Confío: Latin America’s PayPal

Julian Moon

Contents

1. Background
2. Why Venezuela?
3. Next Target: Argentina
4. Expansion into All Over Latin America
5. Business Model and Market-Product-Fit
6. Competitors
7. Why Us? — Founder Introduction
8. Token Economy
9. Legal Disclaimer

1. Background

The currency revolution is near. Not too far from now, Bitcoin will swallow up all different kinds of assets worldwide and replace the US dollar as a global reserve currency. The industry has been moving very quickly. Since we wrote this white paper, Elon Musk, the world’s richest person at the time, revealed his support for Bitcoin, and Tesla, an innovative electric car company he founded, included Bitcoin in its balance sheet. Ray Dalio, a legendary hedge-fund manager who previously criticized Bitcoin, changed his stance. PayPal, Venmo, Square, and Cash joined Bitcoin. MicroStrategy bought up more Bitcoin. Coinbase went public. Citibank, Goldman Sachs, JP Morgan, and VISA are growingly optimistic about the future of Bitcoin. Bitcoin ETF funds are on the rise. El Salvador became the first country in the world to declare Bitcoin a legal tender. All of these changes are rapidly but quietly happening.

None of the major players within the financial sector openly declares that Bitcoin will take over the US dollar. Rather, they are taking a prudent step to avoid regulators’ radar. But the market players quickly realize that they may be behind and lose the race if they do nothing about this ongoing revolution. Little by little, American money is getting involved in Bitcoin. You are no longer right if you think Wall Street is ignorant of Bitcoin. A strong signal is being detected that Wall Street is increasingly favoring Bitcoin over traditional asset classes. They are experts in chasing money. Sooner or later, all the Wall Street money will go to Bitcoin. At first, regulators dismissed Bitcoin as it was (still) too small. It did not even reach gold’s market cap. But one day, when they wake up, they will see that Bitcoin has become too big to regulate. What could they do at that point? They are funded by Wall Street, and now Wall Street likes Bitcoin. Bitcoin is unstoppable.

It was evident that this debt-based fiat currency system could not last forever. Many insightful people have pointed out that the empire of the US dollar will fall. It was not a matter of “if” but “when.” But the Coronavirus outbreak dramatically advanced the day of the currency revolution. All central banks worldwide are printing money as if they promised each other. They call it “liquidity provision.” Before the Coronavirus, few people realized that the FED and the Treasury had deceived them. The FED and the Treasury stole money from everyone worldwide (as the US dollar is a global reserve currency) by printing money and occurring inflation. It devalued the entire world’s fiat currencies that ordinary people depend on and allowed asset holders and bankers with early access to printed money to become richer and richer without doing anything. Bitcoin was invented amid the largest fraud scheme in the world’s history. It was right after the United States subprime mortgage crisis. In the first Bitcoin genesis block, Satoshi Nakamoto coded: “Chancellor on the brink of second bailout for banks.” This was the start of Bitcoin, although not many people understood this until recently.

But now, everyone realizes it. It does not make sense to save your money in fiat currencies while central banks print a crazy amount of money. It cannot store the value of the goods or the services you offered at the time. Even people who are not interested in Bitcoin or how our economy is doing have heard concerns about too much liquidity and possible hyperinflation. So far, the stock and cryptocurrency markets have absorbed much of this liquidity. But the bubble will eventually burst. And the world will pay for printing an unlimited amount of money.

We can see that the wave of changes is so fast, and we are concerned that the currency revolution may happen before the technologies revolving around cryptocurrencies and blockchains mature. It will take many years for the relevant blockchain industries to handle real-time transactions with negligible transaction fees. Ethereum 2.0 is not the ultimate answer for everyday cryptocurrency payment methods considering VISA and Mastercard alone process thousands of transactions a second.

Bitcoin Lightning Network and Ethereum Layer 2 are not the ultimate answer for daily payment, and they cannot be free from centralization either. It might be a good try to utilize them for a real-world case, but from our point of view, we do not see a compelling reason why we should be obsessed with sticking to the on-chain solutions for every single case and call it a “revolutionary” decentralized solution, while they are centralized as well as any other platforms. Unless you directly open a 1:1 P2P channel with the person you are trading with, you must somehow trust a centralized party to open a communication channel for you. They might be decentralized at some level, but at the same time, they have centralized validators and checkpoints, and they have a limited number of points of failure if the powers want to come after them. We are not trying to blame them or sell them short. We understand that we have different perspectives, and we in this community are trying to solve this problem differently. This competition is healthy and beneficial for all of us. The point here is some level of centralization is inevitable to utilize Bitcoin at the moment and will continue to be so for the foreseeable future.

Evidently, to make Bitcoin user-friendly, proper mobile wallets are necessary. The wallets have to be distributed to the general public for mass adoption. And this cannot be done without the support of Apple and Google. If the mobile wallet is not a form of a smartphone application, usability and accessibility will greatly decrease. But some centralization already involves with uploading an app to Apple App Store and Google Play. Apple and Google can take down the app whenever they want or whenever regulators of specific states want it. The state may want the beneficiary owner of the app if it is a dictatorship state. So-called De-Fi apps are mostly inaccessible to most of the population if the powers in specific states want to cut access to the “Decentralized”-Apps because the D-Apps will lose the user-friendly client-side access points. Any government can turn on the kill switch for any D-Apps by blocking access to the D-Apps’ GUI clients’ IP addresses and domains. Do you believe that the general public will resiliently continue to use the forbidden D-Apps by typing command lines in the text-only console? We don’t think so.

