On 27 August 2018, Dash Core Group announced its strategy to the community, followed up by the more detailed Business Development areas of focus on 6 September 2018. One of the key pillars announced was Venezuela specifically and the larger LATAM region more generally [Footnote 1,2]. Launched at the end of August at a conference in Caracas, Venezuela, our partnership with mobile phone manufacturer Kriptomobile is a key element to our strategy in driving adoption within the market. As originally outlined in an article for Nasdaq.com [Footnote 3] and to be further expanded upon here, our approach to Venezuela is based on the combination of the right opportunity, with an adoptable solution and means of communicating it to a larger heterogeneous audience. Our objective with this article is to communicate a recap, an update, and our path forward.

Why we’re doing this

As a payment network, Dash focuses on near instant transactions with micro fees. When a market experiences hyperinflation, the economy is negatively impacted due to every payment method being broken — the national fiat no longer works. Venezuela is the most recent example where hyperinflation can ruin a nation’s economy, although inflationary stress is starting to impact other markets such as Argentina and Turkey. With an annual inflation rate currently forecasted at 1.37 million% and 10 million% in 2018 and 2019 respectively [Footnote 4], the high level major impacts are:

Cash based transactions require physically large amounts of currency and approaches the point where there isn’t enough physical currency to meet demand and/or it is no longer practical to physically acquire, store or transact with a sufficiently large enough amount of cash.

Digital transactions on a bank/credit card network are restricted by central banking authorities as they try to combat hyperinflation. It further creates an FX risk to the merchants due to the delta between the date of transaction versus settlement, and decreased functionality for consumers as inflation erodes the usefulness of fixed card limits.

These impacts have now moved beyond economic as migration has increased rapidly to the point of 3 million [Footnote 5] people migrating out of the country since 2014, predominantly resettling in Colombia and neighbouring countries [Footnote 6].

At Dash Core Group, we are focusing on the greatest need and greatest fit [Footnote 1] and where every payment type is broken, is where we feel the greatest need exists. The pain points being caused by hyperinflation can be solved by Dash because:

Dash is digital cash, and therefore removes the need to rely on physically transacting with cash.

Dash is governed by a network of approximately 5,000 Masternodes instead of a central bank. This allows the Dash network to proactively grow and scale for adoption without the compatibility challenges and delays caused by forks and passive networks.

While price volatility is a disincentive to spend cryptocurrency in most developed markets, in Venezuela, the Bolivar is considerably more volatile at an inflation rate of 1.37 million%. Merchants are exposed to a significantly smaller FX risk with Dash.

InstantSend allows for Dash to be transacted near instantly and with micro fees, enabling POS commerce in both brick & mortar and ecommerce settings.

However, the cryptocurrency market is stuck in an “If you build it, they will come” mentality. The reality is that the path to mainstream adoption is far more complicated to make happen, and it requires a coordinated strategy and execution that is based on an understanding of one’s users.

The way we’re doing it

Our approach can be best summarised as making Dash easier for the regular consumer. Adoption can only be achieved through building the right payment foundation that is communicated in a meaningful way to a diverse set of users with different needs. Breaking down how money is used today, the most essential components are no different than what’s required of cryptocurrency. Therefore, the foundation for building a Dash-focused ecosystem rests in our ability to address the following:

Ability to easily acquire Dash

to easily acquire Dash Store Dash securely

Dash securely Transact with Dash easily

These three components need to be addressed simultaneously as this creates the conditions for a positive feedback loop to exist; no single element is sufficient in isolation. A cryptocurrency can be the easiest one to acquire, but if it’s difficult to securely store, or if there’s no places to spend that cryptocurrency — adoption will stagnate. However, building out this foundation alone, though a major component, is not a guarantee that adoption will necessarily occur — even if there’s a clear need.

