He left Amazon to build a decentralized banking platform

Alex Wearn, CEO and co-founder of Aurora

This article is part of Tech in Asia’s partnership with Decrypt Asia where we publish the revised transcripts from the show’s podcast interviews related to blockchain. This is heavily revised from the original transcript. For the full interview, go here or here.

Alex Wearn is the co-founder and CEO of Aurora, whose primary product is Idex (an Ethereum decentralized exchange). In this interview, he talks about the problems that Aurora is trying to address, how Idex works, and the need for a private currency.

Tell us about your background and how you got involved into crypto.

My background is one of economics and software development. I spent about a year at Amazon, during which I was working on Idex. When it gained enough traction, I jumped into it full time.

I first heard about cryptocurrencies in 2011 and made my first purchase of bitcoin in 2012. Coming from a traditional economics background, I initially got hung up on the fact that there was no central government, a guarantee for redemption of assets, and the ability to pay taxes.

Then, I really got enamored by the idea that you could not only have scarce digital tokens but also build into them rules and logic under which they can be transferred or transformed. That’s where we started focusing on the idea of a decentralized exchange.

We started working on Idex in November 2016 and went live in October last year.

Aurora is a “decentralized financial institution.” Could you explain what that means?

For now, we’re focused on our primary product, Idex. The goal is to create a software layer that allows peer-to-peer transactions or the swapping of native digital assets. Currently, it is on the Ethereum blockchain but we’ll eventually expand to all blockchains. Our focus is on reinventing the financial system with decentralized technology at its core.

Another area that we’re really interested in is the issuance of money and the notion of a private currency. We also have plans to release our own stable asset that will be backed by the exchange itself. Once that asset is widely circulated, we will start lending it via blockchain.

What are the problems in financial institutions today that you are trying to address?

There’s an issue of moral hazard. Individuals and institutions take action in their best interests, but the system is not set up properly. It’s either you punish or encourage these people to not act that way.

The private currency I mentioned earlier could be an alternative to a central bank currency. The issue with central banks is it’s in their mandate to do the things that they do. For example, should they have control over the money supply to achieve what are clearly political goals?

Some sovereign states have their own currencies. They print additional funds and use them for different government projects. If those assets grow too quickly, the money supply will start to be devalued and individuals will lose trust in the currency itself.

So, our idea is about using the transparency of blockchains to create a private currency. And in doing so, we want to be more open on the currency’s monetary policy and supply.

Could you tell us more about Idex?

We call it a hybrid decentralized exchange, and that term refers to how we utilize the smart contract within our larger infrastructure. Like all decentralized exchanges, the core component that makes them decentralized is the use of a smart contract for the custody, trade, and settlement of funds.

Tell us more about your stable coin boreal.

What were the key challenges you faced?

What’s on your roadmap for the next three or six months?