Saturday, 2024 April 13

Indonesia is embracing blockchain projects beyond crypto trading

In Indonesia, 7.4 million people have bought or sold cryptocurrencies as of July 2021, according to Indonesia’s Ministry of Trade. While the blockchain is frequently associated with digital assets and financial products, many other blockchain projects are being developed for sectors including philanthropy, agriculture, gaming, and digital arts.

Most blockchain-based startups are still in their early stages, but founders believe the technology can revolutionize the way businesses operate in different markets. Blockchain entrepreneurs often highlight the decentralized nature of blockchain technology and its capacity to record transactions and improve accountability as two significant benefits. Emerging startups are also using different blockchain platforms to better match their needs, including Ethereum, Near, and Binance Smart Chain.

Here are some examples of blockchain projects going beyond finance and crypto trading in Indonesia.

Transparency in philanthropy

BeKind is a startup utilizing blockchain for charity management. Soft launched in June, BeKind looks to answer “two major challenges in the global donation system—accountability and business sustainability,” according to the company’s CEO, Fajar Jasmin.

“Donors who donate through charities don’t know exactly how much of their money goes into the hands of beneficiaries. Since charities are managed by nonprofit organizations, many of them operate without sufficient cash reserves. Hence, they are not sustainable,” Jasmin told KrASIA.

The idea behind BeKind is straightforward. The company created a token, K1ND, built on the Binance Smart Chain. Donors will be able to acquire K1NDs on the Tokocrypto exchange and through other channels like peer-to-peer transfers after the token’s official launch in December. Donors would then be able to deposit their K1NDs into the online wallets of charities and nonprofit organizations listed on the BeKind platform. They can also choose to stake their tokens on the BeKind Hub platform, much like how interest is accrued in savings accounts.

Jasmin said the system allows for greater transparency since all transactions are recorded on the blockchain and can be looked up online by all users. The system also enables donors, charities, and nonprofit organizations to earn interest from staking their tokens. Tokens are deposited into a staking account with a given annual percentage rate or annual percentage yield, and are free to be withdrawn at any time. The APY can fluctuate depending on how many tokens are staked, or it can be a fixed APY, depending on how it is set up by the platform. Jasmin did not offer details.

BeKind is the first blockchain-based donation project in Indonesia. The company is currently selling its tokens through private sales channels for USD 0.17 per token, while its estimated listing price will be USD 0.24, according to its website. BeKind expects to officially launch and list its token on the Tokocrypto exchange in December.

The company is also planning to implement an “impact tracker system” on the blockchain, which will provide information about the development of projects funded with K1NDs. “In the future, we’ll provide documentation and impact donation reports linked to the blockchain to ensure transparency,” Jasmin said.

Blockchain in the agriculture sector

Other entrepreneurs see the possibility of digitizing conventional sectors thanks to the blockchain. Hara, a blockchain-based data exchange for the food and agriculture sector, is one example.

Hara was launched in 2015 with the aim to implement a “precision farming” concept thanks to technologies like remote sensing. Its goal was to manage farms more accurately and improve yields. However, the startup pivoted its business to data collection in 2017 after experiencing difficulties scaling up its original business model.

Hara’s founders, Regi Wahyu and Imron Zuhri, believe that reliable crop data can help actors in the agricultural sector. Currently, the firm collects, verifies, and records farm data on the blockchain, including production data, cultivation processes, soil and crop conditions, pest infestation, and land ownership.

Hara collects and shares crop data to assist different actors in the agricultural sector. Photo by Eddie Kopp on Unsplash.

​​“Hara works with agents we call agripreneurs. They own Android phones, and thanks to our app, they can act as data collectors in their community,” Firnando Sirait, Hara’s head of business development, told KrASIA.

Hara incentivizes farmers, or “field agents,” to provide data by offering loyalty points that can be exchanged on the Hara platform for discounts on agricultural products or mobile phone credit. Hara then utilizes this data to run several projects like crowd planting activities, where farmers can use their backyards or non-productive lands to grow crops using polybags. Hara also provides farmers with production forecasts based on the collected data. Farmers can get “various kinds of support such as best agriculture practices, business loans, or access to more buyers,” Sirait said.

