ANTICIPATORY CASH TRANSFERS FOR CLIMATE SHOCKS

PILOT ENDLINE REPORT

The pilot was led by a partnership of:

Anticipatory Cash Transfers For Climate Shocks

This report was prepared by:

Frontier Tech for Frontier Markets

Mercy Corps Ventures invests in and catalyzes venture-led solutions to increase the resilience of underserved individuals and communities.

​

Our Venture Lab is the leading innovation lab for emerging market use cases of cutting-edge technologies

Alongside our partners, we design, launch and scale responsible pilots for cutting-edge technologies to prove out their potential for resilience building for underserved users

​

We transparently share learnings and insights to build the evidence base for how technology can increase climate and financial resilience, aiming to crowd-in capital and de-risk solutions

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LAUNCH CUTTING-EDGE PILOTS

BUILD THE EVIDENCE BASE

MCV VENTURE LAB

15

PILOTS LAUNCHED

30k+

PARTICIPANTS & BENEFICIARIES

83%

SCALE-UP RATE

10+

COUNTRIES ACROSS AFRICA, LATAM & ASIA

Mastering Money Legos

Founded in 2022, DIVA Technologies AG is a Web3-centric software consulting firm based in Switzerland that supports clients in mastering money legos

MARKET NEED

Blockchain technology paves the way for a host of innovative applications. At DIVA Technologies, we leverage our deep Web3 expertise to help clients build those applications. The team has a particular focus on DIVA Protocol, a derivatives protocol co-founded by CEO Wladimir Weinbender.

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DIVA Protocol

DIVA Protocol is a highly versatile smart contract-based system for creating and managing derivative financial contracts peer-to-peer. With DIVA Protocol, users can create a wide range of derivative financial applications, including structured products, insurance, prediction markets, parametric conditional donations, swaps, and more, without involving a central intermediary.

DIVA TECHNOLOGIES

Powering impact through data

Founded in 2022, Shamba is HQ’ed in Kenya, has a team of 10 experts and is working to drive resilience through on-chaining ecological data ��

MARKET NEED

Ecological data is required to manage climate risks and to build resilience. Timely reporting of ecological state is critical for new climate adaptation solutions being developed.

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THE SHAMBA ORACLE

The Shamba Oracle provides ecological data sourced from satellites to web3 applications that drive climate action and climate resilience. It provides this information on-chain enabling smart contracts to execute logic based on real world conditions. In this pilot the Shamba oracle reported on the state of vegetation and thus pasture for livestock across the counties of interest.

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SHAMBA NETWORK

Financial inclusion at the base of the pyramid

Founded in 2014, Fortune Credit is a Microfinance institution in Kenya,catalysing financial inclusion through credit, insurance and novel financial tools serving over 50,000 communities with social-economic & ecological transformation.��

MARKET NEED

Marginalized communities lack financial access. Without access to credit, insurance and other financial instruments to improve their economic status we find them faced with a myriad of social challenges, hunger and poverty. Capacity building and technologically driven distribution of financial services is key to reach them and address these challenges.

FORTUNE CONNECT SOLUTION

Our innovative platform seamlessly integrating technology with on-ground presence. We enlist local village champions as our community liaisons, facilitating the delivery of our education and financial services directly to their communities. To optimize effectiveness, we harness digital tools for streamlined data collection, information dissemination, and product delivery, ensuring a tailored and efficient approach to meeting the needs of each community we serve.

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FORTUNE CREDIT

Advancing innovation and responsible regulation

The Crypto Council for Innovation produces evidence-based documentation of crypto and blockchain’s real-world impacts.

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��

GLOBAL COLLABORATION AND INSIGHTS

Crypto Council for Innovation is the premier global alliance advancing crypto innovation. We believe in leading with a global world view, advocating for inclusive regulation, developing actionable and evidence-based insights, working in trusted partnership with government and business stakeholders and unlocking the promise of Web3.

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We have teams in San Francisco, Washington, D.C., New York, Denver, Los Angeles, London, Brussels, and Hong Kong.

CRYPTO COUNCIL FOR INNOVATION

CONTENTS

• Executive Summary
• Overview
• Key Findings
• Hypothesis 1
• Hypothesis 2
• Hypothesis 3
• Lessons Learned

CONTENTS

ANTICIPATORY ACTION | ENDLINE REPORT

EXECUTIVE SUMMARY

OVERVIEW | PASTORALISM IN THE HORN OF AFRICA

Pastoralism is a way of life in Sub-Saharan and Eastern Africa.

• 50 million people across sub-Saharan Africa are pastoralists, living in communities depending primarily on livestock for income and subsistence. Pastoralists are nomadic, grazing their livestock in open-access pastures and moving with them seasonally.
• As of January 2023, pastoralism provided income for more than 95% of rural families in Northern Kenya and accounts for 90% of youth employment in the region.
• Economies in Kenya are reliant on rainfall and susceptible to extreme weather events and changing climatic patterns. Precipitation across the country varies greatly.
• Without sufficient rainfall and the resulting vegetation, pastoralist herds are unable to graze and fall victim to emaciation and starvation.

​

​

​

Humanitarian aid delivery is often slow and reactive, delivering aid after negative impacts have already been experienced.

​

It has been estimated for every USD 10 spent on relief, only USD 1 is spent on reducing and managing risks.

​

PILOT | THE PARTNERSHIP

Anticipatory action delivers greater impact for predictable shock events.

Anticipatory Action is a form of aid that uses predictive analytics to reduce the negative impacts of humanitarian shocks, delivering aid before events occur and impacts are experienced to facilitate better outcomes.

