Exclusive: How to Reach the Unbanked for Financial Inclusion?By May 20, 2019 7 Min Read
Exclusive Interview with Darren Lu, CEO of Vodi
One of the main visions for using blockchain is to facilitate financial inclusion, which can be achieved by reaching the unbanked population! However, it’s not easy to reach them even for giants like Amazon! Darren Lu, CEO of Vodi explained to us the challenges in reaching the unbanked and how Vodi facilitates financial inclusion. He also revealed the latest plan of Vodi going forward!
Darren Lu explained how Vodi can reach out the unbanked population.
Let me take a step back and talk about what we do. Vodi stands for Value on Demand Internationally. Our concept from day one is about always giving back more to our global users. Vodi provides services such as money transfer, mobile top ups, gift cards worldwide. We already have proven track record where users come on to do micro tasks work. They can fill out surveys, they download games, and they get Vodi points. In doing that, they use the points to top up their prepaid phones.
We want to add micro tasking services for the machine learning AI industry. Users are getting paid with Vodi tokens from AI companies that want to outsource their requested work. AI companies list the micro tasks and people will come and do the job via Vodi. What's challenging for AI companies is to reach the unbanked population. Let's say with Amazon, Amazon Mechanical Turk, you need to have a computer and a bank account which makes it very difficult. That would wipe out 3 billion unbanked population.
The global smartphone penetration ranges from somewhere between 25% to 50% on average. People can perform micro tasks on VodiX, our decentralized ecommerce ecosystem. People don't need a computer or a bank account. That's already happening today. We're excited to take it to another level. It's not easy because you still have to have a smartphone, data or WiFi connection. Yet it's definitely a lot easier compared to tasks requiring computers or bank account.
How do you reach those population without bank account to gain adoption?
We have something like a referral code, like Uber. Basically, we digitally link all these referral codes. We show how many of your friends from the first generation versus second or third. It looks a little bit like LinkedIn, you have connections from the first, second and third tier. Our concept is to get back and regrow value on demand. It was a concept and we didn't know if it's going to be proven successful. But today, when I looked at my phone, I invited 220 people and down five generations, I have 18,000 connections. People start inviting their connections and they see that this makes sense. They start to share word of mouth and that's how we grew into the market.
What is your view on decentralized finance (DeFi)? What are the challenges?
Wow, that's a difficult question. Talking about financial inclusion, I believe that people go after the most profitable business and it is understandable. There's always a market that maybe left out, a market that is not the wealthiest. Institutions don't have the solutions to reach these markets. That's why you see the articles talking about how cryptocurrency is more popular and fast growing in places like Africa. It is because the local currency is unstable, or the banks don't have the tools to reach out the unbanked. We are not trying to solve the world's problem to be honest, but we think we can help to a certain extent.
If we can create micro tasks for millions of people, where they have Vodi tokens to pay for different services, such as topping up mobile phones for family and friends, collect cash and go buy food with it. We can actually start building the community. We are in talks with one Hong Kong based company, where they already integrated with many banks in Vietnam, Indonesia, Philippines, Nigeria, and Ghana. They are doing all the proper KYC and we're having all the proper licenses with the banks. People who work on Vodi will be able to send the Vodi tokens to their loved ones living in these countries, and the loved ones in these countries can convert that to fiat currency in local banks.
In your opinion, this will facilitate a more decentralized finance?
This could help where people without bank account can use Vodi tokens, which can be converted to Bitcoin to some local regions. This can be very helpful to facilitate decentralized finance in some local regions.
We know VodiX use Proof of Reputation. Can you elaborate more on this and how reputation can be measured?
That is a very difficult and challenging topic in the industry itself. I've talked to different experts and learned from them. From my understanding at a very high level, proof of reputation is when people work, the arbiter can rate the result of their work such as if you provide good quality and consistent work, you’ll get a higher rating; if you do a lousy job, you just want to do a quick task for getting paid, then your reputation will be on a lower scale. On the high level of proof of reputation, that's how I understand it. Of course, there's a lot more on how the arbiters work in the whole blockchain ecosystem, which is being built out.
I heard of StormX and Gem, I think they successfully raised a lot of money couple of years ago. What I learned is that they're similar in that they are decentralized on the blockchain. Compared to them, we have a live user base of 5 million people. We have services that people who work to earn Vodi tokens, they can top up their phones, buy gift cards and so forth. For StormX and Gem, I don't think they have a huge user base. They don't have products that people can cash out, maybe they are planning something. From the last time I read about them, they basically promote that you earn the tokens and then you can go to crypto exchange for exchanging Bitcoin. I think that would be a bit tricky because if you want to gain mass adoption, you want a lot of people around the world to come on to work, they probably don't necessarily understand crypto exchange and how that works, and then convert that to their bank account somehow.
We believe how we differ is that we have a lot of the pieces of the puzzle coming together, maybe others don't have yet or building something else out there. I don't know everything about my competitors and I'm pretty sure they are great companies. For Vodi, we believe we can drive from 5 million users to 50 million users.