Forget the hype, let's talk reality. Coinbase integrating DEX trading into its main app would be a seismic shift — particularly for Africa. Yet it’s not at all clear that it will be the game-changer that everybody is hoping for. I'm cautiously optimistic, and here's why. It’s not enough to think about access – we need to think about empowerment.

Africa's Untapped Potential: A Goldmine?

Africa is a continent brimming with potential. Mobile penetration is through the roof, and legacy financial infrastructure is pretty…questionable, to say the least. This is the perfect storm for crypto adoption. I am convinced that Americans want new financial services options. Crypto offers an alternative to cut through red tape, sky-high fees, and the exclusionary nature of legacy banking. Consider it a digital leapfrog, bypassing 30-plus years of legacy systems.

Coinbase’s latest move is especially noteworthy, because it’s like giving someone a shovel if they’re standing on top of a goldmine. This unexplored wealth of African crypto users is pure gold. Access to more crypto assets is the shovel that digs up that gold. Having the shovel doesn't guarantee success. You still have to know where to dig, how to dig, and what you’re looking for.

Zero Fees, Zero Friction, Zero Excuses?

Coinbase sponsoring network fees is huge. This barrier is exacerbated by low network fees, which can act as a substantial barrier to entry for users with constrained forms of capital. These high fees are a profit killer as they too can chew through profits and render small trades unprofitable. By removing this friction, Coinbase is bringing DEX trading to a new, broader audience.

Let's not get carried away. Zero fees are a nice start, but they’re not the end of the story. Internet connectivity is still an immense challenge, especially in remote communities across Africa. Data costs can be prohibitive. Regulatory uncertainty continues to loom large. Coinbase should have a plan in action to aggressively tackle these challenges if it truly wants its DEX integration to catch fire in Africa. Or are they hoping to work with local ISPs to provide a subsidized data plan? Are they working with regulators to create a clear and consistent legal framework for crypto? Those are the questions on many people’s minds that need to be answered.

It’s a little like the early internet. Sure, free dial-up was fantastic. So what if you couldn’t get it on your computer at home or your new home on the go, a mobile phone? Access is just one part of the equation.

Hidden Gems Or Fool's Gold?

The allure of being able to discover the next “hidden gem” token is hard to resist. The notion that African users will be able to participate early on in some of the most promising new projects is very compelling. Think of it: projects solving real problems within the African context – decentralized agricultural finance, cross-border remittance solutions, micro-lending platforms. These are exactly the kinds of projects that would be better able to access the capital they need with increased access to capital.

The crypto space, all too often, is a den of scams and pump-and-dump schemes. No one will be held accountable if you end up losing your money. Coinbase’s own language says that they do not curate or review assets. The responsibility to sift through advertisements masquerading as research is left to the end user. If we’re being honest, who really goes out and does that?

This is where education comes in. In return, Coinbase must work to invest and inform African users on the risk associated with trading DEX. This starts by giving them the resources and the tools necessary to assist them find the most legitimate projects and avoid the most obvious scams. Otherwise, this whole "hidden gem" thing could turn into a massive wealth transfer from Africa to the rest of the world.

Think about the dot-com boom. Remember when everyone was trying to invest in all things that ended with .com? Most of those companies went bust. We must heed the lessons of the past and not make the same shortsighted decisions again.

  • Potential Benefits:
    • Access to a wider range of crypto assets
    • Opportunity to invest in promising new projects
    • Greater financial inclusion
  • Potential Risks:
    • Scams and pump-and-dump schemes
    • Lack of regulation
    • Limited internet access and high data costs
    • Complexity of DEX trading

Ultimately, Coinbase's DEX move could be a catalyst for Africa's crypto revolution. But it's not a silver bullet. That’s why responsible innovation is so critical. We need to invest in education and dig in to appreciate both the challenges and opportunities that lie within the continent. The burden is now on Coinbase to show us that they aren’t only interested in merely extracting value, but rather creating it. Perhaps the future of African finance does too.