Concerned about the rate at which scam, unsafe, or high-risk Blockchain and cryptocurrency projects are springing up in Nigeria, Stakeholders in Blockchain Technology Association of Nigeria (SiBAN)—Nigeria’s Blockchain association—has inaugurated a Complaints, Inquiry & Disciplinary (CID) Committee. This decision was made based on one of the recommendations of SiBAN’s Ad Hoc Committee which was recently set up and instructed to make an inquiry into AfroDex, a Blockchain and cryptocurrency platform founded in Nigeria. On 13 February 2019, the Ad Hoc Committee submitted an 11-page report, including recommendations, to SiBAN’s Caretaker Committee. The Ad Hoc Committee’s thoroughness—noticeable from parts of the report made public by SiBAN on Thursday 14 February 2019—was received with refreshing hope by members of the community.
Could SiBAN be the body Nigeria needs to sanitize the increasingly toxic space from the inside? The manner in which SiBAN’s Ad Hoc Committee has addressed the complaint raised against AfroDex beams hope. If Nigeria’s Blockchain and cryptocurrency community can be sanitized, it will significantly boost investor confidence and consumer protection. Nigeria needs this to maximize the immense potentials of the Blockchain. Scammers must be booted out.
Though the Ad Hoc Committee report confirmed that AfroDex was not a scam project, it pointed out that it was a “challenged project”. Until its fundamentals were fixed, it would not enjoy support from SiBAN, recommended the Ad Hoc Committee.
Ten recommendations were made to AfroDex for implementation. As published in the Ad Hoc Committee’s report, these recommendations, are:
- “Whitepaper: To ensure consumer protection, AfroDex develops and publishes its whitepaper before raising funds from investors in whatever guise;
- Business Model: To operate a business structure that is formidable enough to sustain AfroDex’s promises to the public, AfroDex secures a Business Model which demonstrates knowledge of the market, technology, SWOT analysis, and proven ways of winning its niche;
- Tokenomics: To protect AfroDex against avoidable risks and any negative perception or misgivings which may create doubts about the authenticity of the project, AfroDex reduces its token supply from the current quadrillion to a reasonable value proportionate and consistent with a solid tokenomics towards efficient management of demand and supply;
- Proof of Concept: For the purpose of building its structure on a solid foundation, AfroDex revisits and restrategizes its proof of concept;
- Focus: To protect AfroDex and its users against avoidable business and legal risks, AfroDex focuses on creating an acceptable MVP and not sales at this stage as selling tokens or any resemblance of it to the members of the public for exchange with their ETH or other cryptocurrency endangers the project;
- Minimum Viable Product (MVP): To have a formidable business that can attract the right local and international investors and also boost public confidence in the project, AfroDex reworks its MVP as its current MVP is not a good entry point for a project that markets itself as innovative and disruptive;
- Team: AfroDex make public its team profile via its website and whitepaper;
- AML/KYC: AfroDex implements adequate KYC/AML into its plan and website;
- Roadmap: AfroDex make available its roadmap on its website and whitepaper stating timelines and milestones; and
- Business Registration: AfroDex registers its business or provide evidence that its business is registered, if this is the case.”
Seeing that SiBAN’s Ad Hoc Committee was not out to destroy its project but significantly de-risk it, AfroDex founder and president Mr. Adam accepted to implement the recommendations immediately, except the recommendation touching its quadrillion token supply. In fact, Mr. Adam had “already started work on most of the recommendations” by stopping self-drop sales, aborting its smart contract; informing its community that sales have been paused; and putting its uncompleted website on maintenance mode. Regarding AfroDex’s quadrillion token supply, he promised to deliberate on the matter with his team and get back to the Committee with the team’s decision. The Committee assured Mr. Adam that it would be watching closely and should AfroDex need help, it should reach out to SiBAN.
This is very laudable from SiBAN, genuinely showing interest in ensuring consumer protection and boosting investor confidence in Nigeria’s cryptocurrency space, thereby reducing scams and minimizing risks. Bodies such as SiBAN deserve the support they need to self-regulate a space that is probably more “decentralized” than any decentralized ledger technology invented by man.
SiBAN has demonstrated that is not necessarily out to destroy projects but help de-risk them to boost consumer protection and investor confidence in blockchain and cryptocurrency projects. But when projects are found to be scam projects, they will be called out. This is indeed a welcome development and worthy of support. We hope that this self-regulatory initiative by SiBAN is sustained.
Towards having sustainable projects in Nigeria’s Blockchain and cryptocurrency space, instructive are the closing words in the AfroDex report, “Regardless of the founder’s good intentions, vision, mission, and ideas, a project without effective execution is a risk not only to investors and members of the public but also to itself. AfroDex should immediately implement the Subcommittee’s recommendations. A stitch in time saves nine.”
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