Originally published in the ChangeNOW blog
While being overwhelmed with the market hype, this instant exchange service offered its users to finish all DOGE exchanges at a fixed rate! Read how and why we did that below.
Current Status (11:30 AM 01/31/2021) – Most problem exchanges have been finished. Right now, there are 280 exchanges stuck in manual mode and a handful of Failed transactions. The team is working to finish them all by the end of today. Read the complete update at the end of this post.
It all started with a question (8:13 AM UTC, 28/01/2021)
“Has Doge ever been to a dollar?” This very question was asked by WSB Chairman, one of the leaders of the wallstreetbets Reddit community on Twitter. The entire community picked up on the idea. r/wallstreetbets turned its attention to DOGE – the coin that was created with no purpose of practical application other than having brilliant dedicated supporters. What happens when two communities of keen enthusiasts find common ground? Yeah. Magic happens. At this point, the rate starts to grow.
DOGE goes to Mars (1:27 AM UTC, 29/01/2021)
At 1.47 am UTC on January 29th, Elon Musk published the cover of a joke magazine DOGUE, which pumped the rate even higher – DOGE went from 0.02 to 0.04 USD.
As was expected, the former Dogecoin CEO’s (as Musk claimed himself) call was heard and the coin went up. From 4 to 10 AM, DOGE experienced an all-time high of $0.082. The joint efforts of DOGE lovers, the SpaceX founder, and the WSB community made it possible to launch DOGE to infinity and beyond.
Node down! We’ve got a node down! NODE DOOOOWN! (3 AM UTC, 28/01/2021)
ChangeNOW watched the growth of DOGE rates. We saw other cryptocurrency exchange services disabling DOGE exchanges, one by one. We could have joined them, but we had hoped that our tech infrastructure was perfect and we’d carry the load. In fact, on January 29th, when all other services suspended their operations, ChangeNOW was among the few exchange services where people could still actually swap DOGE.
Our deposits and withdrawals began to shut down at the very peak at 3 AM. At this moment, we decided to fully rely on our liquidity provider’s node and proceed with all exchanges.
Market reaction and liquidity provider shutdown (4 AM-9:30 AM UTC 29/01/2021)
At 9 AM our liquidity provider’s node gave up – as did the liquidity provider itself.
From that moment on, we stopped all DOGE exchanges, as we lost any technical capacity to process exchanges.
The Darkest Hour. The Decision Had to Be Made. (9 PM-10:50 PM 01/29/2021)
So at this point, we end with the situation when new exchanges cannot be created anymore, numerous exchanges that were created right before the meltdown are stuck, and people all over the internet naturally start to worry: what happened to their money? This caused an overload for our support service. All communication channels out there were letting us know that we sucked. Our service sucked. We were cheating our customers out of their profits. What else could they think? We already received numerous deposits, some of them were already sent to exchange, some of them already exchanged – but rates were changing much faster. While our tech team was finishing every exchange manually and the support team was trying to calm the customers down, top management had a tough decision to make: what do we do with all the stuck exchanges?
Justice in a world of injustice
Typically, a company has three ways out of a situation like this.
- Refund each and every customer – give customers all their money back. In other words, not providing the service advertised at all. Pretend as if nothing ever happened.
- Carry out all the payouts at the current estimated rate. In this case, the difference between the initial rate and the final rate would have meant losses for the customer, but the service could have avoided this loss.
- Process all the exchanges as though they were meant to be exchanges at a fixed rate. In this case, the customer would get their money according to the rate that they saw when creating the exchange, no matter if the market went up or down. If we went with that, we would suffer losses, as a lot of exchanges had a much lower rate by then.
The decision came to us fairly easily. As soon as our node was back to normal and our liquidity provider could service us, we would proceed with all the exchanges at the rate that the customers saw when initiating the exchange despite any volatility and despite any losses on our side. We wanted to provide a high-quality service to our customers: you create the exchange, you agree to the rate, and we finish your exchange no matter what. Yes, some of the exchanges took hours to finish – but in the end, we finished all exchanges according to the agreed rate.
The thing is, we believe the growth of the crypto community is impossible if there are no safe and responsible services that can carry out an exchange of assets between people, regardless of the situation on the market.
The crypto market is a highly volatile place and you have to accept the rules if you want to play.
However, we just couldn’t accept the fact that both the DOGE and WSB communities would suffer because we were not able to finish all your exchanges instantly and made them wait. Therefore, processing everyone’s exchanges at a fixed rate was the right thing to do to follow our principles.
Another Update (11 AM 31/01/2021)
Important message on stuck DOGE exchanges!
The exchanges that we promised to handle on a case-by-base basis will be split into 2 groups.
Right now, there are 280 transactions stuck in manual mode. The first group will get a profitable outcome with us pushing their exchanges at the initial estimated rate.
The second group will get out with a profit if we trade their deposits at a current rate.
As our customers are our top priority, we will execute those exchanges so that all of these customers come out at a profit in the end.
We will take your side in this. Always.
We would like to extend our most sincere gratitude to:
Everyone who trusted ChangeNOW with their funds, everyone who left us a review and let us know that something was wrong, everyone who trusted us and waited for us to make a decision, everyone in the DOGE and WSB communities, Elon Musk, everyone who made this a difficult, but extremely useful test of ChangeNOW’s capabilities. We now know how to make our infrastructure stronger, how to make our service more reliable, and, most importantly, we know that even though we work in fintech, there’s something a lot more important than money. Good karma could be one example of that.
Final words of newly-acquired wisdom:
- DOGE community rules!
- ChangeNOW has to add more liquidity providers to ensure the stability of the service in moments of market craziness.
- ChangeNOW will increase our support team to make sure we could process the exchanges faster
- One should never underestimate the amount of hype possible in our market. It is always worth having a “reserve” of all capacities: equipment, liquidity, providers, people, etc.
Make no mistake, guys – we learned our lesson! Next time such a hype happens we will be ready.