A shortened version can be found here

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by Alinagwe Mwaselela, Nyota community lead

While we are still in the process of preparing for the National General Election, in Mburahati Ward, Ubungo Dar Es Salaam, the Nyota community continues to benefit from the fruits of Encointer and Kusama in their economic and social life.
An analysis of raw data from July to September this year shows that the turnover of the Nyota community currency is 2.4 times the amount claimed via the faucet. Although the total volume of $1,760 is still small in absolute terms, the impact is noticeable in our district. 

This is blog post is a continuation of recognizing members and stakeholders who have been developing and managing the community’s economy by receiving and providing Nyota in payment for goods and services. The first report of this kind was published in July. 

All these members are members of Nyota Business groups, and up to now we have 7 groups in Nyota community, Heshimu Pesa ya Meza, Nguvu Moja, Urembo, Mavituz DeliciouZ, Afya Care, Media Group and Together as One Group, which is the new and last group for this year. All these groups make a total of ~60 active individual members

Our Chairwoman: Jackline Sobo

Busy druing the cycles: Nyota Chairwoman Jackline.

Meet the Chairperson of the Nyota Community, Jackline Sobo, who has been an active member for more than a year. Over this time, she has inspired more than 20 new members to join the community. Jackline is well known in Mburahati for her delicious cashew nuts and her skill as a hair braider, especially for young girls. She is also a loyal customer of Nguvu Moja and Heshimu Pesa ya Meza groups.

Jackline owns the house that serves as our regular meeting place for attestations and Nyota Digital Community Building Team (DCBT) sessions. She says:

“Through Nyota, many people have come to know my work. Now I sell more cashew nuts and get more hair clients from the community. We support each other. When I buy from them, they also buy from me. It makes us grow together.”

Anisa

Anisa, bringing her tasty bites to the cycle.

Her name is Anisa. She has been part of the Nyota community for more than seven months and serves as the General Secretary of Mavituz DeliciouZ Group. Anisa is a dedicated cook, well known for her delicious Maandazi, Chapati, Sambusa, and other tasty bites.

Within the Nyota community, she is both an active member and a loyal customer of Heshimu Pesa ya Meza packages. Through her business, she serves more than 25 community members who regularly enjoy her food.

Thanks to Nyota, Anisa can now buy her household necessities like rice, cooking oil, wheat flour, sugar, and more, directly from Heshimu Pesa ya Meza. At the same time, the community’s business groups have become steady customers of Anisa’s bites and other products, creating a beautiful cycle of mutual support within the Nyota economy.

Afya Care Group Member

 
A Member trying the innovative PePain system

He is passionate about improving women’s health, especially by helping to reduce menstrual pain. In our community, many women, both young and old, experience discomfort during their cycle, yet this aspect is often overlooked in health services.

His innovation, a device called PePain, offers three different features designed to relieve menstrual pain safely and effectively. Many Nyota members appreciate this product because they can now access it more easily and at a lower cost, thanks to payments made in NYT.

Using Nyota has made it easier for him and the Afya Care Group to reach women across the community. This not only supports women’s wellbeing but also increases local circulation of NYT, strengthening both income and community engagement.

Amina Kijaji

Talent meets dedication: Amina

The talented tailor Amina Kijaji is an active member of Nguvu Moja Group. Besides her tailoring work, Amina runs a small personal business selling underwear and various fabrics in her neighborhood.

Amina is one of the pioneers of the Nyota community, she joined right from the beginning when NYOTA was first introduced. Over time, she has become known for her creativity and reliability, always ready to help others with sewing needs or advice on materials. She says: 

“Amost all of my customers come from the Nyota community. Through Nyota, my business has really grown. I sell, I buy, and we all support each other. It is not just about money; it is about connection. When I help others with my tailoring or underwear business, they also help me. That is how our community keeps moving forward”

Today, about 80% of Amina’s customers are from the Nyota Community.

As we move into the next quarter, we look forward to sharing even more portraits of Nyota community members. With the General Election soon behind us, many will return to their regular routines, making it easier to document their inspiring stories. We also plan to launch the first Nyota Market, an open event that will showcase the work of Nyota Business Groups to Mburahati residents and local leaders, creating new opportunities for collaboration and support.

The post The Second Glimpse into the Nyota Community appeared first on Encointer.

by Alinagwe Mwaselela, Nyota community lead

In a year when national attention is focused on elections, something powerful is happening on the ground in Mburahati, a neighborhood of Dar-es-Salaam, the largest city in Tanzania. A quiet but remarkable transformation is happening, fueled not by political campaigns, but by community connection, creativity, and digital innovation. Read on to meet the inspiring individuals who are shaping the new face of Mburahati — one plate of food, one dress, one transaction at a time.

