Introducing Vera, an Open Protocol for Decentralized P2P Commerce
“If Bitcoin is a peer-to-peer network to allow online payments sent between strangers without relying on a financial institution, then Vera will enable peer-to-peer networks to allow physical goods to be exchanged between parties without relying on a big tech oligopoly.”
What is Vera?
Vera is the world’s first blockchain omnichannel P2P commerce solution that leverages smart tags and decentralized oracles.
Recent innovations with blockchain and distributed ledger technology have provided decentralized means to connect business ecosystems, enabling an efficient and frictionless digital economy. Vera is building the world’s first blockchain-powered P2P commerce ecosystem that finally allows consumers to buy products from any direct sales channel without intermediaries. Without middlemen fees, businesses can guarantee unparalleled competitive pricing. Using NFC smart tags technology, sellers and brands can also guarantee consumers authentic products and reviews, and mobile experiences that are engaging, informative, and relevant to the consumer anywhere, from the retail shelf to the consumer’s home.
Why Decentralized P2P Retail + Smart Tags?
Starting your own store or a digital store is daunting. Whether you are building your own storefront with digital economy solutions like Shopify, Square, PayPal, or Stripe or selling on an existing marketplace like Amazon, Taobao, or eBay, it still isn’t easy work and requires much technical skills and know-how to undertake. There are also no shortage of expensive third party SaaS solutions that will further eat into your bootstrapped capital and marginal or non-existent bottom line.
For the first-time digital entrepreneur, this is only the beginning of the challenges. You still have to figure out what to sell, how to sell it, how to price your goods, whether to sell it in your own site or someone else’s marketplace, advertising, marketing, compliance with local and international laws, how to deliver the goods to your customers in a timely manner and — most importantly — how to get the customer to your shop, convert, and become a repeat customer.
And meanwhile, you will try to not think about how centralized marketplaces have also been fraught with sellers fed up with high fees, fake products and fake reviews, security breaches, and data privacy abuses. Most recently, Amazon, CafePress and StockX allowed hackers to gain access to data from over 100 million customer accounts.
Decentralized P2P retail make sense mainly because of no or low middlemen fees and increased efficiency, transparency, security, and data privacy and confidentiality, eliminating many risks and high barriers to entry for the digital entrepreneur. Removing the need for trusted centralized intermediaries to facilitate order transactions decrease service costs, increase margins for businesses, pass savings to the consumers, and decrease the risks for fraud and counterfeits thanks to a leaner and more efficient supply chain.
Furthermore, smartphone-compatible NFC smart tags enable a trustless, open protocol to ensure the identity of physical products, faster dispute resolution, brand protection, customer engagement, and a host of other free or low-cost decentralized business services that is fully aligned with the interests of the retail system compared to their centralized counterparts.
Fake Products & Fake Reviews
The global market for fake and counterfeit goods exceeds $1.7 trillion and 86% of consumers rate online platforms’ efforts to address this issue as lacking or poor. U.S. companies suffer most, with one in five knock-offs infringing on American products, and 63% of counterfeit goods coming from China. On the other hand, of the 1.8 million unverified reviews posted in March 2019 on Amazon, 99.6% were five-star, which was an increase of nearly 25% from the previous year’s monthly average. This trend points to further evidence of more rampant and fraudulent reviews.
Misalignment of Marketplace Incentives
E-commerce today is a $2.8 trillion-dollar industry and is expected to surge to $4.8 trillion by 2021. Global digital ad spend will double to $517 billion by 2023, contributed by the high-precision targeting ability of AI-powered ads with consumer retail data. With the majority of consumers already willing to exchange personal data for a better consumer experiences, a massive opportunity exists in the $4.8 trillion e-commerce market for a decentralized P2P commerce platform to actually reward consumers for data they are willing to sell to advertisers as opposed to solely increasing the profits of tech oligopolies that have a track record abusing consumer data, pushing away their responsibilities, and deplatforming merchants without notice. Demand for a consumer-first business model is validated by Basic Attention Token’s (BAT) privacy-centric Brave browser which achieved the 20 million downloads milestone on Android earlier this year. Using Vera Protocol, developers can build decentralized applications for P2P commerce that align incentives between advertisers, sellers, and consumers similar to how BAT has achieved adoption with Brave.
