What’s the secret to making a new cryptocurrency go mainstream? Local Australian blockchain and crypto startup CanYa believes the secret isn’t all that secret after all. Get people to use them for what they were originally intended for – p2p transactions. And what industry is most ripe for more streamlined payments? The international gig-economy of course.
After raising $1.1 million from founders and investors, and then a further $1.5 million in an ICO pre-sale of its CanYaCoins in November, the crypto business has gone on to raise a further $12 million, in an ICO that closed just last week, on the 27th of December.
While it fell significantly short of its goal – according to StartupSmart, the company had hoped to raise $25 million – the still substantial raise made the CanYaCoin ICO one of Australia’s more successful ICO’s in 2017, taking podium honours alongside Power Ledger, who raised $34 million back in October and HCash, who claim to have raised $53 million. A little bird also told me Robert Tidy’s Bartercoin has also already sold a substantial number of its coins prior to its white paper even being released. I wouldn’t be surprised if there are more happy to stay under the radar, for now.
Cryptomania is definitely heating up in Sydney and Melbourne.
But back to CanYa. According to the startup’s whitepaper, since soft-launch:
- over 3400 provider listings have been created (people who will do work)
- 7600 users have ‘engaged’ via the app (people who need work done);
- and over 1000 peer-to-peer jobs have been undertaken
Australia’s household name peer-to-peer marketplace, AirTasker, with 1.6 million users, is no doubt watching CanYa’s progress very closely. But given the business has global aspirations, even the likes of UpWork must be in CanYa’s sights, not to mention eBay’s Gumtree.
Here’s how the CanYaCoin will work
While payment today for services contracted within CanYa’s iOS and Android apps is only via fiat currency, the goal is to replace this with the CanYaCoin.
When live, the CanYaCoin will act as a cryptocurrency intermediary. Users looking for home-help, or help installing their latest Smart TV will exchange some cryptocurrency for CanYaCoins, to pay Providers. Holders of CanYaCoin tokens from the pre-sale and ICO will be able to:
- Access premium features in the app for a monthly CanYaCoin fee (i.e. premium position in listing for a Provider willing to pay)
- Pay for services direct from their CanYaCoin holding
- HODL their CanYaCoins. For the uninitiated, this means to hold your crypto as a store of value
CanYa will charge a 1 percent transaction fee processed for every payment made on its platform, deducted from the Provider’s payout.
To compare this to two other similar services operating in this space, PayPal.Me charges 2.9% plus $0.30 USD to the provider for receiving payments, and UpWork charges 2.75 per cent to the user and hits the service provider with a 20 per cent of the first $500 worth of earnings. This drops to 10 per cent for earnings between $500.01 and $10,000. No free lunches there.
Why I think CanYa is interesting
- They’ve taken KYC seriously from day one.
As they point out in the whitepaper, fiat ‘on/off rails ‘like credit and debit card purchases of CanYa tokens and withdrawals to fiat will not be possible from a regulatory sense unless they take this piece seriously. So while this functionality won’t be immediately available, it makes sense to get a headstart by forcing all ICO participants to KYC upfront. KYC in arrears is painful and cumbersome. I know because I’ve witnessed it first-hand.
The only risk here is that the KYC CanYa has conducted is too light for future requirements. There is no crystal ball on what regulators will expect from a KYC perspective, so something is certainly better than nothing. Showing good intentions and best efforts also makes for a nice ice-breaker when talking to the local and international regulators.
- There is a real need
I operate in the gig-economy, both as a client contracting freelancers on Upwork, and as a private contractor, billing for my services. Most of my invoicing is made out to clients outside of Australia, where I am forced to use SWIFT, TransferWise or PayPal.Me. While I can price the transaction fees into my fees, the less the better. And imagine losing 20 or 10 per cent of your revenue via UpWork! That seems extortionary.
As a side note, I did try and sign up for the platform this afternoon as part of my research (nothing quite like a primary source), however the SMS authentication code for my iOS download never appeared…I’ve messaged CanYa on Twitter but have not received a response as yet. Guess they might still be celebrating that $12M raise…
- Marketplaces are becoming ubiquitous, and they all need better payments platforms
If you were CanYa, why wouldn’t you look to power other marketplaces with your platform? And will startups like this be able to get there before Amazon? We know Amazon are reported to be buying cryptocurrency orientated domain names. Amazon Home Services could even look to acquire something like CanYa, if it showed promise.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy.