Hello community!

This is a proposal from Electrocoin team to discuss our new idea regarding remittance services.

Hope you’ll find it interesting and worth your attention.

1. Project description and context of proposal

LiteSend is a remittance platform developed by Electrocoin (https://electrocoin.eu/en/about-us). It seeks to revolutionize the remittance industry by leveraging blockchain technology to facilitate efficient and secure cross-border money transfers. Our platform, accessible via a user-friendly website (litesend.com), simplifies the process of sending money internationally, aiming to offer a seamless experience for clients worldwide. LiteSend platform MVP is in silent production, and it can be used in some markets. We are currently working on onboarding partner institutions to expand to new markets.

The user journey begins with the sender visiting our website and selecting the geographical regions for both sending and receiving the funds. They will then provide the recipient's email address. Our system automatically assigns a bank account number from a partner institution located in the sender's region (e.g., SEPA for European transactions). The sender deposits the funds into this account.

Upon receipt of the funds, our partner institution converts the amount into a stablecoin on the Polkadot’s AssetHub chain, harnessing the speed and security of blockchain transactions. The stablecoin is then transferred to a corresponding partner in the recipient's area. This receiving partner is responsible for converting the stablecoin back into local fiat currency and ensuring the funds are paid out to the recipient.

Our main idea is to simplify and accelerate the remittance process but also ensure lower transaction fees with enhanced security, typical of blockchain transactions. We intend to establish new standards in the remittance sector, offering a reliable, fast, and cost-effective solution for global money transfers.

Funds raised through this proposal would be primarily used (1) to integrate AssetHub’s stablecoin transactions in LiteSend’s platform (2) to fund the marketing campaign launching LiteSend and (3) to expand the network of partner institutions serving different regions of the world. LiteSend would include “secured by Polkadot” in its branding and promotional activities. The whole approach when acquiring the market will be based on the Polkadot blockchain, therefore Polkadot will have significant visibility when marketing our product. Primary benefits of this proposal for the Polkadot ecosystem are (1) real world adoption of Polkadot blockchain among users of remittance and (2) exposing the masses to the Polkadot brand through the “LiteSend - secured by Polkadot” launch campaign.

There is also a possibility to approach and integrate LiteSend software into already existing remittance solutions or any other payment provider currently based on traditional business models to enhance their service. This would expose the Polkadot ecosystem directly to traditional financial institutions.

2. Company background

Electrocoin (https://electrocoin.eu/en/about-us) is a successful cryptocurrency brokerage and crypto-payment processing company founded in 2014. Our core business involves selling and buying cryptocurrencies from both retail and institutional clients, as well as facilitating cryptocurrency payments for merchants.

Electrocoin has emerged as one of the most successful crypto companies in the region, enabling fast, easy, and secure cryptocurrency trading within the European Union. Except for the usual deposit - trade - withdraw crypto trading service, Electrocoin’s noncustodial trading service offers a unique way to buy and sell crypto for fiat without the need to relinquish custody of your funds. Apart from providing exchange services, Electrocoin is providing state of the art blockchain-based payment service, which has been successfully integrated at more than 2000 locations (online and physical stores), including prominent partners such as Konzum (the largest Croatian supermarket chain), Tifon (a leading chain of gas stations in Croatia), bazaar.hr (biggest Croatian webshop) and successful collaborations with traditional financial service providers such as Croatia Osiguranje (biggest insurer in Croatia), as well as the integration of exchange services into the Croatian Post.

Electrocoin's 30 members team work has been recognized by the business community, with the company being named the best small and medium-sized enterprise in the revenue growth category by the leading business magazine "Poslovni dnevnik" in 2019, and in 2020, it was recognized as the fastest-growing Croatian technology company in Deloitte's competition for the 50 fastest-growing companies in Central Europe.

