Everex, a new start-up that provides ethereum based remittance and microfinancing services, won a RemTECH Awards at the United Nations headquarters for “Service Originality” on June 15th.
“We believe what separates Everex is our ability to create a credit history for underserved people, thanks to the Ethereum public blockchain, smart contract and decentralized application technology,” Alexi Lane, Everex’s CEO, said in a press release.
According to their website, they have blockchenized fiat currencies, like dollars and pounds, turning them into “cryptocash,” which is 100% backed, they say, as “for every Cryptocash dollar, one US dollar is held in a publically [sic] viewable third-party escrow,” making them redeemable at will, they say.
The cryptocash can be cashed out at vendors that accept Everex transactions as payments, with the start-up stating they have built a “global network of partners and vendors.”
On top, they provide loaning facilities with Lane stating Everex uses the ethereum based blockchain technology to “put national currencies on the blockchain, where financial records create public credit history for the underserved. Like credit card transactions, blockchain records show how much is spent, so we can apply AI and machine learning to analyze the data and come up with the loan rate to offer the user,” Lane said.
We asked them a number of questions, starting with whether they are basically performing what Western Union does but through ethereum’s blockchain. In reply, a representative from Everex stated:
“In very general sense, yes. However our solution helps solving financial inclusiuon problem, because all WU transations go outside of traditional financial systems building no credit history or financial records for the underbanked users. As well, Everex plans to offer cross-border microlending services on the same platform, using Ethereum blockchain.”
A typical transaction would have cash-out fees of 1% from fiat point to fiat point, we were told, with delivery times of less than 1 minute.
The start-up is VC funded “by angel investors who contributed to the pre-ICO seed round,” with an ICO to be held in late July.
Remittance is big business with billions transferred daily by largely the poorest in our society, making them very cost conscious. Any reduction in transfer fees, therefore, would likely increase market share, but the field is very competitive.
Every corner shop in the developed world has a Western Union outlet, with the giant having build a vast global network of outlets where you can just give or receive cash.
Transferwise boasts of a global network too with fees of 1% up to $50, but they do not provide any financing services. However, they are regulated by FCA, while Everex told us in response to whether they hold any license:
“We are not financial service company but a technology provider offering our solutions for other financial service companies at this time.”
The names of these financial service companies were not provided, and that’s the biggest flag regarding Everex. There is hardly any detail about anything. There is no high level explanation of how this crypto-cash is set up, how the “publically viewable third-party escrow,” which holds US dollars, works, how the microfinancing works, or really how any of this works.
There is no whitepaper, and although they stated in a press release back in 2016 that they held a pilot where “more than 100 migrant workers transferred money instantly over blockchain to their homes in Myanmar in the last months,” they provided zero detail.
With their ICO to launch only next month, you’d expect a lot more publicly available information to cover all the necessary aspects, including risk management for the loans.
With such information lacking, we can at least say they are VC funded which means we should expect them to have done some due diligence, but we can’t be sure that is the case because we don’t know who the angel investors are.
That is not to say the above points can’t be addressed by Everex. Moreover, their apparent lack of grammar in some cases may be explained by the fact they appear to be based in Asia.
However, as ICOs become more prominent and the field starts becoming more crowded, the industry might soon start expecting far higher standards, with a lot more detail, including demos and alphas.
That said, the concept is of course enticing. Lowering payday loan costs for underdeveloped nations by building credit history through blockchain based crypto-cash is most probably a needed service, but execution is everything.
Whether Everex has it remains to be seen, but what is becoming clear is that ethereum is now entering more simple payments markets which were the main focus of bitcoin.
That currency appears to have abandoned those aims, focusing more instead on serving individuals who may need a censorship resistant platform. So giving ethereum an opening to enter traditional payments markets on top of the many other industries it hopes to disrupt through its breakthrough smart contracts invention.