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district0x / district-proposals

Proposals for new districts to be built by the district0x Team.
https://vote.district0x.io/
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DP61: Aurora - Decentralized eCommerce for Cryptocurrency #61

Open quantumdwayne opened 7 years ago

quantumdwayne commented 7 years ago

Purpose

Aurora aims to provide crypto users a way to easily exchange, trade, sell, buy, or auction goods in their cryptocurrencies of choice. The vision for Aurora is to combine the functionality of Craigslist, eBay, and Amazon into one platform.

Background

As of July 27, 2017, the market cap for the entire cryptocurrency space was roughly $88 billion. This represents a 7.3x growth from the same time a year ago when the value was close to $12 billion. Craigslist did $694m in revenue in 2016, eBay did $8.9b, and Amazon posted a staggering $135b. If cryptocurrency adoption and growth continues at a similar rate, it will become a trillion dollar industry within the next few years. There will be a real demand to use cryptocurrencies in an eCommerce setting and the major players will be slow to adopt/incorporate it into their existing platforms.

Description

Currently all eCommerce done online uses fiat currency and there isn't an infrastructure in place that allows people to buy/sell goods using crypto. For example, let's say an individual wants to sell an item and use the money to buy DNT tokens. This seller would have to deposit the cash into their personal bank, then transfer it to a service like Coinbase to buy Ethereum, and then transfer the Ethereum to another exchange that has a DNT/ETH pair. Not only will there be a fee for buying the Ethereum on Coinbase, but there will be a fee for transferring it to another exchange, and a third fee for buying the DNT tokens using Ethereum. This workflow is too complicated for anyone who isn't a seasoned veteran in the crypto space and ultimately limits adoption from regular people. Furthermore, the chances of a small error resulting in your money disappearing increases with so many steps involved. Aurora aims to solve this issue and become the standard for buying/selling goods using cryptocurrency.

Aurora at its core will make use of several d0xINFRA features:

Seller Options

Sellers will have the option of listing their goods locally, online, or both. Additionally, they can choose to list it with a “Buy it Now” price or hold an auction where people can bid on it for a specified amount of time. Sellers will be allowed to attach photos, list their location if selling locally, detail their shipping methods, specify the condition of the items, quantity, and more. For communication, sellers can list their email, phone number, or whichever method of communication they prefer.

Sellers can make use of escrow and bond services which would be highlighted by a special icon/small badge next their name on the listing. Using these services is not required but may instill confidence in buyers, especially for high value items. Ultimately the transacting party will decide themselves if direct payment is the preferred option or if they would like to use escrow. An example of a potential escrow & arbitration workflow using other district proposals can be found below.

If the transacting party is meeting locally, they will have to arrange for payment in a way that works for them. As the Ethereum ecosystem matures, platforms like Status, OmiseGO, or MetalPay will make in person transactions as easy as paying with cash.

Ranking

All users on the site will have a ranking associated with their account. This is to encourage people to use the system as it was intended and to create a community that people can trust. Reviewers are encouraged to post photos of the items they received from sellers and leave a detailed written review. Sellers will also be able to leave reviews on buyer’s accounts. This would help sellers narrow it down if they have received numerous responses for a listing.

Members who have completed a high amount of transactions on Aurora with overwhelmingly positive reviews will reach Gold Tier. This will give members a special badge next to their name which indicates that are trusted by the community and good people to work with. There will be more perks associated with Gold Tier as time goes on.

Monetization

As a way of generating revenue, sellers can pay for sponsored ads that gives their product greater visibility throughout the site. For example, if someone types in “iPhone 7” into the search bar, the first 1-2 listings could be sponsored listings and the rest below will be regular listings. If there are many listings competing for the limited amount of sponsored listings slots, the highest bidder will appear more often than someone bidding a low amount. This is similar to how Amazon works.

Power Sellers, individuals who sell high amounts of items, can pay a fee to get special perks on their account. Some perks will include the ability to choose any time duration for auctions, a special badge next to their account name and on their listings, extra photo uploads, etc.

Escrow & Arbitration

Over the past few weeks there has been a lot of great discussion (primarily in the Slack channel) about how to implement escrow services into a platform like Aurora. Escrow isn't needed for all transactions and would ultimately be up to the buyer/seller to decide upon. For example, someone selling/buying a $10 item might find an escrow service cumbersome and not worth it considering the value of the item.

Since District0x is a network of marketplaces I would like to see Escrow functionality built into d0xINFRA in the long term. Once the District Creation Platform is ready (again, thinking long term here), there will be an explosion of districts being created and the demand to use an escrow service will be immense. Having to use third party services outside of District0x for escrow would not be ideal for users of the platform.

