The following is a report from Ethereum Foundation Fellow Marcus AM.
Hola 👋, I am Marcus, a researcher and creator from Guatemala, and an EF Fellow. An optimistic individual at heart, I’m motivated by utilizing social, cultural, and technological innovations to construct improved societies – a belief I have upheld since childhood.
Guatemala: A Nation of Daunting Opportunities
During my youth, I accompanied my father on weekends to numerous of Guatemala’s most desolate regions. At that time, he managed a non-profit organization dedicated to providing last-mile healthcare and creating educational initiatives. The community we frequented most was the town of Puntarenas.
To reach Puntarenas, we would navigate for up to three hours by boat through thick mangrove forests to arrive at a village deep within the jungle. Initially, when we started our visits, the inhabitants of Puntarenas lacked access to clean water, healthcare or educational facilities, and had very little economic activity.
Founded during the civil war, the residents of Puntarenas sought sanctuary from the violence and massacres that claimed the lives of over 200,000 innocent civilians across the nation. For now, I’ll withhold the grim truths regarding US intervention in Latin America (and beyond) during the Cold War era, but if you’re keen to delve deeper into the topic, I would highly suggest reading Schlesinger and Kinzer’s book Bitter Fruit.
Through the years, we collaborated with the Puntarenas community to provide medical and dental initiatives, establish a healthcare center, construct housing, and raise funds for infrastructure projects, including a school operated by the community.
Fast forward a few decades and Puntarenas is now an autonomous village, where families enjoy access to education, healthcare, water, and electricity (provided by solar panels that even power a handful of computers at the school)! The transformation in Puntarenas is a testament to the fact that access to basic dignified services can profoundly influence a community, even in the most desperate circumstances.
The narrative of Puntarenas reflects the reality of Guatemala – a beautiful land, rich in culture, heritage, and breathtaking landscapes. At first glance, Guatemala can seem like a fairly affluent nation; indeed, we possess the highest GDP in Central America and at one time, had the highest number of helicopters per capita worldwide.
Regrettably, the socio-economic framework of Guatemala presents a starkly contrasting image. We are a nation grappling with severe inequality, a consequence of a brutal 36-year civil war and a legacy of exploitation and corruption. Throughout Guatemala’s rural and primarily indigenous areas, it is not unusual to find communities that, similar to Puntarenas in the past, have been isolated from essential services such as running water, energy, housing, healthcare, education, and nourishment. Despite these daunting conditions, individuals in these areas aspire to establish improved livelihoods for themselves and their communities.
Impact Begins at Home
One of the substantial hurdles to development is the fact that over 19.6 million individuals in Guatemala exist in deplorable living situations. In the most severe instances, multiple generations may inhabit a single room, where open-fire stoves pollute the air, and sanitation is an afterthought (if present at all).
We are convinced that providing dignified housing is foundational to constructing brighter futures for everyone. After all, our homes are the spaces where we spend the majority of our time, where we learn, where our families converge, and where dreams begin.
This is the reason a group of lifelong friends and I are engaged in an initiative named Lamina POP. Lamina POP is a patented construction technology that uses commonly available building materials in new ways to create affordable, lightweight, and architecturally sound homes. The technology is straightforward and can be applied in even the most isolated parts of Guatemala.
Together with our partners, including Habitat for Humanity, the University of Cambridge, and Stanford, Lamina POP’s approach is significantly enhancing the lives of those for whom we are constructing homes. Collectively, we believe that a home encompasses so much more than just four walls – it represents the chance to instill a renewed sense of hope and progress.
The benefits of dignified housing are tangible. From improving educational outcomes, to minimizing the environmental footprint of housing, to boosting psychological well-being, we’ve witnessed the remarkable impact of development that the Lamina POP system can foster. As we progress, we are eager about the possibility of bringing forth more innovation-driven solutions throughout Guatemala and beyond.
Despite our endeavors, we have encountered a significant barrier to widespread adoption of innovative solutions like Lamina POP’s – the deficit of financial infrastructure and education within marginalized communities. Although Lamina POP’s solution costs 30% less than any other leading affordable housing alternatives, the demographics we aim to assist in obtaining housing cannot access loans with favorable interest rates to invest in homes for their families.
