Chama is the Kenyan name for a Savings Club. Savings Clubs have existed around the world for centuries.
There are over 1,200,000 Kenyan Chamas. They give people a means to save and access low-cost loans which are used to start or grow businesses, to improve community infrastructure (by saving to build or equip a health centre, for instance) or to support Members in temporary financial difficulty.
Chamas’ collective savings account for 46% of Kenya’s GDP. For those unable to access bank accounts (due to costs or geography), Chamas are invaluable.
New Members must be guaranteed by two existing Members. Because Guarantors have ‘skin in the game’ they’re unlikely to recommend people they don’t trust, so new Members are less likely to fall behind with contributions or repayments. It’s effective way to reduce risk, but it hasn’t entirely eliminated risk: Chamas are susceptible to fraud, theft and accounting errors.
Chamapesa makes running and managing a Chama easier. Digitised bookkeeping and Ricardian Litechains make it possible for each Chama to have a private, immutable ledger visible only to its Members. This improves accountability and transparency, and helps reduce theft, fraud and accounting errors. Chamapesa has four key components:
• The Chamapesa Network
• The dApp
• An ERC-20 native token (Chamacoin)
• Ricardian Contracts (Riccys)
How does Chamapesa benefit Chamas?
Digitised bookkeeping. All transactions are recorded to an immutable ledger: Chama Members can see it, but no one individual can change it, virtually eliminating fraud.
• Identity. By combining Personas with group membership, assurances, guarantees and arbitration, we create a powerful trust model where Members have ‘skin in the game’.
• Ricardian Contracts. These are asset-backed, where the assets are held and distributed by Chamas, essentially decentralising both server and assets.
• Savings. Members can save with cash, mobile money (such as M-Pesa or Airtel) or Cryptocurrency.
• Global opportunities. Using Chamapesa, people can access Cryptocurrencies and engage in global commerce.
• Chamapesa supports Rotating Chamas (Members take turns in receiving funds) and Investment Chamas (those that issue share capital).
What are Ricardian Litechains?
Kenyans’ use of digital currencies is sophisticated. What’s ingenious is how they’ve built this system from the ground up, using cheap mobile devices with low processing power.
Understanding this constraint allowed for the development of Ricardian Litechains. These take Ian Grigg’s Ricardo Transaction Suite and merge it with a blockchain. Ricardian Litechains are a major breakthrough: small enough to fit on Members’ phones (and over 2G networks) without compromising blockchain’s security benefits.
What’s a Distributed Ricardian Contract?
A Ricardian Contract is a way to record a document as a legally-binding contract, one that can be linked securely to other systems, allowing issuance of value in the form of money, bonds, securities, et cetera.
Ricardian contracts were created by Ian Grigg in 1996 as a way to issue bonds, and later digital money. They incorporated the idea of triple entry accounting into a working payment ledger. With Distributed Ricardian Contracts (Riccys), we can create redeemable blockchain tokens - backed by cash reserves, and distributed across numerous independent savings groups.
Previous attempts at creating digital currencies, both blockchain-connected and asset-backed have failed to solve the problem of decentralising the asset reserve. By applying Distributed Ricardian Contracts, we bypass the bottleneck on exchange between fiat currency and cryptocurrency.
Read our White Paper on Ricardian Contracts.
Behind Chamapesa is a company called Solidus. This Bermudan Limited Company acquired Chamapesa’s intellectual property (including the App and source code) from Dinero LTD. Dinero had already developed a successful Alpha test of the App in partnership with Chamas using some $250,000 of founders’ capital. Stretching even further back, Solidus have invested $1.5 million in developing Ian Grigg’s Ricardo Transaction Suite since 1996.
Chamapesa will support an ERC-20 token called Chamacoin. It will be used to collect and distribute usage fees, reward users and can also be held as collateral, further ensuring long-term demand.
To speed up Chamapesa’s adoption, the dApp will be free, with small fees of 0.5% per transaction.
To participate, a Chama will need to put forward collateral in the form of a cryptocurrency (Chamacoin), to be held in a Smart Contract. As the Chama network grows, it increases both the demand for, and scarcity of, Chamacoin.
Savings and payments will be accounted in local currency. Converting fees to Chamacoin will be automatic and invisible to users. Chamacoin rewards will give Members visibility of the token.
Chamacoin can be exchanged for other digital or fiat currencies, giving Chamas access to global markets. Furthermore, Chamacoin encourages Chamas to connect with each other, ensuring that idle savings are put to best use.
