The YapBay Unique Value Proposition
What makes YapBay different from a LocalBitcoins, LocalCryptos or Paxful, you might ask?
What a great question!
YapBay's New Features
YapBay is a next iteration of these platforms and brings the following new features to a global audience hungry for remittances:
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Fiat-to-Fiat Remittances: chained P2P transactions where users can move fiat currency in one country to another using crypto as the transport layer.
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Sequential Escrow: simplified transferral of escrowed crypto from one transaction to the next to expedite cross-border fiat-to-fiat remittances.
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RAI: The Remittance Acceleration Interface (RAI) is a wizard that aims to leverage AI to make the construction of multi-step remittance transactions as simple and efficient as possible for unsophisticated remittance senders.
Additionally, YapBay is:
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Web3: YapBay is censorship-resistant, and will become more decentralized over time.
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DAO: YapBay will eventually become a self-governning DAO, run by its traders.
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No KYC or AML: There will be no protocol-level KYC or AML requirements; individual traders will make their own decisions and the dapp can integrate tools to help them.
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Open Source: YapBay is committed to being open source from day 1.
Scenarios
When thinking about new products, I find scenarios can sometimes help understand the value proposition.
Scenario 1: Simple Remittance
Larry has 5,000 USD in a bank account in Miami.
Maria has a very small amount of COP in a bank account in Medellín.
Larry wants to send Maria 50 USD so she can buy groceries.
However, they do not want to use Western Union or any other legacy/TradFi remittance provider as it is slow, prone to delays, requires lots of paperwork, etc.
So Larry comes to YapBay and he finds a 2 offers to help him get the money to Maria.
He uses the RAI wizard to build his transaction by chaining together the 2 offers.
Offer 1: Mike is based in the US. He can receive Larry's 50 USD in his US bank account and in return sells him 50 USDC.
This USDC is initially be escrowed by Mike.
Once Larry makes his fiat payment of 50 USD to Mike's bank account, Mike releases escrow.
The escrowed USDC is then transferred into escrow with Andres, the trader for Offer 2.
Offer 2: Andres is based in Colombia. He can receive the 50 USDC and in return deposits 50 USD worth of COP (roughly 195,000 COP) to Maria's Colombian bank account.
This is basic use case of the YapBay platform.
Scenario 2: Global Freelance Payment
Nina is a freelance web designer based in Manila, Philippines. She just got a client from London, Mr. Smith who is seeking to send her payment for designing his business website.
Mr. Smith agrees to pay Nina 750 GBP, but experiences problems with his traditional financial institution citing high foreign transaction fees and lengthy processing times.
However, he discovers YapBay as a more efficient alternative.
He connects two offers on YapBay.
Offer 1: Paul, a UK crypto-enthusiast, can receive the 750 GBP in his UK bank account from Mr. Smith and he, in return, can sell Mr. Smith 750 GBP worth of USDC which will be escrowed.
Offer 2: Grace based in the Philippines is looking to sell her 750 GBP worth of USDC received from Paul, in exchange for depositing the equivalent amount in PHP (approximately 50,000 PHP) to Nina’s bank account in the Philippines.
This way, YapBay has managed to provide an efficient and cost-effective global payment method for freelancers like Nina and her clients.
Scenario 3: Microloans for Small Businesses
Similarly, YapBay can connect small businesses in developing nations who need access to credit with microloan providers in wealthier nations.
A small business owner Jose, in Perú, needs a loan of 1,000 USD to buy advanced farm equipment. Traditional lenders are hesitant due to Jose's location, lack of credit history, lack of a bank account and the questionable state of the land registry in his area.
Jack, who lives in New York, wishes to contribute to the economic growth of developing areas and is willing to loan the money to Jose.
In YapBay, Jack finds an offer from Alex, also in New York, who can take his 1,000 USD and in return, give him an equivalent amount of OP which then gets escrowed.
Then, Jack chains this offer with another offer from Sofia in Lima, Perú who can take the OP and then deliver 1,000 USD worth of Peruvian Soles in cash to Jose.
