Nestcoin: Increasing Africa's Wealth Through Crypto
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Hi friends 👋🏻,
Welcome to another essay on Open Africa.
Today we’ll be talking about Nestcoin and one man’s mission to increase Africa’s wealth through crypto.
Insight💡: Did you know that Nestcoin’s $6.5M pre-seed deal is the largest in Nigeria and the second-highest in Africa?
Before this announcement, I wanted to throw a tantrum about how crypto was a hoax seeing how Axie Infinity token prices had fallen more than 100% since their 2021 highs.
Learning a bit more about Nestcoin and its goals has left me a bit more optimistic about crypto as a tool for change and economic empowerment.
Steve Jobs once said that those who are crazy enough to believe they can change the world are the ones who usually do. I think Yele could be one of those people.
To learn about Nestcoin’s ambitions and opportunities, we’ll go through:
Yele: Humble Beginnings.
Nestcoin: Exit The Status Quo
X–To– Earn Business Models
Building the ByteDance of Web3
Speculative Times With Interesting Outcomes
There’s so much to learn about Nestcoin that I’m breaking it up into two parts:
Part I (Today): Yele’s history, past businesses, and Nestcoin.
Part II (Friday): Part II, covering Nestcoin’s Business Models and how it becomes the ByteDance of Web3 is now live!
Favour: Please I would like to check my bias about companies like Nestcoin and need your help with it🙏🏽. Please share your thoughts. Click me
Let’s get to it.
Yele: Humble Beginnings.
There is nothing more powerful than a passionate, self-directed, intrinsically motivated human being - Yele Bademosi, 2014.
Yele began his career trying to save lives by studying Medicine at King's College, London in 2009. However, he felt that that path was not what he was meant for. Throughout 2013, Yele began to think about his desires and what he wanted his life to be known for. He spent months reading and studying for what his next steps would involve. After making up his mind, he decided to drop out of Medical School sharing his reasons in a beautiful letter to his mom. you can read that here.
Side note: Please read that letter. It gives you a personal view of who Yele is on a deeply emotional level.
One thing that stood out from the letter was his passion for social change, consumer products and entertainment.
My mission in life is to “Connect people. Inspire change. Create happiness”…I want to launch a social enterprise that combines technology, with media and positive change.
In 2014, Yele decided he would learn to code, gain management skills, understand business finance, and operations…all within ONE YEAR. If you thought Yele is only now being ballsy, think again!
After building intermediate-level programming skills, he built his first startup, Purple. Purple was a social app that let university students with shared interests in the UK find and connect. In Yele’s words: “...I did everything wrong. I did anything wrong in that, I always joke that if you want to know what not to do when starting a business, I can tell you my story😅.”
As purple didn’t work, Yele packed his bags and came back to Nigeria in 2015.
With no connections in the industry, he hustled his way to build his network. Yele had the idea of building a food delivery business in Nigeria but instead of building one himself, he decided to work with Dotun Olowoporoku who had founded Meal.co.uk. Meals was one of the earliest black-owned businesses that had raised venture funding. At its high, it raised £500k and delivered 5,000 meals to over 2,700 customers.
Meals later folded and Dotun moved on to start Starta (pun not intended😌).
Starta was an online community and resource platform for startups and small businesses in Africa. They wrote guides, articles and hosted networking and funding opportunities. Today, this isn’t unique but back in 2016, Flutterwave just got founded, Paystack wasn’t yet bought for $200m, iROKOtv raised a $19M Series E round. Things were still kicking off in Nigeria.
A sequence of events followed that brought the idea of Microtraction.
Through Starta events, Yele was one of those that met with Michael Siebel (Group partner of OG Y Combinator) when he visited Nigeria in 2016. In a meeting, local investors were complaining to Michael about how expensive YC companies’ valuations were. Oo Nwoye calls it the YC Bump. Around this time too, Yele was invited for a job in VC but wasn’t hired.