The following presents some members from different business groups, sharing the realities of their businesses and the benefits they have gained from the Nyota Community. This reflects the current situation as of July 2nd, 2025. These members will also appear in the Encointer&Kusama short film, where they share their experiences with Kusama and community currencies.

This is an election year in Tanzania, so much of the government’s energy and investment is focused on the general election. Many community members are also involved. Some running for leadership positions, others actively supporting their political parties. As a result, it has been challenging for us to secure full participation from government representatives for our community event permits and other public activities. Nevertheless, we were able to drive real impact to our active and growing community

MoZa Cosmetics

Her name is Aisha, but she is known as MoZa. She is one of the very active members of the Nyota Community and also serves as a Jukumu Digital Community Base Trainers (DCBT). Aisha is a businesswoman who mainly deals in ladies’ accessories and cosmetics, and she is the General Secretary of the UREMBO group, dealing with cosmetics and ladies accessories.

With strong skills in communication and cosmetics, Aisha was introduced to Nyota by her mother, who was one of the original bootstrap members when Nyota first started in Mburahati. The Nyota Community has opened up many business opportunities for her. She initially started by selling cooking oil, but when it became hard to source, she shifted her focus to cosmetics.

Before joining Nyota, Aisha had a client base of around 13 to 15 people in Mburahati. Thanks to Nyota, she can now serve 20 to 40 customers in a single month.

 

 

 

 

RJ Media

He is known as Humbo, but is widely recognized through RJ Media. At 29 years old, he is a reputable member of the Nyota Community. Humbo is a media and video production expert who also works with telephone technology in Mburahati.

He has been a member of Nyota for more than a year.
Reflecting on his journey, Humbo shared:

“I joined Nyota and the Encointer Wallet on my mother’s advice, since she was already part of Nyota before me. What impressed me most was the strong collaboration among Nyota members, I saw that as a powerful market advantage to work with.”

Today, about 60% of Humbo’s customers are people he met through the Nyota Community. He is also the leader of the Media & Electronics Group, which has more than six members, including himself.

 

 

 

 

Renata Uswazi Chips

This is Renata Chips, she is a very famous chips maker, especially for school students around Mburahati. Her business is well-supported by Nyota Members who live around her business place.

She is a member of Mavituz DeliciouZ group, which is a group of people creating tasty and healthy food including fresh juice. For her daily needs like cooking oil, rice, sugar or potatoes that she needs to make chips she goes to HESHIMU PESA YA MEZA group.

Heshimu pesa ya meza is a famous proverb in Tanzania and East Africa, which means respect the money you get for daily home use. In African culture a person has to leave a certain amount daily to his partner for home use now that money is called “Pesa ya Meza”.

She appreciates that she can buy things there with cash and Nyota. The best customers she has from the Nyota community are UREMBO group members (cosmetic and accessories), since they have their stations close by..

Before Nyota, doing business was challenging for her, especially when working with people she knew, which often led to unreturned loans from friends. Now, all of her friends are Nyota members who can easily use small amounts of cash and Nyota to make purchases.

Donosia

She could be the youngest member of the Nyota Community right now, at just 23 years old. Her name is Donosia, and she serves as the General Secretary of the Nguvu Moja Tailoring group, meaning “One Energy Tailors”. She has excellent tailoring skills and a sharp mind for learning digital tools and programs.

Although she has only been part of the Nyota Community for about four months, Donosia is already a loyal customer of the UREMBO Group and the Mavituz DeliciouZ Group. Thanks to Encointer and the Nyota community currency, she has built a network of 10 to 15 customers per week, all from within the Nyota groups.

Sakina the Tailor

This is Sakina, a tailor. In the past, it was impossible for her to have even 20 customers in a month from the same community she lives in. But just last month, the Nguvu Moja Tailoring group sold more than 40 pieces of dresses, and they are now preparing to launch another project that could reach over 100 pieces in a single month.

 

 

 

 

 

 

 

 

Mmanyema Og

Her name is Amina, also known as Mmanyema Og. She cooks Biriani and bakes bread, selling them to the community using both Nyota and cash.

On Fridays, she now sells up to 14 plates of Biriani to Nyota members, whereas before she rarely had more than 4 to 5 customers who could afford Biriani on Fridays. Recently, she also started baking bread as a new business venture, which she sells to the community, accepting a mix of Nyota and cash.