With the money received from Sofia, Jose can purchase his equipment and make repayments over time, thus using YapBay to secure funding and circumventing banking barriers.
Scenario 4: Donation for Social Causes
Alice, based in Sydney, wants to donate 500 AUD to a non-governmental organization (NGO) conducting relief work in rural areas of India. Traditional money transfer services prove to be inefficient, costly, and time-consuming.
Furthermore, she finds that the ONGs operating in Australia either do not offer convincing projects in rural India or have very high overhead costs that detract from the impact of her donation.
She finds two offers on YapBay to help her.
Offer 1: Ben in Sydney can receive Alice's 500 AUD in his Australian bank account and in return, sell Alice 500 AUD worth of ETH, escrowed by Ben.
Offer 2: Priya, in India, can receive the 500 AUD worth of ETH and in return, deposit the equivalent INR into the NGO's bank account in India.
YapBay thus breaks down barriers for international donations, making it easier for people worldwide to support the causes near and dear to their hearts.
Furthermore, now donors can donate direct to local NGOs who are closest to the works to be executed, know the local needs better, are more responsive to local needs and have much lower overhead costs than the large international NGOs.
Scenario 5: Crisis Management During Forced Migration
During a socio-political crisis, SafeHaven - a fictional non-profit organization based in Italy, is working to support refugees from the affected area. SafeHaven usually uses traditional channels to send money, which aren't functioning because of the shutdown of banks in the crisis area.
However, with YapBay, SafeHaven finds a more feasible solution.
Offer 1: Carlo in Italy, can receive the financial support fund from SafeHaven in his Italian account and in return, give SafeHaven an equivalent amount of EURC, which is then escrowed.
Offer 2: Mustafa, a businessman who manages to operate in the crisis-hit region, can receive the escrowed EURC from Carlo and in return, distribute local currency, or goods as needed, to refugees in the region.
This way, YapBay helps mitigate the impacts of crisis situations, ensuring essential funds reach where they need to go safely and quickly, even when the banks or other local infrastructure are not working.
Scenario 6: Accessing Mobile Money in Africa
George in Kenya is trying to pay for vital medical treatment for his father but finds it impossible with his limited access to banks. His friend Lucy, based in New York, offers to help.
She uses YapBay to make a remittance through mobile money, which is popular and widely used in many parts of Africa.
Offer 1: On YapBay, Lucy finds Daniel, a fellow New Yorker who can take her 200 USD and in return offer 200 USDC.
Offer 2: She then links to an offer by James in Kenya who can receive the 200 USDC and in turn deposit 20,000 Kenyan shillings (around 200 USD) into George's mobile money account.
Thus, YapBay allows for remittances using popular local payment methods in regions with limited banking infrastructure.
Scenario 7: Circumventing Capital Controls
Anastasia in Greece wishes to move 1,000 EUR to her college-attending son, Dimitri in Germany. However, due to recently imposed capital controls, she is unable to do so through her bank.
She turns to YapBay to construct two chained offers.
Offer 1: Luke, a Greek resident unaffected by the restrictions, is willing to accept her 1,000 EUR (perhaps in cash) and in return offer her 1,000 EURC.
Offer 2: Helmut in Germany will receive the 1,000 EURC and deposit 1,000 EUR into Dimitri's German bank account.
With YapBay, Anastasia can navigate around capital controls and make sure her son has access to funds for college.
Scenario 8: Overcoming Limitations on Bank Withdrawals
After experiencing an economic crash, the government of Argentina has set a limit on bank withdrawals. Juan, a shopkeeper there, needs more funds than allowed to keep his business afloat.
His cousin Maria in Spain wants to help him with 2,000 EUR.
Maria finds two linked offers on YapBay.
Offer 1: Natalia in Spain can receive Maria's 2,000 EUR and offer her an equivalent escrowed USDC.
Offer 2: Pedro in Argentina will accept the escrowed 2,000 EUR in USDC and distribute an equivalent in Argentine Pesos to Juan's bank account (or in cash, or in a foreign bank account that Juan can access), bypassing the withdrawal limit.
