Markets operating in free economies are inherently imperfect. Yet, they have built-in self-correcting mechanisms capable of balancing forces out. That is until a central body intervenes. Examples abound. Think quantitative easing, for instance.
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The decentralization power of the blockchain has the potential to change this.
One startup is taking advantage of this power, bringing the blockchain’s benefits to the gig economy. The company operates a Brazilian freelancing platform called Diarissima. Since its launch in April 2016, the platform has attracted over 30,000 registered users in 170 cities.
Similar to other platforms, it connects freelancers, including household workers, cleaners and caretakers, with customers. However, it does so completely for free.
Now the company is launching a new version of its platform called Crafty.work. It will use augmented intelligence and the blockchain to make the interaction between users efficient and reliable.
The current freelance industry relies to a great extent on what is referred to as “knowledge gaps” on the market. A good example is the difficulty clients face finding a reliable service provider with the right skills for the job.
The company quotes a paper by the World Bank, which states that reducing those gaps and improving market participants’ access to information are essential to the market’s efficiency and sustainable growth.
Crafty refers to this information opacity and lack of balance on the market as “information asymmetry”.
Information asymmetry is at the root of most of the waste of wealth, a cost borne by all consumers in the form of higher transaction costs and wasted resources, the company says.
Solving the above problems will be at the center of Crafty’s new platform. By facilitating the way users obtain market information the platform will help users make better-informed decisions.
In doing so, the company hopes to be able to democratize access to the market for users by reducing information asymmetry, and establishing user reputation as what it calls “collective currency”.
The platform, which will be available both as a mobile and a web app, will replace the existing Diarissima.
Crafty.work will focus its efforts on making user reputation transparent and reliable across the entire platform. Using augmented intelligence, it will build a reputation score for each user, making finding and hiring service providers safer and more efficient.
After they complete a job, freelancers will receive a feedback from the customer. Workers will also be able to evaluate the client. The feedback will be stored in the blockchain.
In exchange for the reviews they leave, users will be rewarded with tokens.
The company is in the midst of an initial coin offering (ICO) for its Ethereum-based token CFTY. The ICO, which will run until April 9, 2018, is hard capped at $35 million.
The token is intended to allow users to make payments on the platform and receive rewards for their feedback.
The current sale includes 50% of the total token supply. Another 20% will go towards promotions and payments to the team. The rest will go in a reserve fund to be used to reward users for their feedback.
The company plans to use as much as 60% of the raised funds for the project’s marketing. Unsold tokens will be burned.
According to Crafty, it is the only company introducing cryptocurrencies to underprivileged social groups in Brazil, a country with a minimum monthly salary of $292. Its users are workers who prioritize household purchases and, for the most part, cryptocurrencies are out of their reach. This is even more true about Africa where the company also has plans for expansion.
“Our business model allows an easy access to the crypto-world, where every user can earn CFTY simply by evaluating their counterparty. Then they can use the coins to buy products or services from our trading partners or convert them to fiat if they so wish”, the company says.
The company is in talks with different organizations in Brazil to widen the circulation of the CFTY token. Recently, it met with Brazilian trade association ACICG comprising over 7,000 member companies in the western state of Mato Grosso do Sul. The organization has shown interest in promoting the use of CFTY among its member to encourage them to accept the currency, the company says.
Crafty is talking to more organizations for similar partnerships which will bring the coin to everyday use and, hopefully, result in value appreciation.
The team, who has been bootstrapping the project since launch, operates through AZKLENY COMPANY S.A., incorporated in Uruguay.
The platform’s international expansion is scheduled for the third quarter of 2019.