 

 

 

 

 

 

 

 

Digital Community Building Team

The Nyota Community has had the opportunity to learn about digital currency and other related topics. They even took exams to assess their understanding. All members who passed with good marks are now part of the DCBT (Digital Community Building Team). As DCBT members, they receive bonuses for inspiring and train more people about Kusama, the Encointer Wallet, Nyota, and the broader concept of the digital economy.

Sakina the Tailor

This is Sakina, a tailor. In the past, it was impossible for her to have even 20 customers in a month from the same community she lives in. But just last month, the Nguvu Moja Tailoring group sold more than 40 pieces of dresses, and they are now preparing to launch another project that could reach over 100 pieces in a single month.

Mmanyema Og

 Her name is Amina, also known as Mmanyema Og. She cooks Biriani and bakes bread, selling them to the community using both Nyota and cash.

 

On Fridays, she now sells up to 14 plates of Biriani to Nyota members, whereas before she rarely had more than 4 to 5 customers who could afford Biriani on Fridays. Recently, she also started baking bread as a new business venture, which she sells to the community, accepting a mix of Nyota and cash.

Sakina the Tailor

This is Sakina, a tailor. In the past, it was impossible for her to have even 20 customers in a month from the same community she lives in. But just last month, the Nguvu Moja Tailoring group sold more than 40 pieces of dresses, and they are now preparing to launch another project that could reach over 100 pieces in a single month.

Mmanyema Og

 Her name is Amina, also known as Mmanyema Og. She cooks Biriani and bakes bread, selling them to the community using both Nyota and cash.

 

On Fridays, she now sells up to 14 plates of Biriani to Nyota members, whereas before she rarely had more than 4 to 5 customers who could afford Biriani on Fridays. Recently, she also started baking bread as a new business venture, which she sells to the community, accepting a mix of Nyota and cash.

The post A Glimpse into the Nyota Community appeared first on Encointer.

By Asyia Aminu from the PayNuq Community Team

A Quiet Shift, A Bold Step

On a warm afternoon in Zaria, Nigeria; under the shade of local trees and the quiet hum of community chatter, something transformational began. We launched PayNuq, our community’s very own local digital currency, built on the Encointer protocol and powered by people.

PayNuq is more than just a new form of money. It’s a bold experiment in local resilience, economic inclusion, and collective ownership, and we’re proud to say, it’s happening right here in Zaria.

What is PayNuq?

PayNuq is a community currency powered by Encointer, a protocol on the Kusama network that enables the creation of local, universal basic income (UBI) currencies.

Through regular in-person ceremonies, each verified member receives an equivalent of approximately ₦ 1,000 in PNQ every 10 days, designed to cover local spendings of basic needs such as food, essentials, and local services.

It’s a system that’s:

• Fair and fraud-resistant via Encointer’s Proof-of-Personhood.

• Inclusive and local by design: supporting small businesses and individuals.

• To prevent hoarding, PayNuq slowly loses value if not spent (called ‘demurrage’), encouraging regular use, trade, and support for local businesses.

PayNuq is our community’s way of saying: “We take care of ourselves.”

The Launch Moment

The launch event was not just technical; it was emotional. Community members gathered for our first key signing cycle meetup and watched videos of successful community currencies in other places, such as Ijara Isin, Kwara State

Then, we opened the floor. Barbers, farmers, tailors, shopkeepers, restaurant owners, and service providers spoke up, asked questions, and imagined how PayNuq could work for their lives and livelihoods:

• “Can I use PayNuq only within the community?”

• “How do I know which businesses accept it?”

• “Can I grow my business using this?”

• “Is there a way to earn more or use it for loans?”

And we answered. Honestly, openly, and with excitement. Then, as they witnessed the first minting of PayNuq, smiles spread across participants. The idea clicked. The vision became real.

Mapping the Local Ecosystem

A lot of preparation has gone into PayNuq before the first coins were minted. PayNuq has launched with around 30 people and already has 8 small businesses ready to accept and circulate the currency.

Each business is a recipient and represents an active node in our economic web, with connections between them built around mutual value.

To have a rough idea of transaction volume, a detailed mapping of the local value exchanged has been crafted (Table 1). Based on the mapping of current economic value flows, an estimated monthly turnover of 2’000 PNQ was calculated (resulting in a target market cap of ~24’000 PNQ).

Table 1: Estimated Monthly Transaction Value between the 8 official PNQ acceptance points in PNQ (or ₦  1’000). 

