Medici Ventures, a subsidiary of internet retailer Overstock, is set to invest in a software firm that seeks to store grain transactions on a blockchain.
The company has revealed on December 4 that Medici Ventures will be buying an equity stake in GrainChain worth $2.5 million. GrainChain is a company that creates software tools to help farmers and grain buyers. Medici’s acquisition provides it a 10 percent ownership in the company, together with an option to acquire an additional 10 percent in the future.
Although GrainChain initially designed internet of things (IoT)-based software, Luis Macias, the CEO of GrainChain, says that the company began considering employing the use of Blockchain around two years ago, during which time the company’s systems are experiencing problems coordinating with trucks every day due to the volume of contracts involved in the process.
He says that in order to mitigate these problems, the company is now designing a Blockchain platform which makes tracing grain easier, at the same time connect to a bigger number of purchasers.
Macias also elaborates that the platform is not only leveling the playing field for farmers, it also provides an accurate view as to where the grain comes from. He explains that it also eliminates the use of intermediaries.
Macias further states that there are about 500 farmers currently piloting the network with an additional 3,000 on a waiting list. The firm plans to go live with the platform during the first quarter of 2019.
Aside from monitoring grain, the platform uses a token known as GrainPay to be able to expedite payments. In addition to grain tracking, the platform utilizes a token, dubbed as GrainPay, to facilitate payments. The dollar-supported stablecoin is developed exclusively for internal use and with contracts, farmers strike with buyers.
Macias cites the contracts executed by Argentine farmers, saying that a contract is normally done months ahead. He adds that when the contract is executed months later, the farmer can deliver the grain, receive GrainPay and convert it to dollars or Argentine peso at the date indicated in the contract.
Meanwhile, Jonathan Johnson, the president of Medici, states that the token has been utilized with the aim of stabilizing currency swings, which ensures that both sides do not lose over volatility.
He states that this makes cross-border payments more frictionless, faster, and easier, which makes it more appealing to farmers.