​

Half of all humanitarian crises are predictable, and 20% highly predictable – leaving substantial opportunity for humanitarian aid organizations to preemptively reduce the negative impacts of shock events through anticipatory aid:

​

• Greater ROI: Disbursing aid prior to the experience of negative impacts produces better outcomes, with those impacted empowered to plan rather than waiting for relief to rebuild. The Food and Agriculture Organization of the United Nations reports that for every dollar invested in anticipatory action, families could see seven dollars in benefits and avoided losses.
• Empowered by technology: Improvements in the use of remote sensing, environmental satellite data, predictive analytics, and innovative tech can facilitate delivery of support before crises occur – particularly for predictable climate shock events occurring with increasing frequency.
• Potential for scale. The potential market for anticipatory aid is enormous. 300 million people need humanitarian assistance each year. 3.6 billion people are vulnerable to disruptive climate events globally. In 2023, USD 223.7 billion were given as humanitarian aid.

Source: OCHA Centre for Humanitarian Data

CORE HYPOTHESES

DIVA Donate leverages satellite data and blockchain smart contracts to deliver anticipatory aid cash transfers to climate-impacted pastoralist communities in Laikipia and Kajiado Counties, Kenya.

Mercy Corps Ventures with DIVA Donate – a partnership between DIVA Technologies, Fortune Credit, and Shamba Network – launched a pilot using ecological data to determine donation-based anticipatory cash transfers to eligible participants, allowing them to benefit from use of funds before the impacts of the dry season were felt.

DIVA Donate: Blockchain aid for drought-impacted pastoralists

PILOT | OVERVIEW

​

02.

Anticipatory transfers for drought risk mitigation positively impact the livelihoods of pastoralists.

01.

On-chain remote-sensing data and smart contracts increase the speed and reduce the costs of delivery of humanitarian aid.

03.

Blockchain-based transparency of donation flows is favorably rated by donors.

100%

AID RECIPIENTS

would recommend the program to a friend

90%

REDUCTION TIME IN PAYMENTS OVER TRADITIONAL TRANSFERS

(14.5 HRS TO REACH RECIPIENTS)

54%

PARTICIPANTS reported an increase in savings balance

+53%

PARTICIPANTS improved ability to meet a major unexpected expense

77%

PARTICIPANTS

Reported improvements in financial stress levels

62%

PARTICIPANTS

used funds to purchase food for themselves and their families

83

NPS SCORE

for participating donors

​

​

75%

REDUCTION IN

TRANSACTION COSTS

(FROM 10% TO 2.5%)

​

For this pilot deployment, donor funds were pooled with a seed contribution from Mercy Corps Ventures to provide support for 262 pastoralists.

At the core of this pilot is a smart contract, administered via the DIVA protocol, which holds donated funds in escrow and programmatically disburses them if the pasture conditions are deemed distressful for pastoralists. The smart contract assesses pasture conditions using an indicator called NDVI (Normalized Difference Vegetation Index). NDVI is a leading indicator of livestock mortality since vegetation typically tracks rainfall performance.

20,235 USDT in donation funds were contributed to the pilot. The pilot period began in October 2023 and ended January 1st, 2024. Funds were split between the two smart contract escrows designed for each County (below) served. Mercy Corps Ventures provided 20,000 USD. 10 external donor participants contributed 126.18 USDT. The DIVA Protocol team contributed the remainder 108.82 USDT.

PILOT | OVERVIEW

​

DIVA Donate’s crypto donation platform used smart contract escrows to securely and programmatically deliver anticipatory cash transfers to pastoralist communities in Kenya facing climate change-induced drought challenges.

​

The pilot was led by a partnership of four organizations.

​

Mercy Corps Ventures invests in and catalyzes venture-led solutions to increase the resilience of underserved individuals and communities.

​

PILOT | THE PARTNERSHIP

DIVA Technologies is the developer of the DIVA conditional donation platform, a smart contract-based system for creating and managing custom derivative contracts peer-to-peer. DIVA Donate is built on top of the Polygon blockchain network. DIVA’s use of blockchain technologies allows donor contributions to be transparent, trustless, cost effective, and globally accessible.

​

Shamba Network is the developer of blockchain oracle technology enabling collection, analytics, and use of ecological data on-chain. Shamba’s oracle sources satellite data to update smart contracts in real time.

​

Fortune Credit Limited is a microfinance institution in Kenya which provides credit, insurance and other financial services to more than 50 thousand customers including small-holder farmers and pastoralists.

Fortune has built a robust regional network of customers and on-the-ground teams with a strong community presence.

​

The Smart Contract Anticipatory Cash Transfers Pilot

“Success is if we can demonstrate to more traditional institutions that blockchain can actually add value. A lot of people are still looking for blockchain use cases beyond speculation. This use case adds transparency to donations. You can open donations to the whole world, because blockchain is open and transparent by nature.”

-Wlad Weinbender, DIVA Protocol

​

“We look at Web3 as an enabling technology. For instance, something like insurance is made more efficient by Web3. I realized there was a data gap when you build a smart contract to integrate data on how much rainfall has fallen somewhere, how much vegetation there is, what is the risk of drought. So this is why we started building specifically to be able to bridge that gap.”

-Kennedy Ng’ang’a, Shamba Network

​

“In providing insurance to livestock farmers we realized there is a group that is left out, because pastoralists don't have data. They don't have banks. We realized that the financial inclusion that we were trying to achieve is not sustainable without insurance because it takes one event and they lose all the money that’s been generated.”

-Benson Njuguna, Fortune Credit

PILOT | PROCESS FLOW

​

The pilot’s use of blockchain technology sought to address challenges with existing climate insurance and aid payments.

ECOSYSTEM ENGAGEMENT

EXAMPLE

APP USERS

ONBOARDING

ECOSYSTEM ENTRY POINT

OUTCOMES

PILOT | USER JOURNEYS

OVERVIEW

OVERVIEW | PASTORALISM IN THE HORN OF AFRICA

Pastoralism is a way of life in Sub-Saharan and Eastern Africa.

