Can a 1932 ordinance “fit like a glove” in blockchain? It can, because this is what happens with 21.981/32, which regulates the auctioneer profession, as well as other norms and laws in the country. And that’s why Ronaldo Santoro, who was already operating in this market, announced in April 2020 that he would create the Network good value. It is a marketplace that, according to him, currently has 66 auctioneers from 25 houses in the segment.
The decree of 1932 says, for example, that the auctioneer must “acknowledge receipt of movable goods and everything sent to them for sale”. They are also required to have contracts, before auctions, on the conditions of sale, payment and delivery of the goods. They must also register with the Boards of Trade the documents that prove payment of taxes. And whoever gives them the goods for sale must send in writing the maximum expenses they are willing to pay.
“I built a kind of electronic registry, in which everything is registered. My power is in the record (in blockchain)”, says Santoro, CEO of Bom Valor. One of its main differentials, he says, is that the process is already born in a registry office with a digital identity. And in it there are data such as the property owner, bidding notice, buyer data and authorization and contract signature.
For digital identity, the company uses OriginalMy’s solution. For users, who use the Account Proof of the network, the solution is from Interlock Ledger. The investment so far has been R$ 10 million and Santoro expects to raise direct in Series B until the beginning of 2022, “depending on how much we grow. Valulation is already good because I have the case of Superbid and I am from a sector with a barrier to entry”.
Bom Valor created a blockchain marketplace
There is also another important point for those who sell through Bom Valor, says the executive, which is normally, the document files remain with the auctioneers. But with blockchain, seller and intermediary have access to the data, so they have the same rights as the auctioneer.
Today, Bom Valor only works with companies and governments when selling to intermediate or final buyers and is inserting companies and offering services in stages. The next steps may include, for example, vehicle fleet owners, credit unions, financial institutions and construction companies, with whom you have already been talking.
The idea, being a marketplace, is for the owner of the property to choose with whom they prefer to sell their products. Auctioneers will also be able, in the future, to create their blockchain networks within the marketplace.
Thus, Santoro also hopes to break what he calls the “profession’s original addiction”, exclusivity. “There are about 5 million users of digital auctions, with the two biggest platforms having around half of that. “That’s because they lack confidence in others,” says Santoro.
The market for demobilizing used assets is R$1 trillion. Machines and equipment are sold ten times, says the CEO. However, sales at auctions are around R$ 100 billion a year. So there is room to grow, adds Santoro.
Santoro, who moved from the traditional auction – where his family has operated for decades – to the internet. when creating the Superbid, says he realized that blockchain empowers the sale due to the registration of the entire process. The internet brought advances in relation to what was previously physical, but it was still necessary to “improve legal evidence in the relationship between buyer and seller. It’s a technological revolution that covers the failure of lack of trust.”
Cultural change in auctions
In addition to OriginalMy and InterlockLedger, Bom Valor also tests the Ethereum blockchain for users. As well as testing Hyperledger, from a partnership with IBM. This is due to the accounting dynamics. Thus, it tests to develop products and solutions in the cloud, for example. “We are partners to create the culture of use. I’m creating a hub, building the cultural proposal to show that blockchain empowers.”
Santoro says he doesn’t want to put an end to auctioneers. What is intended is to give sellers more opportunity to choose who will serve them by reputation and quality of service, since the platform facilitates this because of the trust it brings. “I don’t want to eliminate the originating (sales) auctioneer. I want them to continue originating, but practice registration and auction in my infrastructure.”
The creator of Bom Valor says he is not afraid of criticism and rejection from auctioneers. “I already suffered this from traditional auctioneers 20 years ago (when he created Superbid). In addition, the traditional ones have new people who understand my value proposition”, he added.
Good value was born from auction software
To create Bom Valor, Santoro bought a software company for auctioneers that was already 10 years old, but not on the blockchain. It already had 50 in it and they can migrate to the new network. The migration includes acting in judicial auctions, such as those involving bankruptcy and condominium debts.
“80% of them are desert, there are no buyers, because they are in one place. Apart from the fact that they are auctions with good volumes. Buyers have to hunt for the auction they are interested in”, says Santoro. There was also a cooperative auction in September, which does not enter the public or judicial category.
It is difficult to make any predictions about where Bom Valor could go, says Santoro. But a number would reach 2%, in the next two years, of the value auctioned per year – today around R$ 100 billion.
*Correction of the number of auctioneers on the network and correct name of Santoro at 11:45 am on October 4, 2021.