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What is Akropolis?

Akropolis is a domain-specific financial protocol dedicated to the needs of the informal economy. It is designed to:

  • enable anybody regardless of geography to quickly set up, operate and grow informal autonomous financial organisations (AFOs), e.g. digital co-ops, guilds, mutuals

  • enable a previously impossible interoperable scalable network between them and external third parties, whereby value can be exchanged freely in a trust-minimised way (e.g. co-invest, lend/borrow, trade).

  • reduce instances of fraud and misuse of funds

What is DeFi? What is your place in DeFi ecosystem?

Decentralized finance (#defi) refers to a group of financial sector-focussed startups that leverages open source software and decentralized networks to transform traditional financial products into trustless and transparent protocols that operate without unnecessary intermediaries. DeFi is by far the most promising area of blockchain application, with a number of high-quality interoperable projects promising the future of transparent, fully auditable, efficient peer-to-peer interactions, based both on existing financial primitives and creating novel ways to generate and exchange value.

We are building an alternative savings infrastructure that can be tested by informal savings groups (or AFOs) in emerging markets now.

What’s the main problem the project solves?

Financial security and access to basic financial services without dependence on fractional reserve-based banking system, and therefore resilient to economic crises.

The protocol is designed to enable scalability of informal member-owned organizations, that have existed for centuries globally and remain active in emerging markets, especially in Africa, parts of Europe, US and Asia. This is envisaged as an alternative to challenged financial institutions mandated with providing pensions/banking/social insurance and a more resilient alternative to traditional banks that rely on fractional reserve banking.

How do you know it is a valid problem with verified demand?

The problem of insolvency of centralised pensions and social security institutions is a well documented one. Our summary of external resources is below:

  • Library of press articles here.

  • Documentary “The Coming Retirement Crisis” by Goldman Sachs’ Raul Pal (our brief video summary is here)

  • Documentary “The Pension Gamble” by the Frontline.

What’s your competitive advantage?

Competitive advantage over other DeFi solutions:

  • validated product-market-fit

  • existing non-speculative target user base

  • clear monetisation model

Competitive advantage over fintech solutions and traditional banking:

  • No bank account required

  • DeFi integrations provide for a continuous above-market* savings rate with perfect liquidity

  • No need for long-term lockups to receive interest - continuous interest payment

  • Resistance to fraud or manipulation

  • Provable solvency - no surprise bankruptcies or not being able to access one’s funds

  • Ability to receive funds even if the organization dissolves or fails

  • Scaling potential to co-operative bank model

  • User incentives to grow the network

  • Transparent, real-time, immutable financial record-keeping for every user – solving fraud and minimizing the misuse of funds through multi-signature fund deployment

  • Easy integration of new financial products due to ethereum interoperability

What does the world look like if Akropolis is a success?

  • Unraidable member-owned “pension funds” vs. a state unilaterally raiding public pension funds, like what happened in Argentina, Poland, Venezuela

  • Provably solvent at all times due to transparent and fully auditable smart-contracts vs. a multi-billion-dollar GE pension scheme that is deemed both “too big to fail” and “impossible to unravel”

  • Source of social insurance and support vs. reliance on an opaque centralised party

What 100x improvement over the status quo do you enable?

Imagine, you are approaching retirement age and are counting on a healthy amount to see you through your latter years? Only to discover that after fees, haircuts and forced reductions, the money you were counting on is not there? Because your country is massively in debt and the public funds have been leveraged to pay other debts of the state. And you are not prepared?

Having an alternative system that renders such outcome an impossibility by design is an ∞x improvement to what is expected to be a status quo for many people on a 10-year timeframe.

What are informal savings groups (ISG)? Why are they important?

Savings groups are member-owned institutions, typically <20 members who save together and take small loans from the common savings pool or invest together and then share profits. Savings Groups are simple, transparent, autonomous and locally run. Members provide their own savings and credit services at negligible cost, while retaining earnings and investment in their own communities.

Savings groups have proven to be one of the most effective, low-cost alternative mechanisms to provide basic financial services for people that have difficulties in receiving those services from traditional financial institutions. Informal savings groups and closely linked to diaspora remittances and are an existing element of most emerging markets economies. They are one of the earliest and most robust surviving forms of a de facto autonomous financial organisation.

What are autonomous financial organisations (AFO)?

Autonomous financial organisations is a term native to the Akropolis protocol used to denote all digital co-ops/guilds, i.e. member-owned organisations that provide financial services such as co-savings and co-investing, access to credit on flexible terms, a basic form of insurance etc. Informal Savings Groups is a real-world form of an AFO.

What services are planned to be available for AFOs?

Savings accounts, co-investment inside the network, access to low-cost easily accessible credit inside the network, social insurance.

Why focus on emerging markets?

  • Real-world use case: mass adoption of cryptocurrencies and blockchain technology will first take place in areas with poorly developed legacy financial infrastructure, where cryptocurrency adds real value and is a superior alternative to currently available options.

  • Weak legacy financial infrastructure: dominance of mobile money (e.g. mPesa) for over a decade; relatively advanced digital financial infrastructure.

