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Circle-Unstoppable domains push for better UX in crypto

source-logo  bravenewcoin.com 05 August 2021 14:30, UTC

On August 4th, blockchain domain name provider Unstoppable Domains and global blockchain financial technology provider Circle will introduce a simple, easily readable username system for stablecoin payments. The following article explains how the move will improve crypto’s user experience problem.

Usernames for stablecoins

Circle operates the popular US Dollar-Coin (USDC) stablecoin. Through integration with Unstoppable Domains, lengthy alpha-numeric USDC wallet addresses will now have the option to be replaced with easier to read .coin addresses (i.e. dextrading.coin). This will enable simple transfers of USDC between wallets, across DeFi apps, and between exchanges.

_Source: The Block. USDC is the fastest-growing stablecoin in the space_

Similar to how popular traditional finance payment apps like Paypal, Venmo, and the CashApp use usernames to simplify the process of sending US dollar payments across the network, the new .coin addresses will make it easier to send digital US dollars across blockchain networks.

For users, the ability to transfer to a username, as opposed to an intimidating blockchain address, should reduce some of the fear of making stablecoin payments. US dollar stablecoin payments are generally a better medium of exchange than Ethereum or Bitcoin for most crypto users due to the inherent price stability of stablecoins such as USDC. This new User Experience upgrade may help the USDC bridge the gap to retail and traditional finance markets.

The cost of a .coin address starts at $40 on the Unstoppable Domains website. There are no renewal fees, so once you are assigned a .coin address it is yours forever. These addresses can be used for USDC payments across any of the 50+ wallets and exchanges that Unstoppable Domains supports, as long as that service supports USDC.

Crypto has a UX problem

Poor UX has long been a significant hurdle that has held back crypto adoption. To the initiated, those willing to spend hours going through the bitcoin.org resources section and poking around in the dark testing buggy, open source apps, the chore of dealing with the web of operations and applications is a necessary inconvenience. For the majority, however, the complicated security setup involved in managing crypto independently is too much of a bridge to cross.

When a user searches “how to secure my cryptocurrency”, the most common piece of advice received is to store assets in an offline hardware wallet. A hardware wallet is a physical device that stores the users’ blockchain keys offline. This means they are not ‘live’ and cannot be compromised by hackers. This may sound simple enough but things start to get messy when a user wants to access the crypto or move it around.

Trezor is one of the top two manufacturers of crypto hardware wallets along with Ledger. Unfortunately Ledger recently suffered a data breach that exposed sensitive private information about thousands of customers.

The user setup guides for Trezor’s two current hardware wallets, the Trezor One and the Trezor Model T show that there are many steps to complete to use one of these wallets. The reason for this is that nothing comes pre-installed on a Trezor wallet, all the software associated needs to be downloaded manually across multiple steps.

_Source: Trezor_

A Trezor hardware wallet needs to be set up to communicate with ‘Trezor wallet’, a web interface for communicating with the hardware wallet to manage assets and initiate transfers.

The setup article begins by stating that there are four ways for your device to communicate with an application called ‘Trezor Wallet’. Some users may be confused already given that the device itself is referred to as a wallet and it needs to connect with ‘Trezor wallet’ which is an interface and not another wallet.

The article mentions two ways to connect with a Trezor wallet, either via a ‘Trezor Bridge’ or ‘Offline with command line tools’. Trezor Bridge, the easy option, involves downloading another piece of software called Trezor Bridge, ‘the most optimized solution’ from the Trezor website.

After establishing a connection with Trezor wallet, there are more steps that need to be completed before the wallet can be used. These involve going to the Trezor website, downloading the latest firmware, creating a new wallet by interacting with the interface on the hardware device, creating a backup of a recovery seed phrase, naming the device, and setting up a seed phrase.

There are real risks associated with using crypto websites in crypto. The Trezor website asks users to bookmark the setup page because of potential phishing attacks. “By creating a bookmark, you will be able to avoid unnecessary googling and distractions that aim to get you to a fraudulent site,” says Trezor. Warnings like this are disconcerting for uninitiated users who are used to the smoother payment experiences in the traditional finance system.

Why is crypto still unsafe?

For most people in the West, dealing with money is relatively simple. An individual works, they earn a wage, the wage is deposited directly into their bank account. To access this money they can use a plastic card that is accepted everywhere and is easy to use and set up. Alternatively, they can withdraw physical cash in the form of paper notes and coins which are physical, touchable, and also accepted everywhere.

For those who prefer to deal with numbers on a screen, banks have online bank applications that are easy to use, simplified, and have systems for password and account recovery to prevent user error.

Flavio Lamenza, a senior UX designer for SKY, writes a popular UX blog. In 2018 he wrote a blog that reviewed cryptocurrency UX across exchanges and wallets. Lamenza was highly critical of cryptocurrency UX writing “If Bitcoins and Cryptocurrencies are the future, how come it is so unsafe?? As a user I am not only lost, but scared.”

Crypto’s UX is improving

An initiative like the Circle-Unstoppable domain partnership is important because it adds a layer of familiarity and intuitiveness to the crypto retail user experience. This has long been a conundrum for crypto product builders — do we build products that users already know how to use or do we refuse to make concessions and wait for users to learn the skills required to navigate the crypto ecosystem?

In June 2020, US-based crypto security specialists Casa announced a new mobile wallet that removed the complicated seed phrase management system. The product was targeted at "first-time Bitcoiners." The Casa wallet offers a completely seedless setup. The only requirements are an email address and a name (can be an alias). Casa says the wallet is perfect for securing smaller amounts of BTC and is an effective introduction to the Bitcoin idea of “being your own bank.”

DeFi protocol Compound has also launched a product to simplify interacting with crypto for institutional clients called Compound Treasury. In cooperation with Fireblocks and Circle, Compound Treasury will let neobanks and fintech firms send real physical US dollars that are converted into USDC where it will then be deployed on Compound for a guaranteed interest rate of 4%. This is a much higher rate than can be obtained in traditional finance.

In July, Coinbase launched a USDC based interest rate product that appears to be a retail-focused alternative to traditional savings accounts. The post announcing the launch notes that the national average for traditional savings accounts currently hovers around 0.07%, and that even high-yield savings accounts still fall well short of even 1%. Coinbase notes that USDC can be converted one-for-one for real US dollars and vice versa within the Coinbase platforms and that account holders can “earn 8x the national average of high-yield savings accounts.”

Importantly, the loaned USDC is not protected by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation, unlike typical savings accounts in the United States. Coinbase presents its new USDC rate as a middle ground passive income offer. It notes that it is different from “crypto interest accounts that offer attractive rates on customers’ assets. While the high-interest rates are appealing, they can present varying levels of risk.” Coinbase says such accounts involve too much third party and credit risk.

Coinbase, Circle, Compound, Casa, and Unstoppable Domains are clearly taking a Goldilocks approach with their UX-focused products. Not quite traditional finance, not quite pure crypto, somewhere in the middle. To make a product like these, concessions had to be made around decentralization and independence from regulators. However, it’s likely that the result will be a steady flow of new entrants into the wider crypto economy.

bravenewcoin.com