Hara also sells the collected data to private companies, government agencies, and financial institutions through a utility token called HART. The token is built on Ethereum and traded on the Indodax exchange.

According to Hara, buyers utilize this data to improve their services for the agricultural sector. For instance, financial institutions can perform credit scoring and risk profiling to grant microcredits to farmers. At the same time, local governments can make decisions to tackle agricultural problems based on the detailed data collected by farmers.

The company is currently working on more use cases for its blockchain technology. Hara is also building an NFT platform that will be launched in the first quarter of next year, although Sirait didn’t reveal details about the project.

NFTs and digital collectibles

As more people utilize crypto and blockchain technologies, NFT platforms are also becoming important for art creators and collectors. According to a recent report by DappRadar, Indonesians only trail the US worldwide in the “interest expressed” toward NFT technology and NTF marketplaces. DappRadar is a leading global app store for decentralized apps (dapps) used by over 600,000 monthly users. The company tracks over 3,000 dapps across ten blockchains to provide reports on blockchain-related trends.

Indonesia’s growing user interest in non-fungible tokens has motivated an array of startups to jump into the NFT bandwagon. One example is Tokocrypto, which launched its NFT marketplace, TokoMall, in September. The platform hosted over 1,403 merchants and 1,391 artworks only one month after its launch, successfully selling over 176 NFTs, Tokocrypto’s co-founder, Pang Xue Kai, told KrASIA in a recent interview.

TokoMall already counts over 8,000 users. Photo courtesy of Tokocrypto.

Another rising startup in the blockchain space is Paras, an NFT marketplace for digital collectibles, including comics, games, and digital art card items. The startup also manages Paras Comic, an exchange where users can read, buy, and lend collectible NFT comics.

The company operates on the Near blockchain. “All transactions use NEAR, the platform’s native token, but we’ll support other cryptocurrencies in the future,” Paras’ founder Rahmat Albariqy told KrASIA.

The company recently raised USD 5 million in seed funding from various investors, including Black Dragon Capital, Digital Renaissance Foundation, and GFS Ventures. The startup will use the investment to develop more crypto-native intellectual property focused on games and comics, Albariqy said.

“We hope there will be more new NFT projects from Indonesia so we can become a regional leader in the next three to five years,” Albariqy added.

The doubts and challenges of blockchain tech

Despite the rising popularity of cryptocurrencies and blockchain-based assets, many consumers still have little understanding and hold doubts about blockchains and their value. Entrepreneurs are aware of this, but they believe that the potential benefits outweigh the risk and skepticism.

Jasmin, for instance, admitted that the speculative nature of cryptocurrencies could impact BeKind and its token in the future. “We realize that there may be people using BeKind tokens for trading to make a quick profit. We don’t promote that, but we can’t control how people use their tokens. This does pose a risk, but we believe blockchain is an important technology that can improve people’s lives,” Jasmin said.

Recent data hacks that have impacted crypto platforms have also affected consumers’ views on the blockchain. Hara’s Sirait believes that as the blockchain industry matures, authorities will create stronger regulations, which will motivate relevant players to implement “safer systems on their platforms to raise public trust in blockchain and crypto.”

Paras’ Albariqy pointed out that more local talent is needed for the sector to thrive. “Blockchain and smart contracts are new technologies that are always evolving, and NFT-based projects need a strong engineering team,” he said.

Despite the difficulties, the three founders are optimistic about the future of blockchain in the country. “Indonesia is open to innovation and is fast in adopting new technology to solve challenges in society. We forecast a sustainable market for blockchain here,” Jasmin said.

Khamila Mulia
Khamila Mulia
Khamila Mulia is a seasoned tech journalist of KrASIA based in Indonesia, covering the vibrant innovation ecosystem in Southeast Asia.

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