Electrocoin is a first registered Virtual Assets Service Provider in Croatia (https://www.hanfa.hr/podrucja-nadzora/virtualne-valute/registar-pruzatelja-usluga-virtualne-imovine/), and are fully compliant with European laws and regulations regarding crypto transactions and anti-money laundering.

 Our main products are:

• Cryptocurrency exchange (Electrocoin Trade - https://electrocoin.eu/en/exchange),
• cryptocurrency payment processor (PayCek - https://paycek.io/),
• B2B platform for crypto exchange at physical foreign exchange offices and,
• LiteSend (https://litesend.com/).

3. Problem statement

Remitting money from/to third party countries can be a slow and expensive process using traditional services. According to top 10 remittance providers, international transfers usually take 1 to 5 working days while the global average cost of remittance is 6.18 percent (Q3 2023)1. The most expensive way of transferring money is using banks, with an average cost of 11.48 percent, while the most favorable way is using mobile money services.1 In 2022 migrant workers sent home almost $800 billion, which shows the sheer size of the market and opportunity for new market entrants who can speed up the remittance process and cut the fees2.

An additional issue for current remittance models are regulatory barriers, i.e. high barriers to entry. Each remittance provider has to undergo extensive bureaucracy to acquire a license in each country in which it intends to provide service. This process is slow, expensive, complicated and overall inefficient. Therefore, there are not many global remittance players offering service worldwide. Also, remittance fees are higher in developing countries due to lack of competition, which can’t easily enter their market because of regulatory uncertainty and/or high risk.

4. Solution proposal

Use blockchain technology based on Polkadot’s AssetHub chain to speed up, secure and decrease the cost of the remittance process, since using blockchain many of the above mentioned obstacles can be avoided.

LiteSend ecosystem consists of a network of “LiteSend partners” which function as endpoints for cross-border remittance of funds over the Polkadot blockchain. LiteSend partner is a crypto on/off ramp company which exchanges funds from fiat to stablecoin on Polkadot’s AssetHub chain and back. Each LiteSend partner is registered in a certain jurisdiction and allows customers from that jurisdiction to send and receive funds using LiteSend.

If a jurisdiction where a LiteSend partner is registered requires a virtual asset service provider (VASP) licence, then the LiteSend partner is required to have one. Since the process of cross-border transfers is performed through blockchain, a money transfer licence isn’t required for the money remittance. From the regulatory standpoint, users of LiteSend are effectively buying crypto and sending it to another person which is then selling that crypto in another country and the whole process is covered by existing VASP licences.

Steps for initiating and receiving remittance through LiteSend:

1. Sender creates a transfer (chooses the sending and receiving country and currency to send) at litesend.com.
2. Sender specifies his email and the email of the receiver.
3. If required, sender completes the KYC/AML verification with LiteSend partner in sender’s country (sender’s partner company) via automatic form they’ve received on email.
4. If required, receiver completes the KYC/AML verification with LiteSend partner in receiver’s country (receiver’s partner company) via automatic form they’ve received on email.
5. Sender makes a bank transfer to the sender’s partner company.
6. Once they confirm the bank transfer, operators in sender’s partner company buy stablecoin on Polkadot’s AssetHub parachain and send it to the address of the receiver’s partner company.
7. When crypto arrives, the receiver gets a form where he types in details for receiving a bank transfer.
8. Once they confirm the crypto transfer and payout details, operators in the receiver's partner company convert stablecoin to fiat and initiate a bank transfer to the receiver’s bank account.
9. Receiver gets the fiat amount on his bank account.

The whole process omits international bank transfers - bank transfers from sender to sender’s partner company and from receiver’s partner company are all local bank transfers. This way we can speed up the process significantly by cutting the working hours of traditional financial services and decrease the cost associated with FX conversion and fees imposed by banks international transfers. As blockchain technology is operating 24/7, transfering stablecoin to any part of the world is instant and cheap. Partners operating in the recipient country can easily convert transferred stablecoin to local or some well recognized global currency (e.g. USD, EUR).

