GiveCrypto Monthly Update — July 2020
Ambassador Program completed, marketplace update and our fraud prevention/detection plan
Venezuelan Ambassador Program Completed
Phase 4 of the Ambassador Program ended earlier this month. As described in previous reports, this phase includes a Randomized Controlled Trial that compares the impact of crypto vs. cash transfers. We sent weekly payments of $10 to approximately one thousand people in Venezuela over the course of fifteen weeks (March to July).
We asked recipients impact questions at four different points; at the beginning, after five weeks, after ten weeks and after fifteen weeks. The questions covered food security, psychological wellbeing, social distancing and household consumption. We are processing the results of the surveys and will publish a paper with all of the details. Below are some preliminary summaries of the data.
Since there are many outcomes in each area, we combine them into one index. The indices are normalized such that the control group has a mean of zero at baseline; a higher value indicates better outcomes. These indices tell us the overall movements of the outcome variables, even if it may be difficult to detect movements from each single outcome variable. We have yet to incorporate outcomes on food consumption (monetary value of food consumed) as this variable requires more cleaning.
As can be seen below, both crypto and cash significantly improve food security. Crypto might also improve psychological wellbeing, although this result is not statistically significant. We saw no meaningful differences in the amount of social distancing between groups.
Crypto Donation Marketplace
We are currently developing a crypto donation marketplace. We spent the first half of July finalizing the prototype and are now implementing the service. Below are some decisions we made about the marketplace’s v1 feature set, which we expect to launch in mid-September.
- Anybody will be able to apply for help and/or donate to a recipient
- All recipients will receive a set amount of crypto for six weeks
- The amount each recipient receives will depend on their location and will be adjusted based on the World Bank’s PPP conversion factor (for example, a recipient in Bolivia will receive $21 per week and a recipient in Egypt will receive $14 per week)
- Recipients will need to provide a description of what they will do with the money as part of their application
- Applications will be voted on by other users and recipients with more positive votes will be surfaced to the top of the feed and should have a higher likelihood of getting funded
We are excited to get this into people’s hands and evolve the service based on their usage.
Fraud Prevention and Detection
If you are giving away money on the internet, you will attract fraudsters. We designed our previous programs so that funds could only go to people that were selected by trusted ambassadors. Even in this controlled environment, we still encountered a modest amount of fraud.
A key feature of the crypto donation marketplace is the ability for anybody to request funds, which exposes us to a new level of potential fraud. Although we can’t anticipate all potential fraud vectors, we have incorporated some basic fraud prevention and detection into the initial version of the service. Obviously, we will enhance these systems as we evolve the service.
It is important to first distinguish between prevention and detection. We define prevention as the ability to identify a fraudulent user before their request is published on the site. Detection is the ability to identify a fraudulent user after they have received funds.
Fraud Prevention
Fraud prevention for v1 will focus on fake accounts. We will use a combination of third party verification services along with analysis of the information that we collect from the user to calculate a risk score. Users with scores above a certain level will be flagged for manual review and/or deactivated.
Fraud Detection
Fraud detection is the ability to identify fraudulent behavior among people that have received our funds and will be one of the key metrics that we track and share with supporters. Fraud detection for v1 will involve manual and automated blockchain analysis to determine where the funds are flowing.
We will assign a risk score to different accounts based on the downstream transfer behavior. We will also perform some manual follow-ups with randomly selected recipients to help us validate the score.
Staying Connected
As always, we love to hear from supporters outside of our updates and events. Please follow along on Twitter and our blog for updates on our programs.
