SOMA USP, Part I: the Heimdall Protocol
This is Part I of a multipart series that lays out SOMA’s unique selling proposition (USP) and competitive advantages.
SOMA’s Interactive Item Card (IIC) is a protocol that provides a clear competitive advantage over other marketplaces and establishes our brand as a leader in the tracking of provenance and history of ownership. Soma has chosen to brand the IIC with the more charismatic title of Heimdall Protocol, after the character from Scandinavian mythology (Soma is headquartered in Helsinki). Hereafter it may be referred to as Heimdall Protocol, simply as Heimdall, as the protocol, or occasionally, for shorthand, as HP. When deemed important for clarification, the phrase interactive item card, Soma Interactive Item Card, or IIC may also be used, in conjunction with the Heimdall terminology or without.
Heimdall is a patent-pending protocol for representing physical items and their provenance digitally. It stores information about ownership history, the item’s condition at key points in time (such as ownership transfer), and where appropriate, verification of the item’s authenticity.
Once an instantiation of Heimdall is created for an item, it can be appended to but never altered. Every change in status, condition, or ownership is preserved as an immutable record. New information can continually be added to the record, creating an increasingly detailed portrait of the item, its provenance, and its subsequent history.
To be niche or general?
All companies must address this question. For Soma, the issue becomes whether to market ourselves as a general marketplace (albeit with unique features such as Heimdall and social influence), or as a specialty marketplace.
Given the rapidly-evolving nature of both blockchain and e-commerce, Soma treats all strategies as provisional. If we need to pivot to stay relevant, we will do so. The following represents our current best positioning on the question of specificity versus generality; it is the core message of the company, to be reflected in all future outreach, marketing, and other communications.
Soma as a general-purpose platform
We believe that the free-market system is often better than human ingenuity when applied to questions of usage and fit. Accordingly, Soma offers a forum for all types of interaction, both commercial and social. The ways in which our platform can be used for trade and commerce are virtually limitless.
Accordingly, we can legitimately say that Soma is a social marketplace for everyone.
Assessing the competitive landscape
When considering Soma’s numerous direct and adjacent competitors — both blockchain-based and not — Soma’s leadership recognizes a crowded field. On one side, ‘traditional’ (defined here as operating outside the blockchain space) social/ecommerce platforms abound. From incumbents like Amazon and eBay to newer challengers like Wallapop, the field continues to evolve.
On the other side, numerous blockchain startups are trying to solve one or more of the following: a) tokenizing real-world goods for greater liquidity and transparency; b) tracking items along a production or value chain; and c) provide a marketplace for buying and selling. While some of these projects may be ‘a solution looking for a problem,’ others are legitimately addressing real-world use cases for which an adequate solution has heretofore remained elusive.
The case for specialization
If Soma is to survive and thrive, it must solve a real-world need, and do so in a way that sets it apart from the competition, both within the blockchain sector and without. In this, the Heimdall Protocol provides the decisive factor. However, its competitive advantage applies to specific use-cases in specific types of markets.
To reiterate: Soma is both an all-purpose and a specialty platform. It can be used for almost any type of social marketplace interaction; however, its competitive advantages lie in specialty use cases.
Heimdall and specialty markets
As discussed, the Heimdall Protocol tracks provenance and item history. While this is incredibly important for certain high-value or unique items, it may not be competitive with RFID for tracking cheap, mass-produced goods.
While RFID is ideal for tracking at scale, it fails to address the need for provenance verification. Items can be verified as passing through a certain location at a certain date and time but cannot validate those items as authentic. Imagine two scenarios.
1. A crate of iPhones leaves a Chinese factory and goes through the various clearinghouses and transports to arrive at a US port. The crate is timestamped at each point along the route — at the factory, boarding the cargo ship, etc — allowing transparency along the logistics route.
2. A world-renowned watchmaker creates a limited-edition timepiece of 20 items and sells them in a private sale via trusted channels.
For scenario 1, RFID would be adequate and easy. For scenario 2, it could not verify the authenticity of each watch over years or decades. Heimdall excels at that very task. Art, musical instruments, high- value collectibles, jewelry, heirlooms, certain antiques, and fine watches, among other product types, all need more robust validation protocols than other tracking solutions provide. The Heimdall Protocol encodes the maker, date of manufacture, AND chain of ownership as a permanent and unalterable part of the item profile.
How does the Heimdall Protocol work?
Rather than relying on a tracking code or physical marker affixed to the item — as does RFID, for example — the protocol relies on more primitive, yet more reliable proof: validation via social capital. RFID can be faked, but the testimony of reliable parties cannot.
To ensure authenticity, the protocol could be encoded with as many identifiers as the buyer and seller want to associate with item. These include but are not limited to model number, serial number, VIN, measurements, markings, or any obscure idiosyncrasy known only to those with privileged access. You could build up such a complete profile that nobody could forge every detail, in contrast to the forgeability of RFID codes by talented and determined bad actors.
A vintage automobile could have details associated with its Heimdall profile that could be incredibly minute: a particular bolt has the letter H on its head; a 2mm by 2.5mm blemish in the leather of the right rear seat back resembles a tree; the spare tire has the autograph of the original owner. Photographic, video, and audio evidence, as well as written testimony, official documents, and more can all be part of the Heimdall record.
The Heimdall Protocol will rely on a 2-part system for encoding, storage, and retrieval of key verification information.
- An off-chain database will store supporting information — photographs and other media, for example — with event sourcing protocols that communicate with the blockchain for validated event stamping.
- Crucial information, such as ownership transfer and data signatures, will reside on the blockchain with reference links to the supplementary materials that reside in the off-chain database.
This hybrid system will allow for the distributed and immutable advantages of blockchain with the scalability and speed afforded by off-chain models.
Can’t a high-value item be forged?
Forgery will be incredibly difficult for items of unique provenance or that have an abundance of identifying detail as per the vintage automobile example above. Additionally, there’s the issue of incentive.
Let’s say person A sells person B a pristine 1989 Aston Martin V8. The sale and ownership transfer is recorded and it’s verifiable that B had it on X date. What possible motive would B have for going to all the effort to sell a different 1989 Aston Martin V8 in its place? Not only would it require a lot of work and expense to pull off the deception, but B risks a destroyed reputation, stored on the blockchain.
Bad actors are immediately penalized and their social capital depleted. In contrast, individuals of high social capital can vouch for the authenticity of items based on their individual expertise or knowledge of the chain of events.
Even if B were highly motivated to pull off the deception — and let’s imagine that we’re now dealing with a Stradivarius violin instead of a car — the Heimdall Protocol has multiple layers of defense. In addition to the granularity of recorded information about the item, each person has a reputation within the Soma community (much like on platforms like Amazon, but encoded in the distributed record for each user).
Furthermore, third-party expert opinions can be attached to the item. An expert on Stradivarius instruments could attest to the authenticity of the item in question; this could be timestamped in the blockchain and indelibly associated with that item’s Heimdall record.
Soma’s interactive item card, branded as the Heimdall Protocol, allows for the tracking and verification of an item’s provenance and history in a way that existing solutions — blockchain and otherwise — cannot replicate. The Heimdall Protocol is uniquely suited to high-value or unique items for which provenance verification is paramount. Accordingly, the Soma team will seek to gain traction within these industries and market sectors. Simultaneously, the platform will be open for general usage.