LiteSend solution is modular and location independent, therefore it can be integrated with an unlimited number of different LiteSend partners, even several partners in each jurisdiction. Virtually all countries already have active crypto on/off ramps that could easily integrate LiteSend into their existing operations. Such LiteSend partners should already have local licences (if needed) and should already be complying with local laws and regulations as a part of their existing crypto on/off ramp business. Using this approach, LiteSend is only providing a communications platform and is not required to start a company in each country and/or to go through a process of acquiring a local VASP licence. So, it should be much easier to break into new markets and expand business very quickly considering already existing crypto entities.

5. LiteSend process flow

6. Development tasks and budget

• Research of Polkadot’s architecture (cca $11,500)

• • Understanding Polkadot’s architecture
  • Learning basic Polkadot operations
  • Identifying the appropriate token for transfers
  • Testing the flow for selected stablecoin on the AssetHub parachain

• Integration (cca $29,000)

• • Integrating AssetHub’s stablecoin transactions in LiteSend's operator dashboard
  • Ensuring the integration is secure, efficient, and user-friendly

• Polishing (cca $19,500)

  • Refining the user interface and experience
  • Conducting extensive testing and bug fixing
  • Optimising performance and scalability

7. Marketing and acquiring strategy and budget

The marketing strategy is built around two objectives. The first goal is to establish contacts in key markets with the aim of establishing operational cooperation with LiteSend partners covering jurisdictions with major remittance flows. The second objective of marketing activities is user acquisition and funnelling from the awareness and consideration building phases towards the trial conversion phase. These activities will focus on targeting the foreign active working groups in the key markets.

Marketing activities proposal:
1. Key market partner acquisition

Channels: 

Events & conferences, Online, Social, Direct Marketing

Tactics:

• EVENTS & CONFERENCES:

Presence and/or active participation in Crypto-related conferences and events with the aim of introducing the platform and establishing direct contacts in key markets. Activities include sponsorships, presentations, participation in panels, or organising proprietary events and conferences (MoneyMotion 2024, etc.).

• ONLINE:

Building awareness through press releases in business and finance online media with key messaging: Introducing the LiteSend platform as a solution to expensive and slow cross-border payments issues - success story and call-to-action for potential partners.

• SOCIAL:

Promotion on LinkedIn and Twitter of content related to the platform's functionalities, use case presentations, and acquisition of potential business entities for collaboration.

• DIRECT MARKETING:

Utilising direct mailing, one-on-one sales activities, and LinkedIn inbox campaigns towards key decision makers.

2. User acquisition

Channels: PR, social, display & search, sponsorships/Influencers.

Tactics:

• PR:

Building awareness and presenting the problem-solving capabilities of LiteSend in key online media platforms visited by the target audience (foreign active working groups in key markets).

• SOCIAL:

Implementing reach-building and lead campaigns on Facebook and Instagram, with precise targeting and language adaptation.

• DISPLAY & SEARCH:

Launching banner lead campaigns (CPC focus) to lead potential users to the LiteSend platform and encourage transaction trials through detailed targeting and language customization in advertisements.

Conducting always-on Google search campaigns for cost-effective reach to active seekers of cross-border payment services.

• SPONSORSHIPS/INFLUENCERS:

Establishing connections with smaller events that gather target audiences through sponsorships or service presentations. Collaborating with influencers followed by key target groups of potential LiteSend users.

