Designing for Decentralized Finance
Designing products that extend financial services to anyone
For our third and latest meet-up, we focussed on the growing area of decentralized finance. The topic of many a conversation in crypto circles, we wanted to find out how teams were hoping to design these services for the mass market of no-coiners and sceptics.
So we invited folks from Argent, Mode and MakerDAO to talk about their users’ problems, their design challenges and value proposition. Here’s a little about them and their products:
Janis, Head of partnerships at Mode
Mode has a suite of financial business products including crypto-backed loans. These allow you to borrow stable currency while not having to sell your more volatile crypto. So you can continue to hold and pay the bills. But they’ve also just launched a new bitcoin wallet application aimed at making it easy for anyone to manage their crypto.
Chris, Product manager at Maker
Maker are one of the biggest names in DeFi. Of the 487.3 million USD locked up in DeFi products, 247.9 million is locked up in Maker. They also gave us Dai, probably the most famous stablecoin, a crypto token soft-pegged to the US dollar, meaning its value always stays within a few cents of $1. There are countless DeFi products building on top of Maker’s protocol.
Graeme, UX & design director at Argent
Argent are the first example of an Ethereum smart wallet. If you’d have asked the crypto community 1 year ago what the greatest obstacles for interacting with crypto are, well… Argent have pretty much solved them with their wallet. They’ve actually recently integrated Maker loans into their wallet, showing just how collaborative this open-source space can be.
But before we dig into what we discussed, let’s rewind and do a quick definition of DeFi and explain why it’s interesting.
Demystifying DeFi
I started the evening by giving a quick overview of DeFi. I’ve spent some time researching DeFi and designing components and patterns for DeFi products as part of my work for Rimble and the ConsenSys design team.
The main points are as follows:
- Decentralized finance (DeFi) is a movement of people and teams working towards a world where financial services are available to anyone with an internet connection
- DeFi products are built to be integrated and built on top of — the movement is open-source to foster rapid innovation. That’s why some people call it Money Legos.
- Blockchain can power this movement because it’s trustless — these services can work without a traditional trust layer like a bank thanks to smart contract technology. And it’s permissionless, meaning you don’t need anyone’s permission to create an account.
- DeFi has already started to change crypto behaviours of crypto. Buy ☞ Hold ☞ Sell has given way to: Buy ☞ trade, borrow/lend, earn and more
- 487.3 million USD is locked up in DeFi products — it’s one of the product areas in decentralized applications that is really getting users
- A lot of teams in this space don’t have designers. Meaning a lot of cool ideas, but not always usable products.
Lightning talks
Janis, Graeme and Chris each gave a short talk describing how their products have brought value to the space and its users.
Janis gave us a quick demo of Mode’s new bitcoin wallet.
Graeme from Argent showed off the Argent wallet in a rather novel way. To show off their security features, he sent me 10 ETH. At around £2000 that triggered a 24 hour delay to the transfer because it exceeded a daily transfer limit (configurable within Argent). This unfortunately gave Graeme ample time to cancel the transfer. My holiday to the Bahamas will have to wait but nevertheless this showed an interesting and effective solution to the problem of keeping users’ funds safe.
Chris talked to us about some of Maker’s design challenges. Particularly interesting was their dilemma of appealing to a mass market without losing the early adopters.
Most of Maker’s early adopters use Maker because it’s decentralized. That in itself was enough of a benefit to attract them to Maker. But decentralization alone won’t cut it for mainstream.
Maker are keen to improve the product experience for their early adopter users. But these users are more technical and savvier with blockchain technology which, when designed for, can create obstacles for mainstream adoption. The goal now is to hone in on the product content and see how they can design an experience that is easy to use and understand, while promoting their decentralized credentials for those that care.
The panel discussion
Following the lightning talks we fired a series of questions at our panel — some our own, others submitted by the audience. We covered user research, abstracting blockchain, increasing adoption and finding design talent in the space.
Here’s a rough, paraphrased overview of the discussion:
What’s the biggest user problem your product is solving?
Discussion on user problems lingered on the language used in DeFi products. And how these products had to deal with the technical jargon of blockchain and financial jargon of well… financial services.
Graeme (G): We want our products to be as easy to use as Monzo. We see no reason not to push for simple ways to get people to understand what we offer. We use regular language so people can understand.