Still, somebody has to carry the ball. Satoshi Nakamoto cannot verify their identity and publish a user-friendly mobile app on Apple App Store and Google Play. We cannot wait for a new decentralized smartphone OS forever, either. Further, even if we cannot be certain about the future advancement of blockchain technology, some form of centralization is necessary and even helpful for cryptocurrency mass adoption as we are in a transitioning period. Hence, rather than just sitting back and waiting, we decided to take the initiative to help facilitate the mass adoption of cryptocurrencies with our solution and help people in need. We decided to create something like Latin America’s PayPal plus Amazon, which would be closely integrated into people’s daily lives at online stores and almost every brick-and-mortar store, unlike in the United States where PayPal is mostly used online exclusively. The initial target, Latin America, was not decided solely based on humanitarian reasons, but the market opportunity and the impact of innovation we could bring to the world were equally considered. Consequently, we suggest a new cryptocurrency payment and e-commerce platform, Confío, that aims to be Latin America’s PayPal by helping Venezuelans and Argentines by allowing them to pay and send in US dollar stablecoins.

2. Why Venezuela?

Facebook would have failed if it had targeted everyone from the beginning. It started from a small Harvard school community and, from there, expanded to other universities, high schools, and companies, and finally, it became a global social media giant. In short, it focused preciesly to scale. For something that has a network effect to expand, it has to start from a small, loyal target segment and build a network from there. Without the initial loyal users, the network has no value. Bitcoin and cryptocurrencies are truly everywhere in the world, and where should we start first?

As you might have seen from media outlets, Venezuela has suffered from notorious hyperinflation. It is often called the “Venezuelan crisis.” With over 10,000% of inflation rate, the Venezuelan crisis produced more than 5 million recorded emigrants, which is more than 15% of the population. Ten neighboring countries have imposed visa requirements and entry restrictions on Venezuelans due to the overwhelming number of refugees from Venezuela. The situation is only getting worse with sanctions from the United States and other developed nations. It is easy to find information that many Venezuelans are turning to cryptocurrencies in response to hyperinflation, and Pizza Hut and Burger King in Venezuela accept cryptocurrencies. But how big is Bitcoin really in Venezuela? CoinDesk found that Venezuela outpaces other crisis economies regarding GDP-adjusted activity on peer-to-peer cryptocurrency exchanges.

No country has come near Venezuela regarding inflation rates, according to Statista.

The urgency and instability Venezuelans feel in their everyday lives would be much stronger than in other crisis economies, so that might be why many Venezuelans trade Bitcoins. But besides the hyperinflation itself, we believe that there are two other factors:

1. Venezuelan migrants abroad send remittances in Bitcoin to support their families back in Venezuela.
2. Venezuela’s unofficial dollarization.

The remittance business for Venezuelan emigrants has already become a significant business in Latin America. According to Caracas-based consultancy Ecoanalítica, $3.7 billion was sent to Venezuela from abroad in 2019. It used to be around $1 billion before 2018. “Money Transfer to Venezuela” estimated that remittance flows are reaching over 2 million recipient households, which equates to more than 35% of the country’s households. And the remittances account for 5% of Venezuela’s GDP. The way Venezuelans send money to their families varies by country, but it appears that there is a large portion of people who send money through informal ways. Because a lot of Venezuelans do not have legal statuses in destination countries, they would be unlikely to have bank accounts to send money to Venezuela in an official way either. Amid the crisis, the Venezuelan government has not cooperated with its citizens leaving the country, so most Venezuelans could not prepare their documents properly. According to our latest information, it took a Venezuelan woman US$500 to get her passport in 6 months.

Unofficial dollarization is another reason why Venezuelans might turn to Bitcoin. The US dollar-to-Venezuelan Bolivars exchange rate has been strictly controlled by the Venezuelan government, and it has forbidden the use of US dollars at least until 2018. Nevertheless, US dollar black markets were created, and now there are more US dollars in Venezuela than the Sovereign Bolivar, Venezuela’s new national currency. Ecoanalítica estimates that more than half of all retail transactions were done in US dollars, which accounts for $2.7 billion. The thing is, they are all in cash. Real physical cash. Venezuelan banks started to store millions of US dollars and Euros in vaults. But it does not mean that ordinary citizens can have bank accounts in US dollars or Euros as well. They can only use bank accounts in the Venezuelan Sovereign Bolivar. The country is not officially dollarized, and technically, those who trade in US dollar black markets can go to jail, although no one goes to jail. So the remittance from their families arrives in Sovereign Bolivars in their bank accounts. They must quickly use or exchange them for US dollars at black markets. Still, those who can receive remittances are lucky as their money is sent in US dollars from their families abroad. About half of Venezuelans have no access to US dollar-based income.

But even if some people can save money in US dollars, even if some lucky employees receive payments in US dollars in cash, they have to stock the US dollars at their home, not in their bank accounts, because Venezuelan banks do not deal with US dollars for ordinary citizens. Payroll in US dollars is not legal, so they are paid in physical dollars, and they have nowhere to keep them other than home. Some Venezuelans open overseas bank accounts in the US, Dominican Republic, and Panama and keep their US dollars in overseas bank accounts. But it is very inconvenient and ineffective. They cannot use debit cards linked to overseas bank accounts for fear that the banks will shut down their accounts. They can only safely use their debit cards when the transaction is online. Plus, there are international transaction fees. When they want to exchange their US dollars in their overseas accounts for Venezuelan Sovereign Bolivar to use in the country, they contact “managers” who are dedicated to the US dollar exchange black market. They receive the US dollars in their bank accounts in the US and send Venezuelan Sovereign Bolivar to the customers in Venezuela who sent US dollars using their overseas accounts. It is fairly complicating, and there are also brokers’ fees. After all, those who can travel outside Venezuela to open a bank account are rare. So what can they do? Their choice would be increasingly popular cryptocurrencies, mostly Bitcoin.

