El Libertador

A Venezuelan mother studying strategy guides for the Crypto-game Axie Infinity, the $20 per day she can make is far more than elsewhere
Nerio's LocalBitcoin broker account, over 5 years old, with nearly 100BTC in volume, over 1000 trades, and a 100% satisfaction rating
Chart showing that if a Venezuelan keeps their savings in Bolivars, it will be worth 10% of what is was in only 3-6 months, due to inflation
GIF
Nerio and Matt hard at work

Inspiration

We have been friends for a while but both came from very different backgrounds and professional lives.

Nerio (Venezuelan Crypto Broker)

Nerio was born in a poor neighborhood in Venezuela, from which he worked his way up to having a thriving game business by his 20's. But under the economic policies of Maduro, he saw his life's savings evaporate and his ability to purchase new inventory every month shrink with deflation, until eventually he was forced to leave to have any hope of a bright future.

After arriving in Argentina in 2016 with only a little bit of money left, he found work common for immigrants, working at a convenience store. As he enjoyed being able to make a wage in a relatively stable economy once again, he desired to send money back to his sister in Venezuela, whose law and real estate practice, once thriving like that of many of the other 30 million Venezuelans, had seen ruin because of the rapid inflation and secondary effects on imports and foreign investment caused by it, as well as the downturn of the countries main industry, oil, due to the mismanagement after its nationalization under Hugo Chavez.

He found many other Venezuelans wanted to send money back to their families, and not just in Argentina. The recent Venezuelan diaspora has left over 5 million Venezuelans scattered around the world, most in the Americas, looking for ways to support those back home. With currency restriction laws put in place to consolidate the single party in Venezuela's economic control over its citizens, the only legal way to send money is through Western Union, whose operation is unreliable, whose fees are massive, and whose exchange rate is often not even able to be given to someone sending money at the time they wire it. With many other options unavailable (which we outline in our white paper), Nerio found the only real solution was using crypto currency as a medium of exchange, and since 2016 he has been acting as a broker for people wanting to convert between crypto and Bolivars. LocalBitcoins@Neri0x

Matt (American Computer Vision & WebXR Engineer)

Matt is from Ohio, and when he met Nerio he had just arrived in Costa Rica. Like Nerio his relevant professional work began in 2016, he has been doing Web Development since then, with a focus on real-time computer vision integrated into WebXR applications. Github@mathyouf

Idea

For months and months we (Matt & Nerio) would hang out and talk about life and other things, but occasionally each others work would come up. Eventually, Matt prodded about what exactly the nature of Nerio's business in Cryptocurrency was, and when Nerio explained his brokering, they got more and more interested in how the work Nerio is doing could be automated.

When we discovered this hackathon, around four weeks ago, we finally decided to block out our schedules and try to take the first steps to making this idea a reality.

Our dApp and Smart Contracts provide a decentralized marketplace to exchange Venezuelan currency, Bolivares, into TerraUSD, a stable currency pegged to the US Dollar.

How we built it

Our dApp is built using React.js, Typescript (statically typed javascript), and the @terra-money NPM library. We cloned from an early branch of the Mirror Protocol and have been editing it to work for our specific use case.

Our smart contract is built for the Terra blockchain, which runs on WebAssembly code compiled from Rust. We cloned from a CosmWasm (WebAssembly framework for cross-platform smart contract creation) template for escrow payments, and have been adding features related to the specific needs of our intended users (having the account numbers match the parameters for the most popular Venezuelan banks).

We had to find technical solutions to the problems Nerio has encountered over the last 5 years as a broker, some of which we're still implementing.

Challenges we ran into

Making our solution for the masses.

Understanding that we also want to reach mothers and people left behind with close to zero education on crypto. Unlike most crypto use cases today, the people we're building this for is an entire country. While Venezuela has historically had a robust education system and internet adoption, many of the people left behind today are suffering from hunger and poverty, and don't have the energy to handle complex on-boarding steps. Designing the site to have as little clutter as necessary to get people to be able to quickly and easily understand how to use it was our main priority. This solution has to work for every type of person in Venezuelan society, since every person lacks access to a stable form of banking.