Noticing all these signs as a “pre-seed funding gap”, he got the spark of investing in local founders. A year later after that meeting with Michael, Microtraction was born.
Under Yele’s leadership, Microtration has invested in companies like Lemonade Finance (S21), Wallets.ng, ThankUCash, Buycoins (YC S18), 54Gene (YC W19) and others.
Not long was his success at Microtraction did Binance come calling. Binance is the largest cryptocurrency exchange in the world by volume.
He joined Binance Labs to develop the blockchain ecosystem in Africa through equity investments in these projects.
The premise for Binance seeking to invest in African startups is quite simple. According to Chainalysis, Africa is the third fastest-growing crypto market in the world. Between July 2020 and June 2021, African countries collectively received around $105.6 Billion worth of cryptocurrency. for comparison, remittance inflows to Sub-Saharan Africa increased 6.2% to $45 billion. North Africa is combined with The Middle East and their remittance inflows increased to $62 billion.
Assuming the MENA region is made up of North Africa and their inflows are added to SSA, the entire remittance inflows to “Africa” edge out Cryptocurrencies by 1%!!!
Joining Binance transformed Yele from just being the Tech bro to becoming a go-to resource for everything crypto. It was in Binance, he incubated and founded Bundle in 2019. Bundle is a social payments app for cash or cryptocurrency. By the time he left, Bundle was live in Nigeria and Ghana with about 100,000 users.
But Yele felt Bundle didn’t do enough to drive mass crypto adoption in Africa. In his interview with Peace, he mentioned two reasons for this which Nestcoin eventually solves:
Custodial wallets. With custodial wallets, your coins are in the “custody” of a third party. Binance, Bundle, Coinbase are all examples. Being custodial meant some trade-offs. It limited regional expansion with Bundle only present in two countries. Also, there were privacy concerns. As popularly said in the crypto community “If you don’t own the keys, you don’t own the coins”. Even Elon agrees.
Lack of education. Even though millennials loved Bitcoin, they still don’t trust or understand it. A lack of both education and spending power limited mass adoption. About 90% of addresses own less than 1 BTC ($38,857.20).
Yele had said his mission was to change lives and be involved in products around consumer, entertainment and media. Bundle, Microtraction and Binance Labs were all iterations of that mission.
Nestcoin is the next.
Nestcoin: Exit The Status Quo
Nestcoin as defined by Yele when it was “NewCo” is a multi-project organization whose mission is around democratizing access to economic opportunity using crypto.
Before going deeper into what Nestcoin is, look at this cap table!
I would bore you to list the portfolio of all these firms but just know that these companies have invested in Flutterwave, Paystack, Paga, Stitch, Rabbithole, Flextock, MFS Africa, Paystack, Slack, Surveymonkey and a whole lot more.
Even Serena Williams’ fund, Serena Ventures, got in on the act.
You don’t bring this pool of heavy hitters if you’re fooling around. You’ve got to have some sort of confidence in yourself and a grand vision. And Yele has buckets of it.
In the announcement launching Nestcoin, Yele believes Nestcoin can:
Acquire one million monthly transacting users
Reach up to 50 million monthly active users
Get 20% of users to hold $10,000 in their wallets
As I said, you can’t be fooling around if you don’t have this sort of ambition.
So what is Nestcoin and what do they do?
Today, Nestcoin builds and invest in “independently nested” products across Decentralized Finance (DeFi), media, digital art and gaming. Although the DeFi and Digital art products are yet to be released, the media and gaming are available to users.
Breach.
Breach is the media arm for Nestcoin. It creates easy to understand crypto content. Going on #CryptoTwitter, you’d see a lot of information about what web3 is or isn’t, who owns the Metaverse, whether DOGE is a good coin and so forth making it hard to understand all that’s going on.
Breach is breaching (pun intended😉) through the noise to inform and educate users about Web3. Breach is made up of four products; Community, Podcasts, Blog and Newsletter. The last two are the only active products today.