This is also in line with the form of the solution we want to provide. Although the United States pulled back from forbidding VISA and Mastercard from operating in Venezuela, we would like to bypass the use of VISA and Mastercard. The first reason is it is unlikely they would partner with us. The second reason is to reduce fees for merchants. The third reason is to avoid risks from US sanctions. In other words, we would like to provide a service that enables people to spend and send cryptocurrencies only with QR codes on their phones, not with VISA or Mastercard. And why would people need to do that? There should be a compelling reason for people to try such a radical payment method. In most parts of the world, the best bet would be to stick to VISA and Mastercard to attract the first target customers. But again, Venezuela’s unique circumstances will allow us to make this happen. With our services, Venezuelans can save money in US dollar stablecoins pegged to actual US dollars, which is legal, spend them over the course of time without having to worry about hyperinflation, and send money to their families back in Venezuela, from abroad, for free.

This idea is not something new. There are already many players worldwide that try to allow people to use cryptocurrencies in their daily lives. But what they are missing is that the success of this business at this moment does not depend so much on how sophisticated their native cryptocurrencies are nor how revolutionary their services are, but on which market they focus and start with. The existing market players are having a hard time expanding their target segment. Their target customers live in countries where their national currencies are considered much more valuable, stable, and usable than cryptocurrencies by the general public. Some of those countries are also tightening regulations with cryptocurrencies and have already started viewing them as potential enemies to their governments. So, which place does not have those barriers to mass cryptocurrency adoption? With far fewer regulations and enormous potential for rapid market expansion, now we have a clear answer in which region on this planet has better environments and conditions to start this business.

One regulation that may hinder this free remittance between families across borders was issued by the current Venezuelan government in September 2020, establishing the requirements and procedures for delivering and receiving cryptocurrency remittances abroad to individuals in Venezuela. The Administrative Guidelines declare that people will use its national platform Patria for remittances, and senders abroad will have to pay as high as 10% of the commission. But in practice, as with many other rules in Venezuela, it only exists in the decree book and has never been enforced. LocalBitcoins is still thriving in Venezuela. We do not believe that the government would come after people who violate this guideline, but we will still need to see how it goes.

Another regulation has been in force earlier by the “Constituent Decree on the Integral System of Crypto Assets.” It requires those who operate or perform any activity related to the constitution, issuance, organization, operation, and use of cryptocurrencies, including mining, to get a license from the Venezuelan authority. However, as a detailed report by the VenezuelaBlockchain Team clarifies, since we are a foreign company, unless we have a presence of personnel or electronic equipment in Venezuela, we are not affected by this regulation.

3. Next Target: Argentina

You might wonder why we do not go for Zimbabwe, the country ranked #2 for the highest inflation countries list, instead of Argentina, ranked #3. We reviewed what factors would be the most critical to cryptocurrency mass adoption, and we concluded that, at the moment, an inflation rate would be a much more critical factor than a cryptocurrency adoption rate. There is a big gap in the inflation rate between Zimbabwe and Argentina; 255% and 53%. So why not Zimbabwe? There were multiple reasons why we did not choose Zimbabwe.

1. Too little information is available for Zimbabwe.
2. Zimbabwe’s market size is considerably smaller than Argentina’s.
3. Expansion to Latin America is possible with a base in Venezuela and Argentina.
4. There would be a more network effect in Argentina derived from Venezuela.

First, it was very difficult to research Zimbabwe besides basic information as there was not much information available on the internet. This is not limited to Zimbabwe but African countries in general. Although some African countries show high figures from data processed by Coindesk and high inflation rates, they were not on Statista’s surveys’ lists as data was not collected from those countries.

Next, we were still looking for data on the total consumer expenditure of Zimbabwe, but it should be much smaller than that of Venezuela and Argentina based on the total GDP(Gross Domestic Product). The market size is one of the important factors we should consider if we want to scale. But the Zimbabwean market seems too small compared to the countries we considered.

Third, with Argentina in addition to Venezuela, a single market marketing strategy is possible in Latin America due to the same language and similar historical and cultural characteristics, and success cases in a specific country can be utilized when entering other countries, enabling rapid market expansion. Furthermore, there is a growing movement towards a single market throughout Latin America.

Lastly, there would be a more network effect in Argentina than in Zimbabwe derived from Venezuela. We do not want to start all over again from a country with no connection to Venezuela unless there is a significant advantage to launch in that different market. We do not want to expand into Zimbabwe just because it is ranked #2 on the highest inflation rate countries list. Rather, we want to take advantage of our establishment and achievement for our expansion strategy, and most likely, the next candidates would be Venezuela’s neighboring countries. Once we dominate the Venezuelan market, the network effect it brings across the Latin American region will be remarkable due to Venezuelan emigrants spreading all over the Latin American countries. Below is the map from The Economist showing how they are distributed across Latin America.

The Venezuelan emigrants would have a significant network effect when we launch in other countries, especially in Colombia. There are 1,408,000 Venezuelans in Colombia, whereas only 145,000 Venezuelans are in Argentina. Colombia was also on our shortlist, with an 18% cryptocurrency adoption rate. But it is not much different from that of Argentina(16%), and more importantly, inflation rates are hugely different. Colombia’s inflation rate for 2019 was 3.53%, while Argentina’s inflation rate for 2019 was 53%. They are incomparable. Who would be much more urgent to seek and be attracted to alternative payment services? Our answer is Argentine.

