The current centralized e-commerce eco-system, the likes of Amazon, Alibaba, and eBay doesn’t provide any monetary benefit to its end users. Of course, those that are involved as sellers in these platforms do enjoy certain benefits like making an additional revenue apart from their existing ‘brick & mortar’ store, better inventory management, and the pick & drop facility provided by its partners. The core problem associated with this centralized e-commerce is that “customers” data are hoarded and are basically used internally to make a bigger profit out of it, which eventually benefits the management and maximizes revenue for private shareholders.
Boson Protocol is trying to tackle this problem, it’s a new foundational layer for Web3 designed to disrupt traditional commerce markets and allow buyers and sellers to exchange digital value for real-world products and services. What this means is it bridges the gap between the newly emerging digital metaverse and the physical world that we live in, thus removing the data hoarding issue and benefitting each and every participant on the network. For now, there’s no trustless mechanism through which one can buy digital stuff and redeem it physically, Boson Protocol makes this possible.
Instead of tokenizing real-world products and services themselves, Boson takes a different approach and tokenizes the future commitments to transact, using the stateful NFT Commitment Token, and can be viewed as a form of futures contracts. They can be redeemed for the underlying transaction’s value or can be left to expire as a futures contract would. In this way, they act as a future commitment to transact.
This way, Boson eliminates intermediaries and minimizes arbitration and rent extraction, making dCommerce frictionless.
For more information on how decentralized commerce would be self-sustaining, I would urge the readers to go through this article that perfectly explains the dcommerce sustainability loop:
https://medium.com/bosonprotocol/introducing-the-dcommerce-sustainability-loop-1d72026636d0
VISION
The vision for Boson Protocol is enabling a world where our commerce and the last-mile supply chain infrastructure are not captured by one or a few extractionary intermediaries. A place where participants, be they consumers or firms, can participate in commerce in a way they share in the value that they create. Other first-generation centralized platforms remove the intermediary but they retain a human arbitrator to manage things like reversals, disputes, but what boson protocol does it replaces human arbitrators with a piece of game theory and that game theory means that we can automate away a lot of that cost and friction delivering what they call Decentralized Autonomous Commerce.
The ambition for the project is HUGE!!
If they’re going to build alternatives to the current monolithic e-commerce systems then that’s a huge endeavor. They have assembled probably one of the strongest ecosystem token protocol design and team.
With decentralization, there is now an alternative future, a future that is “capture resistant” and where participants are not separated from the value they create.
The classical oracle problem revolved around a very simple limitation — blockchains cannot pull in data from or push data out to any external system as built-in functionality. This is where Oracle solutions like ChainLink, Band Protocol, DIA, and many others come into the picture, but when it comes to how “things” (product or service) interact with the smart contracts, there hasn't been any such major developments in this sector.
Boson is thus a breakthrough solution to the physical asset oracle problem. A more simple way of describing it is you’re connecting smart contracts to real-world commerce and its data.
“Our vision is to become the basic plumbing for commerce and its data on the emerging decentralised web, where the value captured is distributed equitably between token holders and protected from capture by a single centralised entity.” — Justin Banon, Boson Protocol founder
Boson can be conceptualized in a variety of ways: (taken from their whitepaper)
- As a set of smart contracts, components, and standardized interfaces.
- As SMTP (Simple Mail Transfer Protocol) for transferring non-monetary value.
- As a universal means to commit, store and transfer promises.
- As a decentralized commercial oracle.
- As “Thing tokens flowing around a thing economy” (Trent McConaghy).
Another vital component is commercial data that can be used on the merchant side in order to inform them of consumers’ behavior. This data could be anything related to customers' demographics, product preferences, and sellers’ reputations, which can be used to make better-informed decision-making on both sides. Boson Protocol leverages the design and infrastructure of Data Tokens, created by Ocean Protocol, to monetize commerce data in a way that protects the privacy and self-sovereignty of network participants.
Instead of locking-away valuable data within proprietary data silos, Boson’s data marketplace makes data openly available for purchase.
