When a person migrates to another country due to economic reasons, a family back home usually ends up relying on the money that this person sends back. To get the most out of the money being sent, many people, with the recent surge of cryptocurrencies, have found a way to avoid the high rates charged by traditional intermediaries. But the high volatility of its value has become a problem in itself.
Francisco José Córdoba is familiar with this problem. He too was forced to migrate and has had a wide network of contacts in the Venezuelan diaspora. For this reason, he has designed an application for remittances specially designed for this group of people. Its main innovation lies in the use of a new cryptocurrency called Send, whose tokens do not change their value according to their supply and demand, but rather by an algorithm designed to take into account their actual use by the community. For this reason, Córdoba has become one of the Innovators Under 35 Latin America 2018 chosen by MIT Technology Review.
Venezuelan migrants face intermediation rates that can reach 30%. For them, the use of cryptocurrencies such as Bitcoin represents an attractive alternative to ensure that the maximum amount of money possible reaches the intended recipients. While this and other currencies did nothing but increase in price, Bitcoin's high volatility was not so problematic. Now, on the other hand, sending bitcoins represents an additional risk since the value of the token can change drastically from the moment the money is sent until the moment the recipient converts the tokens into another conventional currency.
Send avoids this problem by setting a monetary value to each token using an algorithm. The program calculates the demand for tokens in the WeSend user network, an app designed as an electronic wallet to make transfers between users with pre-established maximum and minimum values. Córdoba explains, "At first we designed the algorithm so the price was maintained for a period of seven days, but the tests showed that it was too long." That’s why the time interval by which the price remains stable now also depends on the volume of use in the application.
Only within months after the launching of WeSend it already has 20,000 users who use the app regularly to send money to Venezuela. Previously, Send did two rounds of token offerings, which collected more than one million euros.
The CEO of HAG Consulting & Ventures, Rodrigo de Alvarenga, jury member of Innovators Under 35 Latin America 2018, considers the technology applied in Send very relevant and that this service has "a large potential to be useful to its users."