We believe that for innovation to be adopted by individuals and businesses, regular communication needs to occur over a period of time. As identified by Everett Rogers [Footnote 7], there are 5 stages over which this communication needs to occur:

Knowledge of the technology

of the technology Persuasion to investigate

to investigate Decision to adopt

to adopt Trying out the technology

the technology Confirming the continual use

Growth in adoption is therefore a function of not only the user achieving the final stage of confirmation, but also the speed by which that user progresses through the stages. How then a user moves between stages goes back to the regular communication, and the user’s affirmation of that technology. What’s required in making that decision will need to be communicated differently and efficiently, as the technology moves from a more homogenous group of early adopters, with shared goals and ideologies, to more heterogeneous groups with mainstream participants who may not speak the same language. The way to do this is to make adoption as easy as possible — start with the things people already know, and introduce new concepts in a safe manner.

In choosing the right medium in which to communicate the benefit of Dash to a mainstream audience, the mobile phone becomes obvious because:

Internet Access: Mobile phones are fast becoming primary internet access devices [Footnote 8], and access to the internet is a primary requirement for cryptocurrency usage.

Mobile phones are fast becoming primary internet access devices [Footnote 8], and access to the internet is a primary requirement for cryptocurrency usage. Payment Devices: Mobile phones are fast becoming major payment devices [Footnote 9], and Dash is a payment network solving problems within the existing payments landscape.

Mobile phones are fast becoming major payment devices [Footnote 9], and Dash is a payment network solving problems within the existing payments landscape. Existing/Growing Adoption: Mobile smartphone adoption is approximately 41% in Venezuela [Footnote 10], meaning it’s a device in which people are already familiar with their UX and with sufficient penetration in which to achieve scale.

Mobile smartphone adoption is approximately 41% in Venezuela [Footnote 10], meaning it’s a device in which people are already familiar with their UX and with sufficient penetration in which to achieve scale. Existing Infrastructure: Beyond the existing adoption of mobile phones, the cryptocurrency industry largely already caters to the mobile phone experience. Due to the existing infrastructure, the opportunity wasn’t to necessarily improve upon that which was already built, but instead find new ways to communicate the benefits of Dash, and more specifically the 3 components required for a Dash ecosystem.

On 27 August 2018 we did just that; launching our exclusive partnership with Kriptomobile at an event held by Dash Venezuela in Caracas. Kriptomobile is an Android mobile smartphone manufacturer, focusing on providing Latin Americans with low cost affordable handsets. Our partnership launch introduced several Krip mobile phone models that come preloaded with a min-Dash ecosystem by leveraging our existing Dash partnerships:

Acquire Dash: Uphold is pre-installed giving Krip users the opportunity to sign-up or use an existing account to acquire Dash.

Uphold is pre-installed giving Krip users the opportunity to sign-up or use an existing account to acquire Dash. Store Dash: Dash Android wallet, providing users with the standard Dash mobile phone wallet. This was later upgraded on 23 October to have Uphold integrated directly within the wallet, further improving the user experience.

Dash Android wallet, providing users with the standard Dash mobile phone wallet. This was later upgraded on 23 October to have Uphold integrated directly within the wallet, further improving the user experience. Opportunity to Transact with Dash: Bitrefill is pre-installed sending users to a Dash branded landing page. This provides users with the opportunity to spend Dash to buy various gift cards and mobile phone recharge options.

We then immediately introduce Dash and support the user through:

Dash Experience: Included within the box, is a paper wallet with a small amount of Dash that is scratched off to reveal a QR code. Not only providing the user with their first amount of Dash, but also an introduction to a primary way to send cryptocurrency. We’re further able to do this in a way that ensures Dash Core Group can retain breakage of any unclaimed funds.

Included within the box, is a paper wallet with a small amount of Dash that is scratched off to reveal a QR code. Not only providing the user with their first amount of Dash, but also an introduction to a primary way to send cryptocurrency. We’re further able to do this in a way that ensures Dash Core Group can retain breakage of any unclaimed funds. On the Ground Support: To replicate the user experience of legacy financial institutions, we partnered with Dash Help Me, a Dash network funded initiative for Venezuela. Together, we coordinated the Kriptomobile launch to ensure the team was prepared in advance to support Krip specific user questions.

