Tokenizing Income Share - Use Cases

[GENERAL] Summarize your solution to the problem.

We will research the Income Share Agreement (ISA) value chain in emerging markets; and how to tokenize real-world educational assets.  

[GENERAL] Summarize your relevant experience.

Seedstars spent the past 9 yrs. enabling emerging market entrepreneurs across 75 countries. The group supported 37k+ entrepreneurs, delivered training for 2k+, and invested in 75 companies.

[IMPACT] Please describe your proposed solution.

Contextual background: 

• Seedstars is very active with entrepreneurs’ education and collaborates with institutions like 01Edu, We Think Code_ and others to open 5 Seedstars Academies, tech entrepreneurial education schools, in the next 3 years. The first Academy was launched in South Africa in 2022 followed in September by one in the Ivory Coast and India in 2023. Our goal is to unlock entrepreneurial talent equipped with adequate tech skills. The talents will also acquire blockchain technology and development skills.   
• Problem: Tertiary Education in Emerging Markets does not Match the 21st Century Job Market; and access to quality education - meaning education leading to decently paying jobs - caters to those who have the financial means to attend private institutions in Africa that is only 8% of the youth population. Education financing options are limited for talents and investors see educational debt as a non-attractive asset class 
• Solution: We propose to unlock access to education financing through Income Share Agreements (ISA). With an ISA, a talent agrees to pay for their college education, or a portion of their education, by making pre-determined payments after graduation based on a percentage of their income. Our ISAs will go towards talents attending transformative entrepreneurial educational journeys and acquiring 21st-century skills. In order to streamline and strengthen the ISA deployment and recollection process, we suggest building ISA mechanisms on-chain and tokenizing them. 

Below if the theory of change of the proposals:

Our objective with this proposal is to: 

• Fully understand the ISA value chain and deployment in emerging markets and assess its efficiency 
• Explore the latest development in the on-chain realm to best build tokenized ISAs
• Kindly note this proposal is the related to the work of our proposed PoC 

Our unique reason for doing it this way is:

• To ensure we capture as many on-the-ground realities around ISA deployment 
• Understand the current and forecasted chain developments 
• Build the best-suited ISA tokenization workplan  

The initial workflow can also be found here.

Our audience is:

• Education providers equipping talents with 21st-century skills in emerging markets 
• Income Share Agreement providers targeting emerging markets 
• Talents using/opting/signing up for income share agreements 
• Players trying to enable the tokenization of real-world assets 
• Developers 

The impact will be:

• Research on ISA value chain in emerging markets 
• Key research questions 
• Who are the ISA providers in emerging markets (EM)? 
• Who are ISA providers in emerging markets financed by? 
• What are the key characteristics of ISA provider recipients? 
• What education providers do the ISA signatories attend? 
• What type of jobs do they secure after their education? 
• Which emerging market geographies are most familiar with income share agreement? 
• What are the current strengths, weaknesses, and opportunities of ISA models currently being operated on EMs? 
• What are the most critical assumptions linked to the deployment of ISAs in EM 
• What type of underwriting methods are used for ISAs?

• Research on tokenization of ISAs  
• Key research questions 
• What is the optimal tokenization work flow? 
• What is the best technical implementation?
• What are the legal obstacles? 
• Who are the best players to work with on the various aspects of ISA tokenization? 
• What are the best mechanisms to scale the solution (e.g. charitable stake-pools, etc)? 
• What governance functions are required and what infrastructure is required to fulfill them? For example: what voting mechanisms should be used to accept new ISA, EP or talent stakeholders?
• What repayment model could be adopted? (i.e. underwriting, tracking of talent remuneration, links with mobile money and banks, etc)
• How can users connect their Atala PRISM identity wallets with Cardano wallets? What are the best technical standards linked to token creation in the educational sector? 
• Underwriting and risk assessment of an ISA? At what stage does this happen and is it integrated into the token? 
• Example of assumptions to be validated:
• An Atala PRISM credential can have a token binded to it and vice versa.
• Users will use a PRISM credential to interact with the parties (smart contracts and issuers/verifiers) in the Seedstars ecosystem.
• Seedstars web/mobile app will handle token flows. 
• Users will call Cardano mobile wallet from Seedstars web/mobile app and Proofspace mobile app through the WalletConnect-like standard adopted for Cardano wallets.
• ProofSpace App will handle verifiable credential flows and enable parties to issue both tokens and creds to the corresponding apps(wallets)
• In addition to SSI verification, the token ownership verification will take place. 
• Seedstars and ProofSpace may call each other through deep linking to build a complex flow consisting of token transactions and VCs interactions, that is experienced as a seamless flow by the end user.

