunning landscapes. At first glance, Guatemala also appears to be a relatively wealthy country; in fact, we have the highest GDP in Central America and, in a moment, the largest number of helicopters per capita globally.
Unfortunately, Guatemala’s socioeconomic fabric paints a completely different picture. We are a country facing extreme inequality, sparked by a 36-year violent civil war and a history of exploitation and corruption. Throughout the rural and mainly indigenous regions of Guatemala, it is not uncommon to find communities that, like Puntarena once, have been left without basic services such as running water, energy, housing, medical attention, education and food. Despite these challenging conditions, people in these regions strive to create better livelihoods for themselves and those around them.
The impact starts at home
One of the biggest development challenges is the fact that more than 19.6 million people in Guatemala live in desolate conditions. In the most extreme cases, multiple generations have to share a single room, where open-fire stoves pollute the air and where sanitation is an afterthought (if it even exists at all).
We believe that providing decent housing is the basis for building a better future for all. After all, our homes are where we spend most of our time, where we learn, where our families come together, and where dreams are born.
That’s why a group of lifelong friends and I are working on an initiative called POP sheet. POP Lamina is a patented building technology that uses commonly found building materials in innovative ways to build architecturally sound, lightweight, affordable homes. The technology is simple and can be implemented even in the most remote areas of Guatemala.
By working with our partners, including Habitat for Humanity, the University of Cambridge and Stanford, the Lamina POP system is dramatically improving the well-being of those for whom we build homes. Collectively, we believe that a home is much more than just four walls – it’s the opportunity to provide a renewed sense of optimism and growth.
The results of decent housing are tangible. From improving educational outcomes, to reducing the environmental impact of housing, to improving psychological well-being, we have seen what an incredible driver of development the Lamina POP system can provide. As we continue to develop, we are excited to offer more innovation-based solutions throughout Guatemala and beyond.
Despite our efforts, we have found that one of the key barriers to mass adoption of innovative solutions like Lamina POP’s is a lack of financial infrastructure and education in underserved communities. Although the Lamina POP solution is 30% cheaper than any other leading low cost housing alternative, the people we intend to build homes for cannot access low interest rate loans to invest in a home for their families.
Many of the financial transactions that take place in these communities occur in the ‘informal’ economy. Payments are made in cash, debts are not recorded, and goods and services remain out of the reach of financial institutions. Sending payments, accessing low-interest rate loans, building a credit history, and tracking trades become nearly impossible with Guatemala’s current financial infrastructure. Operating in the ‘grayal’ economy keeps the door closed for ordinary people to take advantage of personal loans, business investments, let alone a mortgage.
As a result, many of these people are dependent on predatory lenders (including traditional financial institutions), which often exploit vulnerable populations for their own gain. It is not uncommon throughout Latin America to find loan sharks who will lend at a monthly interest rate of 20%. crippling debt leaves many in precarious situations forcing them to lose their property titles, to commit crime or, even worse, to take their own lives.
Can cryptocurrencies help?
Among many things, the promise of cryptocurrencies is to create new and more equitable economic models that can benefit everyone, not just the rich and powerful. Some see the promise of DeFi as the ability to provide financial services to those who may not have access to traditional financial instruments in emerging economies around the world, including some of the world’s most disadvantaged communities.
If you’re reading this, you’re probably optimistic about the potential for technology to address some of these issues. Maybe that means decentralized networks that fundamentally revolutionize the way we interact with ourselves, with each other and with systems of power. Or maybe it just means apps that use new, more precise types of digital information to assess someone’s creditworthiness so they can get a decent interest rate on a small loan. I think the reality will be somewhere in between.
In its current form, it is a stretch to say that DeFi is poised to provide viable new pathways to financial inclusion at scale. We face enormous barriers to digital and financial literacy, institutional trust, and substantial challenges on the user experience front. But despite the state the industry is currently in, I believe that we have everything in our power to build solutions that suit communities like Puntarenas.
My next billion scholarship
I have spent the last few months actively exploring ways to break this financial empowerment barrier by leveraging the power of Ethereum. My goal is to investigate a series of viable solutions powered by cryptographic technologies for financial inclusion and access to credit to ultimately enable human flourishing in Guatemala and beyond.
I have been researching what legos of money could be useful in a place like Puntarenas and in the rest of Guatemala. In particular, I have been exploring the barriers to adoption and potential solutions that could be used to unlock peer-to-peer lending for those without access to more equitable financial mechanisms.
To date, as part of my research, I have spoken with members of hundreds of crypto projects, including major DeFi protocols, DAOs, identity and scaling solutions, and other leading developers, designers, and wallet creators. In addition, I have had conversations and interviews with leading local projects, government offices, and international NGOs in Guatemala and other emerging economies to understand where they can see cryptocurrency act as a catalyst for new means of coordination and equitable financial services.
This research has been incredibly insightful and has allowed me to better understand the current state of DeFi and the broader potential of the crypto ecosystem in emerging economies.
Next steps
I am currently preparing an open source report that will provide a detailed understanding of the current crypto landscape and offer recommendations on how to best use cryptocurrencies to unlock greater financial inclusion, particularly for those in emerging economies. I’ll post the final report in the first week of March (just in time for ETHDenver), so stay tuned!
In addition to the written report, I will be publishing an audiovisual series that will engage a diverse set of stakeholders. This includes the thought leaders and native builders of cryptocurrency, those implementing solutions in emerging economies that leverage cryptocurrency, and of course the last-mile communities and organizations that would ultimately benefit from this technology.
The series of white papers and videos I’m creating is primarily aimed at crypto developers who want to better understand the landscape of technical, educational, and societal challenges and opportunities that need to be considered; as well as impact-driven organizations in emerging countries seeking to understand how cryptocurrencies can specifically benefit their efforts and initiatives.
To stay up to date on the latest research findings via email and contribute to the report, you can subscribe and mint a free NFT on Mirror. Let’s also connect on Twitter!
