1st Decentralized Finance Dapp in Peru: Cuy Token

The world of global finance is being revolutionized by the new DeFi trend, which is an international movement of decentralized finance that uses cryptocurrencies based on blockchain technology, to allow interested users to use financial services, such as loans and other financial operations, without the need to depend on centralized entities, such as Central Banks of a country or some traditional bank.

Decentralized Finance

These financial services are provided through decentralized applications known in the world Defi as “Dapps”, most of them being implemented on the Ethereum platform, which is a technology that allows you to send cryptocurrencies to anyone for a small commission. Ethereum is built on the innovation of Bitcoin, but with great differences, which allow it to program on the blockchain.

DeFi is a set of products and services that act as a replacement for financial institutions such as banking, financing, insurance, bonds, and money markets. Decentralized “Dapps” applications allow users to combine their services to develop multiple financial possibilities.

Dapps are often referred to as “Lego” pieces that can be integrated with each other to create decentralized financial applications.

In the world of decentralized finance, for “Dapps” applications to work, it is required that the financial operations carried out are backed with guarantees in cryptocurrencies. The guarantees are formalized in smart contracts, backed with ERC20 fungible tokens. This ensures that every decentralized operation is backed by a smart contract, which is protected in the blockchain, which is impossible to modify and is replicated in many decentralized nodes. Which gives Dapps a lot of stability and support.

Cuy Token

On Saturday, August 28 at 8 pm I attended the launching of the Peruvian cryptocurrency named Cuy Token, which is the first serious decentralized finance model in Peru, which seeks to support the issuance of tokens with Peruvian microfinance projects. The presentation was carried out by the creator of Cuy Token, Lenin Tarrillo, who last year managed to channel 100 thousands soles in microdonations to vulnerable families during the pandemic through his social portal Mapa21.

The business model is very innovative: it proposes the launch of a cryptocurrency called Cuy Token, due to its relationship to the native guinea pig from the Peruvian Andean region linked to ancestral bartering and Peruvian microfinance, which will be supported by the financing of a project presented by a micro-entrepreneur. The heart of the “Dapps” application, that Lenin Tarrillo is developing on the Binance Smart Chain platform, is called the Crypto Credit System “CCS”

Crypto Credit System

This decentralized finance platform business model, has the following steps:

1. A micro-entrepreneur presents his project that requires capital to be implemented.
2. The Crypto Credit System evaluates the project presented by the micro-entrepreneur. For example, a carpenter who wants to launch a new style of furniture to be sold in his artisan workshop. Each project goes through a financial evaluation process to ensure that the project is profitable and allows the micro-entrepreneur to repay his loan.
3. Once the project is approved, a Cuy Token backed by an ERC20 smart contract based on Binance Smart Chain technology is issued for the value required for the microentrepreneur’s project. For example three thousand dollars.
4. The token is put up for sale in the Binance cryptocurrency exchange, where one or more investors can buy the token, the amount of the sale which is loaned to the microentrepreneur.
5. The microentrepreneur receives the capital to implement his project and then has to buy the cryptocurrency on a monthly or weekly basis to pay his loan installments, plus interest.
6. This generates a market to buy and sell the Cuy Token, which increases the value of the cryptocurrency, generating a profit for the investor who bought the token.

In addition to the project of financing microentrepreneurs, Lenin also has plans to develop other applications that allow more uses for Cuy Tokens, such as applications for gamers or other uses of cryptocurrency.

The Cuy Token team is working hard to complete the development of the decentralized finance platform and they hope to finance their first project in November 2021. The biggest challenge being to do it in a transparent way and aligned with the best practices of the Peruvian financial system, which still does not have a regulation on the use of cryptocurrencies.

You can see Lenin expalining his project in spanish in this VIDEO.

If you wish, you can visit the website www.cuytoken.com to be updated about new releases and register your intention to purchase tokens that will be available in novembre 2021.