To leapfrog the build-up of the necessary volume, a “fill the community reserve” strategy was chosen. In the first 4 cycles, a closed group of community members has minted 100 PNQ each (instead of the 1 PNQ planned). This initial sum was then transferred to an account controlled by the community. Anyone who wants to can now purchase PayNuq with a 10% discount directly from the community reserve and buy at favorable prices from local shops.
Concrete: To get 1 PNQ, one needs to pay ₦ 900 (shops will still accept 1 PNQ equivalent to ₦1000). This way, the community reserve can build up a balance in local fiat currency, besides the initial boost in PNQ. 

Further, the mapping helped us understand which businesses will likely acquire a surplus and would probably want to exchange excess PNQ with the community reserve. Here, the idea is that they will do this with a ~20% discount, leaving a little margin for the community reserve to cover operational expenses and the demurrage lost.

Building More Than Currency

One of the most exciting innovations in our launch is the beginning of PayNuq’s Community Reserve Model. Besides acting as a liquidity provider for acceptance points with an excess in PNQ, we are exploring the following ideas: Interest-free microloans to support small business growth, combined with a stake-based model where borrowers share success with the community. The lending cycle model pioneered by Noyta in Tanzania also serves as inspiration. 

Reflections of our First Steps

What we have learned in the first weeks of running PayNuq: 

• Curiosity is powerful: Even those who had never heard of blockchain left the event asking about wallets and marketplaces.
• Real-world clarity is everything: Showing examples from other communities helped demystify the idea.
• The best way to grow is to listen: Every question gave us insight into what to build next.

When PayNuq is introduced in the community, the conversation doesn’t begin with blockchain or technology. It begins with people and with what matters to them:

“PayNuq is your own community currency. Value is kept circulating right here, where we live.”

“There’s no need to be a tech expert. No bank account is required. Nothing needs to be purchased. Just join a local meetup, get verified, and PayNuq will be received.”

“It’s not magic. We build it together. It’s community. And you’re part of it.”

Next Steps

We’re just getting started. In the coming months, we aim to onboard over 50 people and 10 key businesses. We’re building trust and cohesion through regular community cycles, growing awareness with local events and stories, and preparing to establish a local NGO partner for long-term growth.

A Currency Rooted in People

PayNuq is a soft revolution. It doesn’t ask for permission from banks or corporations. It asks for cooperation: from neighbors, from businesses, from families.

What we’re doing in Zaria is just another example. But it’s also a call to others: this model can grow. It can adapt. It can empower. It’s not about decentralization for its own sake. It’s about recentralizing value into the hands of the people.
To our friends around the world, we say: Watch Zaria. Then build your own.

Want to learn more or start something in your community? Reach out to us, we are happy to share our experiences!

The post Launching PayNuq: A New Economy Rooted in People, Cooperation and Local Value Creation appeared first on Encointer.

What is Mchezo?

Informal finance is an important cornerstone in developing economies. Examples include Hawala, an informal value transfer system mainly used in the Middle East, or informal insurance Cajas from Latin America for health and emergencies. The Rotating Savings and Credit Association (ROSCA) is one of the most widespread mechanisms. Depending on the region, ROSCAs are known as Chamas, Tandas, or Susu. Most participants of ROSCAs are women, and early examples were recorded as far back as 200 B.C. in China. In a ROSCA, members contribute to a common fund, with one person withdrawing the full amount at the start of each cycle. A ROSCA thrives on social capital, where group dynamics ensures commitment, as defaulting harms reputation and future creditworthiness.

In Tanzania, ROSCAs are called Mchezo, which means “game” in Swahili. Mchezo is widely used in communities and savings groups all over the country. The amount contributed depends on the group’s agreement, and members take turns withdrawing the entire sum. The purpose of a Mchezo varies depending on the group’s financial goals, whether for investment, emergency funds, or personal use. Some stores organize Mchezos to help their customers finance kitchen appliances or cosmetic products. Store owners understand that this approach is an effective way to attract more customers, especially since many people lack the savings to purchase these items outright.

The Kusama Mchezo

Encointer introduced the faucet feature in Oct 2023, allowing members of communities to claim 0.1 KSM per successful attendance of Encointer cycles. The Encointer protocol ensures that each person can only claim once. The faucet is donation-based and it enables a non-bureaucratic cash transfer directly into the hands of individuals of a specific region where the donations provide an additional income of real value and liquidity beyond Encointer’s community currency. This inspired the Nyota leadership to combine the faucet with local Mchezo traditions.

