Bits.Africa, a Kenyan-based crypto exchange and remittance startup, has introduced the Nara Protocol – an intra-Africa decentralized payment and settlement protocol that is looking to solve the cross-border payments issue using a Makers channel.
The system uses a network of system makers and institutions to provide trust and liquidity to settle between various players.
According to the Nara Protocol whitepaper, the entire process is automated in such a way that every single maker gets an equal opportunity to perform both withdrawals and deposits within a stipulated timeframe and within a specific geographic region where the remittance service is required.
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In order to become a maker, you must complete KYC verification procedures. You must also hold and stake a certain number of Bits.Africa tokens as collateral to get access to the Nara platform.
Essentially Makers act like Nara agents who help process transactions on the network, and in return, earn a percentage of the fees charged on the customers’ deposits and withdrawals.
How the Nara Protocol works:
For Deposits:
- An API request is sent to the protocol
- Nara automatically matches the request to a maker
- Deposit instructions are issued to the exchange/institution
- Fiat deposit instructions are issued to the customer
- The Maker confirms the deposit
- The institutions/exchange Bits Wallet is credited
- Corresponding e-currency is minted
- A confirmation message is forwarded to the exchange/institution
For Withdrawals:
- An API request is sent
- Nara automatically matches the request to a maker
- Withdrawal instructions are issued to the exchange/institution
- Withdrawal instructions are issued to the customer
- The Maker confirms processing the withdrawal
- The institutions/exchange Bits Wallet is debited
- Corresponding e-currency is burned
- Fiat is distributed to the customer less the fees
The platform backend will be accessible to both makers and institutions. For institutions, they will have full access to the Nara protocol maker functions with virtually no limits.
Makers will have access to the protocol via the Bits.Africa wallet application or the web portal while institutions will have access to the protocol via an application programming interface (API).
While speaking and demoing the solution to BitKE, the Bits.Africa team said the solution has been built on the Binance Smart Chain (BSC) and this is what powers the Bits.Africa application.
At the same time, all funds on Bits.Africa have been insured using FireBlocks to guarantee security for all users on the platform.
The protocol is expected to launch on October 4 2021 with Kenya as the first market. Soon thereafter, the team expects to launch across 12 other African markets with key partners across the different jurisdictions.
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