Right out of the box, the Krip user has everything s/he needs to become a member of the Dash family. They are provided with all 3 elements required to create a Dash ecosystem, and more importantly introduce them to safe way on a platform that’s both essential for cryptocurrency and familiar with everyday people.

The mobile phone applications are freely available for the public to individually download from Google Play, however this does not dilute the value proposition as the value is driven by the totality of what is being provided, it’s user experience and the duality in a value proposition that can be applied to the different customer segments:

Users: We cut through all the cryptocurrency industry noise to provide an easy way to get all the components required for a Dash ecosystem, including a small amount of Dash and a support desk. New users are easily bewildered by the spectrum of acquisition and wallet choices when first entering cryptocurrency. Further information, is communicated in a way (i.e. Twitter) that causes further confusion with opaque tribalism and financial interests.

We cut through all the cryptocurrency industry noise to provide an easy way to get all the components required for a Dash ecosystem, including a small amount of Dash and a support desk. New users are easily bewildered by the spectrum of acquisition and wallet choices when first entering cryptocurrency. Further information, is communicated in a way (i.e. Twitter) that causes further confusion with opaque tribalism and financial interests. Merchants/Businesses: Launching initially with Uphold and Bitrefill, the opportunity provides them with both immediate access for incremental customer acquisition and opportunities to increase the stickiness of their existing customers by being preloaded on the customers’ new mobile phone.

To effectively communicate the launch and new partnership, we supported our launch with a direct advertising and promotion campaign on the ground. By coordinating with a local advertising Otiuma, the campaign consisted of the following:

Billboard advertisements: Strategically selected 2 billboards in high-traffic jam areas to ensure high visibility for commuters within Caracas. This has been live for approximately 3.5 months with one billboard still remaining.

advertisements: Strategically selected 2 billboards in high-traffic jam areas to ensure high visibility for commuters within Caracas. This has been live for approximately 3.5 months with one billboard still remaining. Radio advertisements: Los Buenos Muchachos, a daily talk radio show on Hot94 in Caracas Venezuela with 240 ad placements over a 3 month campaign. While program ratings are not available, the combined social media following for the two hosts is in excess of 300k.

advertisements: Los Buenos Muchachos, a daily talk radio show on Hot94 in Caracas Venezuela with 240 ad placements over a 3 month campaign. While program ratings are not available, the combined social media following for the two hosts is in excess of 300k. Social Media campaign coordinated with partners: Twitter led campaign across @DashPay handle as well as those of our partners Uphold, Bitrefill and Kriptomobile. The combined reach via Twitter across Dash and our partners was approximately 350k followers.

campaign coordinated with partners: Twitter led campaign across @DashPay handle as well as those of our partners Uphold, Bitrefill and Kriptomobile. The combined reach via Twitter across Dash and our partners was approximately 350k followers. PR Campaign locally and globally: With Dash Venezuela, coordinated local media attendance for launch event and larger global PR campaign with Wachsman PR. The global campaign resulted in 48 online media placements. While we do not have specific article webviews, the combined unique monthly visitors (UMV) for the sites on which those placements were made, totaled in excess of 133 million.

With phones first hitting the Venezuelan market near the end of September 2018, what we are now calling Phase 1 of our Kriptomobile partnership, has now been available to the end consumer for approximately 2.5 months.

Billboard in Caracas, Venezuela

How we’ve done so far

Phase 2 of our partnership has now officially launched on 18 December and consists of three parts:

Reporting on the Kriptomobile launch to date Expanding our partnership with Kriptomobile with Dash Text and the K1 model Krip phone. Enhancing the Dash ecosystem that’s preinstalled on the Krip mobile phone by partnering with Discoverdash.com.