Although Argentina has been able to recover from many economic crises over the past decades, its national currency, Argentine Peso, is infamously losing its value. Argentina’s inflation rate has constantly increased, from 24% in 2018 to 53% in 2019. While almost every Argentine wants to save their money in US dollars, foreign currency exchange is tightly regulated. The newest restriction limits Argentine’s dollar purchases to $200 a month via bank accounts and $100 a month in cash, a drastic cut from the $10,000 a month restriction. Purchasing cryptocurrencies using credit cards has been banned since November 2019, but right after the ban, Bitcoin trading volume surged. Now, they are using bank transfers to buy cryptocurrencies.

Despite the ban on credit card purchases, cryptocurrencies are not prohibited in Argentina. In contrast, there is almost no regulation on cryptocurrencies other than credit card purchases. Argentina’s capital Buenos Aires is considered a cryptocurrency hub as 150 businesses in Buenos Aires accept Bitcoin, making it the second most common place to find Bitcoin businesses in the world. Cryptocurrency startups are thriving in Buenos Aires, and international cryptocurrency companies are interested in Argentina for their bases in Latin America. Encouraged by these positive factors, we decided to pick Argentina as our next target after Venezuela to see our potential to expand all over Latin America.

4. Expansion into All Over Latin America

One notable thing is that many Latin American countries are crypto-friendly. But other than Venezuela and Argentina, they are not suffering from such insanely high inflation rates. So we can expect that we will need to approach this market very different from the first two countries. They are not in a rush to cryptocurrencies at the moment.

Still, assuming that we already dominated the Venezuelan and Argentine markets, there would be a great advantage for us, not only in terms of burn rates. Yes, we would not need to worry about running out of money and could focus on expansion strategies themselves. That is good. But we expect that there will be further advantages. One of them would be that we can expand into the Latin American online payment market taking advantage of our presence in the Argentine online payment market. Unless they suffer from hyperinflation, it would not be very likely that Latin Americans quickly turn to our payment method services that do not use credit or debit cards but only QR codes. We can also try to lure e-commerce businesses to partner with us, which effectively lowers the cost for merchants. This is the first approach we must take when expanding into the Latin American market.

Latin America’s e-commerce is on the rise. It is the world’s second-fastest-growing e-commerce market, with approximately a 59% internet penetration rate in 2018, up from 36% in 2011. We expect this rate to be higher very quickly. Online retail sales in Latin America generated more than $70 billion in 2019 and are expected to hit 116 billion by 2023.

The potential is tremendous. With low competition, there are no dominant payment methods in the Latin American e-commerce market. Credit card and debit card payment only accounts for around 60%.

Mobile Payments Today describes how cash payment is made for e-commerce. “Consumers simply find the goods they want to purchase, add to the cart, and print a barcode for the order at checkout. They take this barcode to their local convenience store or bank branches the consumer doesn’t bank with and pay in cash for the total value. The payment will then be confirmed, and the item will be shipped out. These cash vouchers define innovation, adaptation, and helping bridge gaps in global e-commerce.”

This is because many consumers in Latin America are either underbanked or unbanked. 2checkout describes, “Research by McKinsey found that Latin America has very low banking penetration compared to other regions. In some Latin American countries, just 30% of the adult population has an account with a major financial institution, compared to 90% in countries like the US and UK and 80% in China. Approximately 70% of the Latin American population is either unbanked or underbanked.”

With a young population and a 70% smartphone usage rate, we believe that there is room that our new payment platform with cryptocurrencies can penetrate to the Latin American e-commerce payment market. Once this becomes popular, the region will become much closer to each other than ever, with the capability of cross-border remittance and payment with cryptocurrencies, facilitating economic integration.

In Latin America, cryptocurrencies are generally unregulated. In the end, it will solve many issues Latin America has been dealing with, including but not limited to the rescue from unstable societies and building credit societies.

5. Business Model and Market-Product-Fit

Our goal is to enable everyone to use cryptocurrencies in everyday life easier. We will provide an Android app, an iOS app, and a website to achieve this. The range of our products and services can be categorized as below:

1. Send and receive cryptocurrencies through our mobile wallets.
2. Spend cryptocurrencies at brick-and-mortar stores.
3. Spend cryptocurrencies online through our exclusive “Shopping” ecosystem.
4. Send and receive payroll in cryptocurrencies.
5. Get a certificate of your anonymized payment stream history to prove your credibility.
6. Have easy access to data-driven decision opportunities through a business analytics panel.
7. Advertise to potential customers with consumer-behavior-based micro-targeting.

Features designed for customers will work on Android and iOS mobile applications, such as making payments in cryptocurrencies. Features designed for businesses will work on the website, such as the business analytics panel and the business payroll control panel.

Users can send USDC, KOOL, and CONFIO to their mobile wallets provided by our app and spend them either online or at brick-and-mortar stores. Unlike many other cryptocurrency apps in the market, we do not force our users only to use CONFIO, but there will be incentives to use CONFIO, such as lower fees. An exchange feature will be supported in our platform, so users do not need to exchange them at other platforms. We do not intend to be dedicated to an exchange platform business. We offer the exchange feature for a seamless user experience acknowledging that the regulations for exchanges are tighter than simple payment applications.

