Servers of domestic crypto-exchange major WazirX are under pressure due to heavy trading activity in Dogecoin, a crypto-currency token that has been gaining considerable adoption in the last few months.
The price of Dogecoin, a meme crypto-currency, has been surging in the last few weeks ahead of Tesla CEO Elon Musk’s debut Saturday Night Live appearance. Musk is a prominent investor in DOGE, the crypto token. On May 05, the price of Dogecoin surged to a record high of $0.6 from $0.3 at the start of the month, according to Coinmarketcap. And its market value shot up to $78 billion as of May 06 from around $40 billion on May 01, 2021.
As a result of surging global demand for DOGE, Indian investors also jumped on the bandwagon. This led to large number of new user signups on WazirX and the platforms’ DOGE to Indian Rupee service witnessed a sudden surge in trading volumes.
“We did not anticipate the surge. On both Tuesday and Wednesday, we had around Rs 600-650 crore worth trades take place in DOGE take place while new signups grew by 3 times,” said Nischal Shetty, CEO and Co-Founder, WazirX. “No exchange in India has seen such volumes,” he said.
While the surge in investor interest for DOGE led to order fulfillment or trade execution issues for the platform, Shetty said that trades were always being processed and that there was only a slowdown. “We have not cancelled or stopped any trades in DOGE or other cryptos,” he said, in response to allegations from users that the platform was manipulating trades and prices. Shetty said that investors who punched in orders will see their trades get processed in the same sequence that they had placed on the platform.
Shetty added that other crypto-markets on WazirX like Bitcoin and Ethereum did not face similar issues and were functioning smoothly all through the last few days.
This is not the first server issue WazirX has faced in recent months. In April, trading volumes on WazirX breached the internal limits set by one of its infrastructure providers, which led to a server downtime.
Some issues resolved, new ones appear
With a slowdown in trading activity, users of the crypto-exchange took to social media to complain that the platform was not functioning and that they could not confirm their trades or fund balances. “DOGE’s sudden price movement has caused a massive surge in our traffic. We’re seeing more than a 1000% spike in concurrent users,” WazirX said in an FAQ on Twitter. “We’re witnessing a new all-time-high every day in trading volume, traffic, user signups, and active traders,” it said.
Many users complained that prices of DOGE on WazirX were higher than those displayed on rival exchanges. In response, the company said that it was due to high demand and less supply. “Right now, more people are willing to buy DOGE with INR instead of USDT, and fewer people are willing to sell DOGE for INR. This means there’s a higher demand for DOGE in the INR market than in the USDT market,” it said.
On Thursday, Shetty said that they resolved some of the server issues and increased trading capacity for Dogecoin investors.
WazirX team deployed one improvement to DOGE/INR market late last night around 2AM.
Working well and has significantly increased the trading capacity.
We’re not stopping here. Working on more improvements, to ensure we’re ready for a surge in DOGE traffic ✌️#IndiaWantsCrypto
— Nischal (WazirX) ⚡️ (@NischalShetty) May 6, 2021
However, the crypto-exchanges’ problems have not ended. On Tuesday, MediaNama reported that leading private bank were shutting bank accounts and payments services to crypto-exchanges. As a result, investors are facing issues in terms of depositing and withdrawing funds from their crypto-wallets held by WazirX.
Two issues that the WazirX fiat team is solving currently:
1. Bank account not visible
2. Payment not getting credited and money reversed back to your accountSome portion of our users are facing this issue. Team is working on this and aims to solve it today#IndiaWantsCrypto
— Nischal (WazirX) ⚡️ (@NischalShetty) May 6, 2021
This issue has also led to issues with the crypto-exchanges’ ability to accept funds transferred by investors through the Unified Payments Interface (UPI). Shetty said that with banks pulling their services to WazirX, the payment provider had to shift WazirX’s account to another bank. “For each customer, there is a unique bank account (virtual) which the payment provider had to regenerate as part of the transition to a new account. And this problem was compounded by new signups we witnessed in the last few days,” he said.
Shetty said new users will face some issues for the next 6 hours, as the payment provider completes this transition for each existing and new user.
UPI is not working?
That’s because banks are not providing UPI to crypto exchanges
Do you want to help?
Then tweet to your banks & ask them to provide UPI access to crypto industry
If you want to make an impact, do it for the right reasons#IndiaWantsCrypto https://t.co/hRulkZ03fU
— Nischal (WazirX) ⚡️ (@NischalShetty) May 6, 2021
With a large number of investors unable to use the platform for trading or redemption purposes, WazirX has a large backlog of complaints to deal with. “We got 30,000 tickets within 6 hours, related various issues caused by trading slowdown,” Shetty said.
For those who want to understand, we got over 30,000 new tickets over night.
While we have a large team & expanding, it’s not possible to reply to these many tickets instantly
Please have patience, our team is working on resolving all issues.
Many tickets will be auto solved. https://t.co/cueTdtAkEJ
— Nischal (WazirX) ⚡️ (@NischalShetty) May 6, 2021
The company said that a large proportion of its support staff are either directly or indirectly by the ongoing COVID-19 pandemic, which is why there is a backlog. “The entire WazirX support team has been working overtime and even during week off’s for over a month now. We’ve increased the strength of our support team by 150% in the last month. We are aiming to further increase it by ~300% in the next few weeks,” it said.
MediaNama has prepared a guide on crypto-currency regulations in India, listing the government’s position over the last few years and various policy recommendations; read it here: A complete low-down on crypto-currency regulation in India.
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