Xerxes

A decentralized Lending and Borrowing Protocol, providing income to Lenders and Loaning
opportunities for borrowers with need any crypto asset of your choice

Xerxes is a lending protocol strategy product on the web3 Ecosystemn that enables crypto users to borrow and or lend their crypto assets

Xerxes gets to solve the issue of crypto lending and create a financial support system for crypto holders and traders who have some financial needs and don't want to liquidate their assets and still have access to funds for their needs or investment purposes.

Role

Product Designer

Client

Xerxes

Duration

2 months

Year

2021

Problems Faced by Users

For every crypto investor, there has been one major statement we get advised with before we being and that is “Don't put in more than you can lose”. But this is one piece of advice we know but like me, a lot of users fail to uphold.

The frequent dips in cryptocurrencies have been that of major benefits and also losses on a lot of users which often places users in a tight spot especially those who have a dire need for their investments.

A lot of users tend to embrace the HODL stance and keep their funds for two major reasons; The faith in the tokens to rise back based on its historical proofs and the pain of selling now and incurring all the loss.

This has kept a lot of users facing serious financial problems, those who have to starve or lack some basic amenities because their funds are tied up suffer from it.

What Does Xerxes aim to Achieve?

Crypto Investments do not need to be one that financially cripples you, the goal is financial liberation both short and long term.

Xerxes hopes to bring a solution that allows users access to lending systems whereby you can borrow tokens either stable coins or others with the collateralization of your crypto investments and sort out whatever financial needs, you don't need to tell us without ever having to sell and be on the losing side of the dip

Also what is a DeFi Protocol without investment opportunities, so we aim to make the system embrace the decentralized nature of web3, hence we aim to facilitate a peer-peer lending system where the borrowers would be incentivized with profit for borrowing their extra cash to those who need it in a secured nature.

Research Time

During the research phase, we engaged with a lot of users in the web2 space and also the web3 space because the goal of the project is to understand the psychology of users wanting to borrow funds and leverage off lending protocols, and due to this technology being utilized in the web2 space already we needed to understand from a solutions perspective. But we understand that the methods of the approach of lending in web3 are different because of the peer-peer fashion we also needed to understand how similar protocols in the web3 space carry out lending and borrowing.

After listening carefully to a couple of users in some one-on-one interviews scheduled on google meet, and some sharing the vision session with the product owners I was able to identify some business needs and at the same time identify the pain points of the users and able to come up with some deductions.

Deductions

The research has shown that it was crucial for the success of the project to identify the pain points and translate them into solutions

Users needed a way to borrow money without necessarily supplying first
Customizable Loan Terms
Repayments flexibility, I can decide to clear my loans once or set recurring payments connected to my wallet
Transparent risk assessment
The ability to multiple tokens from the wallet to borrow one asset on the platform
Repayment terms and answered questions
Clarity on terms used in the lending/borrowing cycle

User Personas

Based on the generative user research I conducted, I created user personas that capture the essence of both user categories so its easier to personalize the experience to addressing the users pain points

About

Wade Warren is a 26yrs old Human Resource manager who invests a lot in crypto, he isn't so experienced with trading and other forms of investments so he buys to hold long term, most of his holdings are in Ethereum and Doge

Goals

Wade needs a way to have funds to use for another personal run around and at the same time HODL his tokens because he doesn't want to lose out on any Rise
Wade also needs a way to borrow and be sure of the terms he is getting into based on bank lending schemes he is a bit untrusting
Wade needs a way to earn passive income with his tokens as he is holding long term

Pain Point

Not knowing how to get cash to spend so he ends up borrowing funds from friends to meet personal needs and sometimes the friends might not have the funds so he is stuck.

About

Rebecca Richards is a 29yrs old Sales agent at Chipper Cash she stays in Amsterdam. She is more of a take-profit seller and holds short-term until the token has yielded a substantial profit. She controls a diversified portfolio to maximize her luck

Goals

Rebecca needs a way to borrow funds when in need of cash and at the same time not risk her chances of a potential profit
Rebecca wants a way to borrow funds when they are high with a more stable token when she predicts the tokens will dip so she can leverage off the dip and earn profit as well
Rebecca needs a way to earn passive income with his tokens as he is holding long term

Pain Point

Overpriced interest placed on loans
Often when the price of a token collateralized falls in the market your collateralization limit might cross the safe point without her being aware and she might lose her collateral due to the protocol of liquidating it to avoid loss.