An escrow & arbitration service that has been proposed recently is Escargot. It is a marketplace-styled escrow service where transacting parties can post contracts that detail dispute terms which are then are bid on by competing arbiters. Arbiters within the district would have a ranking associated to their account which is determined by their performance according to the community. To make the process even more fluid, a service like Water Works could "trigger" an escrow & arbitration event within Escargot (or any other escrow district) automatically once the buyer and seller agree upon a transaction. The goal is to have the process of buying/selling goods be seamless, quick, but also enstill confidence in the consumer.

Closing

This is my early vision for the platform. I think something like Aurora could go a long way towards making cryptocurrency feel more legitimized if people are using it to buy actual goods or products. I want this to become the go to platform for anyone who wants to sell/buy products with cryptocurrency. I will be adding more to this post as time goes on and I look forward to your thoughts on it.

Edit:

8-28-17: Changed the project name from EthTrade to Aurora

Slack Name: lonzo_ball

Bradymck commented 7 years ago

Definitely something this ecosystem needs. Especially as governance experiments solidify viable alternatives to the tech giants.

quantumdwayne commented 7 years ago

@mckmuze Thank you and I absolutely agree!

lkngtn commented 7 years ago

Seems natural to use d0xInfra for e-commerce, and could see an Ebay type system where sellers have profiles and storefronts and reputation attached them working really well. However, I think some thought needs to be put into escrow services in addition to just reputation. Reputation systems can be easy to game if there is a profit incentive to do so, which there definitely is in the case of sellers listing their services.

Unlike in a tradition Ebay/Amazon marketplace where there is the possibility for refunds or charge backs in the case of fraudulent sellers, and conversely some protections to prevent chargeback in cases where buyers act fraudulently that system doesn't exist in a decentralized fashion.

I think putting some thought into how an escrow system might work with this, particularly for varying levels of purchase. The first thing that comes to mind is MAD (used by shadow/particl for their decentralized market), which relies on a variation of https://en.wikipedia.org/wiki/Ultimatum_game to ensure that both parties have some recourse in the event of a bad interaction with a vendor. The problem is that this creates significant transaction costs for both vendors/users compared to a traditional marketplace, so its only really useful for goods that would not be allowed on traditional markets.

A better approach might be to look into an arbitration system, where sellers are bonded in order to participate in general (rather than per transaction) and in the event of a dispute the arbitration network would be used to determine if the seller should compensate the buyer (and enforced because the seller has a bond that the arbitration network can control). Sellers don't need protection in the same way because of the immutable transaction finality that already exists on Ethereum.

A similar approach is being considered for the judicial system of Aragon, however, I don't think that resolving escrow services makes sense for that system. Instead a District0x specific network could be created (and use DNT for judge bonds) that specifically provides escrow service for all districts.

xibot commented 7 years ago

Great idea! For sure we need a district that enables this "easy decentralized" eCommerce directly without so many steps. It might be interesting to integrate maybe 0xproject protocol for trading tokens as I believe they have partnered with district0x for payments. They could manage all the sending txns, the cold storage(for incomplete orders, refund, etc), the receiving & all over the payment system. We need to make all crypto payments feasible for mass adoption to buy & sell goods and even services as well! :)

darryljamison commented 7 years ago

I was actually thinking about this very topic the other day. This is definitely something I think has potential and should be built onto the District0x network! The more widespread crypto becomes the more people will want to transact directly with it instead of having to convert to fiat and deal with fees/taxes.

chickenpie347 commented 7 years ago

@quantumdwayne I think since d0x already supports 0x protocol, 0x-based crypto trades would be a great way to go! We can utilise 0x with the marketplace functionality of district0x. Great idea!

quantumdwayne commented 7 years ago

@darryljamison Thank you for the kind words!

quantumdwayne commented 7 years ago

@98farhan94 Absolutely. I think 0x integration within District0x is inevitable. Being able to buy a computer with Augur REP tokens would be awesome. :)

Bradymck commented 4 years ago

Hey @quantumdwayne,

I'm not sure if you're aware but we recently launched a new bounty to migrate your proposals to the actual District Registry: https://registry.district0x.io/

We're replacing the old voting app with the registry. Let me know if you need help but I would love to see you migrate this over so you can claim your DNT.

It does take a 10,000 DNT submit to submit your proposal but this gives you an extra 2000 you can stake in the registry beyond the deposit amount.

Hit me up on Telegram or Discord if you need help or have questions.

Telegram: https://t.me/district0x/75217 Discord: https://discord.gg/P9RQejv

PS, please excuse the canned response. I am encouraging everyone here to start migrating so they can claim their 12000 DNT.