Swapsteem is a peer to peer exchange platform where users can trade their STEEM/SBD for fiat with other steem users. Swapsteem is completely open source and utilizes Steemconnect for user authentication and steem escrow transactions for safety of users' funds. Today, we are glad to announce the alpha version of swapsteem is ready for alpha testing. This post is a detailed overview of the swapsteem platform. This Post contains information about :
- How SwapSteem works?
- How SwapSteem is different from other similar platforms?
- What are Escrows and Escrow Agents?
- What are the Transaction Fees at Swapsteem?
- The SwapSteem Delegation Program
How SwapSteem works?
As already mentioned, SwapSteem is a peer to peer exchange, which essentially means that trades on swapsteem happen with mutual consent between two users.
**Step 1 **: Users can Find Advertisements to Buy and Sell STEEM/SBD from users who have already created a trade advertisements, or create their own advertisements with desired details like amount, payment methods, margin from the live rate of STEEM and SBD etc.
Step 2 : If a user wants to trade with an existing ad, they can create an order for for that ad with desired amounts to trade. The order is created at the market value(+/- margin) of the coin at the time of creation of order.
Step 3 : Upon creation of order, the other party needs to approve the order in order to proceed with the trade. advertiser can cancel order if they don't have enough balance or not willing to trade with that person.
Step 4 : Upon approval of order, The STEEM/SBD holder needs to create an escrow transfer transaction with other party as reciever and @swapsteem as escrow agent.
Step 5 : The other party needs to create an Escrow approve transaction for the Escrow transfer created earlier.
Step 6 : Once both participants have sent their transactions, the agent ( @swapsteem) as of now will approve the escrow.
Step 7: After approval of agent, the reciever of Escrow needs to transfer fiat to the Sender's bank account via the payment method mentioned in the order. The reciever also needs to mark payment as done and let the sender know of the transfer.
Step 8: Once the reciever marks payment as done, the sender confirms receipt of funds in bank and he can then Release the Coins to receiver's Steem with a Escrow Release Transaction.
Step 9 ( In case of any fraud) : Either of the parties can raise a dispute in case they find that the other user is doing a fraud. A fraud is case where either the reciever marks payment as done without actally doing the payment, or the sender refuses to confirm the bank transfer even after the funds are sent by receiver. In Such a case, The agent will ask for proofs from both the parties and come to a conclusion on whom to release the funds.
SwapSteem alpha is not yet ready for Escrow transactions, hence users can use SteemConnect hot sign feature at https://steemconnect.com/sign for creating escrow related transactions. Before creating any escrow, the users are suggested to chat and share payment details on our community server or Discord and notify the Server Admins.
How SwapSteem is different from other similar platforms?
There are many centralized and decentralized exchanges already on the web. The problems with them are :
- Not all of them have STEEM/SBD trading support. According to coinmarketcap.com there are only 22 market pairs for STEEM and 9 for SBD.
- Those having STEEM/SBD listed at their exchange do not have trading pairs for fiat currencies(Except USD and KRW), Hence user needs to use multiple exchanges for trading first to BTC and then to Fiat.
- Trading on Exchanges is completely banned in some countries like India, China etc. P2P solutions like Localbitcoins.com are the only way to trade crypto in such currencies.
- High transaction fees - Converting Steem/SBD to BTC/BCH and then BTC/BCH costs way too much on these exchanges. Users may also be levied withdrawal/deposit charges if they use more than one exchange.
- What are Escrows and Escrow Agents?
Escrow transactions are a type of smart contract between two users, where the amount to be transferred is kept by a third party agent until the contract is filled by receiver. Only the sender or agent can release funds from an escrow. Steem has inbuilt feature for creating Escrow transactions.
As of now, transactions with only @swapsteem as agent are supported, but we are planning onboard reputed members from the Steem community to register as a trusted escrow agent. more details in the Delegation Program below.
What are the Transaction Fees at Swapsteem?
For the alpha version, only tradses upto STEEM/SBD 200 are accepted. All trades have a flat SBD 0.500 Fee for trades upto STEEM/SBD 100 and SBD 1.000 Fee for trades between STEEM/SBD 100-200. The detailed fee structure will be announced with the beta release.
The SwapSteem Delegation Program
As mentioned earlier in the post, Swapsteem will be onboarding reputed members of Steem community as escrow agents. After the beta release of the platform, Users will be able to choose from upto 3 escrow agents registered for their country including @swapsteem which will be the default agent in all trades, and create the escrow transactions on our platform itself.
Anyone having a reputation over 50 on Steemit is eligible for applying as an escrow agent role. The candidates need to Delegate 1000 SP ( Or 500 SP if they are running a witness too) to @swapsteem, in order to be considered for the escrow agent role. Agents can earn a decent amount of SBD/STEEM as escrow fees.
The Swapsteem alpha is ready for testing at http://Swapsteem.herokuapp.com.
We are inviting traders and QA/testers to visit our platform and give us feedback about it.
Till next time!