  • Multi-billion-dollar total addressable market: Informal savings groups hold hundreds of billions of US$, with remittances between diaspora/immigrant communities reaching US$240 bn YoY.

  • Existing behavioural patterns and product-market fit: Without imposing new behavioural patterns on users who have already been operating like this for years, we help informal savings circle leapfrog to member-owned banks by making them scaleable, fraud-proof, and geography-agnostic using the blockchain technology.

We see informal economy in Africa, esp. Kenya as an excellent market to verify assumptions and get real user feedback that will help the protocol evolve into a tool for developed markets based on our 10-year outlook (failure of centralised pension funds, failure of depositor protection schemes, cash controls, etc.), which if correct will spawn a new wave of digital member-owned financial organisations as safer, more trustworthy alternatives.

Why adopt blockchain technology?

Two of our target networks have already decided that they need to move to a blockchain-first infrastructure from their legacy infrastructure which is now >10 years old. The advantages they see is low OpEx, low cost of remittances, resilience to fraud and manipulation, and ability to scale their businesses.

On a more general note, a stable financial system relies on trust in the state and private sector financial institutions. In most developed markets, that trust has been lost. In our use case, blockchain technology uniquely enables alternative member-owned financial institutions by providing the following:

  • trust-minimised exchange of value between the parties that do not know or trust each other

  • shared immutable on-chain financial accounting prevents fraud and misuse of funds

  • fully transparent and auditable smart contracts ensure provable solvency.

For more details, please see our Wiki FAQ

Please elaborate on your token economy?

MakerDAO and Livepeer as reference models. For more details, please see our Wiki FAQ.

What’s the necessity for token issuing?

A native AKRO token is required to enable fiscal governance of the internal network economy and solve for trust in cases of credit issuance between network members.
Token issuance is required to ensure wide initial distribution of the token.

For more details, please see our Tokenomics Wiki Page.

Why not use stablecoin instead of your token?

Our protocol has an internal economy. Governance of the internal economy requires an internal token. The token staking and governance approach requires a token whose value is connected to the current network and not tied to other projects and networks. As such, the AKRO token is an essential element of the protocol internal economy and cannot be replaced by an external stablecoin.

Our team will continue improving the model through collaboration with the largest blockchain research centre in Europe, University College London, and their token economics research programme, detailed here.


Why is there a need to use blockchain and what does it uniquely enable that wouldn’t otherwise be possible?

A stable financial system relies on trust in the state and private sector financial institutions. In most developed markets, that trust has been lost. Blockchain technology uniquely enables alternative member-owned financial institutions by providing the following:

  • trust-minimised exchange of value between the parties that do not know or trust each other

  • shared immutable on-chain financial accounting prevents fraud and misuse of funds

  • fully transparent and auditable smart contracts ensure provable solvency.

Will you be building your own blockchain?

No, we are not. Designed as a blockchain-agnostic protocol, Akropolis is currently being implemented on Ethereum, the next iteration will be built using Polkadot, with active R&D underway.

What is the risk of your solution being affected by Ethereum scalability issues?

At the protocol level, speed and immediately finality are not as relevant as being able to guarantee fraud-resistant accounting and solve for trust-minimised exchanges of value between remote parties. Therefore, scalability is not a critical dependency on our roadmap.

What are the building blocks of Akropolis protocol?

  1. C2FC

  2. AFO maintenance and Governance Module

  3. Identity Management module

  4. Accounting module

  5. Network Governance module

What is C2FC?

Commitments to Future Cashflows (or C2FC) – a financial primitive that represents a digital right to operate with future cashflow that will arrive in any form to any Ethereum address (now it works in Ethereum, but could be implemented in any blockchain)within a given time frame. Simply put, it looks like a relay: a C2FC issuer must receive payment within this specified period, but those payments are fully or partially forwarded to the C2FC token holder’s address. Therefore, the future cashflow of any individual, company or service takes the form of a measurable digital unit that can be easily exchanged, traded or used as collateral.

What is AFO maintenance and Governance Module?

AFOs work as decentralised autonomous organisations. The governance inside each AFO is different from a protocol governance as only AFO members are able to make decisions thus there is no need for the internal token in every autonomous financial organisation.

AFO maintenance and Governance Module provides decision support for Autonomous Financial Organisations. The core API supports a number of base level commands, like registration of new Autonomous Financial Organisation, making changes to its constitution etc.

What is Identity Management Module (IM)?

IMS is analogous to Ethereum Naming service, which keep the following records:

  • Registry of all users of the protocol and links to user’s external personal data providers, e.g. hash with a document copy or IPFS link

  • List of all created AFOs

  • List of all created AFO members

Do you provide a credit scoring system?

No. We do not centrally store protocol user data or provide scoring and risk assessment within the protocol. Any third-party can access pseudo-anonymised transactions on-chain and assess the risk on their own or use third-party data to assess the risk. Off-chain information may be elected to be shared by AFOs in order to get access to competitively-priced credit from external capital providers. As a result, a third-party may combine various opt-in data sources to create an alternative credit scoring system.

When Ethereum anonymisation and gas-effective zk-snarks solution is created, we will seek to apply it to the protocol. We continue monitoring the ecosystem, e.g. Aztec protocol.