Designing the architecture of the online platform for the cryptocurrency exchange
About how the economic situation and cultural conditions may affect the final product and how important it is to understand the customer’s social and economic background, we’ve found out while working for a Venezuelan startup from the fintech industry. In a country struggling with the economic crisis, it was extremely important to ensure the security of the product and to adjust it to the habits of the Venezuelans. The initial assumption was that the result of our work was to be a decentralized cryptocurrency exchange – safe, fast, simple and highly functional. All these requirements were fulfilled, finally providing our client with a functional cryptocurrency exchange.
We started working on the Eldoradohub.com platform due to the recommendation from our partner – Pragmatic Coders. In 2018 they were approached by Guillermo Goncalvez, CEO of a Venezuelan startup, in order to develop an innovative, secure and as easy to use as possible cryptocurrency exchange. As Project: People we covered the UX/UI Design phase so that Pragmatic Coders could then introduce the results of our efforts.
The reality of virtual currencies
To make all the terms used in this article clear, let me clarify a few things before I move on to the details of the project.
Let’s first consider what the reality of cryptocurrencies – virtual money – looks like. First, they are entering the mainstream, and their market is growing dynamically and systematically. Niche cryptocurriencies are increasing their market share, resulting in the introduction of further regulations, which we can hear about in the government, for example. Therefore, it can be expected that cryptocurrencies will become increasingly popular in the near future.
Moreover, the amount of emitted ICO drops. Up to now, virtual coins, based on ethereum, have very often been created in order to obtain funding quickly. Currently, however, as a result of relatively small successes, investors in industrialized countries are looking less and less sympathetically at this type of funding. The competition on the developed markets itself is highly sophisticated.
To fully understand this case, it is worth defining a centralized exchange. To put it simply, we can compare it to an ordinary bank. A bank has a server that records all operations performed by clients of this and other banks. This method of recording data is quick, simple and cheap to maintain. This mechanism has been transferred to the cryptocurrency market and most popular stock exchanges, like Binance, operate that way. In this case, however, there is a certain problem, as all it takes is to “hack” the main unit to lose all the money, as was the case, for example, in the Asian exchanges, where users “got rid of” millions of dollars just like that.
Apart from the stock exchanges, there are also exchange offices. When it comes to exchanges, prices are set according to market demand – if there are more sellers than buyers, prices drop. Otherwise, they grow. When we speak of an exchange office, we can quickly exchange cryptocurrencies for dollars, but we accept prices determined by one seller who specializes in liquidating currencies.
Desk research & initial assumptions
The discussed example is Venezuela, for which the client originally wanted to create a decentralized cryptocurrency model. He presented the following assumptions:
- must be very safe
- mustn’t leave a trace
- has to be very fast
- should be easy to use
The first thought that came to our minds was that… at Project: People we haven’t dealt with money laundering yet. However, we always try to reach the source of the client’s problem. So we started over from the very beginning to identify the causes of the problem.
After a relatively short research we found out that Venezuela is a very specific country. First of all, the level of inflation is unique there on a global scale. The currency there is much more unstable than Bitcoin, hence the idea to spread the solution to all citizens. Moreover, it is also shocking how the everyday life of a typical Carlos San Juan Diego Cortez looks like :). When Carlos receives a paycheck, the first thing he does is go to the store and spend all the money he earned on food. If he spent the same fund on food 3 days later, he would probably buy only part of what he managed to buy on the payday.
Furthermore, it should be noted that the exchange for the dollar in Venezuela, as an alternative to the local currency, is not possible because the government has banned such activities. Obviously, there are some wealthier people who have their own dealers. The dealer doesn’t deal drugs or alcohol, but a dollar 🙂 Another, a bit more legal way, is to exchange for cryptocurrencies. However, the current websites are not suited to the needs of the market and they usually use phrases from the money market, with a complicated nomenclature, where a typical Carlos does not understand the difference between a candlestick chart and a linear chart.
Given the typical Carlos and Venezuelan economic ecosystem, we have therefore specified several key factors:
- The South American nation is a highly expressive nation, it would be nice if there was some help throughout the whole process;
- The process itself must be very simple;
- Surprisingly, the price of cryptocurrency is not the most important element. The cryptocurrency is much more stable compared to the Venezuelan currency.
We are therefore proceeding to the benchmarking phase, i.e. searching for current solutions. It turned out that LocalBitcoin, popular in Venezuela, also offers interesting mechanisms. It is a slightly more advanced exchange office, where each user can place their own offer to sell cryptocurrency or buy one. The whole process is manual and consists of a conversation with a potential buyer/seller via an anonymous chat box. The advantage of a local bitcoin is that it promotes transfers to an account in a bank from the same bank so that it is booked as soon as possible. So it uses a mechanism well-known to the Venezuelans.
The other benchmark was coinbase, popular for storing money. After short tests it turned out that users fell in love with the simplicity of the solution and simple design.
We decided to merge both services. Localbitcoin inspired us with its transaction system, which was simple and well known to Venezuelans, whereas from Coinbase we borrowed simplicity of data browsing and intuitiveness on screens such as overview.
At first, we created mock-ups. At the very first glance, you can see that they are as simple as possible. Search options are popular not only for the crypto market, but also for a regular online store.
In the search itself, inspired by a system from local bitcoin, we promoted transactions within the same bank. The offers were posted by so-called market brokers, i.e. verified persons. The data was stored in a centralized way, but on an independent unit, on a server outside Venezuela.
We’ve changed the sales menu and purchase through chat quite a bit. At the top we presented all the important elements, while at the bottom the users were provided with information on how the process looks like and at which point they are. The grey element, the so-called “context menu” clearly showed what to do to move on to the next stage. This is where the user approved e.g. receiving bitcoins/dollars.
The Final Design
The final design was some kind of a challenge – the connection in Venezuela is very slow, so the developers spent a lot of time on optimizing the code. The design itself must not have had any images.
Eventually, the client asked to build an exchange, while a functional currency exchange was created, where everyone can offer their own assets.
We also prepared a landing page for the project, which explains how the stock exchange works and which served as a kind of information source. It was based on the same UI as the platform, presenting several additional information. The results can be seen under the link below:
Summary of our work in numbers and more
All projects are important and relevant. Each one is a different story. However, working on a project for such a different culture and reality is particularly memorable. I still remember the in-depth interviews with Guillermo (CEO of the startup), who described his situation in his home country and what impact it had on him. We carried out this project with a sense that through technology we are able to help! 🙂
Intensive cooperation sprints
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