DIGITAL TO PHYSICAL PROBLEM
Boson automates digital to physical redemptions by tokenizing a Buyer and Seller’s commitment to exchange digital value for a real-world “Thing” (goods and services) at a later date. Commitments are made by depositing digital value (be it anything) into an escrow contract within a stateful non-fungible commitment token.
For example, If person A wants to sell product X to person B, then Boson simply tokenizes the buyer and seller’s commitment to transfer the product X to the buyer in return for $BOSON or any other token transferred to the seller.
Boson’s automation mechanism implements a 2-sided deposit structure. This ensures that both buyer and seller have skin in the game. In addition, a lightweight reputation system will also be implemented to increase trust between both parties.
HOW DOES IT WORK
First, the seller makes an offer and sets the necessary requirements (price, deposit amount, time to deliver, etc). Then he makes a deposit and also sets the required buyer’s deposit amount, and finally, the NFT Commitment Token is minted into existence.
Deposit amounts may vary with every transaction, and this in fact creates an extra layer of trust. They are set by the seller and accepted by the buyer.
Once the buyer receives the goods, he signs a redemption transaction that triggers the escrow that releases the buyer’s payment amount to the seller as well as returns the initial deposit made by the seller.
If now the new buyer wants to resell the good, he needs to follow the same process as well.
Having custody of a commitment token grants the holder the right to redeem the token for a particular thing in an automated, reliable, and secure way, as well as the right to transfer the token by transferring the commitment token from a crypto wallet just like any other NFT.
These 2-sided deposits represent commitments within a dynamic game that minimizes arbitration by automating dispute mediation and reversals.
There’s also a penalty/slashing mechanism in play for bad actors as the protocol incentivizes buyers and sellers to go through with the transaction to an agreed-upon level of quality. Deviations from this happy path result in the slashing of commitment deposits. Boson Protocol has one of the world’s top algorithmic game theorists, Dr Akaki Mamageishvili, working on this core mechanism as a live academic research project.
Commitment tokens are governed by Boson’s core mechanism, in which buyer and seller commit deposits up-front. The rules and the final deposit transfer scheme are designed in such a way that coordinates transactions and incentivizes parties to behave fairly.
This solves a big problem and thus the physical and digital becomes connected with a shared economic layer where value can seamlessly flow between the two in different states: be that physical to digital or vice versa (This is exactly what stateful NFT means). As more and more digital wealth and value is generated and shared within the digital economy, bridges to the physical world become ever more important and it’s increasingly critical they aren’t monopolized by any one central party.
The interplay between Things, money and data is at the heart of Boson Protocol. Boson enables for any Thing: the automation of digital to physical redemption, liquid digital markets, and a planetary-scale Web3 commerce data market.
In the same way that DeFi is disrupting banks with ‘MONEY’ tokens flowing around an open tokenized money ecosystem, and Ocean Protocol is disrupting Facebook and Google with ‘DATA’ tokens flowing around an open tokenized data economy. Boson Protocol disrupts e-commerce platforms with ‘THING’ tokens flowing around an open thing economy.
USE CASES
- ONLINE COMMERCE: Open digital marketplaces where any Thing can be offered, searched and exchanged with minimized trust and cost.
- CRYPTO EXCHANGES: Enabling exchange tokens to be redeemed for real-world rewards directly from an exchange marketplace without touching fiat, thus increasing token value.
- TOKENIZED NETWORKS: Enabling users to exchange their network tokens for digital and physical goods and services, in order to increase user-perceived value and token value.
- LOYALTY AND REWARDS: Enabling loyalty programs and credit card rewards to offer any digital or physical Thing in a standardized, composable and interoperable digitized format, without the cost and friction of intermediaries.
- GAMES: Enabling video games to gift or grant permission to buy rare or special items. For example, on completing a certain achievement in the game, a player has the right to buy a special t-shirt or a physical copy of an item. Imagine that your favorite in-game items could finally co-exist with you in the physical world.
- I-GAMING: Enable online and on-chain casino customers to earn real-world prizes and purchase real-world items with winnings without touching fiat.
