Roadmap to Zim Adoption of Dai and DAIHard
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# 1. Introduction

### 1.1. Zimbabwe Needs Sound, Bankable Currency

The Zimbabwean government has perhaps the most irresponsible monetary policies in the world today.

By November 2008, the inflation rate had reached an unbelievable 79,600,000,000%. Then, between 2008 and 2016, the government simply gave up currency printing encouraged the use of USD. Many locals see this "dollarized" period as a rare high point of economic stability. Then in 2016 a "bond note" was introduced, pegged to USD (at first). By January 2019, inflation had started again, with the rate of USD to bond notes reaching 1:3. Today, it hovers between 12 and 17, with unpredictable swings in value.

Restaurants must routinely print new menus with updated prices to respond to the inflation, and daily there is a scramble to reach out and get a good idea of what the "rate of the day" is, simply to conduct normal business.

It is uncontroversial common knowledge among the locals that the bond note, like its predecessors, is headed for a collapse of value, at which point the government will once again introduce a new currency, and the cycle will repeat, with another batch of useless paper filling the cupboards of whoever was holding them last.

### 1.2. USD: Sound, but Illegal and Not Bankable

Currently, the only way a local can protect his wealth is to obtain USD or ZAR and physically hold it, perhaps under a mattress or overseas (I'll refer to USD and ZAR as "hard currencies"). But the government has declared such use of foreign currency illegal, meaning that to do this one must go to the streets and engage in the black market of currency trade, a task further complicated by the fact that exchange rates change daily. And while many businesses accept USD with varying levels of subtlety, this too is illegal, and comes with an incredible threat of a 10 year prison sentence (a threat not yet used, but extremely daunting nonetheless).

Nevertheless, hard currencies are still widely available. Businesses generally accept it, people use it to save, and the black market of currency exchange on the street has resisted all attempts from the government to push it down.

If a Zimbabwean obtains USD or ZAR, they are able to protect their wealth and save. But even then, this wealth cannot be spent digitally in any meaningful sense. Deposits into banks with hard currency is possible, but withdrawing is completely infeasible: one can only withdraw in the local currency (bond notes, for now), and only at extremely low limits (ZW$50 per day, currently worth ~US$3) after waiting in line for hours.

Any business larger than a street-side stall relies heavily on digital money services, such as transfers and loans. Thus, while a business might happily transact in USD and use it to store wealth, they are still reliant on bond notes to pay suppliers and employees, or to take out loans.

### 1.3. Dai: A Stable, Incorruptible, Unblockable Banking System

Cryptocurrency has already demonstrated many groundbreaking characteristics. The relevant ones here are that it is unstoppable, borderless, unhackable, and immune to control, corruption or inflation. However, most cryptocurrencies are also extremely volatile, which makes crypto an unattractive alternative to someone trying to exit a failing economy: you trade one kind of uncertainty for another kind, and you still can't tell how much your money will be worth in a day, month, or year.

Dai inherits the benefits above but factors out the volatility. Using some economic mechanisms and Ethereum smart contracts, the value of 1 Dai is guaranteed to trend closely to $1 USD. For over a year now, this ambitious promise has been fulfilled, with the value of Dai staying firmly between US $0.95 and $1.04 since February 2018. Practically speaking 1 Dai is simply equal to $1 USD.

Hardcore crypto zealots might bristle at calling Dai a "banking system", as banks have long been a sworn enemy of crypto ever since the origins of Bitcoin. But from a marketing and user education perspective, the payoff is immense. Someone unfamiliar or apathetic to crypto can receive $10 (10 Dai) to a wallet, and in a week or a year it will still be worth $10. This can be honestly marketed as simply "a new kind of banking system, that no one can stop you from using". The usual volatility discussion--one that is fraught with complication and monetary theory--is entirely skipped as irrelevant and unnecessary.

When I explain Dai to locals, I'm sometimes asked: how do I join?

### 1.4. DAIHard: An Unstoppable Gateway To and From Dai

Briefly, there was a traditional (centralized) crypto exchange in Zimbabwe, which one could use to buy Bitcoin, which could then be traded for Dai; and the reverse could be done to exit Dai and get local currency. However, the Zimbabwean government shut the exchange down before too long, as it threatened their exclusive control over currency flow in and out of the country.

DAIHard is gateway between Dai and local currency, specifically designed to survive and thrive in such hostile regulatory environments. It relies on no company or central server to operate, and as such, like cryptocurrency itself, there is no point to which a hostile government can apply pressure. You can read more about how this achieved [here](https://blokt.com/news/daihard-the-unkillable-ethereum-based-fiat-to-crypto-dex-announces-its-open-beta-on-mainnet).

With DAIHard available, Dai as a banking system gains an additional benefit: the guaranteed option of exit. This is an absolutely crucial guarantee for Dai to gain any traction in Zimbabwe, where Zimbabweans expect digital currency to be difficult or impossible to turn into hard cash.

# 2. The Roadmap

There is nothing in Zimbabwe that can come close to offering such a combination of benefits, which in the first world are taken for granted: a user can deposit cash into Dai, send it wherever they like, keep it in for a day or a year, and withdraw at any time without losing any value aside from transfer and money-changer fees.