For payment, merchants must set up their products and service units in advance, just like e-commerce platforms. When they receive payment, they only type the quantity of the products they sell or the number of services they offer. A QR code will be generated for a brick-and-mortar store payment. Then the customer scans the QR code using our app. The app will ask for the customer’s permission to process the payment. Once the customer selects which cryptocurrency they want to pay and accepts the purchase request, they are all set. The payment will be immediately processed. This does happen on blockchain systemsbut we will only store the details of the blockchain transactions in our database so that users’ privacy is protected. Merchants need to know which cryptocurrency they want to accept from their customers. If a merchant does not accept USDC, when a user selects USDC for the payment, a warning will come up, saying that they cannot pay with USDC at this store. You might wonder why we do not offer an auto-conversion for payment in any cryptocurrency. When users pay in USDC, we collect the USDC and transfer the USDC to the merchants later. When users pay in CONFIO, we collect the CONFIO and transfer the CONFIO to the merchants later. All these happen in our system. Merchants are free to send CONFIO or USDC from their outside wallets, but there will not be any CONFIO nor USDC paid out to merchants’ wallets unless some customers make deposits in our system and pay the merchants. It allows us great flexibility by freeing our service from the necessity of reserves. In other words, to operate our service without any reserves, we simply “transfer” the amount in the cryptocurrency the customer paid to the merchant.

For a remittance, senders need to know the receivers’ usernames in our platform, or raw addresses, if they want to send outside the Confío platform. When senders use receivers’ usernames for the remittance, everything will be processed on our platform, and the remittance fee will be free. We do not charge a remittance fee for outside cryptocurrency addresses either, but the blockchain will incur a fee, and we subtract the fee. But again, we do not charge any fees for profit for remittance, nor senders and receivers. This will highly encourage cryptocurrency remittances between Venezuelan emigrants abroad and their families back in Venezuela.

We also offer a seamless online shopping experience in cryptocurrencies through our “Shopping” tab. This feature has been devised and added earlier than we initially expected due to the lengthened coronavirus situation and the consequent uncertain point of a future marketing campaign. Our initial marketing plan was to set up an event booth to distribute Confío tokens on Venezuelan university campuses. At the event booth, we will bring banners and pamphlets explaining how cryptocurrencies may help Venezuelans from the current crisis and what they can do with the given amount of Confío tokens on their university campus. We were going to pre-contact and sign a contract with in-campus businesses to accept our native token, Confío. Of course, they have no faith in Confío or whatever cryptocurrencies. This is only possible when the Confío tokens distributed to their students are backed by US dollars, which will be done in USDC.

And why university students? They are more tech-savvy and sensitive to new trends; most of them have a smartphone; most importantly, a university campus has its business ecosystem and ongoing business activities revolving around the campus, which is a physically collective place. Why is this important? Let’s say that we are trying to make a contract with a major grocery chain in Venezuela. We do not know to whom to distribute free Confío tokens. We will also need a lot more effort in educating them on how to use the free Confío tokens as the target is across all generations, and there is no guarantee that they would go back to the grocery store to use the distributed Confío tokens. The university campus strategy easily solves this issue. We can make a fairly exact estimation of how many Confío tokens in-campus businesses would receive based on the distribution amount. The biggest hurdle would be persuading the in-campus businesses to accept USDC because they would not know what USDC is. But there is a good chance that they will end up understanding this because, in Venezuela, there is no way we could transfer that large amount of US dollars to the in-campus businesses. From their side, they have nothing to lose in this experiment of giving away free bread, not to a few dozen students, but hundreds or thousands of students. Why not allow thousands of their students to get free bread with no commitment?

This promising marketing campaign plan had been on hold for an unlimited period due to the pandemic. All university classes switched to online. Every once in a while, a new variant of Coronavirus comes up, and people continued to be affected by the new variant. Even experts were reluctant to give an exact time frame for when we can see the end of this pandemic. But it is not a good idea to wait forever for the end of the pandemic. This became a new initiative for us to launch the in-house online “Shopping” tab earlier than planned. On our “Shopping” tab, businesses can register and sell their products and services. Customers can purchase them with a few clicks. Everything is in cryptocurrencies, and users will enjoy seamless experiences as everything will be connected and done with the cryptocurrencies they have in their wallets on our platform. But why not partner with existing e-commerce giants? Unfortunately, there is no dominant e-commerce giant in Latin America. MercadoLibre is often called “Latin America’s Amazon,” but its dominance and impact in the market are not comparable to that of Amazon in the North American market. We suspect that a high rate of unbanked or underbanked population has been one of the biggest obstacles to preventing the advent of a dominant e-commerce giant in Latin America. So why not create our own with cryptocurrencies? There will be a great demand for our “Shopping” tab if we correctly guess that the root issue was the unbanked or underbanked rate. The “Shopping” tab will be country-specific and adjust to the customer’s location.

Another marketing campaign being conceived recently is giving away CONFIO tokens when users check in at popular malls, including but not limited to Venezuelan and Latin American ones. Users can open the Confío app near big malls or markets and check in using GPS daily and get $0.01 worth of Confío. If it is practiced by many, this should draw attention from merchants in the malls or markets. We could give away an extra $0.01 worth of Confío if users share their daily check-in on social media with a tag like #VenezuelaConConfío (“con” means “with” in Spanish).

We will also provide a certificate of our users’ payment stream history to prove their credibility which can be potentially integrated with NFT. In Latin America, especially in Venezuela, it is hard to trust each other or even businesses. So references are a great deal. But even references are not trustworthy because even the governments are highly corrupted, and by bribing, people can buy many things that normal citizens cannot deserve. We will use our payment history to prove that a user is a legitimate person with some payment history. In other words, the user’s payment history doesn’t lie that they are a good business, a fake business, or a fake individual.