• 50 million people across sub-Saharan Africa are pastoralists, living in communities depending primarily on livestock for income and subsistence. Pastoralists are nomadic, grazing their livestock in open-access pastures and moving with them seasonally.
• As of January 2023, pastoralism provided income for more than 95% of rural families in Northern Kenya and accounts for 90% of youth employment in the region.
• Economies in Kenya are reliant on rainfall and susceptible to extreme weather events and changing climatic patterns. Precipitation across the country varies greatly.
• Without sufficient rainfall and the resulting vegetation, pastoralist herds are unable to graze and fall victim to emaciation and starvation.

​

​

​

OVERVIEW | PASTORALISM IN THE HORN OF AFRICA

​

Climate change impacts on rainfall threaten life for pastoralist communities in the region. �Temperatures in Kenya demonstrate a distinct warming trend. Frequencies and volume of hot days and nights are projected to continue increasing. Rainfall in arid zones of the country is projected to decrease as climate change worsens. Moderate drought events occur on average every three to four years, with major droughts every ten, but prolonged and lengthy droughts have increased since 2000. In the eastern Horn of Africa, over 7 million livestock were lost during the recent multi-year drought. The UN has described the impacts of climate change on pastoralist communities in Africa as “unprecedented.”

​

Weather Challenges for Pastoralists

Climate change impacts on rainfall threaten life for pastoralist communities in the region. �Pastoralists struggling to sustain their herds sell their cattle, forcing market prices down and increasing pressure for other pastoralists to sell as well. The impacts of climate change-induced drought have driven pastoralists across international borders in search of viable grazing pastures to save their withering herds, contributing to competition for remaining vegetation and water and posing travel costs to already strapped farmers. Tensions between herders and ranchers who were already established in these regions have led to violent clashes with pastoralists migrating in search of resources.

Many aid programs deliver aid too late to be effective in reducing negative impacts.�Aid delivery for pastoralists in Kenya often comes after the impacts of drought are already experienced, including heard death, making recovery more difficult.

Conversely, aid that is delivered before impacts of extreme weather events are felt produces notable reductions in negative impacts experienced. The World Food Programme found households at risk of flooding in Bangladesh were 36% less likely to go without eating for a day and 17% more likely to evacuate livestock when receiving cash transfers before the flooding occurred compared to households that did not receive a transfer.

​

Humanitarian aid delivery is often slow and reactive, delivering aid after negative impacts have already been experienced.

​

It has been estimated for every USD 10 spent on relief, only USD 1 is spent on reducing and managing risks.

​

PILOT | THE PARTNERSHIP

Anticipatory aid uses predictive analytics to reduce the negative impacts of humanitarian shocks, delivering aid before events occur and impacts are experienced to facilitate better outcomes.

​

Half of all humanitarian crises are predictable, and 20% highly predictable – leaving substantial opportunity for humanitarian aid organizations to preemptively reduce the negative impacts of shock events through anticipatory aid:

​

• Greater ROI: Disbursing aid prior to the experience of negative impacts produces better outcomes, with those impacted empowered to plan rather than waiting for relief to rebuild. The Food and Agriculture Organization of the United Nations reports that for every dollar invested in anticipatory action, families could see seven dollars in benefits and avoided losses.
• Empowered by technology: Improvements in the use of remote sensing, environmental satellite data, predictive analytics, and innovative tech can facilitate delivery of support before crises occur – particularly for predictable climate shock events occurring with increasing frequency.
• Potential for scale. The potential market for anticipatory aid is enormous. 300 million people need humanitarian assistance each year. 3.6 billion people are vulnerable to disruptive climate events globally. In 2023, USD 223.7 billion were given as humanitarian aid.

Anticipatory aid delivers greater impact for predictable shock events.

Source: OCHA Centre for Humanitarian Data

CORE HYPOTHESES

DIVA Donate leverages satellite data and blockchain smart contracts to deliver anticipatory aid cash transfers to climate-impacted pastoralist communities in Laikipia and Kajiado Counties, Kenya.

Mercy Corps Ventures with DIVA Donate – a partnership between DIVA Technologies, Fortune Credit, and Shamba Network – launched a pilot using ecological data to determine donation-based cash transfers to eligible participants, allowing them to benefit from use of funds before the impacts of the dry season were felt.

DIVA Donate: Blockchain aid for drought-impacted pastoralists

PILOT | OVERVIEW

​

02.

Anticipatory transfers for drought risk mitigation positively impact the livelihoods of pastoralists.

01.

On-chain remote-sensing data and smart contracts increase the speed and reduce the costs of delivery of humanitarian aid.

03.

Blockchain-based transparency of donation flows is favorably rated by donors.

For this pilot deployment, a small number of donor funds were pooled with a seed contribution from Mercy Corps Ventures to provide support for 262 pastoralists.

At the core of this pilot is a smart contract which holds donated funds in escrow and disburses them to enrolled pastoralists only if the pasture conditions are deemed distressful for pastoralists. The smart contract assesses pasture conditions using an indicator called NDVI (Normalized Difference Vegetation Index). NDVI is a leading indicator of livestock mortality since vegetation typically tracks rainfall performance.

20,235 USDT in donation funds were contributed to the pilot. The pilot period began in October 2023 and ended January 1st, 2024. Funds were split between the two smart contract escrows designed for each County (below) served. Mercy Corps Ventures provided 20,000 USDT. 10 external donor participants contributed 126.18 USDT. The DIVA Protocol team contributed the remainder 108.82 USDT.

PILOT | OVERVIEW

​

PILOT | CONTEXT

​

​

​

The Local Regional Context

Pilot participants were split between the Kajiado and Laikipia counties in Kenya. These counties were selected for Fortune Credit’s history of providing climate insurance products there and pre-established relationships with local communities.

All pilot participants indicated negative impacts of drought during previous dry seasons. In interviews, participants explained that the effects of drought conditions causing their entire families to skip meals in order to survive the season.

