Nigerian crypto startup, Quidax, is building Africa’s crypto infrastructure one major market at a time – Techpoint Africa

Nigeria is at the moment one of the major hubs for cryptocurrency actions globally, a standing it has retained regardless of a current authorities clampdown. According to Paxful, world buying and selling volumes place Nigeria second solely to the US. In a deviation from the norm, native crypto exchanges traded at least $500 million in 2020.

The time period cryptocurrency is nonetheless fairly imprecise to those that don’t at the moment personal a crypto pockets, and there’s nonetheless a big market untouched by cryptocurrency.

In 2014 when it was tough to purchase crypto, Buchi Okoro, an funding and valuation analyst, determined to check out a imprecise concept.

“I contacted a man, he instructed me his charges, and I despatched him cash. That was the final I heard of him, and I fully misplaced my cash,” he recounts with a smile.


These sorts of offers had been just about the usual at the time: non-public negotiations between the customer and vendor and a nice deal of belief positioned on the opposite occasion to carry up their finish of the settlement. Sadly, this was what number of crypto scams had been finished again within the day.

Okoro, who was working at M.I. Okoro and Associates, noticed the longer term in cryptocurrency and started to mess around concepts along with his mates from Covenant University, his alma mater: Uzo Awili, a software program developer and member of Andela’s earliest cohort; and Morris Ebieroma, Founder and CEO of Hostsleek Technologies.

Uzo minimize his enamel in a number of technical roles earlier than changing into Quidax’s Chief Technology Officer (CTO) in 2017.

While in class, he labored as an IT intern for organisations like DN Meyer and the Digital Bridge Institute. He had numerous stints as a software program developer and UI/UX designer earlier than becoming a member of Andela in 2015.

“Uzo was the nerd amongst us. The form of man who bought 90/90 in exams. I imply, who does that?” Okoro queries with a slight chuckle.

A pc science scholar between 2008 and 2013, Quidax’s Chief Information Officer (CIO), Ebieroma, based Hostsleek Technologies in 2010 and did an industrial traineeship at Seamfix Nigeria Limited. In 2012, he turned technical lead at Syracuse Digital, a position he led to 2014 to give attention to Hostsleek.

“If you paid somebody on your pc science venture, that individual seemingly gave your venture to Ebieroma. He was that good,” says Okoro.

The three mates started to check totally different concepts. Before lengthy, they got here up with one that caught and have become one of Nigeria’s largest crypto exchanges.

Second, solely to Obafemi Awolowo University, Covenant University has produced essentially the most startup founders who’ve cumulatively raised at least $1 million. Find out extra concerning the breeding grounds for Nigeria’s largest tech entrepreneurs at Intelligence by Techpoint.

From WhatsApp teams

Cryptocurrency exchanges have advanced. The earliest types of crypto exchanges had been peer-to-peer (P2P) platforms that linked consumers immediately with sellers.

One such in style platform was LocalBitcoins, a P2P alternate platform that positioned a vendor’s cash in escrow till they affirm that the customer has paid.

Some analysts imagine torrent web sites like Napster and BitTorrent impressed most of these exchanges.

Exchanges now provide crypto to fiat cash and crypto to crypto. But the alternate evolution was a bit slower in Nigeria, and WhatsApp reigned supreme.

Okoro and his mates selected WhatsApp to construct belief for {the marketplace} they had been attempting to develop.

“We created a group that fostered shopping for and promoting cryptocurrency, and we had been in a position to construct a fame as a reliable platform,” Okoro explains.

With his mates’ assist, the thought for a crypto alternate that may make shopping for, promoting, and withdrawing as seamless as potential started to take form.

“We realised that for crypto to achieve wider reputation, individuals wanted to interpret it by way of the worth it can carry,” he says.

What higher approach to carry worth to Nigerians than to assist individuals withdraw crypto on to their financial institution accounts.

The problem of beginning out

As a comparatively unknown alternate, Quidax’s major focus was beginning actions within the new alternate. This introduced a big problem, one they’d be higher suited to resolve for others when the time got here.

“When you construct a market, you need to discover methods to carry each the consumers and the sellers collectively, and that is more durable than most individuals suppose.

“It’s identical to the rooster and the egg scenario. Buyers gained’t go the place there aren’t any sellers, and sellers gained’t go the place there aren’t any consumers.”

To resolve this problem, the fledgeling startup needed to grow to be each purchaser and vendor on its market, which introduced a severe liquidity downside.

“At this stage, we had to make use of our personal cash to purchase a lot of crypto from sellers, and we offered to the occasional consumers that got here on the platform.”

Sometimes the corporate’s employees needed to pose as consumers and sellers on the alternate to jumpstart the buying and selling course of.

At that time, no investor or firm got here to their rescue. The cash used got here from the founders, a few well-meaning benefactors from respected firms, and finally, income from its market.

The startup made cash by charging a fee on P2P trades, fiat deposits, and crypto withdrawals.

Surviving this era was maybe a important second in Quidax’s journey, and the way it has positioned itself within the three years it has been in enterprise.

Okoro insists that Quidax hasn’t acquired a lot assist from ecosystem gamers, and the startup has largely tried to determine issues out itself.

