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Brazil-based startup Crafty plans to revamp its freelancing platform with the help of the blockchain technology, opening access to cryptos for most underprivileged social.
The site connects clients with freelance service providers, without charging users any service fee. The new platform will use AI and the blockchain to build a reputation score for users, both customers and service providers.
Assigning an objective reputation score is meant to facilitate interaction between users, and lower costs for clients. Such a feature, the company hopes, will be able to combat market inefficiency, democratizing access to information for users.
Initially, the company focused its efforts on a segment of the labor market, where the need for change is most acute – domestic workers. They include housekeepers, nannies, cleaners, caregivers and others, who are considered to be the most vulnerable group of workers. They are often employed in private households, working without any formal agreement, and are unprotected by legislation.
‘More than Any Other Country’
Data by the International Labor Organization (ILO) shows there are some 67 million domestic workers globally. In Brazil alone, they are about seven million, which is “more than in any other country in the world,” the ILO says.
On the other hand, customers face difficulties finding and hiring workers, who are qualified enough to do the job. To find the right person, customers need to use word-of-mouth recommendations, which takes time and limits their options.
Alternatively, they can hire workers through a large, reputable organization. The latter option, however, comes at a considerably higher price. Larger organizations have higher operating and marketing costs which, ultimately, inflate the end-price of the product.
Furthermore, large-scale marketing campaigns influence customers’ decisions and lead them to purchases, which do not necessarily represent the best value for money.
“The current labor relations are not enough to promote happiness and trust between people, generating friction and, consequently, waste of resources,” the company says in its white paper. Crafty, which will be released both as a mobile app and a web app, has a mission to fix this “information asymmetry”.
The company believes this asymmetry is at the root of most of the waste of wealth, which leads to higher transaction costs for consumers. To facilitate freelancer discovery, it plans to place the concept of reputation value at the center of the platform.
Using AI and the blockchain, it will help customers and service providers leave feedback after each interaction, which will be logged and stored on the blockchain, collecting reliable and transparent data. The company will use that data to develop a reputation score for each user, making future interaction more efficient.
The CFTY Token
Users will receive rewards for the feedback they leave in the form of network tokens. Currently, the company is carrying out an initial coin offering (ICO), which will go on until April 9, 2018. CFTY is an ERC20 utility token based on the Ethereum blockchain. It will allow users to pay for services on the platform and receive rewards for the feedback they leave.
The sale is only for 50% of the total token supply. The company will allocate another 20% to promotions and payments to the team. It plans to put the rest in a reserve fund, which will secure the rewards for users leaving feedback. The ICO is hard capped at $35 million, with 60% of the funds planned for the project’s marketing. Unsold tokens will be burnt.
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, which 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 company operates through a legal entity called AZKLENY COMPANY S.A, incorporated in Uruguay.
The team has been bootstrapping Diarissima since launch in 2016. International expansion is planned to start in October 2019.