Merchant Asset Preference
Status: Not Started
Priority: High
Last Updated: 2026-06-18
Contributors Welcome: Yes
What We Don’t Know
When merchants cash out remittances, which asset will they choose: H€, HAu, or BCH?
This affects:
- Pool capital allocation (more demand for H€ vs HAu?)
- Oracle requirements (prioritize EUR/BCH vs gold feed?)
- UX design (default choice, recommendation logic)
- Product-market fit (are we building what they want?)
Why It Matters
Asset preference determines system design priorities.
If 90% choose H€:
- Focus pool capital on H€ contracts
- Prioritize EUR/BCH oracle reliability
- HAu might be unnecessary for Phase 0
If split 50/50 between H€ and HAu:
- Need balanced pool allocation
- Both oracles equally important
- UX must handle dual-token economy
If 90% keep BCH:
- H€/HAu mechanism is solving wrong problem
- Merchants comfortable with volatility
- Should focus resources elsewhere
Wrong assumption = Build wrong product, waste capital on unused features.
Current Hypothesis
Most merchants (70%) will choose H€ for operational expenses, some (20%) will choose HAu for long-term savings, few (10%) will keep BCH.
Reasoning:
Why H€:
- Familiar unit (EUR) - easy mental math
- EUR/VES exchange rates readily available
- Operational expenses (rent, suppliers) priced in VES (derived from EUR)
- Quick conversion path (H€ → VES familiar to merchants)
Why HAu:
- Universal hedge (protects against ALL fiat inflation, not just BCH)
- Gold is “sound money” narrative familiar to crypto users
- Long-term savings (merchants who want to accumulate wealth)
- Less correlation to local fiat (Venezuelan hyperinflation makes gold attractive)
Why BCH:
- Belief in BCH appreciation outweighing volatility risk
- Already crypto-native, comfortable with volatility
- No pool capacity fee/constraints
- Philosophical alignment with Bitcoin Cash
But: This is guesswork. Venezuelan merchants may think differently.
Investigation Method
Questions to ask:
- “You receive €100 in BCH. Would you:
- Keep it as BCH (volatile but potential upside)
- Convert to token pegged to Euro (stable, familiar)
- Convert to token pegged to gold (stable, universal)?”
- “What are your biggest expenses?
- How are they priced (VES, USD, EUR)?
- How far in advance do you plan them (weekly, monthly)?”
- “When you receive BCH, how fast do you convert to VES?”
- Same day / within week / within month / hold indefinitely
- “Do you trust EUR stability more than gold, or vice versa?”
Deliverable: Survey responses from 5-10 Venezuelan merchants
Step 2: Analyze Venezuelan Economic Context
Research:
- How are wholesale prices denominated in Venezuela? (USD/EUR/VES?)
- Do merchants mentally price in dollars, euros, or VES?
- What’s the cultural relationship with gold? (seen as store of value?)
- Are there Venezuelan precedents for EUR-pegged vs gold-pegged savings?
Deliverable: Economic context report explaining merchant mental models
Step 3: Compare to Spanish Sender Behavior
If senders receive H€ when covenant aborts:
- Would they prefer H€ (familiar EUR) or HAu (gold)?
- Spanish context: EUR is stable, gold is alternative investment
- Likely: Strong H€ preference (already thinking in EUR)
Hypothesis: Sender preference skews H€, merchant preference more balanced
Deliverable: Comparative analysis of sender vs merchant preferences
Step 4: Analyze Adjacent Markets
Look at existing crypto savings behavior:
- What stablecoins do Venezuelans use? (USDT? DAI? Others?)
- Are there gold-backed crypto products in LatAm? (PAXG usage?)
- BCH merchant acceptance in Venezuela: hold or convert immediately?
Deliverable: Market research on Latin American crypto asset preferences
Step 5: Model UX Influence
Default matters: If wallet defaults to one option, most users pick it.
Scenarios:
- Default: Keep BCH → Maybe 50% keep BCH, 30% H€, 20% HAu
- Default: H€ → Maybe 70% H€, 20% HAu, 10% BCH
- Smart default (based on merchant history) → ?
Test: Can we influence preference through UX?
Deliverable: UX mockups with different defaults, hypothesis on behavior
Success Criterion
This unknown is answered when:
- ✅ We have data:
- Survey responses from Venezuelan merchants
- Economic context explaining why merchants think in EUR vs gold
- Adjacent market behavior (stablecoin usage in LatAm)
- ✅ We can estimate distribution:
- “X% will choose H€, Y% HAu, Z% BCH”
- “Reasoning: [cultural context, economic factors, UX influence]”
- “Confidence: Low/Medium/High”
- ✅ We can make design decisions:
- Pool capital allocation (H€ vs HAu split)
- Oracle priority (EUR/BCH vs gold feed investment)
- UX defaults and recommendation logic
Answered = “Merchants prefer [asset] because [reasons], here’s our Phase 0 design based on this.”
Contributor Guidance
Skills needed:
- Survey design (interviewing merchants)
- Cultural understanding (Venezuelan/Spanish economic context)
- Market research (crypto asset usage in LatAm)
- UX design (default choice psychology)
Estimated effort: 3-5 hours (research), 5-10 hours (if conducting surveys)
How to start:
- Research: What stablecoins are popular in Venezuela?
- Check forums/Telegram: Venezuelan crypto groups discussing savings
- If you have Venezuelan contacts: Ask the survey questions
- Document findings in GitHub issue or email rufitnes@proton.me
Quick contribution: Even researching existing stablecoin usage helps! Full surveys not required for initial insight.
Impact on Architecture
If H€ heavily preferred (>70%):
- Launch Phase 0 with H€ only, add HAu later
- Simpler UX (no asset choice confusion)
- Single oracle feed (EUR/BCH)
If HAu significant minority (>30%):
- Must support both from Phase 0
- Dual oracle infrastructure
- Need clear UX to explain difference
If BCH preferred (>50%):
- H€/HAu optional feature, not core
- Focus resources on core remittance UX
- Revisit stability layer in Phase 1
This unknown determines scope of Phase 0 development.
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