But there are still barriers to this new economy. DAIHard is a resilient exchange, but it's not easy to use, and requires Dai as a deposit even when buying Dai. And while Dai's UX is a great step forward in crypto, there are differences between it and a bank account that seem confusing at first.

Then there's the network effect: no one is interested in joining an economy that no one else is yet using. It's not enough to evangelize cryptocurrencies: if that's all it took, the whole world would be using crypto. So how do we move from where we are today, to the beautiful vision of nation-wide adoption of Dai?

First, we expose the value of Dai, directly and clearly, in a way that solves a real need of people on the ground. By marketing it as a service provided by "agents", we can avoid the need of educating the user on how cryptocurrency or Dai works.

After demonstrating its practicality via services, we target a community in Zimbabwe and push adoption and use of Dai directly, via seminars and Dai giveaways.

Third, we provide an unblockable portal of commerce between Zimbabwe and South Africa, a market that's already huge but also tightly constrained by currency control, forcing Zimbabweans to physically drive over the border with bundles of foreign cash.

### 2.1: Agents: Ambassadors to the New Banking System

We start by setting up "agents" in some of the major cities in Zimbabwe: Bulawayo, Harare, Mutare, Masvingo, and Victoria Falls. These agents provide various bank-like services to anyone interested. Unless the customer asks, they won't need to know anything about Dai or cryptocurrency.

##### 2.1.1: Agent Services

Each of these services addresses a significant failure of the current Zimbabwean banking system to address their customers' needs, utilizing Dai to offer a better alternative without limits and with lower fees. Because Dai itself is cheap and easy to use, the agents can charge a small commission and still remain extremely competitive.

**Money Movement Within Zimbabwe**

If a local wants to send money to a relative in another town, currently they have two basic options:

- Physically deliver the cash.
- Use ecocash or bank transfers. Bank transfers require an invoice, ecocash has stringent limits, and both have significant fees. Both also have intense fees and obstacles related to withdrawals.

We offer a better option. A local can bring bond notes or hard currency to an agent and specify the recipient the money is intended for. The agent takes the physical currency and sends Dai to the agent in the recipient's area. This second agent receives the Dai, then gives the equivalent in cash to the recipient. Each agent charges a commission, and still the customer has saved money and hassle compared to the existing alternatives.

**Money Movement To and From Other Countries**

There is a large network of Zimbabweans who have left the country for greener pastures, often referred to as the Zimbabwe Diaspora. Large amounts of money is constantly sent back from this diaspora to those still in Zimbabwe.

There exist services to help with this, but again they have severe disadvantages and high fees. Western Union charges 10%, and companies like Mukuru charge $5 as a minimum fee.

Again we can clobber these services, because Dai simply routes around the cumbersome banking system and bureaucracy. Lower fees, no waiting in line, and no withdrawal limits.

At first we'll simply market to people in the diaspora who are already familiar with crypto, i.e. "Send Dai/crypto to Zimbabwean relatives". With time we can choose high-value countries to set up agents similar to those in Zimbabwe, so we can market a much broader service: "send money to Zimbabwean relatives".

Again, the Dai is sent to an agent who then gives cash to the recipient.

Additionally, we can reverse the process above to send money out, but again the external country will receive it as Dai (unless there are agents in these countries).

**Commerce With South Africa**

The above service is even better concerning South Africa, because there is already a product (Hatchlet.co) that will accept Dai deposits into any South African bank account, and facilitates withdrawals from any South African bank account into Dai. It charges a 3% fee, but requires no signup and doesn't care where the Dai is coming from or going.

Thus, agents can offer to send money directly into any South African bank account, without limit, or similarly can receive a payment from any South African bank account in Dai, then hand cash directly to the local recipient.

**Entry/Exit Into Dai**

Finally, the agent can simply offer entry and exit into Dai itself. They can help a customer set up a wallet, and then sell Dai for any currency as well as buy Dai back at any point--each time taking a small commission.

This will open the door to customers beginning to value Dai itself as currency, because they can save on agent fees by doing some of the work themselves.

For example, if a customer wants to send money to a South African bank account, they can choose to directly buy Dai from the agent and use the hatchlet tool themselves, saving on the extra fee the agent would charge for such a service. Or a customer might receive money from abroad, directly, in the form of Dai--and they can take their time bringing it to an agent to withdraw into cash. Also, instead of bringing it to the agent directly, they may send it to a friend whom they owe a debt to, telling the friend they can bring it to the agent to cash out.

At first, agents and customers will treat Dai simply as something of a coupon or token, which holds its value, and can be exchanged for cash. But as the customers realize that there is no expiration date to this "coupon", and that indeed there is even a global market that values it outside of Zimbabwe, Dai itself will inevitably feel more and more like a valuable currency in its own right.

##### 2.1.2: Maintaining Agent Liquidity

Imagine an agent is holding $1000 in Dai and $1000 in USD, and customer wants to send $500 USD to a South African bank account. The agent will take the $500 and send 500 Dai to the SA bank account via Hatchlet. The agent has made a small commission, but now is left with close to $1500 USD and only 500 Dai.

