An Improved User Story Map for a Collaterized Debt Platform
In order to improve my UX Design skills, I worked on a challenge prompt from Druids’ challenges on Notion: “ Create an improved user story map for a collaterized debt platform”.
Introduction
I didn’t know anything about collaterized debt platforms so, I had to make some research on them before I could think about doing an improved story map for these platforms. I started by learning the meaning of “collaterized debt platforms”.
A Collaterized Debt Platform(CDP) is a financial system or platform that enables borrowers to obtain loans by pledging collateral. In this context, collateral refers to an asset of value that the borrower provides as security to the lender. The collateral serves as a form of protection for the lender in case the borrower defaults on the loan.
CDPs are typically associated with decentralized finance(DeFi), and operate on blockchain networks. Some examples of collaterized debt platforms are: MakerDAO, Aave, Compound Finance, etc.
Typical Features of Collaterized Debt Platforms
All collaterized debt platforms have typical features which enables people to lend money and drop some form of collateral. Some of these features include:
- User Registration: Users sign up for the platform by providing their personal information. Advanced platforms perform KYC(Know Your Customer) checks.
- Collateral Creation and Valuation: Here, the user adds their collateral by depositing assets into the platform. The platform verifies authenticity and ownership of the collateral and evaluates the value of the deposited collateral based on predefined parameters and market data. This determines the borrowing capacity for the user.
- Loan Agreement, Disbursement and Repayment: Users can now request for loan specifying the desired amount and duration. The platform assesses and approves the request based on collateral value and other factors. Then, the loan terms, including interest rates and repayment schedule is handed over to the user and digitally signed once agreed.
- Collateral Monitoring: The collateral is monitored using trusted data sources, to ensure that it’s value does not drop and to implement proactive risk management steps.
Challlenges Discovered
Having gotten the main features, I read the reviews of some collaterized debt platforms as well as some articles. This gave me insights to some challenges many of them face:
- Security Risks: Most collaterized debt platforms are at the risk of cyberattacks, fraud attempts and unauthorized access. Measures has to be put in place to protect against these risks.
- Collateral Volatility: The value of collaterals, especially cryptocurrencies can be highly volatile. This volatility might affect the loan-to-value ratio and trigger liquidation events.
- Valuation Accuracy: Collateral assets has to be valued correctly before determining borrowing capacity and loan terms. This might be somewhat difficult because price fluctuates a lot and pricing mechanisms for some assets might not be established.
- Complexity: Some CDOs are very complex for users to understand. This is very challenging and it’s important to provide educational resources and clear communication channels between users and the platform.
An Improved Story Map
After discovering the challenges, I came up with a story map that eliminates most of these challenges and ultimately helps the user achieve their goals of using the platform.
Activities
The first stage of any story map is the activities stage. These are high level tasks users complete on the platform. For this story map, I came up with 5 main activities:
- User Registration
- Collateral Creation & Valuation
- Borrowing Request (Request for Loan)
- Loan Agreement
- Loan Repayment
Steps
Next up, I added the steps users would take to complete the activities above.
Details
Next, I added details- discrete interactions that helps users complete the steps above.
To Solve The Challenges
- The improved story map shows a secure user registration process, complete with KYC verification and OTP for additional security. .
- Collateral valuation can be cross-refrenced and confirmed from external sources for clarification, creating trust.
- The story map also simplifies the complexity of the platform, making sure users understand every bit of the process.
Conclusion
This was my first time working on a complex platform such as this, and I learnt a lot. I got to learn about collaterized debt platforms, and measures that would help with their user experience. This was definitely a bit challenging than other story maps I’ve worked on, and I loved every bit of it.
Thank you for reading this piece. Please drop a clap and a comment; I would love to hear your thoughts!!