Janis (J): We’re going to be regulated and also listed soon, so we are very careful about the language we use. We try to be simple, but even words like “Fiat” are intimidating and not well understood.
Chris (C): You have to ask yourself who is the target user? Our Collateralized debt position (CDP) product is targeted at a financially literate user. But we want Dai to be the mainstream… and mainstream users don’t need to know that Dai is generated via CDPs.
On CDPs:
How much of the blockchain should be abstracted from the product proposition?
G: Eventually we should completely abstract. We can abstract detail and still be transparent and truthful. It’s about ordering what you show first and then allowing people to dig into the detail.
J: We think our users don’t really care about the technology, they’re focussed on the value. They just want to know it works. Even if it’s fascinating, the technology isn’t valuable for the user.
In the absence of regulators, how are you going to convince people that it’s safe to store their money with you?
G: We rely on experts to signpost things to trust. My dream would be for Martin Lewis to one day say “You can trust crypto and here are the companies to trust”, with Argent being one on that list. But we’ve also gone through security audits and do bug bounties to make sure Argent is as safe and secure as possible.
C: Just look at Web2 applications… we have things like TrustPilot offering reassurance to users for relatively unknown services. This kind of social proofing could be big for the crypto space too.
Are we trying to move to Web3 (complete decentralization) too quickly? Should we make more effort to ease people into via a Web2.5?
G: We are already kind of operating in that Web2.5 world… we have push notifications to let you know when transactions are done and emails if you change your daily transfer limit. Currently we ask for your phone number — this is so one person can’t create thousands of accounts and drain our funds overnight (we pay to deploy every new wallet on the network). But we’re looking at a future where maybe you could choose to provide a phone number or pay a fee. This way the next iteration could be more decentralized.
What’s your business model?
C: We have a foundation for covering costs and reinvesting money into our products. We hope this will be self-sustaining by taking fees.
J: Our service is free but we charge money on the fiat to crypto conversion. We will eventually phase this out as we start to hold crypto ourselves.
G: We cover users’ transaction fees and it costs us every time we deploy a new wallet. For now we have money in the bank but in the future we could possibly see subscription models or a low fee contract model — it would be fully decentralized, fully non-custodial and within your control.
Has user research shown anything surprising that you weren’t expecting?
C: We’ve had surprising feedback on words we thought were easy, for example “Vaults” for our CDPs. Although you lock up your Ether in a CDP — hence “Vault” — the fact that a CDP is by nature a little risky made “vault” a poor choice of word in our users’ minds.
G: We’re testing very often and there’s always stuff that surprises you because you’re so focussed on designing the product. They key is to test early and often to reduce the impact of those surprises.
How do you make sure the design voice isn’t drowned out by the tech?
J: We have those battles, also between Legal and Design. There are lots of guidelines we create to try and be more human and frame it in terms of anticipating and preventing user mistakes.
C: Although it wasn’t always the case, designers are now fully integrated into developer teams. This is making our process better and our products more user friendly.
G: We’re fortunate that one of our founders comes from a consumer-facing background. The whole co-founding team are very grounded in the user problems we’re solving.
How easy have you found it to hire talent in design, content and research?
C: We’re lucky as most of our hires have actually come to us. We have a global design team because Maker doesn’t have a fixed location. Without geographical restriction we can tap into a global talent pool.
J: We’ve not struggled to find talent… we’re actually hiring now!
G: We’ve found it difficult to find talent. We want someone who can think in terms of systems but who has an eye for the detail too. We’ve been picky but it’s a must-have combination for us. We’re currently a distributed team too, but we limit our scope to Europe so that the team can travel and meet up with each other as regularly as once a quarter. We use that time together to hack features and strengthen our personal relationships.
In typical Decentralized Design fashion, everyone stuck around to discuss DeFi further until closing.
Thank you to everyone that came along. And if you couldn’t make it, I hope this article gives you the info without the FOMO.
Thank you to Argent, Maker and Mode for sharing their stories with us.
And thank you to our generous sponsors: ConsenSys and RMG digital.
Decentralized Finance is not only exciting in its potential but also in the design challenges that teams are working on right now. It’s also probably the space in the growing world of decentralized products that’s most ready for mainstream adoption and most exciting for design folk. So if you’re interested in getting more involved, keep an eye out.
Join the Meet-up! Decentralized Design ☞