We need a mechanism for the agent himself to change USD into Dai. This is the trickiest part, but we have quite a few options available.

Agents can trade among themselves, but then the problem becomes ensuring that the network of agents, or Zimbabwe as a whole, has a way of replenishing or selling Dai as demand dictates. With enough momentum, this problem will take care of itself--similar to how the ubiquitous demand of ZAR and USD in Zimbabwe has a way of enticing those currencies to appear in the local economy. But this won't kick in until Dai itself is well-known and has a similarly ubiquitous demand.

Here DAIHard plays a crucial role. DAIHard allows an agent to make a buy or sell offer for Dai, to a wide network and for any payment method. He can offer to sell Dai for ecocash, for example, and gain access to the entire Zimbabwean market for Dai. Or if DAIHard's local market is lacking, then as a last resort an agent can make a global DAIHard offer, by using a payment mechanism such as Mukuru or WorldRemit. This will incur greater fees, but will remain a last-resort option if the local market is completely saturated with Dai and demands local currency.

In addition, there is already a healthy, trust-based market for Bitcoin. Thus DAIHard will have users who specialize in buying Dai via DAIHard, trading it for Bitcoin via a tool like Changelly, and then selling this Bitcoin to the local Bitcoin market for local or hard currency. Or they can do the opposite: buy Bitcoin locally, turn it into Dai, and sell it via DAIHard. The robust Bitcoin market in Zimbabwe, combined with the fact that moving between Bitcoin and Dai is easy, results in a dependable market to both offload and obtain Dai.

Finally, certain agent services listed above drain Dai, while others replenish it, and we can change our marketing strategy to help balance things out. For example, if agents are generally running out of Dai and building up piles of hard currency, we can market more to the remittance use case. This will bring more Dai into the agents' hands, while they disburse hard currency to the recipients. Conversely, if agents are running out of hard currency, we could market harder to sending money to South Africa: the agent sends away Dai and accumulates hard currency from the locals sending the money. And with each such operation, of course, the agent charges a commission and builds wealth in the long term.

##### 2.1.3: More Agents via DAIHard

DAIHard is a portal to the Dai economy, available to anyone with a laptop, some starting Dai, and wifi. Anyone who can use DAIHard to enter and exit Dai can then offer their services as an agent to their community, and make money doing so.

From this perspective, Dai and DAIHard resembles a company that anyone can join, as something between an employee and investor. A tech-savvy teenager with Dai can legitimately offer to his community the service of sending money to a South African bank account--or any other service listed in 2.1.1--for a service fee, of course. He can then use DAIHard replenish his stock of Dai, and offer the service again.

This will allow the network of agents to grow in a decentralized fashion, without needing to set up any organization or other centralized controlling body. We may wish to directly market to such individuals to increase the rate of the growth of the agent network--but it may not even be necessary, as friends tell other friends of a new exciting way to make money.

### 2.2: Adoption Drive in Targeted Community

With the above in place, and Dai proving its utility and value to anyone curious enough to ask, we can begin explicitly pushing Dai use for its own sake.

We'll choose a community that's not too large, as a smaller network is easier to saturate than a large one; but the community should also have a firm place in the national economy, as Dai shines the most when there is a need for commerce with other communities.

We are currently considering Masvingo or Beitbridge for this. Masvingo is nice and small but is a transit hub, and Beitbridge sees a lot of business with South Africa.

We will begin seminars and other educational workshops. The purpose of this is not simply to educate, but also to investigate as well. We will engage in a dialogue with the community and, together, find the uses in which Dai helps the most--both individual relationships, such as a single shop and its supplier and employees, as well as entire use-cases, such as street-side vendors.

### 2.3: Market to South African Businesses with Zimbabwean Customers

There is a significant amount of Zimbabweans moving across the South African border with ZAR, simply to purchase goods. Some of this traffic is an extended shopping trip for household items at cheaper prices, and some is the industrial purchase of supplies for business purposes back in Zimbabwe.

This occurs despite the costs and barriers involved. First a Zimbabwean must buy the ZAR from the street, then they must transport it across the South African border and risk confiscation by border patrol. Then there is the time of the trip to account for, as well as the cost of petrol--[which itself is difficult to find in Zimbabwe](https://www.youtube.com/watch?v=ZQ_mFzQAxcM).

With a healthy market and use of Dai in Zimbabwe from sections 2.1 and 2.2, we target any South African businesses these Zimbabweans are buying from, and make the following case:

By only accepting ZAR, the business limits itself to the portion of the Zimbabwean market who is willing to spend time and petrol driving over the border with physical cash. But if the business accepts Dai directly, then suddenly their product is available to any Zimbabwean with Dai and wifi. If the product is digital or can be shipped, then the Zimbabwean customer can order the product without even leaving their home.

The savings for Zimbabwean customers is so immense that the business could even charge a higher price in Dai, and still see an increase in sales. The business could then sell the Dai via a South African exchange. They will have not only increased the number of sales, but even the effective price-per-item.

Dai-holding Zimbabweans, meanwhile, will see more and more businesses in South Africa become available to them, and will be able to make a payment to these businesses for less than $US0.01.