Did you hear about RXS? No, it’s not some new viral dance challenge. Instead, it’s the crypto that wants to be the bridge between old finance and the new blockchain-world by tokenizing everything from real estate to art. Sounds exciting, right? Particularly for Africa – a continent rich in untapped potential and with a critical need for financial inclusion. The RXS story is fast becoming a cautionary tale, and we need to have a serious discussion about it.

Dreams Shattered, Wallets Emptied

I’ve spent the last couple of weeks listening to people on the continent of Africa who invested their hard-earned savings into RXS. To Aisha, a small business owner in Nairobi, RXS represented an opportunity to diversify her income. She wanted to provide a firm foundation for her kids’ future. She put in millions of her own dollars, expecting a big return. However, she soon saw its value dissolve. Less than a week after launch, it had fallen by half. Her story isn't unique. Many of them, such as farmers, teachers and young entrepreneurs, were hopeful that RXS held the key to their success. Today, however, they can hardly keep up with horrible losses. What about those forgotten voices? The women in rural villages knew they would get further if they pooled their resources. On the one hand, the newly inducted graduates saw RXS as their ceiling to financial success.

The raw emotion is palpable. The rage, the disappointment, the crushing disappointment of watching their dreams fall apart. Someone even told me of contemplating suicide. This isn’t solely a financial issue. It’s a matter of faith. It’s about the loss of faith in a technology that was supposed to give them power.

DeFi's Dark Side Emerging

The RXS crash isn’t some one-off outlier. It's a symptom of a larger problem: the Wild West nature of DeFi, particularly in emerging markets like Africa. We are so excited to harness the promise of blockchain that we forget the risks that come along. Unregulated markets combined with complicated financial products created a breeding ground for fraud. Moreover, the lack of investor education creates an environment in which unviable projects can easily flourish.

Think about it. All in all, this project has a total supply of 1 billion RXS tokens. While it did raise an impressive $50 million during the presale, it will have a circulating supply of zero immediately at launch. Zero! How does that inspire confidence? When the price crashes 98% within days, and there’s complete radio silence from the team, how does that look? Doesn’t this sound like those “pump and dump” schemes that used to infect the stock market? The kind that left countless people broke?

Then, you have more thoroughly tested RWA tokenization platforms like Ondo Finance and Mantra, which have greater proven credentials and track records. Why would anyone choose RXS?

Yet, the silence from the Rexas Finance team is absolutely deafening. Comparisons to other “exit scams” such as Retik Finance and Renq Finance are circulating, exacerbated by the lack of transparency. While I’m not yet prepared to declare RXS a scam, the red flags are waving furiously.

That feels a lot like the early days of the internet to me. Recall all the get-rich-quick scams and shady companies that arose? It took years of heavy-handed regulation and widespread national consumer awareness to force the bad actors out. We're in a similar phase with DeFi, and Africa can't afford to be the testing ground for every fly-by-night crypto project.

Regulation and Education – Twin Pillars

So, what's the solution? Should we abandon the DeFi dream altogether? Absolutely not. We should do so with our eyes wide open and a healthy dose of skepticism.

First, we need regulation. Not the type that quells competition and innovation, but the type that truly protects investors and fosters fair competition. One, African governments should urgently collaborate with each other to develop a clear, internationally accepted and consistent legal framework governing crypto assets. That should include rigorous licensing requirements, disclosure rules, and mechanisms for holding project teams accountable.

Second, we need education. Financial literacy is crucial. Most importantly, investors should be aware of the inherent risks associated with DeFi, and conduct their own diligence before investing in any project. That entails knowing how to understand tokenomics, being able to read whitepapers and analyze a project’s team with a critic’s eye. Instead, listen to the thousands of social media proponents out there.

We need to lift up the people who have gotten burned. This effort is meant to inform others, it is not intended to scare away potential applicants. We need to communicate the upside, to shine a spotlight on the DeFi projects that are truly empowering African communities. They do exist.

The RXS saga highlights challenges to DeFi adoption in Africa. Importantly, it points out the pitfalls we need to avoid on this journey. With the proper protections, we can harness all of the benefits blockchain has to offer. Together, this technology will create unprecedented economic opportunity and allow us to build a more inclusive financial future. Let’s take these lessons to heart and collaborate in building a DeFi landscape that fosters innovation while upholding high ethical standards. Keep the dream alive, but get real — and do your homework!