The user can disclose their payment history to a specific person they want (potential company/boss for an interview or potential business partner) or the public (if they want). And that payment history won’t be raw. It is a simple summary of where they have spent money for the last few months or years. For example, a user spends 40% of their money grocery shopping. But the viewer cannot know exactly the grocery store’s name. It will reveal their constant expenditure stream to the grocery store. And they got a salary from a company regularly in a certain time frame. But the viewer cannot know what exactly that company is. The user (owner of the history) can decide to disclose their payment stream history, and then the viewer chooses to get quotes from any of its connections with the revenue stream. For example, the viewer can ask the company that had regularly paid the salary to the person about who this person is. The viewer will pay for the quote, and the responder will receive the compensation. The payment history proof may resolve Venezuelans’ identification issues abroad.

We will offer a payroll service to facilitate cryptocurrency circulation in the target countries. Somebody has to bring some funds from outside our platform. If payroll is done in our system, users will have easy access to their funds and spend them in our ecosystem without experiencing the hassles of going through the learning curve of sending cryptocurrencies to our platform from the outside world. Users do not need to go to cryptocurrency exchanges to exchange their fiat currencies for cryptocurrencies and send them to their wallets in our mobile app. They can spend cryptocurrencies as soon as they receive payments from their employers using our platform. This is a whole new positive-loop ecosystem.

But the best thing businesses in our ecosystem can take advantage of is our analytics service, which will be free for most small businesses. Thanks to how we handle payment transactions between customers and businesses, we will deeply understand how customers behave. Before Confío, this has been only possible for e-commerce businesses. They tracked how their customers behaved using Google Analytics and their management solutions. But cryptocurrency is based on electronic transactions, enabling Confío to discover the missing keys for businesses to understand their customers. Businesses will be able to see demographic data for their stores. But Confío does not stop there. It continues beyond the store-level analytics. We mentioned that the payment has to be made with the set up of products and services in advance. Hence, Confío knows what products and services are sold to which customers. We offer a more convenient way for businesses to sell many physical items. This is where things get more interesting. We offer a barcode scanner system, and merchants can record their products using the respective product barcode in advance. When they sell, they simply scan the barcodes of products using the Confío app, just like a traditional POS system. The barcode scanning will be done locally on business users’ smartphones and batch-sent to our server when the merchant finalizes the payment. We will process the payment with the items. And we map all these data internally. This unlocks a unique opportunity for Confío. No service in history has ever been able to offer such comprehensive analytics to brick-and-mortar stores. No service on this planet has been able to link such information from end to end throughout the supply chain. Credit card companies only have information on the transaction as a whole, not the details of each item. PayPal only has information on the transaction as a whole. In contrast, with product/service level transaction management, Confío has information in all details, which was only possible through e-commerce platforms. In other words, by e-commercializing the entire payment world and business activities, Confío will transform the marketing industry to the next stage: micro-targeting for brick-and-mortar store consumers.

Marketers love Facebook because it allows them to micro-target their customers. Facebook knows how old you are, where you live, what you are interested in, and much more. Confío makes it possible not only online but also for the in-store payment scene. Confío needs to have information on whether you like apple pie. But let’s take a quick example. A bakery franchise chain rolled out a new bread. They can link the data that customers who used to buy their apple pie have loved a new bread. But they figured that those types of customers didn’t like their doughnuts. This application case can further expand to the manufacturers or the producers at the end of the supply chain. They will now have insights into what is going on at the end of their distribution channels. It will give them a huge incentive to come to our platform and register their products, even before we ask them because they would be highly interested in how their products perform.

Lastly, with this deep understanding, micro-target marketing is possible for businesses. This is almost the same as Facebook or Google, so only a little explanation would be needed. Confío users can see brick-and-mortar stores close to them from the map offered on the Confío app. Among the list, we can ship the advertisement based on location. Online-exclusive advertisement is also available on the “Shopping” tab.

But we have a more active incentive program for consumers. We mentioned that the business analytics service would be free for most small businesses. Businesses bigger than certain sizes must agree to run their reward program for their customers in the Confío ecosystem. These would be most likely discount coupons. But wouldn’t it be a loss for businesses? Why would they be encouraged to issue a coupon for already loyal customers? Large-size businesses signed up and partnered with Confío do not necessarily run the reward program for current customers. They can also offer a reward program for potential or future customers. But this “incentive for customers” ecosystem works as a whole. Customer A, who is loyal to company A, could get a discount coupon from company B, while the customer’s consumer behavior mostly helped company A. Meanwhile, Customer B could get a discount coupon from company A, while most of their payment activities are involved with company B. So the businesses help each other with this positive-loop ecosystem. With the non-tracking privacy option chosen, users won’t have access to discount coupons or any reward program.

You might wonder if this is too much out of sync with the ethos of cryptocurrency. It might seem too centralized. But as we mentioned earlier, we understand that we cannot take all of the good aspects of blockchain technology, and thereby, we chose to concede on the decentralization part as this service has to be centralized to some level by nature. Rather than pretending to be like other De-Fi projects or innovative decentralized solutions for the ideal anarchists’ world to gain the cryptocurrency community’s support, we make it crystal clear that we are less decentralized besides the fact that we only store an encrypted copy of users’ seed phrase in connection to Apple and Google’s authentication features. We make a bigger deal and exchange the pros and cons more aggressively than our precedents. As we understand that we have to concede the degree of decentralization, we concede it much more and take as many advantages and benefits as we can get as a centralized platform. With cryptocurrency and blockchain, we can instantly help people in need who do not have access to traditional financial services.

