Users of the application used to freeze the value of bitcoin for one minute, which occurs when making a conversion. During this time, they compared exchange rates and made a profit using arbitrage
The developers of the Salvadoran crypto wallet Chivo have disabled the display of the price of bitcoin when buying or selling it in the application. According to the announcement of the project team, users used the freezing of the value of the first cryptocurrency for one minute, which occurs when making an exchange, in order to make money on the difference in exchange rates using arbitration. In a minute, users had time to compare the price of bitcoin on crypto exchanges.
If the value of bitcoin on exchanges increases, users buy an asset in Chivo, taking advantage of the fact that it is blocked. When the price of an asset on the exchanges decreases, the user is sold it at the value fixed by the application.
Also, the developers of Chivo will refuse to freeze the value of bitcoin and change the algorithm for converting funds. In the near future, the application will return the display of the bitcoin price when making a transaction. After that, the funds will be converted in real time, taking into account the current exchange rate.
On October 16, the President of El Salvador, Nayib Bukele, reported that residents of the country contribute much more US dollars to the Chivo wallet than they withdraw.
Chivo is a cryptocurrency wallet that was developed by the government of El Salvador after bitcoin became the official means of payment in the country along with the US dollar.
On September 7, a law on granting the first cryptocurrency the status of legal tender came into force in El Salvador. On the same day, the country’s authorities bought 550 bitcoins. Later, the President of El Salvador, Nayib Bukele, announced the purchase of another 150 bitcoins.