Bitcoin

“Copihue is a stablecoin that is anchored to the value of the Chilean peso.”

Carlos Baeza Negroni is an IT engineer and the brains behind Copihue, a stable coin tied to the value of the Chilean peso. Cointelegraph en Español spoke to him to find out more details about this cryptocurrency, but also to know his vision from Chile.

Fernando Quirós (FQ): How did you get into the world of cryptocurrencies?

Carlos Baeza Negroni (CBN): In early February of this year (2020), the effects of the COVID-19 pandemic on our society, due to curfews and quarantine periods (imprisonment or lockdown), we were forced to commit ourselves in our homes to prevent the Infection rate continues to increase and spread across the country.

“Copihue is a stablecoin that is anchored to the value of the Chilean peso.”
“Copihue is a stablecoin that is anchored to the value of the Chilean peso.”

In this context, I asked myself, “What can you do with all this unused infrastructure? What could you do with all these new actors who come in from home to do their day job? How can the increase in the basic electricity bills of every family be mitigated?

Along with these questions came some assumptions:

  • Not all people take care of their computer all day long, but most need to have it turned on in order to respond to queries related to their work or main activity.

  • The proposal must be very friendly and easy to use by ordinary people.

  • The proposal cannot interfere with the main work of people, that is, the solution must not place high demands on computing resources.

In May of this year I was able to start connecting all the dots and I discovered some solutions that were not blockchain as such, but used the basic technology of some current protocols.

From that point on, it was a matter of time before I got to know Bitcoin and later Ethereum, the platform I’m currently developing on.

QQ: How do you see the crypto market in Chile?

CBN: Very interesting because the perception of the acceptance of cryptocurrencies by Chileans is low, but this represents a great opportunity and market niche for new participants who are willing to continue their financial education and make them available all the necessary tools to be able to work within this new paradigm called DeFi to work.

Local exchanges provide sufficient liquidity to conduct operations in moderate amounts. They have cautious withdrawal deadlines and commission rates that are in line with the market and allow the purchase and sale of crypto assets directly from a “RUT account” (local debit card owned by all Chileans) within a maximum period of 24 hours.

The above gives us the confidence and a solid reason to propose new business models based on this paradigm because when we add the liquidity that the local exchanges give us, the ease of funding them (they don’t need a credit card), and also the ease of use (tokenization, metamask, web3), then we have a formula for success.

The rest is our job to train people as best we can and deliver products that have been properly reviewed and approved by the community.

QQ: And in the rest of Latin America?

CBN: Chile must surely be one of those Latin American countries that are less familiar with the crypto ecosystem. I don’t want to get political so I’m going to say that the “flaw” lies in our local fiat currency, which is pretty stable and usually doesn’t have much depreciation against the US dollar. This certainly never resulted in the Chilean having to consider other financial means or mechanisms.

In other countries such as Venezuela, laws and regulations for this industry are already being discussed, which shows the maturity of this market. In other places like Colombia and Puerto Rico, they are also taking huge strides to adopt this type of technology and promote economic strategies and incentives.

Latin America also has great exponents. One of them, whom I had the privilege to meet and share as part of this year’s hackathon, is Argentine Mariano Conti, who is also very committed to everything that happens in the local DeFi ecosystem.

QQ: Do you see DeFi as a fad, is it a bubble or does it really solve problems?

CBN: I believe that DeFi solves problems effectively, allowing us to add new levels of complexity to traditional financial mechanisms, provide transparency, automate business processes, be able to interact or interact with other protocols, transformed by different types of protocols and assets can be changed and then switch back, that is, we start with DeFi.

There is an interesting term called “Money Legos” or Money Legos. This concept refers to the ability of smart contracts to be programmed to perform various automated and iterative operations, integrating and relating different protocols to each other to maximize the profitability of the assets used in the market.

A practical example of the above could be a smart contract that receives a certain amount of Ether as collateral or capital reserve and does the following:

  • Use collateral and apply for stable currency loans

  • Use stablecoins to broker in pools of liquidity

  • Pay off loan debts in stable currencies

  • Receive arbitrage profits and get the contract securities back too

This is what the various developers are currently testing, formulas and automated mechanisms to get the best return on investment. In this search, many people lose their money by investing in new protocols that ultimately lead to hacks. extraordinary, but part of the risks that exist in this industry and that move so quickly. It is therefore important to find out more and educate yourself well. It is everyone’s duty to conduct their own investigation.

QQ: What is Copihue and how did the idea come about?

CBN: Copihue is a stable coin that is anchored in the ratio of 1: 1 to the value of the Chilean peso and is secured by crypto assets from the Ethereum network as security or value reserve.

A stable coin retains its market value regardless of market conditions or behavior. They are not affected by speculation or volatility that could lead to a massive buy / sell, or by factors outside of the value reference itself on which their anchoring depends.

In this case, 1 copihue would correspond to 1 Chilean peso, and the protocol would regulate this in addition to automatically keeping the price constant.

To achieve this balance, a second token, or governance token, must be added to the equation. This token called Cóndor, which also follows the same technical conventions as Copihue, will be our volatile fixed asset and liquidity reserve fund to ensure the stability of the Copihue price, that is, any adjustment that needs to be made to the delivery or the liquidity of Copihue will come from Condor (Investment Risk Fund).

Interacting with Copihue is done through the Metamask extension, and each person has access to a personalized management panel to operate and verify their account, as well as some surprises that we prepare for the interaction between different tokens and liquidity wells that we are prepared for Investors concentrate early on.

We are preparing a simple implementation integration kit that will focus on activating and equipping traditional e-commerce websites with a payment button that will allow crypto assets to be received directly into supplier or customer accounts via smart contracts without intermediaries. supported by Metamask and Web3.

We’re generating a new market using the Money Legos concept, but our focus is on logistics and retail, with the equation replacing a requirement for credit for hiring a courier to automatically ship a purchase from the store it was generated from It’s the kind of intelligence we could already talk about, and the inclusion of a stable asset, unaffected by market volatility, as an instrument of value in this equation is undoubtedly a fundamental element of this new economic paradigm that is becoming out of crypto-assets created.

How Copihue works from a technical point of view:

  • Token: ERC20

  • Blockchain: Ethereum

  • Libraries: OpenZeppelin

  • Oracle: chain link

  • Version: Solidity 0.7.3

QQ: What do you think of the regulatory attempts?

CBN: Perhaps my opinion will be a little unpopular, but I think if we want to have a healthy industry that grows sustainably over time, regulation is necessary because, although we are partially sacrificing privacy, on the other hand we are expanding the spectrum of acceptance and awareness that can be achieved, i.e. if we manage to regulate and generate standards (while maintaining the proportions), we can involve a lot more people who are interested in participating in these activities, as they will be much better protected and safer feel when using different protocols.

For this reason, all those who want to apply Copihue early and get their contracts in the Cóndor Risk Funds (Vaults) must go through a KYC process in order to comply with all the necessary regulations required by the companies concerned.

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