- PHYSICAL TWINS OF DIGITAL ART: Enable NFT artists to offer physical twins or physical copies of the same item, trustlessly via NFTs which can be redeemed for physical artifacts.
- MACHINE-TO-MACHINE COMMERCE: Enabling any IoT devices to communicate with each other to buy or sell things in a fully automated manner, think of self-driving cars to purchase any parts, or servicing or a smart TV to renew internet package on expiration with autonomous management of disputes and redemption.
COMMITMENT TOKEN
Boson NFT Commitment Token can represent any physical or digital product, service, experience, promise and provides a common standard for representing any “THING”, be it digital or physical, and a common interface for conducting commerce.
They can be assembled into composite products or used to modularize products, can be programmed to enforce any computable rules, and can be easily stored and transferred between actors using standard wallet infrastructure.
Initially, Boson Protocol was using the Dharma protocol architecture, which involved some trusted keepers or arbitrators. In the event of any disputes or reversals, one would have to revert to an arbitrator, which is a pretty set standard set up these days with other protocols and projects such as OpenBazaar. If you’re plugging in a decentralized network into a protocol like Boson that requires arbitration, it increases the cost, friction and that really kind of breaks the process.
Can we eliminate arbitration? Is it theoretically possible? if it can’t be eliminated, then to what degree could Boson minimize arbitration? That’s the major problem and Boson has something quite significant in terms of being able to remove this cost and friction and that is what they refer to as Decentralized Autonomous Commerce.
Boson Protocol is to dCommerce what stablecoins were to the DeFi stack — the catalyst for an ecosystem of highly specialised, yet complimentary and composable protocols.
TOKEN MODEL
$BOSON is the native utility token of the protocol. The token serves three specific purposes:
GOVERNANCE
$BOSON tokens are used by participants to govern the Boson Protocol, ensuring consensus around critical decisions and to grant funds to deserving projects through dcommerce DAO.
STAKING
By using $BOSON to make commitment deposits, Buyers and Sellers may reduce their network fees for coordination of transactions. This creates an additional lock-up of $BOSON token thus reducing circulating supply.
INCENTIVIZATION
$BOSON tokens are used to incentivize actions across the system in a number of ways. Firstly on the supply side, $BOSON rewards supply acquisition via Aggregators and Sellers, and supply quality via Curators. Secondly, on the demand side, Relayer marketplaces earn fees In Bosons to incentivize the distribution of inventory. Thirdly for data sharing, Buyers are incentivized to share their data in return for an equitable cut of the value it creates.
The $BOSON token is the core economic unit of the Boson ecosystem. Growth in the value of the token is driven by establishing an economic flywheel, following the Web3 sustainability loop as first implemented by Ocean protocol.
Supply is reduced by staking and burning, value accrued through transactions and data utilization, and demand is driven through the continuous development of a flourishing ecosystem.
Network rewards incentivize workers to develop platforms and marketplaces on Boson. Revenue generation from these platforms is funneled back into the network with a proportion of all revenue being used to buy and burn $BOSON.
$BOSON can be staked in a multitude of ways to reward participants for curation, aggregation, and distribution of products. Value is captured through the monetary to non-monetary transactions facilitated by the protocol. Demand is increased by the utility of diversely emerging marketplaces and equitable access to data monetization for all network participants.
To conclude, Boson is going to solve one of the most challenging problems in crypto and it definitely won't be an easy road ahead. Execution is going to be a key factor and how the team delivers on the roadmap will also affect its future growth. I’m super optimistic and believe that the Boson team will definitely solve this digital to physical barrier :)
Boson Protocol Links:
Website: https://www.bosonprotocol.io/
Twitter: https://twitter.com/BosonProtocol
Telegram: https://t.me/bosonprotocol
Medium: https://medium.com/bosonprotocol
Youtube: https://www.youtube.com/channel/UCcxilOavX03XF2d5Q9LbMwA/videos
All Oddgems Links:
https://linktr.ee/oddgems
