Brazil-Based Startup to Give Freelancing Market a Blockchain Boost
Brazil-based startup Crafty.work plans to rebuild its freelancing platform with the help of AI and the blockchain.
The company is already running a functioning minimum viable product (MVP) named Diarissima. Unlike many competitors, the site doesn’t charge freelancers any fees for the jobs they complete.
“Waste of resources”
Now the company plans to replace its MVP with the new, blockchain-powered network. A key feature of the new platform is its algorithmic user reputation score.
“The current labor relations are not enough to promote happiness and trust between people, generating friction and […] waste of resources,” says the company in its white paper.
The platform targets the millions of freelancers employed in the so-called “on-demand economy”.
According to a report by US software company Intuit and market research company Emergent Research, there were 3.9 mln such workers in the US in 2017, representing 36% of the workforce. The number is expected to go up to 9.2 mln by 2021, making up 43% of the total workforce.
The platform was originally aimed at helping a specific segment of this economy, which the International Labor Organization (ILO) calls “domestic workers”. They include people engaged in a work performed “in or for a household”, such as cleaning, cooking, caretaking, etc.
Globally, the number of domestic workers stands at 67 million, ILO figures show.
“More than any other country”
The trend is especially pronounced in Brazil, where they were about seven million domestic workers, or “more than in any other country in the world”, according to the ILO.
Often times, the legislation does not protect domestic workers, making them one of the most vulnerable groups of workers. They are self-employed or working unregistered, without any official agreement.
Even when governments do attempt to solve the problem top-down, it often has an adverse effect.
Brazil is a good example again. Regulations which came into force in 2015 introduced significant changes in the relationships between domestic workers and their customers. They were meant to defend workers’ rights and increase their protection. Ultimately, however, they resulted in higher costs of hiring and more complications- proof that centralized intervention rarely works, the company says.
On the other side of the equation, customers of domestic or self-employed workers do not have a secure way of recruiting and hiring the person most apt for the job.
The freelance market is based on a phenomenon, which Crafty calls “information asymmetry” – the discovery problem.
This is where the new platform comes into play. It will come as a mobile app and a web app and will replace existing Diarissima.
It is intended to make finding and hiring workers who have the right skills and reputation for any given job easy and secure.
To do so, it will place the concept of reputation value at the center of the network. With the help of augmented intelligence and the blockchain, it will help customers and service providers leave feedback for each other. The feedback logs will be stored on the blockchain, guaranteeing transparent and reliable information. The data will ultimately allow for the development of a reputation score of each user, helping future users to interact more efficiently.
To incentivize users to leave feedback, the network will reward them with tokens.
The company is in now the midst of its initial coin offering (ICO). The sale of its ERC20 utility token will run until April 9, 2018.
The CFTY token, based on the Ethereum blockchain, will allow users to pay for services on the platform, receive rewards for feedback and others.
The ICO is hard capped at $35 million, with 60% of the funds planned for the project’s marketing. The sale includes 50% of the total token supply. Another 20% will go towards promotions and payments to the team, and the rest will be kept in a reserve fund, which will be used to reward users for their feedback. 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 company operates through a legal entity called AZKLENY COMPANY S.A, incorporated in Uruguay.
The team has been funding the project with its own capital since its inception in April 2016. Today, Diarissima has more than 30,000 users in 170 cities across Brazil.
The company says it has applied for a US patent. It plans to start international expansion in late fall 2019.
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