Venezuelan Capitalism
Venezuela has a unique economic structure. Unlike many countries where the government is funded primarily by taxes from the private sector, Venezuela has historically depended on oil revenues.
The government receives dollars directly from oil sales and then distributes them to the economy. This model, known as rentier capitalism, has shaped the country's economic structure for decades.
Oil didn't create a productive economy. It created a distributive economy where the State is the great allocator of resources.
— Asdrúbal Baptista, Economic Theory of Rentier Capitalism (1997)
Oil Export Revenue
Billions USD (1920-2030 projected)
Peak: $89B (2008)
Collapse: -95% (2020)
Sources: OPEC Annual Statistical Bulletin, BCV, EIA, Baptista & Mommer (1987)
For 100 years, Venezuela has depended on oil. When the price rises, there's a boom. When it falls, there's a crisis. The opportunity now is to create tools that improve efficiency and traceability in currency conversion.
The Opportunity
The main opportunity lies in improving the efficiency of how dollars are converted to bolivars and reach citizens.
For decades, the USD to VES conversion has presented traceability and efficiency challenges. Multiple exchange rates, fragmented processes, and conversion mechanisms that make it difficult to have visibility over currency flows.
Identified improvement opportunities:
- •Rate unification: Multiple exchange references create complexity in conversion
- •Expanded access: Opportunity to democratize access to efficient conversion mechanisms
- •Friction reduction: Simplify processes to streamline exchange operations
- •Greater traceability: Real-time visibility of flows and allocations
Oil wealth can be a blessing when accompanied by systems that allow verification and supervision of its distribution.
Meanwhile, millions of Venezuelans abroad want to send money to their families without losing 10-15% to fees.
Blockchain technology enables new solutions. For the first time, it's possible to create a complementary layer where every USD-VES conversion is traceable, verifiable, and supervisable in real time. An infrastructure that organizes and formalizes existing flows with visibility for the regulator.
The Solution
VESC is a digital settlement layer that replicates bolivar value within a traceable, supervised infrastructure. It enables more efficient value movement, integrating new actors into the system.
VESC is a digital settlement unit that replicates bolivar value. If the bolivar goes up or down, VESC reflects that same value. The system is designed to operate with visibility and supervision by the regulator, enabling real-time flow monitoring.
For Venezuelans in Venezuela: Sell your bolivars for VESC, then redeem for USDC. Now you have digital dollars you can use wherever you want.
For Venezuelans abroad: Deposit USDC, get VESC. Your family in Venezuela sells the VESC for bolivars to their bank. 0.25% fee, not 15%.
For businesses: Accept VESC as payment from Venezuelan customers. Redeem for USDC whenever you want.
How VESC is Created
VESC is collateralized in USDC, and its value replicates the bolivar using the official rate published by the BCV as reference:
Creating VESC (Minting)
$1
USDC
BCV Rate
$1 = Bs. ---
Bs. ---
VESC
VESC replicates bolivar value
Redeeming VESC (Redemption)
Bs. ---
VESC
BCV Rate
Bs. --- = $1
$1
USDC
Minus 0.25% network fee
Dollar collateral: The deposited USDC stays locked in the smart contract. That USDC backs all VESC in circulation.
Bolívar-referenced value: Although the collateral is USDC, VESC replicates bolivar value using official rates. If the bolivar devalues, the VESC amount needed for redemption adjusts proportionally.
Verifiable and supervisable: USDC reserves are verifiable on-chain. The system enables real-time regulatory supervision of all flows.
How It Works
VESC uses proven technology. We're not inventing anything new, we're combining pieces that already work.
| Component | Function | Technology |
|---|---|---|
| Smart Contract | Token minting and burning | ERC-20 / Base L2 |
| Price Oracle | Real-time exchange rate | Chainlink / BCV API |
| Custody | Secure reserve storage | Multi-sig + HSM |
| Fiat Bridge | Connection to VE banks | Pago Movil API |
| Liquidity Pool | VESC/USDC swaps | Uniswap V3 |
Important
VESC is NOT a hedge against inflation. If the bolivar loses value, your VESC also loses value.
What VESC DOES do:
- • Enables bolivar payments that work globally
- • Removes friction to send/receive bolivars from abroad
- • Reduces remittance fees from 10-15% to 0.25%
- • Instant settlement, 24/7
What VESC does NOT do:
- • Does not protect against bolivar devaluation
- • Is not a stable dollar (for that use USDC directly)
- • Does not solve macroeconomic problems
If you want to protect against inflation, redeem your VESC for USDC. VESC is for bolivar payments, not savings.
Fee Comparison
| Method | Cost | Time |
|---|---|---|
| Western Union | 10-15% | 1-3 days |
| Exchange houses | 5-10% | Same day |
| Bank transfer | $25-50 + spread | 3-5 days |
| VESC | 0.25% | Minutes |
Why Venezuela
Venezuela is already digital. People are used to moving money with their phones. They just need a way to connect that money with the rest of the world.
- •$47B in digital payments every year through Pago Movil
- •85% of Venezuelans use Pago Movil regularly
- •7M+ Venezuelans living abroad
- •$4B+ sent in remittances every year (losing 10-15% to fees)
That's $400-600 million per year in fees that we can eliminate.
The Flow
Sending remittance from USA to Venezuela:
1. Deposit $100 USDC
2. Receive --- VESC (at BCV rate of --- Bs/$)
3. Send the VESC to your family in Venezuela
4. They withdraw --- bolivars via Pago Movil
Fee: 0.25%. Time: minutes, not days.
Paying international supplier from Venezuela:
1. You have --- VESC in your wallet
2. Swap VESC for USDC on the app
3. Receive ~$100 USDC (minus 0.25% fee)
4. Pay your supplier in digital dollars
No SWIFT. No waiting. No banks.
Transparency
VESC is designed to be completely transparent. You trust a system with defined rules, where everything is verifiable on-chain.
Auditable reserves: You can see at any time how much USDC backs the VESC in circulation. The smart contract is public and reserves are verifiable in real time.
Open source: Our contracts are on GitHub. Any developer can review them and verify how they work.
Try It
The best way to understand VESC is by using it.