The first Kusama Mchezo group started with 18 members from the Nyota Community. Every 10 days, members pooled the 0.1 KSM they each claimed from the faucet and jointly exchanged them into Tanzanian Shillings (TZS) with the help of an agent who had an account on a crypto exchange. Each cycle, 72k TZS (~27 USD) was given to one member, with the expectation that they would use it to buy supplies for their business and sell goods and services for the local NYT currency, usually at a partial split with TZS. Mchezo participants become entrepreneurs and they are willing to take strategic risks with the “extra money” from the faucet because they get it on top of their – otherwise very restricted – daily budgets and it doesn’t feel like they would risk money they earned with hard labour. This spirit is expected to stimulate economic activity within the Nyota community.

One member used the funds to buy cooking oil or sugar in bulk (10 liters or more). Then the member would provide small packages of around 0.5 to 1 liter to the community, accepting NYT as partial payment (usually 30% in NYT plus 70% in TZS).

With this mechanism, new businesses and acceptance points of Nyota were established. 

The fact that Kusama’s KSM token was used for the faucet complicated things. The volatility of the exchange rate between KSM and TZS made it impossible to maintain a steady payout cycle with a fixed amount of TZS. The Mchezo participants decided to share this risk and the Mchezo payout cycle sometimes had to be delayed to collect more KSM and pay out the 72k TZS to the next participant. In the future, the Encointer faucet will support stablecoins which shall protect the Mchezo from such volatility risks.

Results

The first Mchezo has created 15 new businesses. 7 of these are still actively contributing value within the community (selling tailoring services, cooking oil, flour, rice, biryani, fresh juice, hair braiding, sugar, washing soap for partial NYT payment). The total pooled and distributed amounts to 1,260,000 TZS, which is almost 500 USD in a region where many live off 5$ per day. 

The Kusama faucet has been a key driver for people to join the Nyota Community, introducing them to Kusama, Nyota, and digital currencies in general. This has also sparked greater interest in blockchain technology.

The Kusama Mchezo is the first one in Dar es Salaam where contributions are made in digital currency, unlike traditional Mchezo, which relies mainly on fiat money from personal income or business activities. Here, members can use their Encointer cycle rewards, reducing financial strain compared to conventional savings rotations.

Let’s look at some numbers:

There are more positive effects to be observed in the first round of Mchezo besides the increase of the NYT turnover. Since the Kusama faucet started, the overall money flow has increased, strengthening cooperation and business relations. More businesses now accept the local Nyota currency as payment, making it easier for community members to access services and exchange goods. The Nyota leadership has observed a significant increase in livelihoods in the region and an improved economic situation. 

“It’s what they say and it’s easily observed: Before the Nyota community currency and Kusama benefits, things were completely different compared to now. Now, we can see the community relationship between members is very strong, and they have an open market to sell everything they bring into the community. The use of Nyota currency has increased savings and reduced the cost of getting good products and services. Kusama and Nyota are now additional sources of income that didn’t exist before the Nyota community started.” — Alinagwe Mwaselela, Nyota Community Lead

The results from the first round of Mchezo look promising. It had a positive impact on participating businesses’ turnover and, in turn, improved the livelihood of all community members because they could afford additional goods and services thanks to partial payment in NYT, which they get as an unconditional community income. This improvement was enabled by KSM donations. Our goal is to leverage donations but multiply their impact and eventually reach self-sustainability. Further experimentation is needed to prove this possible.

Outlook

Due to the success and the great feedback within the community, a second Mchezo is on its way. Instead of having one big Mchezo, the idea is to facilitate a few smaller ones. Each Mchezo brings together a specific group of business people, e.g. six Tailors from the Mbhuarati region. On top of the Mchezo, the groups have access to a small businesses loan program, organized by the Nyota leadership. To receive a loan, a joint project with value for the participating businesses must be formulated and a collateral in NYT community currency must be deposited, driving the demand of NYT. 

The Nyota community members often face precarious living conditions that make it challenging to afford everyday essentials. This financial strain can lead to unsustainable business decisions. Recognizing the link between personal well-being and business performance, the Mchezo supports its members’ personal needs, which helps them to build a more stable and productive environment. To foster mutual trust in the community, the usage of the Mchezo funds is being communicated transparently within the group. 

We are looking forward to the next round of Mchezo.

You can donate KSM directly to Encointer communities of your choice now and support these experiments!

Acknowledgements

We thank Alinagwe Mwaselela for managing the Kusama Mchezo, providing the on-the-ground data and co-authoring this post. And we thank the entire Nyota community for proactively blending their cultural habits with the new digital possibilities Encointer offers.