• Research on the creation of a new asset class 
• Key research questions
• What are the main blockers for traditional debt and equity investors? What opportunities are there to lift roadblocks? 
• What are the main blockers for crypto investors? What opportunities are there to lift roadblocks? 

Synergy with other proposals

• this proposal operates in complementarity with the proposal on the proof of concept of the tokenization of income share agreements and the creation of a CIP (Cardano Improvement Proposal) 
• And operates in complementarity with a CIP proposal also submitted under Fund 9.
• Seedstars is a large organization composed of more than 80 team members. It is to our understanding that other teams are submitting proposals unrelated to the activities of our team. For more information, you can visit the IdeaScale handle seedstars.

Additional Ressources

• Proposed Workplan (all proposals)
• Proposed Workflow

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

The proposed solution addresses the challenge in the following ways: 

• The overall question to be addressed by the challenge is: What dapps, products, and integrations can be implemented to bring impactful use cases to the Cardano ecosystem that help drive more adoption?
• One of the areas of focus of the challenge is: the tokenization of real-world assets 
• The project is highly relevant to the key metrics for the challenge: Number of products tokenized as a native asset, Number of people using physical solutions

The proposal also includes other key areas related to the challenge setting such as: 

• DeFi - Borrow & lending mechanism for students
• Marketplaces . for investors and students 
• Nation governance systems - New governance systems for nation-states that provide new education finance practices 

This project will benefit the Cardano ecosystem: 

• Creation of new technical standards linked to education-linked tokens (https://cips.cardano.org/).Goodwill and positive associations to Cardano as a technology as it will be seen as a technology that can facilitate real-world positive projects as opposed to being a vehicle for speculation.
• Through charity staking pools, a successful donation platform that increases willingness to donate in full transparency, traceability, and cost-effectiveness. This has the potential of increasing the adoption of Cardano in new communities and hence attract positive media attention, developers, and researchers to the ecosystem.
• It can draw the attention of public, private, and crypto organizations who seek better ways to transfer money to people in countries with little access to quality tertiary education.
• Building bottom-up incentives for Cardano adoption. All recipients will need to have an ADA wallet to receive their rewards. As the Seedstars Academy scales up, broad-based adoption will follow naturally.

The relevance of the project lies in the fact that quality Dapps, products, and integrations will increase the utility & adoption of Cardano: 

• Ensuring the next generation of well-trained talents in emerging markets have interacted with Cardano on matters as important as their education and first salary will increase the adoption of Cardano amongst well-trained working professionals. 
• Education providers in emerging markets will interact with on-chain financing mechanisms and we assume it will increase the adoption of crypto in legacy systems 
• Testing and proving the model will de-risk the adoption of the model for crypto investors thereby unlocking a new asset class for them 
• Education courses for students about blockchain technology and Cardano will support the next gen of developers and entrepreneurs

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

Risk: Education providers, income share agreement providers and crypto investors do not free up time for interviews with us. 

Mitigation: Seedstars is already in touch with a considerable amount of these stakeholders through previous work and can leverage its network across emerging markets (250+ stakeholders on CRM) to get warm introductions. 

Risk: New actors with the ability to add value to the project arise between the research and implementation phase and slip out of our radar. 

Mitigation: installation of web alerts based on keywords. 

Risk: As with every R&D project there is a risk that technical, design, business, regulatory, operational or other challenges will be discovered which may hinder or block part of the assumed approach. 

Mitigation: Given the level of prior expertise invested into the proposal concept, the risk of us discovering a set of challenges that entirely block the project are low. The risk of discovering challenges that require us to adapt are approach is high, and discovering those challenges is part of the value proposition of the “research” phase. By discovering the challenges and adapting our approach, we increase the likelihood of success in the implementation.

Risk: Approaching the challenge from a theoretical angle and facing very practical challenges that could hinder the implementation. 

Mitigation: We are committed to having as many preliminary discussions with players already operating on the ground in order to try and frame the practicalities that need to be taken into account. 

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

Kindly find the extensive workplan here.