Kajiado: A mostly semi-arid county experiencing growing frequencies and severities of drought. In 2009, Kajiado saw 90% crop failure and 70% livestock loss in the majority of the county.

Laikipia: A semi-arid county experiencing drought and instances of violent resource competition as pastoralists and herders from other drought-stricken regions migrate here seeking grazing pastures for their livestock.

​

[In previous dry seasons] I lost all my cattle from drought since I couldn’t take them to the ranges to be fed at a fee. My family on the other side has nothing to depend on so we used to go for manual labor for food.

-Pastoralist in Laikipia county

​

​

Since we depend on livestock, drought really affects us so much since we buy food and pay school fees from it. Therefore when drought comes, we can barely even buy our own food.

-Pastoralist in Kajiado county

PILOT | CONTEXT

Participants reported resorting to a number of different methods to respond to drought impacts.

Participants expressed migrating their herds to regions with more vegetation, although this was explained to be a costly, risky, and potentially violent endeavor.

​

I used to migrate with my livestock from one place to another in search of pasture.�Pastoralist in Kajiado county

​

During drought I have been moving my livestock from one place to another to save them and it's really costly.

Pastoralist in Laikipia county

Hunger

Migration

Education

Some participants recounted resorting to consuming whatever natural sources of nutrients were left available to them. Others forwent meals to save resources necessary to survive the season.

​

During the dry season, we weren’t able to buy food, pasture nor have any financial access. We used to shake trees with pods as this was the remaining source of food.�Pastoralist in Kajiado county

​

During the drought, we had to reduce the number of meals taken and I also lost many of my livestock to drought.�Pastoralist in Laikipia county

Participants explained that when the impacts of drought and the dry season hit, children's schooling is among the first expenses that they must sacrifice in order to provide for their family.

​

I had to prioritize food first. My children had to drop out of school since the only thing I could provide was food.�Pastoralist in Laikipia county

​

When I signed up for DIVA, my kids were home due to lack of school fees and would go to bed hungry.

Pastoralist in Laikipia county

Alternative Income

Many participants expressed seeking alternative sources of income to survive periods of drought. One participant cited resorting to illicit markets to make ends meet.

​

I am a widow, during drought periods I used to go for manual work and ask for assistance from people around.

Pastoralist in Kajiado county

​

Drought placed me at a loss since I depended on my livestock for school fees too. I had to participate in sand harvesting as much as it is illegal; I had to save myself and my family.

Pastoralist in Kajiado county

DIVA Donate’s crypto donation platform used smart contract escrows to secure and programmatically deliver anticipatory cash transfers to pastoralist communities in Kenya facing climate change-induced drought challenges.

​

The pilot was led by a partnership of three organizations, with critical support provided by Mercy Corps Foundation.

PILOT | THE PARTNERSHIP

DIVA Technologies is the developer of the DIVA conditional donation platform, a smart contract-based system for creating and managing custom derivative contracts peer-to-peer. DIVA Donate is built on top of the Polygon blockchain network. DIVA’s use of blockchain technologies allows donor contributions to be transparent, trustless, and cost effective.

​

Shamba Network is the developer of blockchain oracle technology enabling collection, analytics, and use of ecological data on-chain. Shamba’s oracle sources satellite data to update smart contracts in real time.

​

Fortune Credit Limited is a microfinance institution in Kenya which provides credit, insurance and other financial services to more than 50 thousand customers including small-holder farmers and pastoralists.

Fortune has built a robust regional network of customers and on-the-ground teams with a strong community presence.

​

The Smart Contract Anticipatory Cash Transfers Pilot

“Success is if we can demonstrate to more traditional institutions that blockchain can actually add value. A lot of people are still looking for blockchain use cases beyond speculation. This use case adds transparency to donations. You can open donations to the whole world, because blockchain is open and transparent by nature.”

-Wlad Weinbender, DIVA Protocol

​

“We look at Web3 as an enabling technology. For instance, something like insurance is made more efficient by Web3. I realized there was a data gap when you build a smart contract to integrate data on how much rainfall has fallen somewhere, how much vegetation there is, what is the risk of drought. So this is why we started building specifically to be able to bridge that gap.”

-Kennedy Ng’ang’a, Shamba Network

​

“In providing insurance to livestock farmers we realized there is a group that is left out, because pastoralists don't have data. They don't have banks. We realized that the financial inclusion that we were trying to achieve is not sustainable without insurance because it takes one event and they lose all the money that’s been generated.”

-Benson Njuguna, Fortune Credit

1. Donors interested in climate resilience donated cryptocurrencies on the DIVA platform.
• DIVA’s donation platform facilitated charitable stablecoin cryptocurrency contributions deposited into an on-chain smart contract-held escrow.
• The platform is where donors viewed and contributed to donation campaigns – in the case of this pilot, towards pastoralist communities in Kenya.

​

• With campaign parameters defined, Shamba’s oracle began reporting ecological data to the DIVA protocol.
• Shamba’s oracle collected satellite data assessing vegetation levels in Laikipia and Kajiado putting that information on-chain for DIVA’s smart contracts to access and be updated in real time, using Normalized Difference Vegetation Index (NDVI) as a measure of the upcoming drought period.
• These remotely-sensed trigger values anticipated future seasonal drought conditions by measuring the health and density of vegetation throughout the rainy season.

PILOT | PROCESS FLOW

​

The pilot’s use of blockchain technology sought to address challenges with existing climate insurance and aid payments.

3. Donor funds were automatically released once the pilot period ended, only if predetermined trigger values were satisfied by oracle data.
1. Donation releases referenced the 30th, 50th, and 80th percentiles of the average NDVI value during the rainy season observation period.

