Public Market: The Protocol Layer For Marketplace Commerce
The Public Market Protocol moves marketplace functionality previously available only through centralized applications into the protocol layer. Protocol-enabled marketplace commerce disintermediates private marketplaces, allowing merchants to engage directly with customers without being tethered to monopolistic intermediaries and their associated commissions and fees.
New types of actors such as publishers, celebrities and communities will be able to spin up their own marketplace applications with the same robustness as today’s online storefronts. Consumers will be able to benefit from lower prices and rewards without sacrificing convenience or security. Interoperability among marketplace applications leveraging the Public Market Protocol will enable network effects around reputation, decentralization, protection and rewards without centralized control.
Recently, we explained why we’re building the Public Market Protocol. This post provides more in-depth information about what the protocol includes.
Protocol Overview
The goal of the Public Market Protocol is to provide a set of shared standards and services upon which to build online marketplaces that are independent and at the same time fully interoperable. The protocol decentralizes online commerce in a way that rewards buyers for participating in the ecosystem without compromising on convenience or risk. Meanwhile, restrictions on a seller’s flexibility to price, discount, and market will disappear, and their margins can improve substantially.
The Public Market Protocol is being architected and implemented as four microservices that centralized commerce marketplaces have historically held proprietary: inventory, metadata catalogue, reputation, and protection.
Public Inventory
Public Inventory is intended to be an open and transparent inventory database that replaces the closed data architectures of private marketplaces. The Public Inventory service receives and openly exposes data on which seller is selling what products, at what prices, anywhere in the world. Public Inventory is essentially an open data “database” exposed via a RESTful API, whereby anyone can create a personalized product inventory listing for any product they would like to sell. Public Inventory thus enables anyone to create and populate an online store, select the products they would like to sell, and not concern themselves with holding inventory, or managing order fulfillment. Sellers benefit from having their inventory listed for sale on many more online storefronts than they might manage themselves or through their use of a multiple listing service provider, thus increasing the exposure of their products to a broader audience.
Public Catalogue
Public Catalogue will be an open metadata database that democratizes access to product information that private marketplaces use to stifle competition. The Public Catalogue service provides a mechanism for product metadata management, consumption, and publishing. Metadata provides essential information about a product that is universal to all copies of that product, typically linked to a unique product identifier such as an International Standard Book Number (ISBN), Universal Product Code (UPC) or European Article Number (EAN). For example, for a book, the metadata in question would include the title, author, publication year, cover image and perhaps details such as weight and dimension, linked to the ISBN of the book. Or, for electronics, the metadata could include product images, name, model year, manufacturer and feature set related to the UPC.
Public Reputation
Public Reputation is being designed to be a universal, portable trust protocol collecting historic seller performance, so they aren’t locked into particular marketplaces. Performance history stored on public blockchains creates transparent, open, secure and accessible reputation available to anyone. Public Reputation will initially function as a score that changes over time as buyers give seller review scores. This reputation score is portable and can be utilized on any marketplace application built on the Public Market Protocol (and eventually beyond), rather than being locked into a single marketplace or held proprietary by a unique ecosystem. Over time, additional information can and may be encoded into Public Reputation, such as text-based seller reviews, product scores, buyer transaction history data including return rates and cancellation rates, and more.
Public Protection
Public Protection intends to replace centralized liability for fraudulent transactions with a decentralized fraud protection marketplace. Whereas centralized private marketplaces assume liability for fraud, and use this liability as justification for high commissions, marketplaces using the Public Market Protocol will not need to bear the risk of fraud. Instead, dispute resolution providers whose entire business is to ensure transactions will compete with each other to bear the risk and reward of insuring against “micro-fraud”, thus driving the cost of fraud protection for both buyers and sellers down.
Interoperability, Network Effects & Tokenized Public Rewards
Today’s marketplace platforms leverage centralized and proprietary versions of the above protocol elements to build network effects around their singular application. The more people transact, the more information is included in their reputation scores, growing consumer confidence. The more sellers there are in a platform ecosystem, the greater the breadth of items available and more conveniently consumers can find what they’re seeking. Of course, these sorts of network effects come at the cost of the increasing power (and growing fees) of the marketplace owner.
The Public Market Protocol intends to employ a different approach to these network effects. Interoperability among marketplace applications built on the protocol creates a set of shared resources, which include an ever-expanding universal inventory of goods, more data points for reputation for both buyers and sellers, and broader competition that drives the price of fraud protection down.
Building an audience of engaged and loyal buyers is also a key element of the network effects for Public Market Protocol-based marketplaces. Our decentralized protocol also plans to include tools unavailable to centralized marketplaces to build these network effects that accrue benefits to the marketplace applications and their customers. Marketplace applications built on the Public Market Protocol may also take advantage of the Patron (PTRN) token which will be used to reward and incentivize a variety of beneficial and market-aligning behaviors.
Public Rewards
The Public Rewards service plans to enable marketplace applications to offer rewards to their buyers. This has a variety of beneficial uses. Because of price parity agreements, many sellers aren’t able to offer lower prices than they offer on the major private marketplaces despite the high fees they pay. This means that marketplace applications can’t stand out and differentiate from one another on the basis of price. With Public Rewards, they can provide what is effectively a rebate without actually lowering dollar-based prices. Additionally rewards can be offered directly by marketplace applications to buyers that share their personal and purchasing behavioral data with the seller, or who help lower card processing fees by using debit cards instead of credit cards.
The Public Rewards service is architected and implemented in the form of a Control API, a Rewards Distribution Service, and an Access-Audit service. The Public Rewards Control API functions as a local master ledger that tracks the credits and debits of token rewards between accounts. The Control API also acts as an escrow agent, securing the tokens until the return period for any particular order has expired, thus ensuring that no buyer can make purchases in order to get PTRN token rewards, then return the product for a refund while holding onto the tokens. The Public Rewards Distribution service functions as the interface between the Public Rewards Control API, Blockchain, and marketplaces that use the Public Rewards service. The Access-Audit service ensures access control between the Public Rewards Control API and the Public Rewards Distribution Service, as well as ensuring that the master ledger operations are accurate, and finally, auditing transactions and values for the Public Rewards Distribution Service.
What’s Next: Our Community Commitment and How To Get Involved
Our team have spent their professional careers dedicated to building companies and organizations that expand opportunity. The Public Market Protocol represents a mission to enable genuine open and fair global commerce, and in that context, our commitment to our community of developers and marketplace applications is incredibly important.
This post is the first of (at least) monthly updates from our technology team. We invite you to sign up for our newsletter to hear about all of our company updates. For further discussion, we’d love you to join our Telegram group.
Thanks for spending the time today to learn more about the Public Market Protocol, the protocol for a new commercial commons. Please get in touch with any questions or feedback.