Managing the workload of this and other proposals:

• Proofspace: Here is a link explaining workload management: https://docs.google.com/document/d/1xkE9MMoJGXWKLl9Lkdh7c-R3hH1nn7XdMsZzRSE9LCY/edit?usp=sharing 
• Smart Chain: We have been working for two years on impact tokenomics with several entities around the world, and have the capacity to deliver a PoC following the research phase. That's why it seems essential to us to have a preliminary phase with partner actors.
• Seedstars: We invest significant time and effort at the proposal stage to clearly understand the tech and workflow requirements of the collaboration. Our team has time dedicated weekly to the Fund 9 project and has already set the foundations for the preliminary use case testing phase. 
• Chancen International: Chancen will house this project in its Research and Product Department and make 1 full-time project lead available for 6 months. Our team has over 7 years of experience in ISAs and currently managed 1651 ISA contracts in Rwanda and South Africa. Our input will ensure that underwriting, risk management and operationalizing in the real world is realistically translated into tokenization and a POC that can lead to further scale and ensure an ISA marketplace is established.

[FEASIBILITY] Please provide a detailed budget breakdown.

The detailed budget breakdown can be found here.

[FEASIBILITY] Please provide details of the people who will work on the project.

This proposal is a collaboration between several Catalyst & Cardano ecosystem players. All are very engaged and involved also with the Catalyst Community. 

Lead Submitter: 

• Seedstars (https://seedstars.com/) is a group on a mission to impact people's lives in emerging markets through technology and entrepreneurship. It consists of 3 tracks: investments (VC funds), capacity building for tech startups (Seedstars Programs), and entrepreneurial education (Seedstars Academy). 
• Pierre-Alain Masson
• Background: Founder and CEO of Seedstars, Founder Ensures Capital, CFO SOS Evasans
• Expertise: Business launch, development, and scaling, finance. 
• Michael Weber 
• Background: Founder and Managing Partner at Seedstars, currently leading the development of the Seedstars Capital Platform. Previously co-Founder of soSport. Associate at the Corporate Finance Group, Senior Consultant at PwC.  
• Experience: Finance (incl. Venture Capital, Corporate Finance) 
• Rosie Keller 
• Background: Global Partnerships Lead at Seedstars, Seedstars Academy Team, Regional Manager Asia at Seedstars, Founder of Emerging Markets fellowship.   
• Expertise: Partnerships, product design, Asian entrepreneurial scene. 
• Horatiu Ticau 
• Background: Head of People Operations at Seedstars, Seedstars Academy Team, Board Member of the Entrepreneurship Academy (Romania), Entrepreneurship methodology designer at Yincubate 
• Expertise: Entrepreneurial Education Design, People Operations, Business Operations  
• Tiziana Bombassei 
• Background: Global Partnerships Team at Seedstars, Seedstars Academy Team, Regional Manager MENA at Seedstars, VC analyst at Seedstars, Founder of Changemakers International 
• Expertise: Venture analysis, partnerships, entrepreneurial education operations, MENA entrepreneurial scene. 

Co-Submitters 

• ProofSpace (https://proofspace.id/)- ProofSpace is an interoperable identity network wrapped with no-code tools for issuing and verifying decentralized identity credentials. They aim to eliminate the technical barriers to entry for SSI and proliferate the number of use cases that are possible with SSI. They support Atala PRISM and Hyperledger Indy, bringing a robust, scalable and decentralized identity layer. ProofSpace can also act as a L2 Trust Registry allowing other services and ecosystems to share users without onboarding them separately.
• Nick Mason, CEO (proofspace.nick)
• Background: Venture analyst at Toniic, Head of Portfolio and Operations at BeyondMe, UK Director for Sierra Leone based education charity and Trustee for Street Child. Co-Founded ProofSpace (formerly ZAKA in 2019).
• Expertise: Venture development and analysis, partnership development project management, business development and operations. Europe and Africa.
• Viktor Radchenko, CTO (viktor.rko)
• Background:20-year R&D and full-stack track record. 
• Expertise: Skilled in project and product management, solution architecture, science consulting, blockchain, mobile, web, game, and embedded development. 6 publications in peer-reviewed journals. 
• Olesya Kershaw, Customer Success Analyst 
• Background: professional musician and concert pianist, teacher and business analyst
• Expertise: Analytics, attention to detail, project management, flexibility, quick adaptability to change, reliability, relationship building.
• Ruslan Shevchenko PhD, Solution Architect (rssh)
• Background: Researcher at Institute of Software Systems, Founder of several successful ventures including NBI (internet provider), GradSoft (software development firm) and largest UA Scala group. 10 publications in peer-reviewed journals. Author of “Methods of Algebraic Programming” and active columnist.
• Expertise: 30yrs full-stack across blockchain, telco, advertising and financial services.