We’re extremely pleased with the results to date. As of early December, Kriptomobile has sold/shipped a little more than 66,000 phones to the Latin American market, an average of 26.5k per month with 53,000 for Venezuela specifically. For context, compare this to a blockchain phone that raised $157million in an ICO earlier this year and is aiming for 100,000 phones in 12 months [Footnote 11]; we’ve reached 2/3rds of their annual projection in only 2.5 months. The Kriptomobile figures are wholesale as Kriptomobile sells only B2B to a network of 2,000 stores across the market. However, market demand from distributors is continuing which indicates the phones are being received positively by the public.

One part of the Kriptomobile value proposition was the inclusion of a paper wallet and a small amount of Dash in which people can immediately engage. The goal was to drive transactions through our existing merchant network of 2,400 within Venezuela as well as our partner Bitrefill, which was preloaded on the phones. For those users who claimed Dash from the paper wallet, we are able to identify whether people further spent those funds. To date we’re currently tracking at a Dash spent rate of almost 22%. Initially, this was lower than our expectations due to the stated goal of driving transactions. However, when looking more deeply, there’s several reasons which could explain the figure and provides opportunities to address:

The amount of Dash provided (0.002–0.015) was very small in USD equivalent. By itself this wasn’t enough to make a purchase, therefore requiring users to either already have Dash, or acquire some before transacting.

The perception of using Dash as a store of value may still be strong, particularly given the extreme volatility of the Bolivar. This would provide a disincentive to spend.

Knowledge of where to spend Dash. Especially for new users to the ecosystem, this may impact their initial spend rates as they educate themselves on the opportunities to transact with Dash.

We additionally noticed a positive effect with which additional metrics were correlated for the time period immediately post the launch of Kriptomobile. This fulfilled an additional objective of the partnership which was to drive value back to our partners.

1st time Dash wallet downloads increased : The average downloads from Venezuela for the periods of September and October exceeded that of July & August by 23%.

: The average downloads from Venezuela for the periods of September and October exceeded that of July & August by 23%. Net Retention after 15 Days increased : When comparing the same periods as above, but for those users who have retained the wallet, we saw a net increase of 14%. This implies a slight reduction in our retention percentage after 15 days.

: When comparing the same periods as above, but for those users who have retained the wallet, we saw a net increase of 14%. This implies a slight reduction in our retention percentage after 15 days. Increased volume driven to Bitrefill : Transaction and payment volume more than doubled from Venezuela immediately post the 27 August Kriptomobile announcement; peaking in October and sustaining through November. We thank Bitrefill for allowing us to share high level details of their success publicly.

: Transaction and payment volume more than from Venezuela immediately post the 27 August Kriptomobile announcement; peaking in October and sustaining through November. We thank Bitrefill for allowing us to share high level details of their success publicly. Increased volume driven to Uphold: Payment volume for Venezuela increased by low double digits for Uphold in the periods immediately pre/post the Kriptomobile launch. We thank Uphold for allowing us to share high level details of their success publicly.

Payment volume for Venezuela increased by low double digits for Uphold in the periods immediately pre/post the Kriptomobile launch. We thank Uphold for allowing us to share high level details of their success publicly. Possible secondary market impact: We additionally saw similar increases in wallet download and net retention for the Colombia market. This was interesting as we know it’s the largest market to which Venezuelans are immigrating and that there are mobile phone stores near the border distributing Kriptomobile phones. There is significant work being done on the ground growing merchant and user adoption through separate community efforts. This would also contribute directly to the positive metrics being seen in Colombia.

Kriptomobile for sale, note the “We accept Dash” sticker.

