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AMA Highlights – CryptoLocally

By 29-Sep-2020 No Comments

AMA Highlights – CryptoLocally

By Daniel Dal Bello, Director.

September 30, 2020 – 10 min read.

On Monday 28 September, we welcomed both Jae Chung and Hugo Campanella from CryptoLocally into the Hillrise Capital Telegram chat for an AMA. Jae and Hugo are both cofounders of RocketBC, the company behind CryptoLocally.

CryptoLocally is a startup working to bridge the growing gap between the ordinary user and the expanding and often complex world of DeFi. They want to unleash DeFi to the masses.

The goal is to create an easy and accessible fiat gateway to the DeFi universe through their P2P marketplace, CryptoLocally Vaults (‘CLV’), and governance token GIV.

In this post, we have compiled key questions and answers from our AMA event.

Daniel Dal Bello
Thank you both for being here! As always it would be great to start with an introduction and some background information on CryptoLocally.

Jae Chung
Hey guys, I’m Jae. I’m cofounder of CryptoLocally, and I lead engineering here.

Hugo Campanella
I’m Hugo, also cofounder and in charge of product and UI/UX.

CryptoLocally is creating the easiest and most accessible fiat gateway to DeFi and its tools for everyone. Our goal is to empower all people with the tools to take control of their financial future.
By eliminating the middleman, CryptoLocally enables people to bypass the onerous fees, interest rates, and other restrictions traditional financial institutions impose.

CryptoLocally is already a trusted provider of a peer-to-peer (P2P) digital asset marketplace with no middle-man; it offers out-of-band payment methods and a revolutionary smart contract escrow.
People can meet in person, send a bank transfer, or use KakaoPay, AliPay, WeChat Pay, Venmo and more – all in a currency the buyer and the seller decide to use. All the while, their digital assets will be secured in an escrow that is safer than a traditional bank account.

Daniel Dal Bello
I have gone through your signup process and created an account on the platform. We know that a component of what CryptoLocally does is running a P2P marketplace. My question is around KYC/AML for the marketplace, do you have anything in place for that? If not, why not?

Jae Chung
Sure, good question.

We upgraded traditional escrows into non-custodial, smart contract powered escrows. For the P2P trades, CryptoLocally does not ever touch the fiat payment side. Buyer pays the seller directly. On the crypto side, the seller funds the smart contract escrow directly, which does not give any one party full control of the funds, making it completely trustless. So think of it more like an offer interface, similar to Craigslist or eBay but for crypto trading.

The design is completely different compared to LocalCryptos and LocalBitcoins where users have to deposit/withdraw their funds.

Ray Reijnders
Keeping the recent KuCoin hack in mind, how does CryptoLocally stop fraudulent actors from using the platform, how do you enforce compliance (e.g. AML?) As your website mentions, “…a secure and trustless system.”

Hugo Campanella
It’s also important to mention that as we are non-custodial, there are no middle-men and no deposits needed before trading. Our escrows are powered by revolutionary smart contracts. You’re keeping full ownership of your keys and funds.

Ray Reijnders
How do you stop fraudulent users? How do you enforce anti-money laundering?

Hugo Campanella
We have a reputation system set in place that helps users determine the validity of a trader. They are expected to do their own due diligence and trade with those who have high reputation and volume. You can also freely check feedback from previous trades on a user’s profile page.

Daniel Dal Bello
I guess I’m a bit confused too, so there isn’t really anything in place regarding KYC for the online marketplace?

Jae Chung
They  [Securities and Futures Commission] announced that they won’t even accept license registrations from platforms that do not take custody of funds. We don’t even see the fiat side, we don’t control the crypto which goes in and out of the smart contract escrow during the trade. As mentioned, it’s more like Craigslist for crypto trading, it’s hard to control something that users negotiate on their own directly.

We’re planning to implement optional KYC as part of the users’ reputation system however, so that it’s easier for users to do their own diligence on faulty traders.

Daniel Dal Bello
“CryptoLocally bridges the gap between the ordinary person and the world of DeFi. By doing so, CryptoLocally will unleash DeFi to the masses.”

This is a bit of an open question, but what’s your plan to achieve this?

Jae Chung
We do want to note that one of the main missions of CryptoLocally is to make crypto and DeFi accessible to everyone. We always forget that almost 2 billion in the world are unbanked while 80% of them have a mobile phone. Most of these people are also undocumented, but they are the ones that can benefit from crypto most because they live in parts of the world with weak financial resources. We want to empower these people.