Unlike fiat currencies, Bitcoin is sound money that cannot be manipulated by only a few policy-makers. This allows Bitcoin to be ideal for the world’s reserve currency and help countless people worldwide. That’s the core value we focus on and what we care about right now. A completely unregulated free world is secondary to us. We are aware that we will eventually need to be more decentralized as we grow and catch regulators’ attention. But it is not the right timing for us to decentralize completely now. It is time to scale up very quickly so that regulators cannot even catch up with the speed of our growth. Decentralization should be the aftermath of our service. This strategy will allow us to avoid setting our upper growth limit at a regional copycat of PayPal but make it an Amazon or Facebook scale global platform. In other words, our growth potential has no upper limit with the focus on our core values. We want to show the world what the greatest companies, like Google, Apple, Amazon, and Microsoft, have done for us. We want to receive the baton from them for the next.

With that in mind, let’s briefly see how we make profits.

Transfer inside the Confío platform: Free

Payment: 1.5% for business users. When payment is made in CONFIO, 1% is for business users. Free for customer users in any cryptocurrency.

Shopping (referring to our exclusive online shopping ecosystem): 1.5% in addition to handling payment. So the total of 3% in any other cryptocurrencies and 2% in CONFIO. This only applies to business users. Free for customer users.

Payroll: US$1.5 per employee payroll or 1.5% of the payroll amount, whichever is lower. When the payroll is made in CONFIO, US$1 or 1% of the payroll amount, whichever is lower. Free for employees.

Business Analytics: Free for all business users. Large-size businesses must join a reward program powered by Confío to give incentives to the end customers. The payment will be analyzed based on payments made in the Confío platform. For example, if a bakery franchise accepts 20% of payment from its partners through the Confío platform and 80% of payment through other ways, such as traditional bank transfers, we will only offer analytics data of the 20% payment done through the Confío platform. This will push the franchise beneficiary owners to use the Confío platform and encourage their partners to accept payments through Confío. This will be one of the keys that would allow us to expand outside the Latin American market.

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6. Competitors

First, we will focus on competitors in Venezuela. Competitors in Argentina and other Latin American countries are secondary concerns for later. It is a matter of a distant future and not so much relevant to the survival of our platform. Once Confío successfully passes death valley, we can plan for the future.

We have identified three players in the Venezuelan market that are working on something similar to ours. They are “CryptoBuyer,” “Reserve,” and “Dash.” However, there was not much information on how CryptoBuyer and Reserve are doing in the Venezuelan market. CryptoBuyer claims it has a mobile app, but we could not find it. We only found some screenshots from their website. According to our research, it is one of Latin America’s leading cryptocurrency payment companies. It installed many Bitcoin ATMs in Latin America. According to media outlets, it was also the one that partnered with Burger King and Pizza Hut for cryptocurrency payments. According to the company, more than 400 merchants are on-board to do business with them. We think they are doing great, except that they do not have a mobile app and do not aggressively launch a marketing campaign for their services. It is far from mainstream. We do not see a reason why we would not be able to partner with Burger King and Pizza Hut with our exclusive, user-friendly mobile app.

The second player, Reserve, does have its mobile app on Android. But it has yet to make a great achievement so far. Launched in July 2019, the app has only recorded 10,000+ downloads at the point of writing. But it is enjoying a high rating, giving us a positive signal. However, its problem is that it only allows users to use Reserve, its cryptocurrency. Users cannot use Bitcoin, Ether, and other stablecoins. Users have to top up their balance with fiat currencies and are forced to use Reserve, which is not a popular stablecoin at the time of writing. This is a major drawback that might prevent this app from becoming popular. Allowing other major cryptocurrencies to use from their Reserve wallets should be a way to go. But the two players still have a great potential to thrive. This market is still in its early stage, and there is not much competition.

The third player, Dash, can be the most thriving competitor. Being one of the oldest cryptocurrencies, Dash is already well-known to cryptocurrency enthusiasts worldwide. Despite its decline on the global stage, it is doing a great job in Venezuela. Dash’s mobile wallet app is available in Venezuela. Dash even has a Venezuela-dedicated Twitter account, with over 4000 followers at the point of writing.

In fact, unlike the worldwide market share, Dash is one of the most used cryptocurrencies after Bitcoin in Venezuela. Dash supports InstantSend, which allows users to send and receive Dash instantly. Nevertheless, Dash’s mobile wallet app only supports Dash, no other cryptocurrencies. This is problematic as it does not support the most popular cryptocurrencies, Bitcoin and Ether, and does not support stablecoins which are ERC20 tokens. Dash’s mobile wallet app would have recorded many more active device numbers if it supported other cryptocurrencies. However, since Dash only focuses on its main area, the Dash cryptocurrency running on its blockchain, we do not expect Dash to support other cryptocurrencies on its mobile wallet app in the future. According to our research, Dash attempts to resolve this problem by partnering with CryptoBuyer, the other player in the Venezuelan market.

But none of the three has not yet overcome ordinary Venezuelans’ trust in US dollars. We have to convince users why cryptocurrencies are as valuable as US dollars. Stablecoins are the best fit for this job. And mass marketing is necessary. We have to educate ordinary Venezuelans that using stablecoins pegged to US dollars is no different than using US dollars, except that using stablecoins is much more convenient than using physical dollars. And there should be Bitcoin, Ether, and a popular stablecoin like USDC in this payment ecosystem, considering all the US dollars circulating in Venezuela are also brought from abroad. This is where Confío comes in.

