Why are you participating for Based Africa?

Inequality, poverty and lack of financial inclusion is a problem across Africa, a continent otherwise very rich in talent, opportunity and resources.

For example, 55% of South Africans live below the poverty line. High unemployment (over 40%, using the broad definition, StatsSA 2023) and poverty trap many families and individuals in a cycle of inequality. This not only impacts their well-being, but also hinders the community's overall economic and social potential.

It's often the poor that pay a hefty premium for services and financial products that more affluent consumer can access either cheaper or even for free.

We see Web3, the new internet, broadly, and software built using Base and its ecosystem specifically, as major contributors to drive social change and address these challenges.

The Based Africa theme of solving real world challenges amongst communities in Africa and creating real-world impact aligns perfectly with our mission and goal of using Web3 for good and change.

Our project “Airtime Queen” focuses on South Africa at launch; hence we will make reference to SA for the remainder of our application. We will scale Airtime Queen across the continent once consumers have given us the nod by way of using and loving it.

What challenges are you focusing on?

It is an established principle in Defi to fast, efficiently and indiscriminately access funding as a borrower against collateral provided. We focus on the African prepaid airtime market, especially the widespread use of “Airtime Credit Solutions” (“ACS”), to bring this Defi principle to the real world for the benefit of all consumers and to drive financial inclusion.
Providing Airtime Credit is a highly lucrative business for mobile operators, charging fees between 10% and 20% for providing an advance. But - it is a very costly way for consumers to recharge airtime. For example, recharging R5 using MTN XtraTime comes at a cost of R1.10, a whopping 18% fee.
To illustrate the positive impact ACS has on the financial performance of an operator we take a look at the Q3 2023 results of Vodacom South Africa:

• South Africans borrowed R3.4 billion worth of airtime inQ3;
• Airtime Advance accounted for 45.1% of all recharges;
  Consumers in today’s ACS market have two principle options to access airtime credit:
  Via the operator:
• Very expensive;
• Not immediately available for new subscribers;
• Waiting periods apply and initial amounts available are sub-1 USD within first 3 m;
• “Forced” repayment, the advance & fee will automatically be deducted with next airtime buy - this potentially forces consumers to make decisions between airtime & other important items, i.e. groceries.
  Or via a banking app:
• Usually comes at no cost and has a much more generous repayment period, allowing the consumer to repay at their own pace within 30 days.
• It does come with the requirement to have a bank account in the first place; and to recharge airtime at least 3x via the banking app in a prescribed period.
  In Summary:
• Consumers pay high prices for accessing airtime credit;
• They cannot obtain airtime credit immediately when new users;
• Savings cannot be used as collateral.

How does your submission address this challenge?

We marry Web2 (airtime) and Web3 (stablecoin wallet) to bring the best of both worlds together and make the benefits of Defi available to normal consumers with no exposure to crypto.
Airtime Queen aims to be the easiest and fastest way for users to buy and sell airtime, accumulate savings and borrow airtime at no cost.
Our dual value proposition of earning a return on savings while being able to purchase airtime anytime, including access to airtime credit at no cost, creates a flywheel for African consumers that promotes a positive savings culture which in turn leads to visible cost savings (airtime credit at no cost).
App core functions:
• Saving money & earning interest (local currency stablecoin, APY/ yield generation)
• Buying airtime (any service provider)
• Accessing Airtime Credit (collateralised by savings)
• Sending & receiving money (stablecoin)
• Deposit & withdrawal
With Airtime Queen, consumers
• can accumulate savings & earn interest;
• have immediate access to Airtime Credit at no cost;
• can flexibly repay credit within the repayment period;
• do not require a credit profile;
• can enter a positive, financial health-building cycle of growing their savings and returns from it.
During the hackathon, we will build the following features of our stablecoin wallet:
• A Web interface for a stablecoin wallet with the
o ability to authorise transactions with passkey; and
o ability to send and receive funds onchain
• Sign up with a mobile phone number
• System for onchain payments with offchain fulfilment
o Ability for the user to purchase airtime with their onchain stablecoin balance using an airtime distributors partners API for airtime fulfilment
Our key goals with Airtime Queen are to increase financial inclusion and -well-being in Africa, to make Web3 available to consumers without the need for them to know or understand Web3 at all, and to boost the uptake of onchain usage by non-crypto users for their own benefit.

Challenges we ran into

Solving for a cost-effective, immediate and consumer-friendly “Web2-style” on- and off-ramping between fiat and a local currency stablecoin. We parked this now, will complete post Buildathon.

Additional Features

A lot of the insights that went into building this project were gained from building Open Browser Wallet, an open source passkey browser wallet that we built to be compatible with coinbase smart wallet

The features built during this buildathon include:

• Complete reimplementation of Open Browser Wallet using a more modern crypto stack (wagmi, viem, coinbase smart wallet)
• Backend for processing storing passkey credentials of wallet users to improve UX
• Phone number based onboarding flow
• Interface for transacting using Coinbase Smart Wallet
• Gasless transactions using the Pimlico paymaster

The airtime wallet also tightly integrates with an onchain merchant with offchain fulfillment. This means that the merchant can securely accept crypto payments and process orders upon receipt. To build this the following was implemented

• An order quoting system
• Payment proof verification system
• Order fulfillment flow using a web2 airtime provider

Update 20.10.2024

• We added a ZAR 2 airtime products (for demo purposes) for 2 more networks in South Africa. Now users with South African prepaid numbers can purchase R2 airtime for Vodacom, MTN and Cell C directly from their Airtime Queen non-custodial wallet using USDC.
• We added a send function which allows you to send the wallet currency (at the moment USDC) to any ethereum wallet address - also supports ENS name resolution as well as address resolution for AQ-registered phone numbers.
• We added a savings function that allows users to move funds in and out of a yield-bearing account which currently uses Aave in the background.
• We added geo-fencing to the product catalogue (i.e., if you are not in South Africa, you won’t see products at the moment).