Watumoney Litepaper

ABSTRACT

Watumoney is the first fully operational peer-to-peer mobile bank. It is based entirely on Blockchain and centered around multiple interconnected features that are coordinated in a holistic solution designed to optimize user experience. Watumoney features a fully decentralized mobile payment wallet, a peer-to-peer currency exchange, and a venture fund to foster a vibrant community ecosystem. Its picolending program builds on an emerging economic theory of trust frees citizens around the world from predatory loan sharks and absurd collateral demands. Users benefit from a generous profit-sharing program, an airdrop program for newly registered coins, and proof-of-stake voting rights. Together, these tools empower people with financial instruments that had previously been elusive and inaccessible. Watumoney uses the Stellar blockchain and was completely bootstrapped to production readiness. It is currently deployed in pilot projects on 5 continents.

EXECUTIVE SUMMARY

The cryptocurrency ecosystem abounds with wallets, coins, and centralized exchanges. However, most systems are racked with security problems, and impossible to use. Integrated solutions that bind essential cryptocurrency tools into holistic solutions could solve these problems. Yet existing proposals exhibit two fundamental challenges; they rely on centralized architectures, are paper-only proposals, or both.

Positioning and Architechture

In development for over a year, Watumoney is the first operational peer-to-peer mobile banking solution. Encouraged by the pervasiveness of mobile banking in the developing world, and inspired by the word ‘‘Watu’’, which means ‘‘People’’ in Swahili, Watumoney is ready. Over the past year, Watumoney has been fully bootstrapped, with the testing and evaluation of numerous blockchain technologies, use cases, and prototypes. Stellar has been adopted as the underlying blockchain framework. Watumoney builds on 3 essential pillars:

1. A peer-to-peer payment wallet that allows users to hold crypto, pay bills (e.g. at restaurants, stores, and bars) and transfer funds in day-to-day life. Simplicity is a core achievement.
2. A peer-to-peer local cryptocurrency exchange that allows users to buy and sell cryptocurrencies directly among themselves, without borders, verifications, or middlemen.
3. A vibrant community of users and holders who benefit from a generous profit-sharing program, an airdrop program for newly registered coins, and proof-of-stake voting rights that engage them to participate in shaping the future of Watumoney.

This community is further supported by two essential programs:

1. A venture fund to foster the community ecosystem and stay true to the goal of empowering users and fostering financial independence around the world.
2. A loan program that frees citizens from loan sharks. Artificial intelligence and Big Data are used to create an innovative credit rating system that allows users to borrow without the need for outdated and absurd collaterals.

A New Economic Theory of Trust

The economic theory underpinning Watumoney is that of trust transfer. We build a conduit between the developed and developing worlds. This conduit transfers trust from the first to the second world. In so doing, it allows families in developing countries to borrow funds at significantly lower costs for their daily activities without need for collaterals. Economists have long recognized that differences in trust are responsible for the differences between the richest and the poorest countries. Trust enables people to do business with each other. And doing business creates wealth.

The Watumoney trust transfer framework is a fundamental innovation and the basis for its picolending program. It builds on two observations. First, while a pico amount (e.g. $10) may be significant to a user in a developing country, it would cause no significant loss to a user in a developed world. Therefore, provided enough incentive, a user in a developed economy could act as a warrantor for such a picoloan without exposure to significant risk. The second observation provides the incentive for people in the developed world to indeed enter such warrantor agreements: within two degree of separations, anybody in a developing country can find a developed country user, often a friend or a relative. In other term, everybody in a developing world knows somebody in a developed country or knows somebody who knows somebody in a developed country. The goal of the Watumoney algorithm is thus to build such a loan network for each user in a developing country. The trust that would otherwise be required from the developing country users is now provided by their warrantors within their loan networks. In many cases, the warrantors are simply members of the extended family.

