Startup Wala Facilitates Ethereum Micro-Payments For Africans

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In Uganda, South Africa and Zimbabwe locals are benefiting from Wala startup, which facilitates micropayments with no fees. People there easily put an average credit of $0.27 on their mobiles using crypto-tokens, based on Ethereum. How is it possible?

Wala Changing The Crypto-World

South African startup Wala is disrupting the stereotype that it is only possible to use cyber money when paying fees. Moreover, this young company challenges itself to revolutionize the financial state of lots of African countries. At least, that’s what Wala’s CEO Tricia Martinez has told Coindesk.

Last year December, the startup gathered $1.2 million by vending “dala” tokens, based on Ethereum, via ICO. And it doesn’t look like Wala is going to stop.

Currently, the startup is enabling 6,300 transactions every day for over 57,000 wallet accounts in South Africa, Uganda as well as in Zimbabwe. Impressive, right? It is also interesting that a considerable number of these remittances and other operations doesn’t overcome $1.

Wala is demonstrating the whole world that blockchain-based micropayments are possible, and, most importantly, that they are affordable for citizens of developing countries with low income.

It Wasn’t So Sweet From The Beginning

At first, before the “dala” ICO, Wala was helping users in Africa carry out transactions via its mobile app. However, local banks were charging Wala’s users high fees for almost every step they were making. So not to hurt its customers and save the business model, Wala came up with a solution.

"Zero-fee is the solution, but banks could not support this," the Wala’s CEO Martinez explained.

And this solution was cryptos which offered what the banks did but with lower charges. Now Wala’s project is functioning across ten markets. Therefore, as Martinez has explained, if a person lives in Uganda and his or her relatives live in, let's say, Zimbabwe, the person can pay for their electricity or put credit on their phones remotely and without any charges. And that's all thanks to dala.

How Does Wala Decrease Fees?

As per data, in 2018 Ethereum transaction charges constituted $0.17-$4.15. This is costly as for micropayments that Wala carries out. So how does the startup survive?


The answer is in microraiden technology. It is a “cut” version of raiden, which resembles bitcoin’s Lightning Network (LT). Raiden also carries transactions off-chain in order to increase the scale. However, microraiden doesn’t facilitate numerous channels and payments hopping bidirectionally like raiden itself. On the contrary, it permits dApp devs to establish a channel that exclusively gets payments.

Thanks to this technology Wala carried all clients’ payments via that channel and then "packs" all those operations to set them onto Ethereum blockchain.

Inevitably, the settlement process includes transaction fees, but at the moment Wala is able to devour those charges thanks to the funds it collected during the ICO as well as its venture capital investment. Overall, that makes up $2.2 million.

Not By Ethereum Alone

Despite the satisfactory current state, Wala is looking into other reasonable solutions for its clients. Thus, it considers an opportunity of dealing with several blockchains at a time as long as the partnership only with the one can be a massive risk for the company and its clients.

Centralization. At Least, For Now

The use of microraiden is not the only means that Wala uses for reducing the transaction costs. The startup also centralizes its operations at some point.

Wala plays a role of an intermediary between users of “dala” and the Ethereum. And, actually, it is indeed useful for its customers. The thing is that it is normal for customers to delete their apps mistakenly, get their phones stolen or misplaced, sometimes two family members share one phone, so it is not possible to solve all these issues if the app is not centralized and the company doesn't take care of its users.

Nevertheless, Wala is not going to remain centralized, but its decentralized future lies in the hands of Ethereum’s scalability. Before the project is finally decentralized, the company wants to let users control their private keys. This way, they will have more ownership and will be aware of the entire process. So that is how the decentralization will be achieved, explained the CEO.

Huge Plans

On top of everything, Wala intends to spread the use of dala all over Africa. In the foreseeable future, the startup plans to set off a 'microjobs platform.’ In accordance with their plans, it will offer info for little tasks such as completing research surveys or taking pics.

Overall, Wala wants to partner with 11 countries and even the UK.

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