Swapsteem - Why we need an alternate exchange and other queries answered!
Hello Steemians!
As we announced our platform @swapsteem in the last post, we are back again with answers to questions asked by various people, whom I pitched the idea of making a peer to peer Steem/SBD exchange. In the process, I found out that the problem domain is a lot more wider than what we talked about in the introduction post. Also the solution we are building needs to be robust and secure enough to handle a business where real money is involved. We are still looking for suggestions and ideas from people to create a reliable yet cheaper exchange. Here is a short QnA section where we will share the answers to queries made by potential sponsors and traders.
Que : Why a new exchange altogether? Aren't there many already there in the market?
Ans : I agree, that there are numerous centralized as well as decentralized exchanges there in market. But, since our target is only to provide a quick Steem/SBD to fiat exchange, which makes it unique in it's own category. If users want to trade their rewards for other Currencies, I would recommend using an exchange like bittrex, but most of the users on the platform who come from developing countries, specially minnows are not very keen in trading BTC. It will add additional liquidity to the market, and our goal is to be added the steemit right sidebar as an official p2p exchange.
Que : How will trades will actually happen, given that there is no Fiat payment gateway?
Ans : The swapsteem application flow is adapted from the well established localbitcoins application. Trades happen peer to peer, while the Steem/SBD is held in escrow. Also, only registered and Steem account verified traders are allowed to create trades and determine their trade price. Other users will simply buy from traders. Users can chat with trader and upon mutual consent, the trade will initiated by SBD/Steem holder via escrow. The escrow will be moderated by a third party escrow agent. After agreement on the t&c of trade, the SBD seller can create an escrow transaction between the buyer and seller and choose their escrow agent from a predefined list of escrow agents available for the respective country. The escrow agents needs to be registered with us as agent and need to delegate a certain amount of SP to us in order to be eligible for the role. The escrow fee will be set by the agent himself, but users will have the choose their escrow agent based on their reputation, no of confirmed transactions etc.
Que : Okay, but how do you prevent scammers from stealing people's money?
Ans : Spam is really a potential vulnerability to such platforms, but we can have a reputation feature for All the users. The users' trading limit is determined by their reputation which in turn is computed on the basis of number of previous confirmed and disputed trades. The application heavily reliable on trust between the users. Users can use the reputation score to decide which peer they want to trade with. There is a time frame in which the buyer needs to confirm the fiat payment, by producing relevant screenshot, bank txn Id etc. These will be used as proof in case of disputes, otherwise seller can simply release escrow to buyer. So a spammer is bound to pay the fiat and produce substantial proof.
Now, we are looking forward to hear from the community about their opinion about the platform. Please drop your queries or questions in comments and we will address your concerns at the earliest.
We have already started with development of the platform as a web and mobile application. We are also looking for developers and designers to contribute to this project. The project will be made open source, soon after the launch of our alpha release for web and mobile respectively. And we will reward the contributors with utopian upvotes, bounties and other freebies. If you are developer or designer, join us on our discord and let's discuss about possibility of contribution.
Till then, keep steemin!
@swapsteem