How Might We

At this stage I had to put together all the information I gathered so I could generate some How might we questions that guides the ideation process, which helps us to do with thinking of a solution based on the identified problem

Value Proposition - Customers

In the customer's profile, you describe the job your customer is trying to get done by highlighting customers pains and gains, it's used to track users needs and position the company’s to know more about the customers needs to properly create value

Value Proposition - Business

Here you list the products and services your value proposition is built on, describing in which way the product
features and services are pain relievers and outline how they are gain creators

User Journey Map

This same journey is similar to that of farms but we would be taking pool into account as that was the first test we made in the MVP that held the foundation of the product. This helped us analyze the user's experience and improve the product.

Design Decisions

From the research carried out, the data analysis from responses, and brainstorming session with those analyses, a design was carried out t properly account for every problem and pain points faced by the users in an inclusive manner and the design was split into two aspects both can stand as individuals products but merged into one to improve value to users

Dashboard

From the dashboard, you get to see your stand in the protocol with your NET APY the most obvious showing you the earnings all your investments (lending and borrowing) are yielding you at the end of the year. You also get to see the state of your borrowing limit which is a major factor as the borrowing limit determines if the assets would be liquidated to pay off the debt when the token price borrowed is getting greater than the collateralized amount

From the dashboard, you get to see your supply and borrow market, and can be accessed with a toggle from one to the other

We also aim to bring clarity to terminologies used so we introduced tooltips to do major explanations.

Borrow Market

All users can borrow any crypto asset of their choice from the listings provided by the protocol but with the provision of collateral of another token

Now we decided to make this as seamless as possible whereby normally you can get to lend to the protocol and this lent amount can be converted into collateral for any borrow transaction. But that requires the lending step. So now you can provide collateral directly from your wallet with the available assets and this would stand in as collateral for you.

You can use multiple assets based of your available balance and the amount requested to borrow as collateral for just one asset

We also provide you with analysis and metrics of that borrow pools activities and standings so you get to see your repayment APY and the strength of that borrow pool

Supply Market

Here you get to select out of the assets stated on the protocol for supply or lending and you can lend/supply your tokens to earn APY

Now if you see a supply that you want to invest in and you don't have that token, with our instant swap feature you can supply any asset of your choice and this gets converted to the token that is to be supplied and you can partake in that supply market with just one transaction fee no matter the quantity of the assets supplied with.

Repay Loan

You can decide to repay your loan when you are ready with assets from your wallet or with your collateralized amount, by doing this, your collateral is used to pay the loan and the balance is converted to the assets used to invest in if it was multiple assets or if it was from your supply market, the percentage distribution of the supplied tokens would determine the amount that goes to what assets.

Liquidation Notification

One of the biggest risks with Lending protocols is that your assets can be liquidated if the collateralized amount goes below a safe point that the protocol determines most times 80% in value and this is to ensure the protocol doesn't lose or incur a permanent loss

But we aim to keep the users in the loop at all times for a better experience. Liquidation is greatly affected by how the supplied collateral tokens are performing. there can be a dip in the asset which would affect the value of token talk and reduce the collateralized value and this can cause liquidation.

We are aware of all this and decided to go the extra mile to remind our users, and since this is a web3 decentralized application, we have few ways of contacting the user so we ask the users to provide their email and phone number, not for login but solely for reminder purposes of when liquidation point is close so they can either repay their loans and salvage their collateral or top up their collateral and maintain a safe liquidation point.

Key Takeaway's

Decentralization is undoubtedly a major trend in financial markets all over the world. The arrival of DeFi has changed the way people and institutions perceive finance. We have been witnessing many radical improvements in financial technology. The understanding of risks associated with decentralized exchanges can provide vital insights for identifying possibilities for improvement.

I enjoyed this project and the loads of learning attached to it, the psychology in bridging the world of experts and novices together to a unified value proposition was the peak of my experience

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Hit me up let's create something, fun, magical, a
digital solutions that would truly relate to the users and take
the business to the next level

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