Uses Cases

Our initial pilot projects on 5 continents have eagerly many features put forward

1. Community voting on Watumoney initiatives to shape the project’s future.
2. Support for fiat in exchange as a way to bridge crypto and traditional financial.
3. Buying and selling cryptocurrencies as investments.
4. Funding of community projects as well as bounty programs.
5. Cross-border remittance, a trillion-dollar industry that continues to demand disruption.
6. Airdrop new coins added to the Watumoney exchange.
7. Borrowing funds from peers without excruciating paperwork and outrageous collateral demands. In many developing countries, it is not unusual for the lenders to require collateral valued at three times the amount of the loan, while demanding 30% invest.
8. Transfers to loves one as well as everyday payments. While the developed world gravitates towards credit and debit cards (which are troubled with fraud and security issues), the developing world is leaping towards mobile moneys that are much closer to crypto.

Strategy and Vision

The Watumoney Peer-to-Peer exchange is supported by individual small enterprises that we call ‘‘kiosks’’. Kiosks are individuals and entities around the world that frequently exchange fiat and cryptocurrencies, often for business purposes. In other cases, they voluntarily exchange currencies to foster adoption. Any user can apply to become a Watumoney Kiosk. These kiosks are registered and listed in the Wallet where they can be browsed and discovered by occasional currency buyers and sellers.

The fundamental strategy that guides the Watumoney effort is to blur the distinction between cryptocurrencies and traditional currencies. We anticipate that everybody in the world will know a friend or relatives who is a Watumoney kiosk owner. The simplicity of the system will bridge the gap between familiar money, and previously mysterious and unusable digital currencies.

Successful execution of this strategy will position us as the dominant mobile banking enterprise. We have conducted numerous trials tests, and pilot projects that have allowed us to refine the product, and develop it into a well-tuned and accepted ecosystem.

As the adoption of blockchain progresses, we are fully confident that the line between cryptocurrency based banks such as Watumoney and traditional banks will completely disappear. As such, we envision a future where traditional financial instruments such as ETFs, futures, and commodities will offered on the watumoney exchange.

Coin Use and demand

Given the success of our projects, the next goal is to expand operation and build on these early successes. We plan a token sale of Watucoins with four main features:

1. Transaction in the Watumoney network incurs small fees that are payable in Watucoins. Watumoney comes with tethered national currencies that are implemented on the blockchain. They allow users to pay for services with a blockchain implementation linked to what is perceived as normal currency. Fees for transacting in these tethered currencies will also be payable in Watucoin.
2. Watumoney kiosks are considered franchises. These kiosks are provided with legal support from the Watumoney organization and technical tools that increase businesses effectiveness. In return, kiosk will pay franchise fees using the network’s currency, Watucoin. We will create a worldwide network of millions of kiosks.
3. Trading in the Watumoney exchange incurs fees that are different from normal transaction fees. Theses fees will also be payable in Watucoins.
4. Finally, interest in loans will also be paid for in Watucoins. As expected, our lending program has been extremely popular with our pilot participants; 8 out of 10 users were interested in receiving a loan.

Benefits for Holders

As the networks succeeds, demand for Watucoin will increase in a self-reinforcing loop. The more kiosks there are, the more users there will be, and the more Watucoins will be needed.

Watucoin owners benefit from fundamental privileges:

1. Profit-sharing from Watumoney activities
2. Proof-of-Stake voting right on important initiatives
3. Airdrop for new ICO’s to be listed on Watu Exchange
4. Voting on projects to be funded through Watu Venture Fund

Team

We are building a talented multidisciplinary and geographically distributed team of accomplished professionals and entrepreneurs with records of success in their careers and endeavors: financial veterans, banking experts, funds managers, exchange gurus, software developers and architects with experience with big data, artificial intelligence, or blockchain, operational geniuses, legal experts, etc. Send us a message if you would like to join our team. Our Founder (Ph.D. in Distributed Systems) worked as Lead Architect and Engineer with such renowned companies as Cisco Inc, AT&T, and Verizon. Most recently he was with Overstock, a Blockchain Pioneer who founded tZero, a revolutionary token treading platform along with Overstock’s OSTKP Security Blockchain. Overstock has recently completed a USD 250 million ICO for its trading platform.