What we’re doing to expand & enhance

We are pleased to announce that we are also expanding our partnership with Kriptomobile. As discussed earlier, the internet is a major prerequisite for cryptocurrency usage. With a smartphone penetration rate of approximately 41% in the country, there’s an opportunity to address those who only have access to non internet enabled phones.On 24 September, Dash Text was launched, a network funded initiative being driven locally, which enables non-smartphone users the ability to acquire, store and transact with Dash [Footnote 12]. We are announcing a promotion with the Kriptomobile K1 phone and Dash Text which will provide for the first 1,500 purchasers of the K1 in Venezuela a separate paper wallet to immediately receive a small amount of Dash and welcome them to the Dash family. This is done through a code that can be utilized upon the user’s activation of the K1 handset. The K1 is Kriptomobile’s lowest cost, basic cellular, mobile phone. This will further be supported on the ground with Dash Help Me to ensure new users to the ecosystem have access to a help desk for any questions. This will further the Dash/Kriptomobile brand association and reach for Dash Text. Combined, this will help bring Dash to the 59% of Venezuelans who do not have a smartphone and invite them to participate with a real world solution.

As previously observed, the current paper wallet with Kriptomobile smartphones has a spent rate of 21%. One of the possible drivers of the lower than expected rate could be the awareness of where to spend Dash. To improve this, we are enhancing our Dash ecosystem on Krip by partnering with Discoverdash.com. This website provides Dash users with a merchant directory (off+online) on where they can spend their Dash and is arguably the most comprehensive location to find Dash merchants globally. The Capabilities team within Dash Core Business Development created a Discoverdash.com Android App that is currently being pushed to all 66,000 current and future Kriptomobile smartphones. With 2,400 Dash Venezuela merchants currently listed on Discoverdash.com, the relevance is clear. By including the concept of where to spend your Dash into our acquire, store, spend methodology, we will increase the general awareness of Dash’s utility with users. This increased awareness will further drive transactions, providing value back to our users as well as merchant/business partners. Additionally, we expect that this will create a positive feedback loop for Discoverdash.com through the additional exposure this provides for Dash accepting merchants, specifically in Venezuela. This provides an additional value added benefit for merchants in accepting Dash over other cryptocurrency — particularly as we are growing our merchant base rapidly within Venezuela. The most recent addition being Church’s Chicken in Venezuela where Dash is the exclusive cryptocurrency payment option at all locations [Footnote 13].

Where we’re going

Our partnership with Kriptomobile and the ecosystem that we’ve initially built represents only a single use case in our approach to providing workable solutions to problems being experienced by everyday people in Venezuela. We see communication and making things easier as key elements to bringing more people on board, and we’re doing this through the mobile phone: a universally applicable device that’s already embedded in people’s daily lives. The initial results after 2.5 months have shown to be extremely successful, providing value not only to the Dash network but also our partners and users.

Phase 2.0 is the first step in where we are going — based on our efforts to expand and enhance. First with the Kriptomobile/Dash partnership with Dash Text and non-smartphone users in Venezuela. Additionally we’re making it easier for all Kriptomobile/Dash users to spend their Dash through the development and deployment of the Discoverdash.com web app. This value is further extended beyond Venezuela, as the app is available for free download on Google Play for all Android users.

Our goal is to build a Dash ecosystem on the Kriptomobile platform that is analogous to iTunes or Google Play. As demonstrated with Discoverdash.com, we have the ability to push Android apps directly to Kriptomobile phones regardless of whether they’ve been sold to the end consumer (which update post their initial network connection). In partnership with Kriptomobile, we’ll be further expanding upon the Dash/Kriptomobile ecosystem. We’ll continue this focus through the pillars of acquiring, storing, and now with knowledge of and opportunity to transact with Dash. We will not, however, flood this platform with just any Dash app. Together with Kriptomobile, we will be inviting and building partnerships that are curated to focus on real world solutions. Overall the intent is to grow the platform and user base by:

Enhancing the platform: Increase the value proposition by creating new ways for all customer groups to engage with Dash, our business partners and developers.

Increase the value proposition by creating new ways for all customer groups to engage with Dash, our business partners and developers. Expanding the platform: Increase the value proposition by identifying and building new use cases for Dash/Kriptomobile. While our initial launch focused on Venezuela, we may also consider other LATAM markets in which to expand.