• Smart Chain (https://smart-chain.fr/en/) - designs and implements Blockchain solutions to improve operational performance and create value within ecosystems. The blockchain research and development center counts 50 people, +20 cross-chain projects and distinguishes itself by its experience in development, blockchain technical research, and impact use cases. 
• Adrien Hubert 
• Background: Bank innovation management, Economic
• Expertise: Tokenomics, Business Model
• Vincent Katchavenda 
• Background: Entrepreneur
• Expertise: Creating communities, networks in Africa
• Trishala Suresh
• Background: Entrepreneur
• Expertise: Creating Communities, Networks in Africa

• Chancen International (https://chancen.international/) - a not-for-profit organisation that provides an ethical, fair, and responsible financing model for young people in Africa to access quality tertiary education.
• Batya Blankers 
• Background: Batya is South African and was given access to university in Germany through participation in an Income Share Agreement. She launched Chancen in 2018 and has financed 1600 young people with an ISA in Rwanda and South Africa.
• Expertise: Feasibility, research and operational implementation of ISAs in SSA. MBA from African Leadership University and 10+ management experience in non-profit and for-profit enterprises.
• Yatin Nana
• Edwin Lehoahoa

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

If we are funded, we will return to the catalyst to scale the initiative. With the Fund 9 proposals, we aim to research the field and implementation to build a proof of concept and lay the foundations for the scaling of the initiative. Through our Fund 10 foreseen applications we aim to scale the proof of concept and work on blocking elements we will have identified in the first phase of the project. 

Seedstars see Cardano and the Catalyst community as a long-term partner with multiple collaboration opportunities. We will therefore reach out to the community on various key initiatives that could bring use cases and high-value creation to the Cardano ecosystem 

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

• Novelty: Introduction of Income Share Agreements on emerging markets - where the solution is not widely adopted yet - through on-chain mechanisms 
• Viable Application: the model is well researched and the MVP enables us to not only learn but scale the solution in terms of users being financed through tokenized ISAs
• # of ISA, EP and talent DIDs issued
• New users: 
• # of users creating a Cardano wallet thanks to ISAs. 
• Adoption increases: 
• # of projected new users using tokenized ISAs,
• # of Cardano users who interact with education financing topics (click-through of research findings) 
•  # of users who seamlessly interact with Cardano and its initiatives. 
• Interconnectivity of existing solutions: Increase the number of actors who bring existing solutions together for a more seamless and connected experience between different projects with strong impact potential (Seedstars, ProofSpace, Cardashift). 

[AUDITABILITY] What does success for this project look like?

The success of this project will be measured based on the outcomes of both this proposal and the PoC proposal.

Success will primarily be measured in terms of proving the viability of a new application on top of Cardano and the attraction of new users to Cardano. 

With more granularity, the output/deliverables will be:

• A value chain mapping 
• A gaps analysis of the ISA value chain in emerging markets 
• A gaps analysis of legacy ISA deployment in emerging markets 
• Potential uses of tokens in the value chain
• Selections of assets to be tokenized (e.g. the income share agreements) 
• A roadmap for the development of the tokenization of ISAs 
• A set of elements to be further researched 

The impact will be:

• To enable the intended impact of the PoC 
• To raise awareness about novel ways of deploying ISA amongst all stakeholders making up the nascent emerging markets’ ISA field 

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

This proposal is an entirely new one.

Sustainable Development Goals (SDG) Rating

Our proposal contributes to various SDGs but mostly Goal 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

The main subgoals tackled are: 

• 4.3 By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university
• 4.4 By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship. 
• 4.b Substantially expand globally the number of scholarships available to developing countries, in particular, least developed countries, small island developing States and African countries, for enrolment in higher education, including vocational training and information and communications technology, technical, engineering and scientific programs, in developed countries and other developing countries

To this end, in the scale-up of our proposal (research and PoC) we’ll track 

• The participation rate of youth and adults in formal and non-formal education and training in the previous 12 months, by sex
• The proportion of youth and adults with information and communications technology (ICT) skills, by type of skills
• The volume of official development assistance flows for scholarships by sector and type of study