Medici Ventures and Overstock will be investing in a software firm that is developing a way to store Grain trasnactions on Blockchain. The Overstock subsidiary announced on December 4th the purchase of $2.5 million equity stake in GrainChain. GrainChain hasn’t been on the market for too long. The company has been developing software tools which aid both farmers and buyers in the grain industry for about 6 years. With the recent purchase, Medici Ventuers and Overstock now have 10% ownership stake in the company. Additionally, there is an option for Overstock to purchase up to 20% at a later time.
GrainChain’s original projects were aimed at the Internet of things (IOT) software. The company has started utilizing a Blockchain ledger not more than 2 years ago. During this period, the company was experiencing immense difficulties with its systems. They were having problems coordinating the ever-growing amount of trucks. This was due to the even bigger number of contracts, which had to be filed out and executed manually.
Overstock and Medici’s smart Investment
GrainChain’s CEO, Luis Macias said that the issue was only going to keep getting larger. The only efficient way to take care of these issues and allow room for growth, was to develop a Blockchain platform. With the new platform, GrainChain will make tracking easier and will additionally be able to connect with more buyers.
The CEO also stated:
“This is more than evening the playing field. While the farmer has an easier access, he also has more accurate knowledge of where exactly the grain originated from. The farmer also knows how it’s being paid and its current movement through the entire market. With this, the need for many previously irreplaceable middle-men is entirely removed.”
At the moment, over 500 farmers are using the network. There is also a rapidly-growing waiting list of more than 3000. GrainChain’s platform is expected to go live in the beginning of 2019. The platform will also utilize a token named GrainPay, which will be used for payments. It’s a dollar-backed stablecoin and is only meant for internal use.
Macias gave an example with how the system will work with Argentinian farmers. A contract will be done months in advance and after it’s execution, the farmer will be able to instantly receive GrainPay after delivering the grain. Afterwards the farmer can choose to convert GrainPay to either US dollars or the Argentinian peso.
One other strength of the token is that it’s used to stabilize currency fluctuations. This ensures no loss happens on either side due to market volatility. It’s also extremely useful for cross-border payments. This investment by Overstock and Medici Ventures be a turning point in the development of Blockchain Grain transactions.
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