Tgrade, Trusted Circles and Logistics
The last mile, is a big opportunity for innovation and is one that Figaro has embraced with the first steps of building a smart contract-driven platform on Tgrade. Figaro is a blockchain-based solution to the last-mile problem in logistics. The name Figaro pays homage to the main character of Gioacchino Rossini’s “Il Barbiere di Siviglia.” Figaro is the city’s factotum, running errands here and there for a diversified plethora of clients.
Figaro, working with Bela Supernova, secured a grant from Ocean Blue to build a Proof of Concept to demonstrate how a Cash on Delivery operation would work for a restaurant, using a courier, delivering a pizza to a customer.
In the field of logistics, the “last mile problem” refers to the last leg of a supply chain. It involves the transportation of goods from a distribution point to its final destination, usually the consumer’s home. Last mile has its own sort of peculiarities that set it apart from other stages in the logistics chain.
For example, if the manager of a pizza restaurant offers to deliver pizzas to their clients, they will rely on a delivery service of some sort, such as a rider driving a moped or a cycle courier. The basic expectation of the client is that the pizza will arrive in a timely manner and will be hot on arrival. The delivery person has a limited storage capacity which will add constraints should a customer order many pizzas, and it may need multiple delivery people to transport them.
As such, the price per shipment for pizza delivery will probably be higher than the cost of shipping one unit of weight of flour from the producer to the pizza restaurant.
In the last decade or so, with the advent of mobile technologies, a new class of solutions to the last mile problem have emerged. In a sufficiently densely populated city, some inhabitants may be interested in providing delivery services as freelancers, often on a part-time basis, to supplement their incomes with a path to a full-time job. This is the core working model of services such as Uber Eats, Just Eat, and Deliveroo.
The barrier to entry is low, as anyone with a car, moped, scooter, or bicycle with a mobile phone, a small investment in a bag to carry the goods, can sign up to deliver. The smartphone with fast data connections allows this to be possible as it facilitates the monitoring and the flow of operations at a granular level.
There is a darker side to the model of “set your own hours, earn some money, and have the freedom to be your own boss” for the riders.
- The delivery platforms are built on metrics and are data-driven collecting and using data around the speed of delivery, customer reviews, the number of available couriers, patterns of orders at given days and times. The platforms have total control of the algorithms and these can be to the detriment of the riders who have to accept the terms, which can lead to fatigue, accidents while trying to meet deadlines, and unfair accusations.
- The infrastructure that runs the platforms has significant running costs, along with the service management costs, and the need to maximise profits for their shareholders results in up to 35% of the shipping costs being retained by the platform.
- The collection and distribution of the payments are managed by the platform. The riders can be subject to significant delays or losses where disputes arise and their accounts can be blocked.
Figaro is motivated to address the issues faced by the riders who are the poorest and weakest in the chain. The underlying idea of Figaro is about decentralizing the whole last mile logistics with a more flexible and fair system for distributing benefits and community management. People making deliveries coordinate through a decentralized blockchain-based network with external costs dramatically reduced by:
- minimizing the need of backend maintenance;
- minimizing management costs through the use of Tgrade’s Trusted Circles that ensure the riders pass the required checks, are added to the community, and where the riders build a social rating fairly.
This will bring conclusive advantages:
- Delivery fees will almost entirely be redistributed to the workers;
- All payments will be proceeded straight upon delivery right into the workers and sender’s wallets bypassing intermediaries and eliminating payment risks;
- Riders, senders, and users will get the power of community management;
- Delivered goods could be insured directly by a 3rd party insurance provider;
- Other parties can be involved directly and get their fees and payments straight upon delivery such as labour unions, tax services, and foundations.
Proof of Concept
The team at Bela Supernova developed and tested a Proof of Concept (PoC) which has been delivered under Apache 2 licence and can be found here
The contract has a sender and a courier, the sender is a restaurant that is dispatching an order for a margarita pizza to a specified location. The sender initiates the order and gives an approximate location to inform the courier where the delivery is, and then makes a payment which is held in the contract. The sender then waits for the courier to pick up the order. The courier then makes a deposit payment, which is used as a guarantee, and on receipt of the funds, the sender issues the exact delivery address. The courier then delivers it and on the acknowledgment (signature) from the recipient the payment is made to the courier.
The PoC demonstrates automation between multiple parties with a logistics flow and from this, there are many more features that will be built to develop the Figaro platform.
The PoC was built to demonstrate the automation flow made possible by smart contracts and to make this a useful application a mobile and web application need building, the onboarding of senders (such as restaurants), and couriers to work with Tgrade’s Trusted Circles and mechanisms around auctioning delivery slots.
Why Tgrade?
There is a choice of smart contract ready public blockchains why did Figaro choose Tgrade?
The smart contract engine in Tgrade is CosmWasm which is used by 25+ blockchains in the Cosmos ecosystem, some of these blockchains have specific uses, and others are more general purpose smart contract enabled blockchains. CosmWasm has been well tested across a range of applications and volume tests (it powered the now infamous Terra blockchain).
The twist in Tgrade is the Trusted Circle mechanism which is built in at the protocol level and provides a self-sovereign mechanism to create and manage whitelists of participants and set permissions around the smart contracts. The ability to onboard participants as part of a KYC process is a fundamental need of a business.
Tgrade has been designed to be business focused and begins with the constitution, the consensus model (Proof of Engagement) that incentivizes collaboration, and the toolset around Trusted Circles.
