Alex Wearn on the future of centralized and decentralized exchanges

0:00I'm Ashton Addison from a vincentio for the Crypto Coin Show and today on blockchain interviews we have Alex Warren from Aurora and idec's welcome to the show once again Alex thanks great to be here great man so can you tell us a little bit about of idec's and Aurora for the people who haven't seen the first show I thinks is a hybrid decentralized exchange

0:23operating on the etherium network so on idec's we use a smart contract for all custody of funds and trade settlement what this means is that in users every action has to be authorized by their private key so no funds can move without their explicit authorization without them actually signing then that transaction but we're a little different than from the other decentralized

0:43exchanges out there in that once those transactions have been signed they have to be submitted to the network through the exchange it's kind of a form of a state channel where these transactions are signed and passed off chain to the exchange and then submitted to the network afterwards for processing what that allows us to do is update users' balances in real-time and ensure that

1:02the order books are always up to date eliminating issues such as trade collisions that can sometimes occur on other decentralized exchanges some of the problems that can arise when you're using a blockchain for trade and settlement and having to deal with the latency that comes when waiting for transactions to mind so we've seen a lot of success with this model we've had a

1:21lot of growth recently actually just past 150,000 users were the top smart contract on the etherium network consistently at around 7 percent of the total transaction volume and we're doing about 20 million dollars of daily trading volume it's all into theorem tokens because using an aetherium smart contract we're only able to interface with assets that are on the etherium

1:40network that makes sense and that sounds very technical I know there's a lot of technical details into implementing a perfect exchange I spent essentially especially when you're looking at adding decentralized nature and more security for people's own funds have you guys had a challenges balancing keeping the platform really technical and making it easy for users to adopt so my

2:08description was technical but I think in terms of the benefits they're very straightforward to users the primary one being that it feels snappy and fast we have the look and feel of a centralized exchange in the sense that the best compliment we can get from a user is that they didn't know they were using a Dex to do centralized exchange and that comes from our more

2:28technical design and the way we kind of approached it so we looked at taking a pragmatic approach to the creation of the exchange based on the available tools and their maturity and we looked at what do users care about most and in how can decentralization help that and in nikka in that case we came to the conclusion that the thing they're most worried about is the security of their

2:48funds they like the idea that they can use a private key to sign all transactions and withdrawals and that no one can get to their funds in the exchange unless they're you know authorizing that movement nothing can happen without their explicit authorization so we kind of looked at how can we take the benefits of centralized exchanges in terms of some

3:07of the coordination between different traders and the benefits in terms of speed of settlement that can provide and combine that with the security benefits that come from using a smart contract and a private key to manage the custody components okay that makes sense that's great to hear so that's exciting that you mentioned that you guys are actually the number

3:26one most used smart contract last we spoke was about two months ago and idec's has been growing rapidly since then could you elaborate a little bit on what you guys have done to get to this point so we've done a couple things I think one of them is our incredible support staff so we actually have a telegram room where we have 24/7 support where any individual who's having issues

3:50on the exchange can come in and get get answers to their questions so having a staff that's available when the customer needs it's been extremely important to us no one likes the ticketing system that exists within this the cryptocurrency space can be fair or very frustrating to the boggin issue here back we try to make sure that we can service the customer at the point in

4:11which they're ready to ready to use the application another thing has been our focus on Gordon communities to the platform so we have a team that actually is out there looking to speak to new projects and let the community know that they've been listed on idec's and it's available for trading so we think that those new users are willing to open up to a new exchange at those times so

4:30that's kind of one of our ways that we go out there and we try to acquire new customers to the platform wow that's great to hear so how have the team been doing in developing the platform and the customer support are you guys rapidly expanding absolutely so last we spoke we were a team of five we've currently grown to a team of about twenty we have eleven core team members eight on the

4:56development side three on the business side five support staff three on the token team and then a couple contract on the on the business side as well and it's really been focused on two things one is making sure that the software can handle the scaling needs as we grow and on board more users so it's really about staffing up the development side but

5:16with an eye towards the future development of the platform so we have some initiatives that will take it beyond what we've created today and we want to make sure that we're staffing up the team ensuring they have the capabilities to deliver on that and then the other is just kind of the business side to make sure that we're able to continually support people as they come

5:32onto the platform the support team I can't say enough about how great they've been we actually found most of the team members were community members to begin with they were already in our telegram Channel and answering questions when we weren't around to help them and the fact that they showed that initiative was really impressive to us so we actually

5:50reached out to them and said hey guys you've been doing a great job do you have any interest in formalizing this position so that's one of the ways that our products and our community actually served as a recruiting tool in terms of building the team that we've got here hey that's super great to hear and I can personally vouch for the troubles that can arise when a ticket comes up in

6:14an exchange and I've seen ticketing situations on of the some of the larger exchanges in the past like baloney acts and bit recs and if you get a ticket because for whatever reason like your funds were stuck in a transaction the ticketing service can take months and months for some people to get them to even respond so to have an exchange where the customer support is helping

6:39you right away is probably one of the biggest benefits that you can get absolutely we've really seen it resonate with customers we consistently get feedback about the great job that our support staff is doing and then it's you know it's also interfacing with the team the development team and the business team behind it so we're constantly in communication with them if there's ever

7:00any new issues that arise to make sure that we're all aware of what's kind of going on live at the moment on the platform communication is key as they say so in terms of your business guys and your development guys what are they going to be working on in the next six months interns and how are they going to be growing the platform so from a development perspective we're focused on