​

• Fortune Credit facilitated the last mile conversion and delivery services of funds to beneficiaries.
• Once Fortune received released funds they carried out the exchange of crypto donations from stablecoins into fiat and delivered aid through M-PESA to eligible pastoralists at the conclusion of the pilot.
• This entailed validating M-PESA recipients, determining an exchange rate, and notifying recipients via SMS.

​

​

Payments are automatically triggered to recipients when specified conditions are met.

PILOT | PROCESS FLOW

​

ECOSYSTEM ENGAGEMENT

EXAMPLE

APP USERS

ONBOARDING

ECOSYSTEM ENTRY POINT

OUTCOMES

PILOT | USER JOURNEYS

KEY FINDINGS

100%

AID RECIPIENTS

would recommend the program to a friend

90%

REDUCTION TIME IN PAYMENTS OVER TRADITIONAL TRANSFERS

(14.5 HRS TO REACH RECIPIENTS)

54%

PARTICIPANTS reported an increase in savings balance

+53%

PARTICIPANTS improved ability to meet a major unexpected expense

77%

PARTICIPANTS

Reported improvements in financial stress levels

62%

PARTICIPANTS

used funds to purchase food for themselves and their families

83

NPS SCORE

for participating donors

​

​

75%

REDUCTION IN

TRANSACTION COSTS

(FROM 10% TO 2.5%)

​

ANTICIPATING CLIMATE SHOCK ON MORE EFFICIENT RAILS

KEY FINDINGS | OVERVIEW

​

In the majority of cases, key metrics outlined in the hypotheses for the project’s goals were met or exceeded.

Overall, pastoralists reported experiencing broad benefits as a result of participating in the DIVA pilot.

• The DIVA tech stack improved on efficiencies and cost effectiveness of charitable giving, resulting in improvements in fund distribution time and costs
• In interviews, pastoralists expressed that funds improved their ability to meet basic needs and support themselves and their families.
• Beyond financial and subsistence benefits, participants also indicated social and community benefits such as networking, access to schooling, and improvements for women.

​

​

​

​

I would participate in this program countless times if I could.

Pastoralist in Kajiado county

HYPOTHESIS 1

On-chain remote-sensing data and smart contracts increase the speed and reduce the costs of delivery of humanitarian aid.

​

​

​

​

KEY FINDINGS | HYPOTHESIS 1

​

• Traditional fund distribution processes consume 10-35% of donated funds in fees and operational costs.
• Escrow creation fees, operational costs, foreign exchange (FX), and other exchange fees all impact the total amount organizations can deliver to beneficiaries.
• DIVA’s blockchain tech stack reduced the cost to transfer funds end-to-end to recipients, with pastoralists in the pilot receiving donation disbursements at a total cost of 2.5%.
• A large portion of the cost that remained was attributed to FX and exchange costs totaling 219.48 USD of the total disbursement amount of 11,271 USD.

KEY FINDINGS | HYPOTHESIS 1

​

Leveraging crypto rails provided notable efficiencies and reductions in donation delivery expenses.

vs

• Funds must pass through bank accounts subject to lengthier processing and clearing periods prior to distribution.
• Cash payments through similar non-blockchain programs take approximately 7 to 10 days to reach beneficiaries.
• The DIVA Donate pilot improved on this baseline.
• Pastoralists in the pilot received disbursements through M-PESA 14.5 hours after being triggered by Oracle data and released from DIVA Protocol:
• 8 hours: Waiting period due to release of funds occurring outside of working hours; could be addressed in future by aligning reporting with working hours.
• 3 hours: Final beneficiary list data preparation & cleaning
• 1 hour: Determine USDT to KES exchange rate
• 2 hours: Mpesa validation of mobile wallets (names & active status check)
• 30 minutes: SMS notification preparation and dispatch of expected transfer
• Instant: Cash transfer to mobile wallets

KEY FINDINGS | HYPOTHESIS 1

​

Blockchain rails significantly reduced the disbursement time of donation funds to beneficiaries.

HYPOTHESIS 2

Anticipatory transfers for drought risk mitigation positively impact the livelihoods of pastoralists.

​

​

​

​

KEY FINDINGS | HYPOTHESIS 2

​

• The payouts that were triggered differed across the counties due the lower average NDVI value reported in Kajiado county, reflecting less impacted vegetation levels in that region as a result of rainfall.
• While Laikipia qualified for 100% of deposited funds, Kajiado qualified for 16%.
• A total of 1,657 USDT was paid out in Kajiado, averaging 12 USD per each payment.
• A total of 10,087 USDT was paid out in Laikipia, averaging 75 USD per each payment.
• Across both counties, pilot participants prioritized spending on immediate food and school fee needs versus livestock.
• Over half of all participants used funds to buy household food.
• 1 in 3 participants used funds for school fees.

KEY FINDINGS | HYPOTHESIS 2

​

Payouts were triggered in both communities at different levels commensurate with the NDVI metrics and associated weather conditions in each region.

• Across both counties, the largest negative impacts were seen for large livestock.
• In Kajiado:
• Sheep ownership increased from 36% to 50% of total livestock.
• Respondents owning goats or poultry prior to the pilot remained relatively stable at 37% and 6%, respectively.
• The share of total livestock for cattle in the county decreased from 19% to 7%.
• In Laikipia:
• Sheep and poultry ownership both rose from 15% to 33%. The livestock count reveals that sheep and poultry numbers surged ~2.4x.
• In contrast, goat ownership saw a decline, dropping from 50% to 34% when compared to baseline figures.
• Notably, after the conclusion of the pilot respondents reported no ownership of cattle, compared to 20% during the pre-participation baseline survey.

KEY FINDINGS | HYPOTHESIS 2

​

Fund impacts on livestock varied by community.