Links and References

• https://www.investopedia.com/terms/r/rotating-credit-and-savings-association.asp
• https://en.wikipedia.org/wiki/Rotating_savings_and_credit_association
• https://www.rfgroup.com/caymanislands/news/blog/rotating-saving-clubs-for-small-business-owners
• https://www.e-mfp.eu/post/when-fintech-meets-traditional-informal-financial-schemes-recent-trends-innovations-digitising

The post Kusama Mchezo in Tanzania appeared first on Encointer.

Africa’s Role in Web3

The global blockchain space, including Kusama, which secures the Encointer Network, may well be criticized for being overly concentrated in the Global North. With over 1,500 active nodes distributed globally, most are hosted in North America, Europe, and parts of Asia. Africa, despite being home to 1.4 billion people, is heavily underrepresented in this space.

This imbalance is bad for everyone. The blockchain’s promise of decentralization censorship resistance only goes half-way when the majority of its infrastructure depends on first-world countries and their data centers. The new initiative in Zaria is addressing this by running their own on-premise IT infrastructure, independent of hyperscalers like AWS or Google Cloud.

Global distribution of Kusama Network’s ~1500 active nodes.

The Challenges of Running IT Infrastructure in Africa

Operating productive IT infrastructure in Africa presents unique challenges, including:

• Frequent power outages: Reliable electricity is a luxury in many areas, forcing creative solutions for uptime.
• Unstable Internet connectivity: Intermittent access to the Internet jeopardizes participation in global blockchain consensus.
• Hardware availability: Modern, affordable IT equipment is often difficult to source locally.

Despite these hurdles, the PayNuq community has risen to the challenge. Their IT infrastructure runs entirely off-grid, powered by solar panels and a battery backup to ensure 24/7 operation.

Repurposing Old Hardware for Blockchain Decentralization

Rather than investing in expensive new equipment, the PayNuq community repurposed a 10-year-old HP EliteDesk 800 as a parachain collator for the Encointer Network. The only necessary upgrade? A faster SSD. This DIY approach is a powerful statement, proving that decentralization doesn’t have to mean exorbitant costs or exclusive access to state-of-the-art equipment.

Tackling Internet Connectivity

Independence from the power grid is not enough. The setup also needs uninterrupted internet connectivity. While satellite internet could be an option in the future, it brings new challenges, such as potential monopolization by providers. For now, the team relies on local cellular networks while exploring affordable and sustainable upgrades.

The Bigger Picture: Financial Incentives and Independence

Their efforts don’t just benefit their community—they also make economic sense. The Kusama treasury rewards system chain collators with up to $300 per month for uninterrupted service, providing a steady revenue stream for the PayNuq team. If their infrastructure proves stable, they could expand to run nodes for other systemchains or even become a relaychain validator and build a very profitable business.

Why This Matters

Decentralization isn’t just about technology; it’s about equity, accessibility, and resilience. By creating their own Encointer currency and operating off-grid infrastructure, the PayNuq community is achieving independence from first-world infrastructure operators and foreign currencies to pay for the it.

Moreover, their efforts enhance the Kusama Network’s censorship resistance by diversifying its geographical and operational control. This is decentralization at its best—rooted in local innovation and global impact.

Looking Ahead

As we follow the journey of the PayNuq community, it’s clear that they’re not just building for themselves—they’re setting an example for other underrepresented regions worldwide. Their story is a reminder that blockchain technology can empower communities everywhere, especially when paired with resourcefulness, collaboration, and a commitment to independence.

Stay tuned as the Zaria community grows within the Encointer Network. Their progress promises to be an inspiring chapter in the story of global decentralization.

The post Independence Powered by the Sun: A Nigerian Community’s Journey into Blockchain and Self-Reliance appeared first on Encointer.

In emerging economies, the lack of disposable income is a real obstacle to economic growth. Adding evenly distributed currency in a local setting can tackle this problem. Especially, if the supply and usage of said currency is governed democratically. The Encointer Association has tackled this opportunity in the past 6 years and developed a system facilitating a simple solution leveraging technological advances such as mobile phones and blockchain technology: 

A local community currency, paired with a fractional reserve governed by democratic principles, issued as an unconditional income to all community members. The system has been battle-tested for two years and can now be scaled.

Encointer System

The Encointer Association is a Swiss-based nonprofit organization dedicated to empowering communities worldwide by enabling them to generate their own local digital currencies. The system consists of a local currency, issued as a regular unconditional income and a liquidity fee. This stimulates local economies and reduces inequality. Our digital technologies allow bottom-up participation with the principle of subsidiary democracy. 