7:24taking the parts that we currently run in a centralized manner and further decentralizing them the way to think about it is that at the moment we have certain components that run on a single idec's server and we'd like to take that and turn it into a network of I'd X's if you will with other nodes in the network taking the different functionality that

7:44we do and taking turns kind of doing those functions we have plans to use a proof of stake token to have people in the network be validating these different functions so we're looking at a lot of the different kind of network technologies and paradigms that are coming out for inspiration or development approaches the goal here though is to have a proof of stake

8:04driven network where node operators actually have a chance to earn trade fees from the exchange for their role that the participation in that network so this is we think a really innovative idea where you can actually have an exchange a decentralized exchange that's kind of run by the community members so this network token is called Ora it's our staking token and the ways to

8:27earn it are actually to trade on the platform so the more trading that you do the more volume that you accrue so to speak towards these these or rewards as we call them the more Ora that you will earn or receive every month and in terms of the form of a rebate of sorts and so we think there's a really novel idea and we kind of have been thinking about

8:47token engineering as one of the aspects of the business that the token economics is a it's an interesting space and if done properly it's a way to organize a decentralized group of actors to all move and coordinate towards the same goal in this case the goal would be increasing liquidity and usage of this decentralized exchange so we think that by giving this token back to those who

9:11trade heavily on the platform and then making this token have a role in actually the organization and operation of the exchange that then those who earn this token can then stake it run a node and actually earn trade fees for the work that they're providing to the system so it's kind of a virtuous cycle where the more you trade the more tokens you get and the more you're able to

9:32participate in this staking process Wow that is actually a very super innovative idea if I do say so myself I would I would really appreciate to be able to run a node and that is actually verifying the transactions on the exchange where we are essentially running an entire network of nodes and everyone is securing the exchange together so I'm super excited to see

9:57that being developed thank you yeah we're excited we really think it's really resonated with the community and it's very much in line with what the space is about where you're trying to create software that allows anyone to kind of operate and participate in that network that's great so is there any talks of a stable coin involving with the exchange or just

10:20exchange coins that you know many popular exchanges have coins where you save trading fees or commissions could you explain a little bit about that certainly so we have three tokens that are actually associated with our platform two of them are live at the moment so the first one I just mentioned was hora which is going to be the staking token of the Future Network

10:41the second one is known as ID XM ID X membership so this token gives two different benefits one of them is the ability to have free trades on the platform through the year 2020 for about the next two and a half years those who purchase the token will actually not be charged any fees from the exchange for any trades they do maker or taker there's still gas fees if you're on the

11:04taker side associate that but those go pay those are paid directly to the etherium network the exchange doesn't earn anything on those fees now an alternative benefit and anew sirs can choose between the two is to earn those oral rewards that I mentioned the rewards that you get for trading on the platform you can earn them at twice the rate so that's another benefit that

11:24we see a lot of users choosing where if you remember you can actually accrue those aura tokens faster and even after the free trade benefit expires in 2020 that double reward bonus will continue so this ID XM token is a way it's it kind of borrows from some of the traditional exchange role to the idea where you would buy seats of the exchange and it gave you additional

11:46benefits either the ability to trade or you know maybe even some sort of kind of ownership of the platform so this isn't an equity stake but it's a way to earn more of the aura tokens and to participate in that future node staking process so that's the first two tokens and then the third one you mentioned was our stable coin initiative known as the boreal the idea here is to take revenues

12:09from the exchange and actually use the exchange as a way to kind of back or imbue this token with value so the boreal will always be redeemable on idec's at its target value in lieu of trade fees so you can imagine a scenario where if the price of the token ever dips below its target value then traders are incentivized to purchase it because they can lower their overall trading

12:32costs so this will help create or maintain a price floor on the asset and the asset isn't designed to fluctuate right it's a it's a stable coin the whole point is that it maintains a par value with some other outside stable asset the benefit to us are twofold so first we want to use that as a stable base currency within the exchange to date users are only able to trade

12:57against ether as a base currency pair which brings two levels of volatility there's the token that you're purchasing or trading with as well as the underlying base currency which can make it more difficult to understand kind of the risk that you're undertaking or how your even gains and losses are doing in certain market environments so that's what the first

13:19benefit is just kind of an internal one the ability to have that stable base currency and then secondly we actually want to start lending this currency via the blockchain out to individuals in the ecosystem so we think that there's going to be pretty soon a large group of digital reputation systems as well as digital credit scores kind of measures of economic trustworthiness if you will

13:45and that these scores will be quite valuable people will you know kind of build up a reputation over time by interacting with these different applications and eventually they'll be able to borrow against this so similar to how you have a credit score today that you wouldn't risk tarnishing because it would limit your ability to gain other financing in the future we

14:03think there's gonna be blockchain based versions of this we're really excited to explore that notion there's gonna be different forms of identity and kind of economic trustworthiness and how we can use them as a barometer for kind of the economic risk in from a lending perspective wow that's super exciting three different coins is there a place where we can learn more about the

14:26staking the masternodes the different types of coins or just get into the community and speak with you guys what's the best place to do that absolutely so check us out on telegram the aurora dial telegram similarly aurora dot-com is our website you'll find links to everything on there including our white paper and a little bit more information on some of these

14:48various components and then also check out our medium logs we post more frequent updates there on kind of our latest thinking as this develops you know as you can imagine the space is extremely dynamic and you know new things are coming out everyday so we're constantly refining our thinking to this to solving these problems so there's a couple different places you can get the

15:08overall vision as well as kind of the latest thoughts on our development process wow that's amazing thank you Alex for your time and we will definitely catch up again in the coming months to see how all of these developments unfold fantastic thanks for having me you