Getting started on Breach is just as easy as subscribing to the Open Africa newsletter.
Side note: Since Breach’s launch in November 2021, the “Community” remains invite-only. If 7000+ people are on the waitlist, how long before they sign up elsewhere?
Two weeks after Nestcoin launched, they introduced the Breach Creator Community. The community is for creators looking to share their crypto expertise and earn rewards on it.
This is the gaming arm of Nestcoin.
MVM is a crypto gaming DAO (Decentralised Autonomous Organisation) providing play-to-earn opportunities for gamers. In practice, not all DAOs are decentralized or autonomous, so for our purposes, let’s think of DAOs as internet-based organizations that are collectively owned and controlled by their members.
In the last two years, crypto games exploded onto the scene, the most popular being Axie Infinity. Axie Infinity is a game where users buy NFT pets called Axies, battle each other and earn rewards in form of potions and tokens. This type of gaming is known as Play-To-Earn as users play games and earn rewards at the same time. The rewards in Axie Infinity are known as Smooth Love Potion (SLP) and Axie Infinity Shards (AXS).
With SLP, players can:
Breed new axies. Axies aren’t created out of thin air. Axie holders use SLP to breed new Axies that can be purchased by new players.
Exchange them for fiat. Many players earn SLP then exchange it for money that is used in the real world. Both AXS and SLP are tradable on exchanges like Binance and Uniswap.
At its highs in 2021, Axie made $364.4m in revenues and $862m in total transaction volumes, more than any decentralised app and only behind Ethereum.
But how does this relate to MVM?
Axie Infinity requires a minimum of 3 Axies to begin playing. The cheapest of these Axies costs $19 today. That brings you to a total of ~$60.
You either earn SLP from winning battles against other players with stronger Axies or participate in Player vs Environment (PvE). Stronger Axies need breeding. It costs 1800 SLP to breed once which is about $35. Already getting started needs at least $110.
Nigeria’s minimum wage is N30k ($72). This means that the initial capital to play Axie Infinity raises a very high barrier that prevents gamers from playing.
To make it affordable, MVM buys these Axies and lends them to players in a revenue-share agreement. Nestcoin claims that you could earn up to $1,000 monthly, with them. However, a player’s true earning potential is dependent on their skills and the external market conditions.
These types of agreements between gamers and Nestcoin are known as Scholarships.
Since the success of Axie Infinity, Scholarships like Leaping Corgi Scholarship and Yield Guild Games have sprung up to support more gamers. In July 2021, Yield Guild games announced that it had surpassed 3000 scholars.
Over 600+ people are actively playing through MVM and there are more than 6500 also waiting to join the economy.
Although Axie Infinity’s numbers have dipped since, it has blazed the path for more Play-To-Earn games and more importantly, has pushed the X-To-Earn (anything to earn) trend, showing how people can earn income by doing what they love.
Nestcoin can push that and drive new ways for Africans to earn. The road to getting there isn’t easy but its current investments speak to larger opportunities in the Web3 space.
Nestcoin: Building the ByteDance for Web3
We’ve gone on quite a journey today, covering Yele’s history and his journey from medical school to entering crypto and discussing Nestcoin’s products. It almost seems like everything he touches turns to gold.
In Part II on Friday, we’ll talk about the different business models Nestcoin is targeting and what Nestcoin’s investments tell us about their strategy in Web3.
Meanwhile, if you enjoyed this, please like and share it with your friends, bosses, co-workers and anyone else that could benefit from it. Share with your friends that have gained access to the Breach community too😏!
Also, if you’re an early-stage startup, investor or someone interested in Africa, I’d love to chat. You can send me an email or a DM. Let me know if you have any feedback, how I may assist you, what content you’d be interested in, or just say hi!
Update: Read Part II, Nestcoin: Building the ByteDance of Web3 Now
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Thanks for reading, and see you on Friday,
Kamso.
Good stuff. Thanks for writing about us.