By using YapBay, Juan can keep his business running despite harsh economic conditions.
Sequential Escrow
Escrow systems have long facilitated transactions between parties by adding trust to the process.
Sequential escrow is what I am calling it when there are two or more chained P2P offers and, in order to accelerate the transaction, the output of the first trade is immediately and automatically escrowed in the next trade in the sequence.
Instead of isolating each transaction, sequential escrow facilitates a seamless, chain-like movement of funds from one trade to the next.
This system creates a trustless environment as each party is assured that their transaction is secured and they will receive their funds once they fulfill their part of the deal. This creates a natural order of operations that protects all members of the chain from potential fraud.
To better illustrate the acceleration brought by sequential escrow, let's revisit some of the scenarios touched on earlier:
Scenario Revisited: Simple Remittance
Consider Larry and Maria's transaction. Without sequential escrow, after Larry receives his 50 USDC from Mike in Offer 1, he would have to initiate a new transaction with Andres for Offer 2. This entails creating a new escrow, which adds additional steps and time to the process.
With sequential escrow, however, the transfer of escrow from Mike to Andres occurs instantaneously and automatically as Larry's fiat payment is verified. This eliminates the downtime between transactions, expediting the remittance process significantly.
Scenario Revisited: Global Freelance Payment
In the case of Nina and Mr. Smith, sequential escrow particularly shines due to the multiple borders crossed. Without sequential escrow, Mr. Smith's payment, despite being in cryptocurrency, could still face delays as each transaction would have to be cleared before the subsequent one commences.
However, with sequential escrow the transition from Paul's transaction to Grace's is near-instantaneous. The automation and linkage between Offer 1 and Offer 2 expedite the completion of these transactions, enabling Nina to receive her payment swiftly, and allowing Mr. Smith to avoid exorbitant foreign transaction fees and processing times.
These scenarios demonstrate how sequential escrow significantly trims processing times by chaining transactions together, adding a layer of efficiency that streamlines the remittance process. In doing so, it serves as another testament to YapBay's commitment towards continuous innovation in the remittance ecosystem.
RAI
RAI is a wizard that aims to leverage AI to make the construction of multi-step remittance transactions as simple and efficient as possible for unsophisticated remittance senders.
This is a unique value offering that aims to make the complex simple and straightforward.
RAI will guide users through the process of connecting distinct offers to accomplish a seamless currency transition from one country to another using crypto as the transport layer.
RAI asks end-users their source (starting currency) and their destination (ending) currency. Leveraging a pathfinding algorithm, RAI optimally identifies the most efficient path(s) to convert the starting asset into the final one.
The Wizard achieves this by breaking down each step, detailing necessary per offer exchange rates and providing total fees (including those from the network and offers) required for the exchange. It displays the "amount-in and amount-out"–making it easier for users to understand the conversion rates and the potential value received.
RAI aims to revolutionizes the way individuals transact cross-border remittances by providing a seamless, reliable, and efficient medium to interchange cross-border fiat.
RAI represent a benchmark in disrupting an industry worth billions by introducing transparency, cutting back inefficiencies, and promoting more equitable access to global financial services.
Conclusion
By innovating a sequential escrow system, YapBay is dramatically speeding up fiat-to-fiat remittances, and via the Remittance Acceleration Interface (RAI), it is simplifying the complexity of multi-step remittance transactions.
The various use scenarios discussed here serve as a testament to the flexibility and wide-ranging applicability of YapBay's system. From circumventing capital controls to facilitating global freelance payments, YapBay's unique solution has a broad spectrum of use cases. It is demonstrating its potential to democratize access to speedy and efficient money and asset transfers worldwide.
In the near future, as YapBay continues to evolve and becomes even more decentralized, those who have been underserved by TraFi will have an opportunity to engage with a platform that is tailor-made for their needs.
The promise of YapBay lies not just in the immediate improvements it offers to remittance transactions, but in how these improvements will shape impactful and lasting changes in the financial landscape, particularly in the developing world.