Hugo Campanella
Honestly, we started building CryptoLocally out of necessity. We found the whole process of getting into crypto so complicated at first. It takes a while to realize the route of finding a centralized exchange with fiat-crypto services, and get KYC verified, wait for bank transfers to confirm, get BTC, then trade BTC into alts (while losing a lot of money in fees and time along the way).

Now let’s look at DeFi. Products and tools are completely scattered everywhere. You need to understand a third party wallet like Metamask and move your funds into these wallets from the exchange to get set up. In order to maximize yield, you need to figure out at least 5 different protocols (which also costs a lot of gas fees to move around from each other).

CryptoLocally essentially puts everything in one place, and brings simplicity back to the user. All you need is an email address to get started. No need to connect a bank account and wait for wires to confirm if you can use your favorite local payment method. This is a product that normal internet users can start using immediately.

Daniel Dal Bello
Can you talk to us in some detail about the GIV token? I’ve noted that it will ‘evolve’ to be a governance token on the platform. The first question is, what utility will you have at launch with your distribution event?

Second, in what capacity do holders have governance rights over the platform or direction of CryptoLocally?

My second question relates to a component of the roadmap which mentions that token holders can create and vote on CLV strategies, but I thought this was all algorithmic?

Jae Chung
Essentially, token holder votes will completely determine the staking rewards rates, govern CLVs, and the platform as a whole in the future.

As for CLVs, yes they are based on smart contract algorithms but as a yield aggregator it would not make sense to hardcode a strategy and only stick to one strategy. Strategies for maximum yield will be dynamic — and we believe that in the future the community would be able to suggest better/more optimal strategies. This is a way to incentivize the community to use their voice to increase their yield further.

Hugo Campanella
Right now you can earn GIV while trading on CryptoLocally, after each trade, both users are awarded GIV based on the traded amount. You can also earn interest on your GIV holdings directly on the DeFi wallet. There’s a couple more cool features like boosting your offers or buy fees rebates with your GIV.

As you mentioned we are currently building two major DeFi features around $GIV.

First, CLVs which are non-custodial, smart contract based algorithms deployed across multiple chains. The CLVs will work in the background and apply strategies that optimize yield for users that invest into the vault pools. This will allow users to earn maximum yield on their crypto assets across all chains, all in one place, with the click of a button.

The second one is GIVernance: GIV will evolve to be a governance token on the platform, offering a truly decentralized solution. Voting rights will offer GIV holders the ability to control the level of inflation, interest and free float (by way of token burns), vote on CLV strategies and finally vote for new listings on CryptoLocally.

Daniel Dal Bello
The CLVs are an interesting concept that I’d like to clarify further. You say they are non-custodial, smart contract based algorithms deployed across multiple chains. That description is a little confusing to me.

As I understand it you will have a pool of funds that are algorithmically invested into some income generating assets on behalf of the individual users funding the pool.

The benefit being that the users don’t need to architect a strategy themselves, or incur a bunch of transaction fees (hurting their returns).

I’d like to know more about these algorithms and how they work and importantly how they adapt with the ever changing DeFi world. Second, the whitepaper mentions maximizing yield across all chains, so would I need to invest in several CLVs within different ecosystems, or just one that has exposure across different chains?

Jae Chung
Hey, that is a great question. Let me explain a bit further:

CryptoLocally’s Finance Wallet v1 allows users to earn interest on their digital assets through a simple set-up process. It has been designed with ease-of-use in mind so that anyone can gain access to DeFi. Finance Wallet v1 uses Compound in order to generate interest for its users, but Finance Wallet v2 and v3 will come with significant upgrades while the simple UI remains the same. This is where the maximum yield via smart contract algorithms come in.

With v2, users will be able to earn risk-adjusted, optimal yield through yield farming smart contracts on Ethereum. CryptoLocally plans to integrate some of the most promising yield aggregators such as idle.finance, which utilizes lending protocols including Compound, Fulcrum, dy/dx, Aave, and Maker, in order to increase yield based on risk tolerance and strategy. They will also increase the total potential APY earned for each user by adding GIV staking rewards based on how much they stake into the CLVs.

V3 will scale this model further with yield optimizing smart contracts deployed on Tron, Binance Chain, EOS.IO chains, and Solana, which will open up whole new yield opportunities for users, all in one place. By doing so, CryptoLocally will have a gateway to a complete ecosystem around DeFi for both retail and enterprise users, anchored by its native GIV token.

To answer the last part of your question, we will have different CLV contracts that use different strategies for each chain. This is because each chain has different liquidity, different DeFi protocols, and so on. For example, Tron is still building a lending protocol, and EOS just recently got a Uniswap copy. Therefore, yield farming strategies in these chains look very different from the complex ones on Ethereum. So when you have USDC (ERC-20), TRX, and EOS in your Finance Wallet, each “row” where you turn on earning interest using the toggle button connects to different smart contracts and different APIs completely.

