What is Ethbay?
Ethbay is a marketplace where people can buy and sell items using Ethereum as a base currency. In the future, Ethbay plans to add additional features like Ethbay Services where users can buy and sell services using Ethereum in addition to goods (essentially a decentralized fiverr). And also Ethbay classifieds where users can buy and sell locally using Ethereum. It is one of the first truly anonymous marketplaces in existence.
No personal information is required to sign up and people are ready to begin buying and selling immediately upon registering. Transactions are protected under an ultra secure Ethereum smart contract escrow to keep both the buyer and the seller safe. Unlike standard fiat marketplaces that charge 10-15%+ fees to the seller, Ethbay charges a low 1% fee to sellers making it a much better option for sellers than traditional marketplaces. Ethbay also eliminates listing fees that many competitors charge. A 25% bonus will be given to people who invest within the first 48 hours of the ICO, 15% bonus for the first 7 days, and a 10% bonus for the first 14 days.
Online bidding platforms have been all the rage since they first appeared a couple of decades ago. Giving users the ability to connect with each other to buy and sell directly without a middleman, they quickly became wildly popular, as well as part of the established culture of the Internet. With time though, a number of niggling and persistent problems with their operational models began to show up.
First of all, the use of such platforms to perpetrate fraud is nothing short of notorious. One of the most common scams in existence a few years ago was to offer an item for sale, accept a winning bid and then request payment before delivery. Upon delivery, the poor buyer would discover that they had received something altogether different from what they ordered, usually a cheap knockoff or a poorly-done fake.
Another popular scam was to bid for an item and win, after which the fraudster would then present proof of payment to the seller which was either forged or invalid. The seller, not knowing any better and eager to please an ostensibly paying customer, would then deliver the usually expensive item, only to find out after a few days that no payment was ever made, and they had in fact been rumbled.
These experiences negatively colored the experience of online peer-to-peer ecommerce, and even briefly threatened the existence of some of the largest auction sites. In 2018, following recent advances in the use and application of blockchain technology, all these need not be the case. It is now possible to enjoy the experience of a practically fraud-free platform that does not charge listing fees and goes out of its way to make the process of carrying out peer-to-peer business an easy, straightforward and risk-free one.
With consistent emphasis on use of smart contracts across the platform for a variety of functions, this also aims to be a 100% transparent platform which keeps no secrets from its user community and is in fact owned by them through the issue of its platform-specific cryptocurrency called EBAY.
Ethbay is an online marketplace that is closely similar to eBay, permitting users to buy or sell tangible or intangible items using Ethereum. At a price of just 1%, Ethbay charges a substantially lower fee than eBay or any other standard fiat marketplace. Ethbay charges no listing fees for sellers on the platform, opening up the space to free listings, which is in stark contrast to the accepted industry standard. Best of all, holders of the EBAY token are entitled to proportional shares of whatever fees are generated on the platform.
The ambition of Ethbay is to become a world-leading innovation in the online commerce space. The case for this innovation and its proposed business model and operational philosophy are what will be dealt with in this paper.
Users of online auction platforms and bidding sites like eBay face 3 major issues/challenges that detract from the value they are getting from the service. These issues are as follows:
- Excessive fees for transactions and listing. Despite collecting transaction fees worth up to 9% of the sale amount, many existing platforms also charge listing fees. So a user of one of such services basically has to pay twice to make use of a service that they do not even want to pay for in the first place. After paying a fee for the item to be listed, they also must cough up as much as a tenth of the item’s value in fees to the auction platform.
- Lack of security in carrying out transactions. As noted at the outset, the general lack of security and preponderance of fraud on these platforms has severely affected customer experiences of online auctions for the worse. One of the commonest types of fraud on the Internet is advance-fee fraud, also known as 419. Online auction sites permitted this type of fraud to remain and thrive because there was no real mechanism for preventing buyers or sellers from handing over their money or goods to people they do not know. Till date, doing business on some of these platforms can be likened to gambling, because there is never any sort of guarantee that the desired goods will actually show up in exchange for the money, or that the money will show up when it is supposed.
