Frequently Asked Questions

What does Acumen do?

Acumen seeks to use DeFi to do good through microfinance by offering users to stake stablecoins, receiving an attractive, uncrorrelated yield. The money is converted to fiat and lent out to entrepreneurs in El Salvador who do not have regular or easy access to traditional banking. These business owners currently need to tap the 'grey' market for such loans and often pay in excess of 30% interest per month to loan sharks. Microfinance has been proven to be a true force in achieving financial inclusion and Acumen's team is driven by improving the lives of entrepreneurs in their home land. After successfully setting up in El Salvador, Acumen seeks to bring its model of using DeFi for good to the world, starting in Africa, where early partnership discussions have already begun with local partners.

How is Acumen's Microfinance yield "uncorrelated"?

Most DeFi yield is correlated to crypto market activity. When people want to buy a lot of crypto, yields rise. When demand goes down, yields fall. Some users might prefer a yield that can stay at an attractive level for the duration of its life, independent of crypto market sentiment, which is what Acumen provides.

What has Acumen achieved so far?

Acumen has been able to achieve a number of milestones. First and foremost, the Acumen DAO has become the first DAO recognized by a country's central bank as an authorized lender. This means that the DAO can liquidate and collect on collateral in the real world. It also meaningfully reduces counterparty risk for anyone engaging with the DAO. Secondly, Acumen has successfully deployed its first tranche of microfinance loans and has proven social impact with the entrepreneurs it lent to, as well as generated an attactive income for DeFi users. Finally, Acumen has partnered with and received equity funding from Fuel, Avalanche and Near to help grow its ecosystem and attract liquidity, while also successfully funding operations and its Stabledapp. Acumen is not just a virtual front - there are numerous real-world regulations that the team is dealing with. All this while acting as a DAO (decentralized autonomous organization), an institutional form most governments have never interacted with. While that means speed of progress may not be as fast as with others, purely virtual DeFi projects, we believe that we are building a lasting initiative that can change lives and in turn also improve the standing of DeFi and crypto in the eyes of the world. A short documentary on Acumen's early success in changing lived can be found here.

How are loan operations handled?

Loan operations are not a trivial pursuit. Collateral needs to be evaluated, agreements need to be made and creditworthiness needs to be assessed. Acumen is proud to partner with the Small and Medium Business Association of El Salvador for local operations and has already established early discussions for global expansion as well.

How are Acumen microfinance loans backed?

This differs by pool and details will be offered to users. Broadly speaking, real-world collateral always backs the loans given by Acumen to some degree and a careful assessment is done regarding the recipient's ability to pay back the loan in order to minimize defaults. The big factor in Acumen's favor is that a business owner moving from 30% interest per month (!) paid to sketchy loan sharks to a new loan that requires a payment of just 1-2% per month has a lot of fresh, unencumbered cash flow available for use to service their debt. Nonetheless, defaults are a risk of giving out loans and capital is fully at risk.

How can I participate in the microfinance lending?

Stablecoin pools that fund the lending efforts are opened on the app regularly. You can stay up to date on Acumen's social media.

How does Acumen think about regulations?

The Acumen DAO is built for financial inclusion. That means it is designed to enable everyone to participate in finance in an open and decentralized manner. Acumen's vision is also to use DeFi to do good. Therefore, it is fully compliant with the laws of the countries Acumen operates in. Services are not available in certain jurisdictions. The team hopes that this can change as regulatory clarity improves and has already made preparations to satisfy KYC & AML regulation in jurisdictions where it does not currently operate, but hopes to in the future. It should be noted that, by combating the grey sector and promoting financial inclusion, Acumen's activities are welcomed by governments where it operates.

Why is the Acumen team anonymous?

Acumen is meant to be a true DAO. Financial inclusion also means a move away from centralization. Furthermore, Acumen is competing with loan sharks that are not happy about an alternative to their outrageous loan rates appearing on the market and in countries where harm has come to those fighting powerful adversaries before. For these reasons, the team would like to maintain a first layer of privacy. Nonetheless, Acumen (while recognized officially as a DAO) does have legal representation in the countries where it operates and has interacted with government agencies, so as for the team 'exit scamming', you may be reassured by the fact that partners and lawyers do know the team personally. The team solely represents the DAO; all decisions are taken by the community.

What are Acumen's official communication channels?

The Acumen team regularly communicates updates through the official Twitter account and announcement only Telegram. Otherwise you are more than welcome to connect and ask any questions on our community Discord server.