Daniel Dal Bello
We touched on this just before briefly in one of your answers, but from reading your whitepaper I get the impression that your goal is essentially to provide easy access to digital-assets for a broad range of users. Effectively that is through your P2P marketplace.

There’s an image where we can see several core activities highlighted: invest, earn, borrow, lend.

My question is this, why would I use CryptoLocally as opposed to a platform like Binance that offers spot crypto-markets, futures, leveraged trading, staking, lending, borrowing, OTC, and even a P2P marketplace?

Hugo Campanella
We mentioned a couple of those earlier but here are the main differentiators:

• CryptoLocally is non-custodial, we upgraded traditional escrow systems (used on other P2P platforms) by using smart contracts. This feature completely removes the third party from a trade while keeping a tight security layer throughout the trading process.

• No KYC needed to trade P2P or use our DeFi wallet, you can create an account with an email plus password and start trading right away.

• High privacy as we don’t ask for any personal information.

Large range of altcoins listed, we all know how much hassle it is to go from FIAT to a specific altcoin, we are removing those hurdles and making it a one step process.
We are now supporting ERC20, BEP2, TRC20 and EOS.IO tokens and the list will keep growing.

Same process for our DeFi wallet, you can deposit or buy on USDT on CryptoLocally for example and start earning interest in one click.

Finally, we are building a decentralized, non-custodial P2P trading platform that will soon be managed and governed by the GIV community through ‘GIVernance’.

Jae Chung
As Hugo mentioned, I guess the biggest part is the non-custodial aspect. Deposit/Withdraw means you don’t own the tokens anymore. And as we learned from Kucoin once again, not your keys, not your funds

Daniel Dal Bello
We spoke about how you want to “unleash DeFi to the masses” and now we’ve covered off those core points and differentiators. It’s one thing to have this great product and platform, but how will you get the userbase? Privacy and non-custodial componentry are great, but also Binance has millions of users. How will you get them to come across to your platform?

What are your current user numbers and growth projections?

Jae Chung
XXX

Hugo Campanella
The marketing team is working very hard to promote CryptoLocally. We are looking to invest more into branding, PR, social media and influencers to keep traction growing on the platform. We also want to release more educational content via news articles, guides, review videos made by YouTube creators etc. Lastly, we want to expand our community and focus on new locations like Indonesia, Vietnam, Ghana, Argentina, Venezuela and more. We are creating special campaigns/promotions and partnerships to reach people in these locations.

On top of those, we will be re-investing a lot of the funds raised into marketing and promotions. With several months of marketing/advertisement data under our belt, we know which channels give us the best conversion rates in terms of user acquisition. We’ll be making data-driven, quantitative decisions when spending our budget in order to optimize efficiency and maximize traction.

Regarding numbers, they evolve very quickly we had 15k+ users starting September and soon reaching 20k. We’re seeing significant growth with +50% users monthly on average over the last year.

Daniel Dal Bello
What is your vision for the P2P loan market that you plan to launch before the end of the year?

Jae Chung
This is something I realized could be really powerful in DeFi. Sticking with our mission of empowering those that otherwise don’t have access to crypto and DeFi, we wanted to figure out a way to provide P2P loans through the platform that does not require something like 150% collateral ratio like a lot of other platforms do. We could create a credit score system using reputation on the platform, and may even use GIV as collateral. Clearly, this is still a vision, and we may need to see how quickly we can get through our roadmap.

Daniel Dal Bello
Last one from me as we are getting to the hour, I’ve just recently seen a post that you’re working with Animoca Brands. They’re a company I’m familiar with being previously listed here in Australia on the ASX. What will you be doing with them? I assume NFTs to some degree, I know that’s been a big focus of their pursuits in blockchain.

Jae Chung
We are huge fans of NFTs and believe that it’s better to start building these features earlier than later.

Animoca Brands backed us and they are also providing advisory based on their expertise in the space. We will start by building a P2P NFT market with them, and then integrate NFTs into our Finance Wallet. Then, we’re going to enable renting/lending NFTs through smart contract escrows.

Daniel Dal Bello
Thanks very much for joining guys!

Jae Chung
Thank you for having us!

Hugo Campanella
Thanks for having us, great questions!

The text in this summary has been adapted to correct grammatical errors and for presentation purposes. We thank our guests Jae and Hugo for joining us for this AMA. For more information on CryptoLocally, visit https://cryptolocally.com.