E-commerce plays a vital role in the global economy these days. In 2021, retail e-commerce sales amounted to approximately 4.9 trillion U.S. dollars worldwide. This figure is forecast to grow by 50 percent over the next four years, reaching about 7.4 trillion dollars by 2025.
Blockchain technology makes transactions safer and faster, the potential impact on e-commerce is tremendous. It is estimated that, globally, nearly 4% of the world's consumers hold cryptocurrency. However, there are only around 18,000 businesses worldwide accepting cryptocurrency as payment.
As we dive deeper into the field, there is a lack of a payment system natively designed for e-commerce transactions on the blockchain.
Sellers need a tool that is easy to integrate into their existing online shop and allows them to seamlessly handle e-commerce process flow like cancel order/ return/ refund.
Buyers, though excited about the faster and easier transactions, not having the ability to get a refund once they make a payment is a deal-breaker.
If we can implement a proper payment system on blockchain, we can open the door for mass adoption.
What it does
Libra is a decentralized payment system. With its native token, Libra DAO is mainly used for user-centric governance and incentive rewards for transactions and contributions.
There are four main components:
- Lock and Release protocol: provides a safe mechanism for transactions on blockchain. It locks cryptocurrency on order placement and release cryptocurrency once the order is completed. In case of cancellation or return, it can initiate a refund.
- Dispute Resolution network: is a community based on Resolvers, who must stake their Libra token to become a network member. As they resolve transaction conflicts, they gain more credit and earn tokens as a reward.
- Payment SDK: allow sellers to start accepting cryptocurrency as a payment method on their website through a few lines of code.
- Wallet: is specially designed to be safe for day-to-day usage with a high-security standard by default and remains user-friendly for novice users.
While LRP and DRN make up the foundation, SDK and Wallet are mainly for adopting seller and buyer to the platform.
How we built it
After finding the idea of Libra, we start thinking about how to implement the concept. We deep-dived into the cryptocurrency technologies and compared the pros and cons of each. Finally, we engaged with Substrate and Polkadot for the reasons:
- Scalability and stability: We strongly believe that an e-commerce payment system needs stable throughput and not be affected by the gas race with other dapps. We choose to build a chain instead of deploying smart contracts.
- Easily building a new blockchain with technical freedom: With the Substrate, we do not need to build the blockchain from scratch, but we can customize it to fit the business requirements if required.
- High security: We have to say that it's impossible to set up a new high-security blockchain for the team with limited resources in the early stage. But leverage the shared security of the Polkadot, we believe we can build a secured blockchain with our team resources.
- Strong ecosystem: We prefer not to re-invent the wheel; the Polkadot offers us to connect with other para-chains through XCM to use their services i.e. stable coin (Acala USD) for the stable coin payment, DEX (HydraDx) for currencies exchanges, borrow and lending for credit payment services.
Once we chose the tech stack, we started to build Libra by joining Polkadot APAC hackathon and continued research and making Libra until now.
Challenges ran into
The biggest challenge we faced was the new tech stack and new product mindset. Besides, while the Substrate framework offers powerful tools to build a blockchain, it still lacks Rust libraries cause of the
Accomplishments that we're proud of
Given that the 6-week hackathon is short, we're so excited and get inspired by the process. We managed to build Libra's foundation and a proof of concept Checkout to demonstrate our idea.
What we learned
We have learned a lot of things in our journey, from Rust langue to building a blockchain. That is a fantastic journey for us.
What's next for Libra - Decentralized Payment System
Given the ambitious vision, the only way to achieve it is to keep moving forward every single day.
Our next step is completing the Checkout shop product and deploying Libra to the Kusama network to test our idea with an actual userbase. In the meantime, we will build the SDK and Wallet and find the product-market fit.