Marketing activities timeline:

PREPARATION

Markets research: 2 weeks

Marketing and media research: 2.5 weeks

Acquisition of media offers and negotiations: 2.5 weeks

EXECUTION

Production of advertising materials: 2 weeks

Conferences and sponsorships activities: TBD

PR campaign duration: 4 weeks

Social media campaign duration: 24 weeks

Display campaign duration: 12 weeks

Search campaign duration: 24 weeks

8. Budget breakdown

		cost
DEVELOPMENT COSTS		60,000
	research of Polkadot’s architecture	11,500
	integration	29,000
	polishing	19,500
MARKETING CAMPAIGN (LAUNCH)		55,000
	market research	5,000
	social media/community marketing	20,000
	display advertising	15,000
	PR/native advertising	10,000
	sponsorships/influencers	5,000
ACQUIRING PARTNER INSTITUTIONS IN NEW JURISDICTIONS		80,000
	travel expenses	10,000
	due diligence	20,000
	marketing campaign (opening new jurisdiction)	50,000
TOTAL		195,000
*all amounts are in USD

Budget amounts per activity is subject to slight changes, while total USD amount remains the same.

Payment details:

Total amount: $195,000 

DOT price: $6.78 EMA7 on 2024-02-02 based on Subscan 

Payment amount: 28,761 DOT tokens

Payment address: 16RyudR8hzyJWyQGNbLbnuf7xD3PianrWQx9jTa92t4JLq4s

9. Endorsements

Our grant proposal is endorsed by these crypto OGs:

• Bruno Škvorc, founder at RMRK

  • founded “most advanced NFT protocol in existence” on Kusama, writes DotLeap Polkadot Weekly Newsletter, ex Technical EducatorTechnical Educator at Web3 Foundation
  • https://twitter.com/bitfalls, https://www.linkedin.com/in/swader/
  • endorsement: https://twitter.com/bitfalls/status/1751298778265432236

• Branimir Rakić, founder and CTO at OriginTrail

  • OriginTrail is a Polkadot parachain, they are building world’s first Decentralized Knowledge Graph
  • https://twitter.com/BranaRakic, https://www.linkedin.com/in/branimirrakic/
  • endorsement: https://twitter.com/BranaRakic/status/1752648177256415361

   

• Facu Ameal, PM at yearn.fi

  • building yearn.fi, public speaker
  • https://twitter.com/saltyfacu, https://www.linkedin.com/in/fameal/
  • endorsement: https://twitter.com/saltyfacu/status/1752353228891492602

• Luka Sučić, partner at Meta Change Capital

  • partner at a VC fund focusing on growth stage blockchain companies, ex  Director of investments at æternity ventures
  • https://twitter.com/Beler, https://www.linkedin.com/in/lukasucic/
  • endorsement: https://twitter.com/Beler/status/1751214017438187735

• Anton Mozgovoy, founder at Holyheld

  • building the non-custodial crypto card
  • https://twitter.com/niarbnotna
  • endorsement: https://twitter.com/niarbnotna/status/1751324831398637825

• James Corbett, founder at Superchain Network

  • building an open index protocol, ex CTO/lead engineer in several blockchain projects
  • https://twitter.com/lcm, https://www.linkedin.com/in/jpcorbett/
  • endorsement: https://twitter.com/lcm/status/1751356413224399193

   

• Domagoj Zdilar, founder at BlackDragon

  • heading a decentralised investment platform / early-stage DeFi investing space
  • https://twitter.com/BlackDragon_io_, https://www.linkedin.com/in/domagojzdilar/
  • endorsement: https://twitter.com/BlackDragonio/status/1751885575186002031

• Bojan Peček, operations at Liquity

  • building a decentralized borrowing protocol
  • https://twitter.com/bjnpck, https://www.linkedin.com/in/bojanpecek/ 
  • endorsement: https://twitter.com/bjnpck/status/1751348197778210841

All of the endorsers have received the text for the grant proposal and have agreed to endorse us after reading it.

10. Electrocoin team key participants

Nikola Škorić, CEO

Marin Maržić, COO

Vedran Vukelić, Lead LiteSend Developer

Hrvoje Hrvatin, Head of Marketing

Tomislav Gradečak, Project Manager

11. References

1 https://remittanceprices.worldbank.org/sites/default/files/rpw_main_report_and_annex_q323_1101.pdf, page 3

2 https://www.weforum.org/agenda/2023/02/remittances-money-world-bank/