Thanks to our business analytics feature, we may attract business and customer users outside Venezuela and Latin America, even in the early stages, without explicit efforts. Outside Venezuela and Latin America, our competitors will be Crypto.com and Wirex. They are global-leading players and far ahead of us in many aspects. But we make a distinction and differentiate ourselves from them by not relying on traditional financial systems like VISA or Mastercard. With this critical drawback, we open the door for huge new opportunities that no fintech service has ever seen. It is about directly connecting the end of the consumers and the other side of the manufacturers, producers, and service providers. By doing so, we offer an e-commerce-level business management solution no matter whether they are online or brick-and-mortar stores. None of our potential competitors accepts payments with details. How they create and accept payment is very ancient and similar to not setting up Google Analytics for an e-commerce website. We set our positioning in the market with the e-commercialization of the entire payment and business activities with cryptocurrencies. Every business user, whether a small business owner or the world’s largest franchise chain, will have powerful tools to make data-driven decisions in any aspect of their businesses, in strategy, marketing, and new product development, with the help of Confío. This is our unique value proposition. As mentioned, we do not want to be involved with cryptocurrency exchange businesses or regulated exchange service providers. We do not intend to be involved with cryptocurrency ATM businesses either. This is intentional. We aim to make cryptocurrencies available to spend directly at retail without converting them into fiat currencies. Not even through VISA or Mastercard.

7. Why Us? — Founder Introduction

Founder Julian was born and raised in South Korea, where IT and banking infrastructures are phenomenally well-developed. This environment allowed Julian to experience the sleek User Experiences (UX) of Korean finance and fintech ecosystems. After Julian became fascinated by Web 3 and Blockchain, he traveled to Latin America, where he always had been interested in its culture and saw great potential in adopting blockchain in Latin America. The region’s banking infrastructures were very poor, and he had to top up various services’ balances in a rather difficult way. He was pushed to buy various gift cards from grocery stores to transfer money online. It was still heavily a cash-based society. However, at the same time, Julian witnessed Airbnb and Uber are entirely changing foreigners’ experiences in Latin America with lax regulations, or at least its local equivalents, such as Rappi and Cabify, are thriving. Julian came to see that there is room for blockchains to flourish in Latin America with lax regulations, easiness, and flexibility in adopting tech platforms with the region’s young population. Most importantly, there was a great disparity between the unbanked/underbanked population and mobile internet penetration rates. Having lived through 2 years in Latin America, Julian reconfirmed his hypothesis. Julian moved around from Paraguay to the Dominican Republic, to Costa Rica, to Panama, to Colombia, to Ecuador, to Peru, to Argentina, and to Uruguay. He wrapped up his journey at the São Paulo airport in Brazil, dreaming of entirely changing Latin America’s finances and creating the region’s biggest unicorn.

8. Token Economy

CONFIO is issued as an Ethereum-based ERC-20 token. The purpose of making the Confío token is to be used as a virtual currency in our exclusive platform, Confío, to use in our everyday lives, and the token has no other utility as of now. Again, we want to be clear that it was created to be used as a virtual currency only. This may change as Confío grows, but as of now, we do not promise any further potential utilities. We do not prohibit using our tokens outside our services, and you are free to withdraw your Confío tokens from the Confío platform and keep them in your private wallet.

When we first deployed the token contract as [Duende(DUENDE)], our previous brand, on the Ethereum network, we took the initiative to make this token circulate by depositing 1% of our token supply into a decentralized cryptocurrency exchange platform Uniswap to make it available for the public on Friday, January 1, 2021. The Initial Uniswap Listing done on January 2021 shows great interest in the Duende project; the total purchase amounts to US$1,383,095.85 in the first few days.

The link to the spreadsheet.

However, we withdrew from our strong initial motivation because the founder Julian was inexperienced back then (2021) and could not deal with complaints from Uniswap investors very well. Some demanded him to verify his identity with his Korean passport in public. A lot of “marketers” came in and insisted that they could bring more members and grow the community by posting on others’ Telegram/X(ex-Twitter) by paying them some bucks. Some others kept complaining about the founder for not doing any marketing by paying the “marketers” who begged for some bucks for Telegram posts/Tweets. In the end, the founder Julian declared a refund for everyone from Uniswap. For further information, please visit this link and read Julian’s letter. 80 days were given to everyone who swapped their ETH for DUENDE on Uniswap. Most swapped back their DUENDE for ETH. But some folks did not swap back and continued to hold and they are the current 36 holders.

Currently, The DUENDE token contract address: (0xb5653Dce3ae89De4B2B2238026eeb691fb094269)

Below is the detailed distrubution and allocation of the CONFIO tokens:

https://docs.google.com/spreadsheets/d/1weknEMqEiq90V53MqRGs8pZouM8ycfTwrRhWfjuAUPc/edit?usp=sharing

8. Legal Disclaimer

This article was provided to you by Duende Limited, a Seychelles company. Duende Limited was organized under the laws of Seychelles and operated under the laws of Seychelles. The author of this article is the company’s founder and represents the company by acting within the course and scope of the company’s operation.

Confío tokens are not intended to constitute securities in any jurisdiction. Rather, Confío tokens are intended to function as a virtual currency from the beginning. This article does not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities or a solicitation for investment in securities in any jurisdiction. The tokens and the terms and conditions have not been, and will not be, registered under the US Securities Act of 1933.

Furthermore, this article is not composed under, and is not subject to, laws or regulations of any jurisdiction designed to protect investors. Confío tokens are not investments or contracts, nor should they be construed as such. This article does not constitute or form part of any opinion on any advice to exchange or any solicitation of any offer by Duende Limited to exchange any Confío tokens.

No person is bound to enter into any contract or binding legal commitment in relation to the exchanges of the Confío tokens.

Website: https://confio.me

Pitch-deck: https://docs.google.com/presentation/d/1wRK7VE90fOZT8rqx2My61GKYJt7SPtum9ZMO2F1CK1Q/edit?usp=sharing

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