• The data – including outsized deaths for larger cattle livestock – suggests that participants prioritized livestock feed for smaller livestock, including in Laikipia which experienced greater losses of larger livestock.
• Pastoralists in both counties reported that their access to food and water for their livestock improved after participation in the pilot program.
• In Laikipia, where participants received higher payout amounts as a result of conditions, 87% of respondents indicated increased access to food and water for livestock versus 56% in Kajiado.
• Pastoralists in Kajiado reported selling more livestock than in Laikipia.
• 63% of Kajiado pastoralists sold livestock, versus 37% in Laikipia.
• It remains unclear whether Kajiado livestock increases and larger sales are a typical response to favorable rainy seasons and modest financial support.

KEY FINDINGS | HYPOTHESIS 2

​

Fund impacts on livestock outcome were mixed, likely reflecting pastoralist priorities for fund spending.

After receipt of the funds, I paid school fees for my children and the rest I bought food and an additional sheep.

Pastoralist in Laikipia county

​

DIVA Donate has saved a number of lives from hunger. The program came just in time when we were in need and therefore from the funds received, the pastoralists bought food and some with school fees arrears took their children back to school.

Village Champion in Kajiado county

​

Before participating in the program had previously slept for two days without food. On receipt of the funds, I went and bought food for my family.

-Pastoralist in Kajiado county

​

​

• Pilot participants in Laikipia reported an improved ability to handle significant unexpected expenses.
• In Laikipia, where the entire amount of the contributed funds (KES 11’475 per pastoralist, c. $75) was disbursed, nearly 80% of respondents indicated an improvement in their ability to handle major unexpected expenses exceeding 10,000 KES.
• Participants here indicated spending donated funds on livestock subsistence, household food and water, and school fees.
• These findings suggest that the disbursed amount was moderately sized - neither too small nor too large.
• A lower share of participants in the Kajiado region reported changes in their ability to withstand emergency costs.
• In Kajiado, where a relatively small sum of KES 1’836 was distributed to each pastoralist, the majority (66%) indicated no change in their capacity to manage unforeseen costs.

KEY FINDINGS | HYPOTHESIS 2

​

Participants across both counties reported financial improvements consistent with payouts received.

• Participants likely put most or all of the donation funds towards immediate needs or school fees, as reflected by moderate increases in the proportion indicating an increase in savings.
• A greater share of respondents in Laikipia reported a slight increase in their savings balance, at 67%, while 25% reported no change.
• In Kajiado, a lower share reported the same increase, at 42%, while nearly one-third (29%) reported no change.
• 25% of the respondents reported a slight decrease in their savings. This may be a reflection of the lower payout amount for the Kajiado region relative to modest drought conditions.
• No one in either county reported a significant increase in savings.

KEY FINDINGS | HYPOTHESIS 2

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Participants in both counties expressed modest increase in their savings balances.

• Over 75% of the respondents in both Laikipia and Kajiado responded having experienced a slight improvement in their financial security and corresponding stress levels.
• Approximately 1 in 5 participants reported no change.
• This consistent reporting across both counties may reflect the fact that, for pastoralists, even modest support to meet immediate expenses can reduce stress.

KEY FINDINGS | HYPOTHESIS 2

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Across both counties, the majority of participants expressed an improvement in financial security.

• Survey participants overall reporting having gone a day without a meal decreased from 63% before the pilot to 31% after receiving donations.
• Survey responses revealed the addition of 12 food types to participant diets as a result of the donation.
• These included meat, vegetables, bread, fruits, ugali (a traditional maize dish), rice, chapati (flatbread), mboga (a Swahili term for vegetables), dengu (lentils), potatoes, sukuma (kale), and beans.

KEY FINDINGS | HYPOTHESIS 2

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Participants reported subsistence benefits from funds, improving their access to food and quality of nutrition.

PILOT | TESTIMONIES

DIVA Donate has saved a number of lives from hunger. The program came just in time when we were in need and therefore from the funds received, the pastoralists bought food and some with school fees arrears took their children back to school.

Village Champion in Kajiado county

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Before participating in the program I had previously slept for two days without food. On receipt of the funds, I went and bought food for my family."

Pastoralist in Kajiado county

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• Participants cited the ability to pay for their children to return or continue going to school more than any other benefit.
• This was often expressed alongside increased access to food.
• In interviews, some participants reported growing closer to their community and improving conditions for women and children.
• Some female respondents expressed experiencing improvements in their ability to participate in decision-making.
• Village Champions found the experience they created for their community to be the most rewarding part of their participation.

KEY FINDINGS | HYPOTHESIS 2

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Beyond financial resilience, participating pastoralists cited community benefits.

11

My circumstances changed a bit since my son who was home for school fees went back."

Female pastoralist in Kajiado county

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Future programs will be beneficial to my community. This will really help in reducing poverty and illiteracy caused by dropping out of school due to lack of school fees.

Male Village Champion in Laikipia county

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This program brought a lot of women together. This helped them in decision making and saved a lot of lives from the food bought.

Female Village Champion in Kajiado county

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Three areas participants responded about were related to improving financial donations as they currently exist. In interviews, pastoralists expressed a desire for:

• Increased donation amounts:
• Some participants expressed that funds were not sufficient to fulfill their needs. With the pilot concluding with undisbursed funds, DIVA might consider increasing the donation release amount or decreasing the threshold triggers.
• Longer sustained time periods of donations
• Participants communicated how impactful funds were, expressing a desire for regularly sustained payments.
• Shorter release periods of funds
• While fund delivery based on the metrics set at the outset of the pilot improved significantly, participants responding about the time it took to receive funds appear to have misunderstood the pilot process for fund delivery, which may have resulted in incorrect expectations about when they would receive funds.

KEY FINDINGS | HYPOTHESIS 2

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Pastoralists suggested improvements and changes to the pilot for consistent financial benefits.

11

I will recommend the program implement in future training and knowledge sharing on Finance, Family and capacity building since most of us aren’t that aware of them.

Female Village Champion in Kajiado county

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Given a chance to change something about the program I will recommend an increase of the funds amount since I have a girl at home who didn't join secondary school due to lack of funds. Therefore, I still need help.