- Lack of any long-term reward for platform loyalty. Some online auction sites have been in existence since the late 1990s and yet have never come up with any meaningful way to reward, recognise or appreciate their long-standing users who have contributed to the success of the platform.
Ethbay takes these three problems head on with an innovative solution that eliminates listing fees, radically reduces transaction fees to just 1%, incorporates an ultra-secure Ethereum smart contract escrow solution, and even includes a platform-specific cryptocurrency that tracks the value and popularity of the platform, rewarding its holders with substantial returns on their investment.
How it works?
Now that the problems necessitating the establishment of a third way have been established, how then does Ethbay work, and does it really satisfy the requirement for being a third way?
To begin with, at the point of registration on the platform, anyone from any country can register onto the site. No user information is required. An account ID will be generated that users will be asked to save. They will be asked to set a password for their account and will be given a 12-word mnemonic phrase that can be used to reset their password if they forget it. Buyers may add their email address to receive notifications from the site regarding their orders or sales if they wish but it is not required. In keeping with the blockchain’s theme of anonymity, this platform attempts to place as little focus as possible on centralization of any sort.
Two factor authentication will also be available (but is not required) for added account security through scanning a QR code with a mobile device or having a text message sent to your phone number with a 6 digit code to validate any login attempts. Changing this phone number will require the entering of the user’s 12-word phrase so hackers won’t be able to easily change the user’s phone number.
Sellers can list any item they wish to sell, except for fraud or drug-related items as well as any other items that are illegal to own. Sellers will need to provide an Ethereum address where they want to receive payments for any sales they make. Items can be listed as either an auction with the start time and duration indicated by the seller or as a fixed price listing. A search function will be available, so buyers can search for the seller’s item based on keywords. Buyers can also select a category to search under and can browse items under a certain category with or without entering a key word. When searching, the buyer can select items for sale to be sorted by best match to the key words searched, price (high to low or low to high), or time listed (most recently listed or time ending soonest).
When a buyer has found an item they wish to purchase, they can enter their maximum bid amount for auctions in a similar way bids are submitted on eBay. If the buyer’s maximum bid is higher than the previous bid, the bid will only show the minimum amount required for the buyer to be the high bidder based on the previous high bid and bid increments. And if new bids are submitted that are outbid by the maximum bid, the original bidder’s maximum bid will also only increase by the minimum amount required to remain the high bidder. Once the auction ends, the winning bidder will be given an escrow address (all transactions are protected under escrow) to send the Ethereum to. Once the Ethereum transaction is confirmed, the order is officially confirmed. This same checkout process is also used for fixed price listings after the buyer commits to buy the seller’s item.
Once the buyer receives their order and are satisfied with their purchase, they can release the escrow to the seller. If the escrow is not manually released by the buyer, it will automatically be released to the seller after 30 days. However, the seller can file a dispute requesting an earlier escrow release if they feel the buyer is unfairly holding their funds or is being non-responsive to the seller’s messages. Released escrow payments are automatically transferred directly to the seller’s Ethereum address they have on file (this can be updated at any time).
There is a 1% escrow fee deducted from the sale amount when the escrow is released to the seller. These escrow fees are shared among the token holders. There are no listing fees, fees are only charged after the transaction is completed. In the event of a dispute (the buyer didn’t receive the item, or the item was different than what was described in the listing), the buyer will be allowed to file a dispute within 30 days of the purchase. The buyer and seller will be asked to work together to come to an agreement to resolve the dispute. If no agreement is reached or if one party fails to follow through on an agreement, the case can be submitted for review to the Ethbay team.
Ethbay may request additional information from each party and will then thoroughly review all information provided and decide based on the supplied evidence as well as the buying and selling history of the parties involved. If the case decision involves a refund to the buyer, the buyer will be returned their original payment to the Ethereum address that they indicate. No escrow fees will be charged. If the decision involves the funds being released to the seller, the standard 1% escrow fee will be imposed on the funds the seller receives. Sellers with numerous disputes filed against them or buyers found to be abusing the dispute system will be suspended.