Encointer’s currency system distributes a community currency regularly, similar to universal basic income, and requires in-person meetups where community members mutually attest each other to verify recipients. Key benefits include increased local spending, mitigated inflation, promoting financial inclusion without needing state-issued IDs, and enhanced social capital. The platform is accessible via free apps, is cost-effective, and ensures trust through regular community meetups. 

By fostering regular physical meetings and adhering to democratic principles, Encointer builds strong communities and offers a system for effective development aid. The LEU pioneer community in Zurich has demonstrated Encointer’s feasibility.

Nyota Community

The Nyota community currency was launched in September 2023 as an experiment in Dar Es Salaam, using the technical tools and protocol provided by the Encointer Association. Nyota is the most promising implementation, paving the way for many other successful programs in emerging cities. It is a joint venture of the Encointer Association, Chatafisha and Jukumu.

After a successful launch, Nyota’s community leaders quickly expanded to nearly 100 participating individuals, proving the viability in the Mbuharati region. Nyota has been established as a payment alternative for locally produced goods and services. The community leaders leveraged the local tradition of saving groups (mchezo) to accelerate acceptance. The Noyta community reserve is initially filled through cash injection. As this reserve secures the value of the local community currency, it acts as a fractional reserve: Each dollar injected into the reserve can facilitate multiple dollars of turnover within the community economy. Nyota uses the community reserve to invest in starting local businesses that are targeting basic needs.

Chatafisha

Chatafisha is a community-driven team building digital solutions for marginalized communities. The word Chatafisha itself comes from two Swahili words; Chata meaning mark & Safisha which means cleaning or enhancing. Put together it means enhancing and advancing communities by leaving a mark. Chatafisha works with various communities on the ground such as waste pickers and community savings groups. Understanding their pain points and challenges allows them to tackle these through disruptive solutions.

Jukumu

JUKUMU is the short form of the words Jumuiya ya Kiuchumi, Ujasiriamali na Maendeleo ya Umma which means Economic Community, Entrepreneurship and Public Development, this is a non-government organization that helps build good relationships in the community, by creating and uniting groups of entrepreneurs, business professionals, and other services providers to solve various challenges that our communities face in economic and social matters. Further, members are kept close to investment opportunities, self-awareness education, and marketing techniques. JUKUMU works within the borders of Tanzania, and so far has engaged more than 200 groups represented by 58 Community base Trainers (CBTs).

Outlook

Local currency brings prosperity:

Education is an important aspect of our community-building approach. With an increased financial literacy the reach and the adoption of the local currency within the Mbuharati Region in Dar Es Salaam can be increased. 

Economic sustainability of all participating actors: 

The financial sustainability of all actors in Nyota is ensured by fostering a resilient local economy. We focus on the effective use and replenishment of the community reserve, support continuous local spending, and enable the growth of new local businesses.

Develop impact assessments: 

Comprehensive impact assessments will be created to evaluate the social and economic outcomes of the local currency initiative. These assessments will guide improvements and demonstrate the initiative’s effect.

Preparing for growth within Dar Es Salaam and Tanzania: 

We are preparing to scale the local currency model within Dar Es Salaam and eventually across Tanzania. This preparation includes building the necessary infrastructure and partnerships to support widespread adoption.

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In contrast to most other community currencies, Encointer operates without a central entity that keeps the books, defines the rules and needs to be trusted. Encointer communities are managed on a public blockchain and the governance rules are enforced by the blockchain protocol. In this article, we’d like to present our first prototype of democratic governance for local communities.

First, let’s clarify what we mean by democracy on the local community level:

• Equality: every person who is affected by a decision has exactly one vote. All affected persons have equal power over the outcome.
• Deliberation: Everyone affected by a decision can publicly and freely express their views and learn from others.
• Information Symmetry: Every voter has equal access to the necessary information to form an opinion and cast their vote by themselves.
• Sovereignty: Communities independently determine their fate without relying on any internal or external authority to respect and implement their decisions. This ensures full control over governance and decision-making processes.

While these idealistic goals are challenging in practice, technology can help approximate them. This article presents the first implementation of democratic governance for Encointer communities, focusing on equality and sovereignty. It allows for essential experimentation, driving the protocol’s evolution.

Who gets to vote?

Encointer communities are open to all individuals physically present within the community’s defined area who are willing to participate in its social protocol. A mobile phone with the Encointer wallet app and internet access is all that’s required—no identity documents, bank accounts, credit cards, or spare money needed. Participants don’t even need to reveal their name, email address, or other identity attributes.