That value proposition will be driven across Dash’s three different customer groups:

Users: In addition to getting a Dash payment solution pre-built on their new Kriptomobile phone — the curation performed by Kriptomobile/Dash will cut through the noise and hidden agendas that often exist within the cryptocurrency industry. This makes it easier for more mainstream adopters who might not have the same depth of experience. Additionally, we will look to provide additional reasons for users to engage with the ecosystem — whether through new use cases or receiving value direct from our merchant/partner network.

In addition to getting a Dash payment solution pre-built on their new Kriptomobile phone — the curation performed by Kriptomobile/Dash will cut through the noise and hidden agendas that often exist within the cryptocurrency industry. This makes it easier for more mainstream adopters who might not have the same depth of experience. Additionally, we will look to provide additional reasons for users to engage with the ecosystem — whether through new use cases or receiving value direct from our merchant/partner network. Businesses: Dash accepting merchants in Venezuela firstly derive value through Discoverdash.com. This provides opportunity for additional customer exposure now that a webapp is being deployed across 66,000 Kriptomobile phones. This is also extended to non-Venezuelan merchants as the web app for Discoverdash.com is freely available on the Google Play store globally. Those businesses with whom we partner to directly deploy onto the Dash/Kriptomobile ecosystem benefits from having an instant distribution across a growing base of Kriptomobile/Dash users. This drastically lowers the cost of customer acquisition for our partners, as demonstrated by Uphold and Bitrefill’s initial performance.

Dash accepting merchants in Venezuela firstly derive value through Discoverdash.com. This provides opportunity for additional customer exposure now that a webapp is being deployed across 66,000 Kriptomobile phones. This is also extended to non-Venezuelan merchants as the web app for Discoverdash.com is freely available on the Google Play store globally. Those businesses with whom we partner to directly deploy onto the Dash/Kriptomobile ecosystem benefits from having an instant distribution across a growing base of Kriptomobile/Dash users. This drastically lowers the cost of customer acquisition for our partners, as demonstrated by Uphold and Bitrefill’s initial performance. Developers: Similar to the way the Capabilities BD team built the Discoverdash.com web-app, there is the potential for developers to further contribute to the development of apps for a platform that not only provides instant distribution, but is solving real payment problems within the Venezuelan market. We will look to partner with developers, where appropriate, to further the ecosystem.

The initial results of our partnership with Kriptomobile and the value being delivered have been extremely promising. Our partnership is one example of the real world solutions we are building, and the strong wholesale figures, and correlated metrics show the success and opportunity. We thank again our partners Kriptomobile, Bitrefill and Uphold for allowing us to share performance information.

Kriptomobile K55 model

Footnotes:

1 https://www.youtube.com/watch?v=Nyz5JhUrkzU

2 https://www.youtube.com/watch?v=4c1sIFno6XE

3 https://www.nasdaq.com/article/creating-a-foundationfirst-cryptocurrency-ecosystem-in-the-developing-world-cm1028642

4https://www.imf.org/external/datamapper/PCPIPCH@WEO/WEOWORLD/VEN

5 https://www.aljazeera.com/news/2018/11/million-refugees-migrants-venezuela-181108155245793.html

6 https://data2.unhcr.org/en/situations/vensit

7 https://books.google.com.au/books?id=9U1K5LjUOwEC&redir_esc=y

8 https://www.statista.com/topics/779/mobile-internet/

9 https://worldpay.globalpaymentsreport.com/#/insights/insight-three

10 https://newzoo.com/insights/rankings/top-50-countries-by-smartphone-penetration-and-users/

11 https://www.coindesk.com/sirin-labs-999-blockchain-phone-will-start-shipping-in-december

12 https://www.newsbtc.com/2018/09/24/the-first-sms-wallet-service-launches-enabling-dash-remittance-payments/

13https://www.facebook.com/churchsvenezuela/posts/10156354441113778