“One lesson I learnt in the middle of our journey is that no one cares about you till you grow to be massive and necessary.”

In comes Techstars

Quidax bought into Techstars 2020 class

It is necessary to notice that, in contrast to common fintech firms, VC funding for Nigerian crypto startups is fairly uncommon.

Interestingly, Quidax secured entry into Techstars’ 2021 batch, which might entice $120k in seed funding. It joins TalentQL and Plentywaka on the listing of Nigerian startups that bought into the Toronto-based accelerator.

Quidax has seemingly shied away from institutional investments and accelerators in earlier years, however Okoro believes that there was one thing totally different this time.

“We had been in search of a programme that may contribute to our progress and embrace the distinctive and difficult setting we’ve needed to develop in. That was Techstars for us. They have a tremendous community that we’ve been in a position to leverage, particularly as we plan to broaden,” he says.

Building Africa’s crypto infrastructure


With choices on its web site and easy-to-use Android and iOS apps, Quidax has gained widespread reputation. Its aggressive rates of interest additionally make it a sexy possibility for crypto arbitraging. From a profitable market, Quidax is getting down to construct the spine for crypto infrastructure in Africa.

Africa, and Nigeria specifically, may be massive on P2P buying and selling actions and speculations. However, it is nonetheless a great distance off building the blockchain infrastructure that powers all of the buying and selling actions. Sadly, the continent lags behind the remainder of the world on this regard.

As the corporate’s CIO, Ebieroma is tasked with building the corporate’s blockchain infrastructure that can energy different exchanges and funding platforms seeking to incorporate crypto as an asset class. All firms have to do is combine the Quidax API.

“Building and releasing such an API may take potential prospects away from our platform, however we’re doing this to assist take crypto mainstream,” Okoro explains.

These firms will stay unknown as Quidax has confidential agreements with them, and if they don’t come ahead, their identities will stay undisclosed.

Before the CBN’s ban on crypto-related transactions, Nigerian investment-tech startup, Trove, added crypto to its asset class, and it revealed Quidax powered the mixing.

“We listing crypto initiatives to provide them extra publicity and permit them to construct communities by our alternate.”

Another alternate that readily involves thoughts with related options is YC backed Buycoins, which launched in the identical yr with Quidax.

Besides the API integration and crypto listings, the corporate has additionally helped budding startups with their liquidity downside.

Ben Eluan, CEO Blueloop — makers of Flux, a platform that wishes to disrupt cross-border funds in Africa with the very best of fiat and crypto — revealed that after an intensive seek for a answer, Quidax helped resolve its liquidity downside.

Okoro reveals that although the corporate may be exploring extra B2B choices, it can nonetheless retain its market, which has garnered a loyal fan base over time.

However, he insists that the corporate is nonetheless rising and has a lengthy approach to go.

The CBN’s crypto ban

Photo by Ewan Kennedy on Unsplash

In February 2021, the CBN rocked Nigeria’s crypto area with a round ordering banks and different monetary establishments to cease facilitating crypto transactions. Before this ban, a number of Nigerian startups had developed thrilling use circumstances for crypto, however that each one got here to a grinding halt.

Okoro and his group went again to the drafting board and developed P2P fee options. Predictably, like we’ve identified, this got here with its personal distinctive set of challenges, however Okoro claims the corporate is properly over these hurdles now.

“Our focus is to make the naira deposit and withdrawal course of as seamless because it was earlier than CBN’s letter. We perceive that this is simply how issues are in crypto. A problem can fall out of skinny air anytime. It’s our duty to prospects to innovate rapidly and look ahead. It’s a part of what makes crypto work,” he argues.

Immense progress and growth

The Quidax group at Techpoint Digital Currency Summit 2021

Despite challenges with belief, liquidity, and laws since its inception, Quidax says it has processed over $3.2 billion in transaction quantity and has a buyer base of over 400,000 throughout 72 international locations.

This places Quidax’s yearly common transaction quantity at $800 million, properly over the figures reported by different exchanges in 2020. However, contemplating the crypto increase Nigeria witnessed in 2020 and 2021, it stands to motive that the majority of Quidax’s transaction quantity was recorded in 2020 and the primary 5 months of 2021.

Okoro insists that extra individuals want crypto training and extra relatability with platforms providing it. He is continually stunned by the distant areas that individuals register from and this, he says, is a testomony to the wholesome distribution of the corporate’s consumer base throughout the globe.

With plans to render the Quidax platform in French and Swahili for Kenya and Francophone Africa within the coming months, Quidax is eyeing a world growth.

Any firm seeking to broaden is seemingly going to expertise totally different sorts of challenges in new markets. The firm went absolutely distant in February 2020, and the CEO reveals that productiveness has remained stellar, and it is working to enhance choices on its platform.

“We even have plans to launch a number of CeFi and DeFi merchandise on Quidax. Naturally, we’ve been engaged on scaling our platform to accommodate much more cash, so a lot extra in style cash can be coming to the alternate quickly.”

On May 17, 2020, Quidax launched its token, QDX, which it says will gasoline its growth and different processes on the alternate. The token would additionally enable for higher rewards and reductions to its group and permit them to create extra wealth.

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