Making our solution work in a decentralized way.

Many solutions that exist today (localbitcoin) not only have a very outdated and complicated interface, but also rely on a centralized exchange. This can be targeted by governments and shut down, and too many people have lost money from having the rug pulled out from under them as central exchange owners disappear. Our smart contracts are a template we made and our site allows users to instantiate a custom version for the bank account they need money sent to (their own, or a relatives), as well as the amount they are trading for it (in TerraUSD). This means we never have our hands on people's precious money, and the tokens will always end up going to one of the two parties involved.

Making our solution as reliable as possible.

This is perhaps the hardest part, and one whose solutions we're still discovering and implementing. Our exchange, like many, will be using a trust metric based system where contract creators can determine the necessary trust metrics an accepting wallet holder must have to be able to attempt to fulfill their contract (by sending Bolivars to the account listed on the contract). We hope this system will tip the scales towards people wanting to be honest brokers, as they stand to make more money with the volume a trustworthy account gets, than by scamming a single user. Ultimately, the risk a user is willing to take under this system will be up to them.

Additionally, we will have a manual arbitration process where the contract creator can initiate it if they feel they have been scammed. Nerio will be personally overseeing these cases to start. With his 5 years of experience doing this manually under his current rate of ~80 customers a week, we hope he'll be able to stop fraud quickly and easily. Long term we hope his work doing this will help us detect flaws early and help us come up with programmatic solutions for preventing them in the future.

Finally, with Chainlink looking to integrate into Terra in the coming months, we are considering building an Oracle based solution where people sending Bolivars could upload proof which could be validated by a computer vision model. Matt has several years of experience both training and deploying computer vision models. We hope this solution could pan out in the future as a novel way to bridge the real world and the crypto world. Gathering image data through our arbitration process might be our initial way of getting the training data, but we hope more solutions will come to mind as we continue working on it.

Accomplishments that we're proud of

Designing a technical, scalable solution to an on-going crisis for the 28 million people remaining in Venezuela.

Creating educational material (Aprender section) for Venezuelan citizens from all walks of life to be able to understand how they can use cryptocurrency as a financial tool to be able to return to their normal lives. How they can access savings rates, a stable currency, international wire transfers, and low, predictable transaction fees. Our educational materials, which have mostly been written, but we're still working on being put on our website, show users how to both use our solution to assist them, but also how they can return to normalcy once they hold the TerraUSD that we offer as a store of value for their savings when they have more Bolivars than they care to hold during the 25% monthly inflation.

Learning how to build smart contracts on the Terra blockchain. This was Matt's first time using Rust, but the help from the volunteers at Terra made learning everything so much easier. The hackathon environment resources made quickly learning this very new concept for me a lot easier. Thank you so much to them.

Learning how to integrate a web app into the lifecycle of a smart contract, to give users an easy interface to interact with using their privately managed wallet (Terra Wallet in our case). dApps had always been a bit of a mystery to me, how one could have locally stored custody of their keys and still interact with a website, which by its nature is very exposed. Seeing what's going on behind it was relieving, and again, a huge thanks to the mentors who helped make learning it so quickly possible.

What we learned

We have learned that sometimes, a problem can't be fixed by one person. This project not only involved Nerio's experience and Matt's deep knowledge on implementing solutions, but also allowed us to discover that many companies are looking to help people working on solutions to these issues around the world.

What's next for El Libertador

Educational Material

Our education material, which is in Spanish specifically for our Venezuelan users, still needs work. Our mission is to continually simplify it, so that Venezuelans can understand how to use crypto as a way to recover financial normalcy. Nerio has been doing this educational work for years with his clients, as well as through his social media accounts, including his Instagram account @venezuelanstacker. Much has been taken from Venezuelan citizens by their government, but the main lever of control remains Maduro's grip on the central bank. By being able to store their money in private accounts, with a stable currency (TerraUSD), with savings rates (via protocols like Anchor), and the ability to make international transfers once again, they can regain much of the financial autonomy they've lost.

