The following is an update to Member of the Ethereum Foundation Marcus AM.
Hello 👋, my name is Marcus and I am a researcher and builder from Guatemala, and a EF MemberAn optimist at heart, I am driven by the desire to leverage social, cultural and technological innovation to build better societies – a conviction I have had since I was very young.
Guatemala: A country with stimulating opportunities
When I was a child, I spent my weekends traveling with my father to the most isolated villages in Guatemala. At the time, he ran a nonprofit organization whose mission was to provide last-minute health care and educational programs. The community we visited most often was the city of Puntarenas.
To get to Puntarenas, we traveled up to three hours by boat through thick mangrove forests to reach a village deep in the jungle. When we first started traveling there, the community of Puntarenas had limited access to clean water, no health or education infrastructure, and minimal economic activity.
Founded during the civil war, the people of Puntarenas sought refuge from the violence and massacres that claimed the lives of over 200,000 innocent civilians throughout the country. For now, I will spare you the harsh realities of U.S. intervention in Latin America (and beyond) during the Cold War, but if you want to learn more about the subject, I highly recommend Schlesinger and Kinzer’s book Bitter fruits.
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.
A few decades later, Puntarenas has become a self-sufficient village, where families have access to education, healthcare, water and energy (provided by solar panels that even power a few computers at the school)! What is happening in Puntarenas reminds us that access to dignified basic services can have a huge impact on a community, even in the most desperate situations.
The story of Puntarenas depicts the reality of Guatemala: a beautiful country, rich in culture, heritage and breathtaking landscapes. At first glance, Guatemala also seems to be a relatively wealthy country; in fact, we have the highest GDP in Central America and, at some point, the the largest number of helicopters per capita worldwide.
Unfortunately, the socio-economic fabric of Guatemala presents a completely different picture. We are a country facing extreme inequalities, born of a violent 36-year civil war and a history of exploitation and corruption. In rural Guatemala, which is mainly indigenous, it is not uncommon to find communities that, like Puntarena in the past, have been deprived of basic services such as running water, energy, housing, health care, education and food. Despite these difficult conditions, the people of these areas are working to create better living conditions for themselves and those around them.
The impact starts at home
One of the biggest challenges in development is the fact that More than 19.6 million people in Guatemala live in deplorable living conditionsIn the most extreme cases, several generations must share a room, where wood stoves pollute the air and where sanitary facilities are a last-minute concern (if they exist at all).
We believe that providing decent housing is essential to building a better future for all. After all, it is in our homes that we spend most of our time, where we learn, where we gather as families, and where our dreams are born.
That’s why a group of long-time friends and I are working on an initiative called Lamina POP. Lamina POP is a patented construction technology that uses common building materials in innovative ways to build low-cost, lightweight, and architecturally sound homes. The technology is simple and can be deployed even in the most remote areas of Guatemala.
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 we build homes for. Collectively, we believe that a home is more than just four walls: it’s an opportunity to offer a renewed sense of optimism and growth.
The results of decent housing are palpable. From improved educational outcomes to reduced environmental impact of housing to improved psychological well-being, we have seen first-hand the incredible engine for development that the Lamina POP system can provide. As we continue to expand, we are excited about the prospect of bringing more innovative solutions to Guatemala and beyond.
Despite our efforts, we have found that one of the biggest barriers to the mass adoption of innovative solutions like Lamina POP is the lack of financial infrastructure and education in disadvantaged communities. Although Lamina POP is 30% cheaper than all other low-cost housing solutions, the people we want to build homes for cannot access low-interest loans to invest in housing for their families.
Most of the financial transactions that take place in these communities take place in the “informal” economy. Payments are made in cash, debts are not recorded, and goods and services are largely outside the control of financial institutions. Sending payments, accessing low-interest loans, establishing a credit history, and tracking business transactions are all but impossible with Guatemala’s current financial infrastructure. The “informal” economy closes the door on ordinary citizens who want to obtain personal loans, business investments, let alone a mortgage.
As a result, many of these individuals rely on predatory lenders (including traditional financial institutions), who often exploit vulnerable populations for their own gain. It is not uncommon in Latin America to find loan sharks who will lend at a monthly interest rate of 20%A crushing debt leaves many people in precarious situations forcing them to lose their property titles, fall into delinquency, or worse, commit suicide.
Can Cryptocurrency Help?
Cryptocurrency promises, among other things, to create new, more equitable economic models that can benefit everyone, not just the rich and powerful. Some see DeFi as an opportunity 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, chances are you’re optimistic about the potential of technology to solve some of these problems. 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 accurate 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 would be an exaggeration to say that DeFi is ready to offer viable new pathways to financial inclusion at scale. We face enormous hurdles in digital and financial literacy, institutional trust, and significant user experience challenges. But despite the current state of the sector, I believe we have everything within reach to create solutions that are tailored to communities like Puntarenas.
My Next Billion Scholarship
I have spent the last few months actively exploring ways to break this barrier to financial empowerment by harnessing the power of Ethereum. My goal is to research a number of viable crypto-based solutions for financial inclusion and access to credit to ultimately enable human flourishing in Guatemala and beyond.
I did some research to determine what monetary legos might be useful in a place like Puntarenas and the rest of Guatemala. In particular, I looked at the barriers to adoption and potential solutions that could be used to unlock peer-to-peer lending for those who lack access to more equitable financial mechanisms.
To date, as part of my research, I have spoken with members of hundreds of crypto projects, including those leading DeFi protocols, DAOs, identity and scaling solutions, as well as other developers, designers, and wallet builders. Additionally, I have had conversations and interviews with leading local projects, government offices, and international NGOs throughout Guatemala and other emerging economies to understand where they might see crypto acting as a catalyst for new means of coordination and equitable financial services.
This research has been incredibly informative and has given me a deeper understanding of the current state of DeFi and the potential of the broader crypto ecosystem in emerging economies.
Next steps
Currently, I am preparing an open source report that will provide a detailed understanding of the current cryptocurrency landscape and offer recommendations on how to best use cryptocurrencies to drive financial inclusion, particularly for emerging countries. I will be publishing the final report by the first week of March (just in time for ETHDenver), so keep an eye out!
In addition to the written report, I will be releasing an audio-visual series that will feature a diverse set of stakeholders. This includes crypto-native thought leaders and creators, those deploying solutions in emerging economies that leverage crypto, and of course the last-mile communities and organizations that would ultimately benefit from this technology.
The report and video series I am creating are primarily intended for cryptocurrency builders who want to better understand the landscape of technical, educational, and social challenges and opportunities that should be considered; as well as impact-focused organizations in emerging countries looking to understand how cryptocurrency can specifically benefit their efforts and initiatives.
To stay informed about the latest research findings by email and contribute to the report, you can subscribe and mine a free NFT on Mirror. Let’s also connect on Twitter!