How do people get hold of Chamacoin?
Members can exchange funds for Chamacoin through the Agent Network. Local, accessible and convenient, Chamapesa Agents will act as a gateway to Chamacoin, other digital and fiat currencies and mobile payment systems. (For launch, Chamapesa will be integrated with at least one mobile payment system: M-Pesa, Airtel Money or Equity Bank.)
Members earn Chamacoin by making assurances and guarantees, through good behaviour, by recruiting new Members and other groups, and by increasing their Chamas’ overall savings. They can also earn Chamacoin by sharing their data with third parties.
What’s Chamacoin’s transaction fee?
0.5% per transaction is small enough to make Chamacoin competitive, and large enough to cover ongoing network growth and development. Fees will be automatically converted into Chamacoin. 80% will given back to the Community in the form of Rewards, and the remaining 20% will fund network development and growth.
What functionality does the Chamapesa App have?
Using the Chamapesa App, people can create and manage savings groups through their phones. Membership, bookkeeping, share issuance, payments, and loans between Members can be organised from a mobile.
Members can see what the Treasurer’s doing with group assets and check on the performance of individual loans. There’s also multiple signature (Multi-sig) functionality for larger transactions.
Each Member’s identity and performance history will build up a ‘Persona’ within the App. Personas can act in a similar way to credit records, and can be shared with other users and Chamas.
Chamapesa will also include integration with local mobile money rails, as well as an Ethereum-compatible wallet to help people access global commerce through the use of Cryptocurrencies.
If someone loses their phone with the Chamapesa App, do they lose their savings?
No. All transactions made on Members’ phones are encrypted and backed-up to the Cloud, so if someone’s phone is lost or stolen, they can still access their savings.
What is Chamapesa’s Identity Model?
Chamas use guarantees to limit risk when new people join, so each new Member must be guaranteed by two existing members. It works, as people tend to make better decisions when their own money or wellbeing is placed at risk. It’s what Nassim Taleb refers to as ‘skin in the game’.
So instead of relying on a centralised credit bureau, we build user identities based on their community social network (who they know in real life, as opposed to who they know via Facebook).
Furthermore, Chamapesa lets Members control their own identity documents and choose who to share them with, unlike credit bureaus that sell reports to any institution. Members can earn Chamacoin each time they choose to share their data.
What technology is behind Chamapesa?
Chamapesa features a hybrid technology called Ricardian Litechains. They combine Ian Grigg’s Ricardo Transaction Suite with blockchain technology, creating small, private blockchains that fit on Members’ phones.
Is Chamapesa decentralised?
Chamapesa uses Distributed Contracts - these are asset-backed Ricardian Contracts. As all assets are held and distributed by Chamas, Distributed Contracts decentralise the server and assets.
How do Ricardian Litechains differ from Blockchain?
The biggest difference is size. Ricardian Litechains are small enough to sit on Members’ phones. Their size also means they can be used over 2G phone networks.
How secure are Ricardian Litechains?
Litechains offer full blockchain security features. They enable full transparency for Members inside a group, yet keep activities opaque from outsiders. Litechains feature an immutable ledger that can be seen by all, but can’t be tampered with by any one individual.
When does the public sale begin?
Please refer to our website and Telegram channel for the latest information
What currencies will you accept during the auction?
We accept ETH
How do I take part in the auction?
When the auction starts, we’ll announce an official Ethereum address to send ETH to. Please ensure you take all precautions before sending ETH.
The contract address won’t be released ahead of the auction’s start. Please check our Telegram page for details. Don’t send ETH from an exchange. (The key is owned by someone else, so we can’t send Chamacoin directly to you.) Only send ETH from a private wallet that you have full control over.
Please double-check the address against Etherscan before sending ETH.
How many days will the Auction run for?
Eight days. 32 million Chamacoin tokens will be sold in eight, separate daily auctions of four million tokens each. The pre-sale funds already raised will be divided into eight equal portions and entered in the eight daily auctions.
How many hours will the auction run each day?
18-hours, with a two hour gap between each one. This way, no one time zone will have an advantage over another.
How many tokens will be available?
40 million - 40% of all CHAMA tokens.
How many tokens will be available on each auction day?
4,000,000 tokens will be available in each Auction.
How have you set the price for each token?
The price for each token will be set at the conclusion of each daily auction. In this respect, the token sale resembles a cascading Vickrey style auction.