Encointer uses a digital personhood protocol to assign votes to unique individuals physically present in the community over time. This protocol relies on in-person gatherings, as explained in our whitepaper: Community members attest to each other’s personhood and membership at cycle events every 10 days. The more frequently a person attends these gatherings, the higher the confidence that they maintain a single account. To prevent Sybil attacks, each cycle attendance within the last five cycles counts as one vote for governance decisions. This approach, though not perfect, aligns much better with democratic values than plutocratic token voting, common in proof-of-stake blockchains, and is preferable to relying on an autocratic platform operator.

How to propose changes?

Any community member can propose spending community reserves or changing currency rules, such as modifying community income, adjusting the demurrage rate, or changing cycle gathering locations. These changes can be automatically enacted by the protocol upon approval without needing an administrator or authority. Additionally, members can submit petitions signaling community wishes for change, which motivated groups can act upon.

As any member can submit proposals, there can be many proposals up for vote at the same time and they might mutually contradict: One proposal may set the community income to 10 units every 10 days, another one to 100 units and one may even suggest 0 units. This allows for a more expressive participation than a simple Aye/Nay vote on a number that has been previously agreed on in a working group of only few people in a take it or leave it manner.

The simple rule to resolve the conflict among competing proposals is that the first proposal that maintains approving state for a confirmation period will be scheduled for enactment whereas all other open proposals for the same parameter change get canceled.

Stagnation vs. Chaos: Adaptive Quorum Biasing

Every governance system needs to balance stability vs agility. “Never change a working system” vs. adapting to changing needs.

We need to acknowledge that not every community member will actively participate in governance. Many may take a passive stance and don’t act as long as they don’t suffer. Building an opinion on a matter can be a lot of work and not everybody is willing or capable to invest this effort. This is one of the reasons many democracies elect representative bodies to decide on their behalf. As a grassroots protocol, Encointer attempts to avoid such representative bodies and instead proposes a very dynamic proposal system which still defaults to the status quo unless the approval for the change is very strong.

The basic principle is: The lower the voter turnout, the higher the approval threshold. At 100% turnout, the threshold is 50% and matches the simple majority rule. With lower turnout, a higher percentage of Aye votes is required for approval, ensuring only well-supported changes pass. A turnout threshold, suggested at 5%, ensures proposals represent a significant portion of the electorate.

The Lifetime of a Proposal

Proposals can be submitted anytime and are voted on continuously. Let’s first look at an example where only one proposal is active.

After submission, a proposal has a 9-day voting period. To be approved, it must stay in a passing state for a 2-day confirmation period within its lifetime. Approved proposals are scheduled for enactment for the upcoming cycle.

On Leaderlessness

Every community will have its leaders, whether those who initiated the currency or those knowledgeable about the technical tools. While striving for equality, we must recognize the importance of leadership in accomplishing necessary tasks. Encointer provides tools for communities to distribute power more equally, but each community must find what works best for them. Encointer’s architecture intentionally avoids centralizing power in a single leader by default while still maintaining structure.

Sovereignty

A community is only sovereign if it controls all necessary components for its platform and does not depend on external actors. With Encointer being a global platform, there is a dependency on the Kusama Network and the Encointer parachain for a local community currency to operate. Encointer takes various steps to enable communities to run their own infrastructure, from blockchain nodes to indexers. But in the end, Kusama governance can overrule all local decisions if KSM holders choose to. Therefore, true sovereignty requires an exit option for communities.

Exit means: leave the Kusama consensus system and go solo or join a different consensus system. Thanks to the technical flexibility of substrate chains, this is actually possible: A community can snapshot their state at any point in time and re-genesis on their own substrate chain – which they then need to maintain alone, obviously.

Pioneering Web3 Democratization

Decentralized systems like blockchains have typically used cryptoeconomic governance, inevitably leading to plutocracy. While some may favor plutocracy over the autocracy of big tech or certain nation states, we shouldn’t give in to the lesser evil too quickly if a more socially sustainable solution is possible.

With its approach to democracy, Encointer gives humans a vote. There are no gatekeepers controlling membership or credentials. Participation is based on physical presence and voluntary engagement.

Simply implementing the best governance system possible won’t do: We also need the communities who adopt it and give it meaning. Your turn!

Are you interested in how it works exactly? Try our deep dive tutorial!

Ready to experiment in your community? Follow the examples of leu.zuerich, GreenBayDollar, and Nyota in Tanzania: Bootstrap an Encointer community!

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