Pastoralist in Kajiado county

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HYPOTHESIS 3

Blockchain-based transparency of donation flows is favorably rated by donors.

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KEY FINDINGS | HYPOTHESIS 3

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Donor survey responses indicated a very positive experience participating in the pilot and its novel donation mechanism.

• The pilot provided donors with a novel experience, offering a refund of donations if the specified aid conditions were not met.
• Donors responding to the survey reported a high satisfaction rating of 9.6 out of 10.
• No donor participants expressed less than an 8 out of 10 satisfaction after participation.
• With no detractors, DIVA’s post participation donor survey generated an 83% Net Promoter Score.
• In interviews, participants expressed enjoying the DIVA Donate app, citing its user-friendly and intuitive contribution process and the need-based donation approach.

KEY FINDINGS | HYPOTHESIS 3

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Donor participants reported positive experiences with DIVA and the donation.

Super experience, well done, really! Makes you want more. This is how donating is fun and meaningful.

DIVA Donate donor survey respondent

• As part of the donation onboarding process, DIVA released a Twitter thread accompanied by a video guide on the fund reclamation process for the donors’ conditional contributions.
• 9 out of 10 contributors still have not reclaimed eligible undistributed funds.
• DIVA is exploring the possibility of rolling over unclaimed funds in future updates.

KEY FINDINGS | HYPOTHESIS 3

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Participants that were eligible to reclaim a portion of their funds did not do so, leaving remaining funds in escrow.

• Enhanced marketing initiatives: Donors suggested increasing marketing efforts to attract more contributors, including forming partnerships with badge platforms like etherscore to incentivize app interaction.
• Simplified onboarding: Donors requested expanding accepted forms of donation to include contributions made in fiat currency, making it easier for a broader audience to participate.
• Enhanced POAP utility: Donors revealed a desire for more value and functionality to POAPs in order to increase their appeal.
• User interface improvements: Feedback from donors suggested minor adjustments to DIVA Donate app user interface functionality.

KEY FINDINGS | HYPOTHESIS 3

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Interviews with donor participants returned rich feedback for future iterations of the platform.

NFT POAPs donors can receive as a demonstration of their support.

LESSONS LEARNED

The partnership plan to operate future fundraising campaigns.

• DIVA protocol plans to repeat the existing campaign, with a focus on increasing the number of participating pastoralists and further improving efficiency.
• DIVA plans to:
• Onboard additional local partners, including NGOs, local government bodies, and financial institutions, which will be instrumental in amplifying the financial resources available to support the campaign and increasing the impact.
• Implement data collection and analysis mechanisms to enhance an understanding of the needs and behaviors of both pastoralists and donors, as well as to assess the program’s impact and identify areas for improvement.
• Actively pursue grant opportunities to sustain and expand these initiatives.

Key strategy moving forward�DIVA plans to enhance its Donate platform through three strategic directions:

• Geographic expansion: Broaden DIVA Donate's impact across the Horn of Africa by scaling up proven campaigns with pastoralists in Kenya and establishing partnerships to initiate similar projects in neighboring areas (e.g., South Sudan, Somalia).
• Diversify campaign types: Broaden the range of campaigns to address diverse risks affecting vulnerable communities but also incentivizing positive behavior changes. This includes products designed to protect against adverse economic events like inflation and the introduction of conditional reward campaigns that encourage sustainable agricultural practices among local communities.
• Enhance monitoring and evaluation: Strengthen the platform's effectiveness through the implementation of monitoring and evaluation frameworks. This will assess the impact of various campaigns, enabling continuous refinement and adaptation to meet the evolving needs of users more effectively.

LESSONS LEARNED | FUTURE OF THE PROJECT

LESSONS LEARNED | RECOMMENDATIONS

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1. Leverage blockchain oracles and crypto payment rails to reduce costs and increase impact in insurance and aid distribution projects.�

• Smart contract fund distribution process significantly reduced the period of delivery from release to recipient, with a 90% reduction over traditional transfer mechanisms.
• Timing can be further improved by automating final-mile delivery steps, including the confirmation of exchange rates, recipient validation, and preparation of SMS notifications.
• Blockchain rails reduce the cost of delivering aid to beneficiaries – increasing the amount of aid received. Accounting for currency exchange and fees, DIVA was able to provide 98% of all eligible donated funds to participants, reducing cost of delivery from a baseline of 10% to 2%.
• Direct, automatically triggered cash donation transfers to impacted pastoralists are critical to ensuring intended impact. In the pilot program:
• Over 75% of respondents in both counties expressed improved financial security and corresponding stress levels.
• More than half of survey respondents in both counties reported improved access to food and water for livestock. In Laikipia, this was expressed by nearly 90% of respondents.
• The most cited benefit expressed by pastoralists in interviews as a result of donation funds was the ability to send or keep children in school.
• Donations improved access and quality of nutrition for participants. Participants indicated increased ability to provide food for themselves and their families, and a broader spectrum of food groups after receiving funds.