Validation Protocols

The money being transferred in the cases of remittances (money sent from Venezuelans abroad back to family members) can sometimes be the money for food that week. Because of this, we are extremely committed to ensuring the chances of being scammed on our platform are as close to zero as possible. Nerio has a 100% satisfaction rating on his 5 year localbitcoins brokerage account alone, not to mention his thousands of transfers he's done over the phone between people he knows and has met through doing these exchanges. More than anything, he cares deeply about making sure no one's money is lost, as he knows personally as someone who has sent money to his family as well, how important those transfers can be to someones life.

Our plan is to extensively test and expand our trust metrics, our arbitration system, and explore the possibility of integrated oracles to validate transfers.

Release

Once all the work has been done to assure the site is easy and understandable for even users with very little technical background, and we've built a robust and trustworthy validation system, our plan is to launch the site with a charitable pool of money set aside, where first time users can send $10 in TerraUSD to a first time receiver bank account of their choice in Venezuela. These contracts will then populate the marketplace, whereupon people wanting to convert their Bolivars into TerraUSD (often shopkeepers) will be able to fulfill them one by one and send people their free sign-on Bolivars. We hope this will help get the foot in the door of people who could desperately use this solution, and be a way to provide some assistance to possibly the most needy people in Venezuela now.

Our rollout plan includes a strategy to fulfill the contracts at first, as finding the people to fulfill the demand for Bolivars (those who still manage to make some amount of profit in Venezuela every month) is often the hardest part of the job. Nerio's long list of trusted contacts have already discussed with him our platform, and are eager to use is when it is built, so our plan is to involve them in the launch process and testing during the pre-launch process to make sure that first time users have a smooth and safe experience.

Our Secret Advantage

Early on we were asked if we had considered designing the site for a more general audience hoping to convert between fiat and crypto. We at that moment decided no, and we think that will ultimately be our biggest advantage.

By taking the time to solve very specific problems of our users in only a single country, we can find solutions that might not work everywhere, but work extremely well specifically for them. There are three major banks in Venezuela, and on rollout we plan to support only those, and support them well. We hope our minuscule focus on this one market will help us find solutions to the validation process, and create educational materials to solve problems they specifically face in their daily lives.

But as we have worked on this, we've seen that while Venezuelans are some of the most desperate people in the world for a decentralized economic solution, they are not the only ones. Nerio knows all too well that Nigerians have experienced many of the same problems he has, and recent reports show Lebanon has also experienced the hardship that comes when a government, in control of your central bank, borrows against your future. If we do ever perfect our solution in Venezuela, we hope to find partners in places like Nigeria and Lebanon to help us localize our solutions to those markets, and custom tailor resources to help them. If that sounds like you, please contact us.

Final Note

We want to thank you so much for taking the time to learn about our project. Venezuelans have experienced a lot of suffering in the last 6 years, with their life savings evaporating under 10,000,000% inflation, and their financial futures seeming more and more uncertain. But we believe that this is perhaps the greatest of their problems, it is still a country that has so much infrastructure and education, having been the most wealthy in Latin America for much of the last century. We hope that our solution can help restore people's lives to what they once were, so that mothers and sons can be reunited, and people can enjoy their lives under a more fair financial system.

El Libertador Whitepaper

The whitepaper, site, and smart contracts you see will be functional and finished for the scope of this hackathon, but work is on-going, and we are still pre-launch!

El Libertador Github Org

Due to the potential for phishing scams of our users by malicious people who could easily throw up a clone of our website, or a clone of our contract, we are still deciding if we will make the code public. If we do, it'll be visible on the org link above.