Numerous financial transactions occurring within these communities transpire in the ‘informal’ economy. Payments are rendered in cash, debts remain unrecorded, and goods and services operate well outside the reach of traditional financial establishments. Sending payments, securing low-interest loans, establishing a credit profile, and tracking transactions becomes nearly unfeasible given the existing financial infrastructure in Guatemala. Operating in the ‘informal’ economy precludes the opportunity for everyday individuals to utilize personal loans, pursue business investments, let alone secure a mortgage.
As a result, many of these individuals depend on predatory lenders (including conventional financial institutions), which frequentlyexploit vulnerable communities for their own gain. It is not rare across Latin America to encounter predatory lenders who charge a 20% monthly interest rate. Crushing debt places many in vulnerable positions leading them to forfeit property titles, fall into delinquency, or even tragically, to end their own lives.
Can Crypto Assist?
Among various possibilities, crypto’s potential is to establish innovative, fairer economic systems that can serve all individuals, not merely the affluent and influential. Some view DeFi’s potential as a means to deliver financial services to individuals who may lack access to conventional financial tools in developing nations worldwide, including some of the most marginalized communities globally.
If you’re reading this, it’s likely that you hold a hopeful outlook regarding technology’s capacity to tackle some of these issues. Perhaps that signifies decentralized networks that radically transform the manner in which we engage with ourselves, each other, and societal structures of authority. Or it might merely imply applications that utilize innovative and more precise forms of digital data to evaluate someone’s creditworthiness, enabling them to secure a reasonable interest rate on a small loan. I believe the actuality will lie somewhere in the middle.
In its present state, it is an exaggeration to declare that DeFi is equipped to furnish feasible new avenues for financial inclusion on a large scale. We confront significant obstacles in digital and financial literacy, institutional trust, and substantial user experience challenges. Yet, despite the industry’s existing conditions, I am confident that we possess the tools necessary to develop solutions that cater to communities such as Puntarenas.
My Next Billion Fellowship
I have spent the previous months actively investigating ways to dismantle this financial empowerment barrier by harnessing the capabilities of Ethereum. My objective is to explore a range of viable solutions driven by cryptographic innovations for financial inclusion and credit access, ultimately aiming to enable human development across Guatemala and beyond.
I have been examining which financial building blocks might be applicable in a region like Puntarenas and throughout Guatemala. Specifically, I have researched the obstacles to adoption and potential solutions that could facilitate peer-to-peer lending for individuals without access to more just financial systems.
So far, as part of my research, I have engaged with members of numerous crypto initiatives, including those spearheading DeFi protocols, DAOs, identity and scaling solutions, along with other principal developers, designers, and wallet creators. Additionally, I’ve had discussions and interviews with local pioneering projects, governmental agencies, and international NGOs throughout Guatemala and other developing countries to comprehend how they view crypto as a catalyst for novel methods of cooperation and equitable financial services.
This research has proven extremely enlightening and has granted me a deeper insight into the current landscape of DeFi and the broader crypto ecosystem’s potential within emerging economies.
Subsequent Steps
At present, I am preparing an open-source document that will offer a comprehensive analysis of the existing crypto environment and provide suggestions on how to most effectively leverage crypto to enhance financial inclusion, especially for individuals in emerging economies. The final report will be published by the first week of March (timed for ETHDenver), so stay tuned for that!
Beyond the written report, I will be releasing an audio-visual series that will showcase a diverse array of stakeholders. This will include crypto-native thought-leaders and innovators, individuals implementing solutions in developing economies that utilize crypto, as well as the last-mile communities and organizations that would ultimately gain from this technology.
The report and video series I am developing are primarily intended for builders in the crypto space who wish to gain an understanding of the landscape of technical, educational, and social challenges and opportunities that should be taken into account; as well as for impact-focused organizations in emerging nations that seek to learn how crypto can specifically enhance their efforts and initiatives.
To stay informed on the latest insights from the research via email and contribute to the report, you can subscribe and mint a complimentary NFT on Mirror. Let’s also connect on Twitter!