Key stakeholders: �Regional and global aid organizations (such as the UN); Regional insurance entities; Aid recipients

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Secondary stakeholders: �Regional community development organizations; Web3 builders looking to create impact

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Key stakeholder: �Government regulators

Secondary stakeholders: �Regional and global intergovernmental forums (such as WEF, the AU, the UN)

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Key stakeholder: �Government regulators, cryptocurrencies

Secondary stakeholders: �Cryptocurrency users

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Key stakeholder: �Telecom providers, Telecom associations (such as the GSMA and the ITU)

Secondary stakeholders: �Government regulators

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LESSONS LEARNED | RECOMMENDATIONS

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2. Articulate use case value to key stakeholders to support and protect ecosystem scaling.�

• Jurisdictions with unclear regulatory environments that restrict token on- and off-ramps can introduce friction to efficient payment rails. Project leaders should urge policymakers to define clear and nuanced digital asset definitions and guidelines that prioritize use cases without penalization. Should a digital Kenyan shilling emerge in the future, exchange costs could also be eliminated, further increasing cost effectiveness of DIVA’s services.
• Thoughtful last mile partnerships can drive greater end user adoption. Crypto-based projects can still create benefits for those who are not familiar with the technology. In this case, off-ramping was facilitated through Fortune and completed seamlessly through M-Pesa, making the program widely accessible to unbanked and underserved populations.
• Limited crypto on-ramp services may impede a donation-based project’s ability to generate wider participation by donors. Exploring fiat-to-crypto on-ramp solutions to user experience challenges complicated the donation process with KYC procedures, contradicting the project’s objective of simplifying donation processes. Coinbase Pay may offer a solution to these challenges, eliminating the need for internal KYC since Coinbase has already completed this step. However, services would then only be available to registered Coinbase users.

Key stakeholders: �Crypto infrastructure projects; Regional government entities; Regulators in all relevant jurisdictions; Web3 builders

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Secondary stakeholders: �Aid recipients; Donors

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Key stakeholder: �Government regulators

Secondary stakeholders: �Regional and global intergovernmental forums (such as WEF, the AU, the UN)

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Key stakeholder: �Government regulators, cryptocurrencies

Secondary stakeholders: �Cryptocurrency users

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Key stakeholder: �Telecom providers, Telecom associations (such as the GSMA and the ITU)

Secondary stakeholders: �Government regulators

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LESSONS LEARNED | RECOMMENDATIONS

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3. Advance thoughtful community education and onboarding approaches when deploying decentralized impact solutions. �

• Community-based recruitment approaches build trust and engagement. Fortune Credit used its existing and robust network of on-ground community leaders to recruit Village Champions who could educate their peers.
• Onboarding can always be improved to better align expectations with outcomes. In future, pastoralist onboarding should integrate more thorough explanations of the donation campaign process to participants to prevent misunderstandings. Interview responses indicated potential misunderstandings of the fund disbursement timeline. In interviews, participants appeared to expect donations prior to the conclusion of the observation period. Beneficiary screening processes resulted in duplicate entries and the inclusion of participants lacking key qualifications, such as access to an M-PESA wallet or ownership of livestock.
• Crypto onboarding presents a challenge for generating robust donor participation in campaigns. Digital wallet installation and multiple token requirements were barriers for donor ease of use and participation. Only 10 external users participated in the campaign.

Key stakeholders: �Web3 projects and builders; Regional and global aid organizations (such as the UN) leveraging Web3 tools or services

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Secondary stakeholders: �Regional community development organizations; Web3 builders looking to create impact

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Key stakeholder: �Government regulators

Secondary stakeholders: �Regional and global intergovernmental forums (such as WEF, the AU, the UN)

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Key stakeholder: �Government regulators, cryptocurrencies

Secondary stakeholders: �Cryptocurrency users

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Key stakeholder: �Telecom providers, Telecom associations (such as the GSMA and the ITU)

Secondary stakeholders: �Government regulators

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LESSONS LEARNED | RECOMMENDATIONS

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4. Projects leveraging oracles should select data and design trigger points carefully. �

• Measuring rainfall impacts on vegetative growth using the average NDVI value may not be the most accurate predictive measure for upcoming dry seasons. While choosing the average NDVI value to determine donation release triggers sought to address cloud coverage misreadings, this measure may lead to unnecessary disbursements as a result of inaccurate readings of true vegetation density. Using peak vegetation density NDVI value metrics may be more precise, though further detailed analysis and backtesting is needed.
• Data manipulation considerations are crucial when selecting the trigger metric. Satellite imagery is generally less susceptible to tampering compared to data gathered manually or by terrestrial equipment accessible to humans.
• Adjusting the oracle configuration to report promptly post-campaign expiration is vital for eliminating delays in fund distribution. In this pilot, there was an avoidable 8 hour waiting period between the opening of reporting – which occurred outside of working hours – and approval of funds disbursement which could be addressed in future deployments (see slide 36 for discussion).
• Using a centralized oracle solution for data reporting may suffice for initial pilots, but larger, longer-term campaigns with significant funds should consider a decentralized oracle system. This approach reduces the risk of a single point of failure and enhances overall system resilience and reliability.

Key stakeholders: �Regional and global aid organizations (such as the UN); Web3 builders and oracle providers

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Secondary stakeholders: �Regional community development organizations; Regional insurance companies

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APPENDIX

Pastoralists from both regions participated in surveys before and after the pilot period to evaluate pilot success against its goals.

• The initial survey assessed baseline conditions prior to the onboarding of pastoralists to the campaign.
• A follow up survey was conducted after the completion of the campaign and disbursement of funds to eligible pastoralists via M-PESA.
• In all, 85 pastoralists from Laikipia and 95 from Kajiado participated in both surveys, totaling 180 pastoralist survey participants.

Of the 266 number of total participants who took part in this program, 10 participants and two (2) community champions were interviewed in person regarding their experiences participating in the project.

Feedback from donors was gathered at three stages during the pilot:�Post-contribution feedback: A "Take Survey" prompt appeared in the DIVA Donate app immediately after a contribution was made during the active phase of the campaign, enabling participants to leave their feedback and rate their experience.�Post-claim feedback: Following the claim of unreleased funds, a similar "Take Survey" notification was triggered in the app.�Donor interviews: Interviews were conducted with 2 donor participants after the campaign had concluded.

We received 10 responses, which included both ratings and qualitative feedback, along with suggestions for improvements.

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Participant Surveys & Interviews

Methodology

APPENDIX

CONTACT

FOLLOW

Kenneth Kou�kkou@mercycorps.org

Renée Pinto da Silva Barton�research@cryptocouncil.org

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