Real-Time Consumer Engagement
Salesforce finds that engaging customers in real-time is the top opportunity and 80% of brands agree that improving consumer experiences is the number one priority. McKinsey suggests that using IoT in retail environments is the holy grail to cash in on this opportunity and estimates that the potential economic impact will range from $410 billion to $1.2 trillion per year by 2025.
With up to 90% of global mobile handsets having NFC enabled by 2020, Vera Protocol enables any developer or business to leverage next-generation consumer engagement campaigns and services during the entire customer journey lifecycle from manufacturing to sale to consumption. Providing an open-source alternative to proprietary consumer engagement solutions that hoover up consumer data and repurpose it solely for corporate profit, Vera allows any brand and seller to create personalized, in-store, in-home, or in-person consumer experiences that increase customer retention and lifetime value. These value propositions are unique to Vera decentralized applications because the misalignment of incentives between marketplace operators, sellers, and consumers prevent centralized marketplaces to provide equivalent or greater value at a lower price to the digital commerce ecosystem.
Blockchain + Smart Tags = The Holy Grail?
Decentralized P2P marketplaces powered by a simple-to-use, open smart tags system removes these risks and enables opportunities for real-time consumer engagement via mobile handsets. Buyers and sellers can fulfill orders without middlemen and become less reliant on third parties to track shipments, process payments, and handle disputes. Data is not stored on a centralized database, sellers can directly deliver products to buyers, and only real customers can leave reviews after receiving the product.
Blockchain technology removes the need for intermediaries, creating new opportunities to empower sellers and consumers (instead of the tech oligopolies) and allows for significantly higher margins for sellers and lower prices for consumers. By providing an open infrastructure and smart tags system, sellers can also directly advertise their products to consumers, have visibility on when and where they interact with the product, and partner with third party advertisers to further monetize their customer base and the data they own. Ultimately, entrepreneurs finally have a reliable alternative P2P retail or marketplace solution they actually own and take back control of their business that worked so hard to build.
Open P2P Protocol vs. Centralized P2P Marketplaces
Why can we not just build a better proprietary, peer-to-peer retail solution or marketplace? There’s a few reasons why an open protocol is a better solution:
Omnichannel Value Capture
Sellers today are increasingly selling products on multiple sales channels to increase their marketing reach, enabling the need for innovative omnichannel commerce solutions. These channels may be an marketplace such as Amazon or Taobao, mobile app such as Wish or WeChat, or social media such as Instagram, inside a brick-and-mortar store, or even a smart vending machine.
The largest marketplaces today are single channel solutions for entrepreneurs and run on their own proprietary systems and infrastructure which siloes the captured data from other channels or platforms, and even to the seller. They are also incentivized to hoover up all the data, abuse and repurpose it for monetization without fear of repercussions because there are no shortage of sellers that want access to the largest audiences.
Decentralized P2P marketplaces built with Vera allows data to be owned by the sellers, which are less likely to abuse their customer’s data, and consumers, who have the option to receive rewards and promotions in exchange for sharing their data with the sellers. Moreover, standardized and un-siloed data enables high-quality analytics and intelligence for the supply chain ecosystem. Data can also be tokenized so value can be shared to ecosystem stakeholders where market demand exists. Examples of tokenized value include:
- Tokenization of Physical Products: The value of goods can now be traded as a single asset, multiple assets, or as derivatives on decentralized financial exchanges. Arbitrage will enable an efficient global market where consumers will always get the lowest market price for physical goods. In addition, corporations can no longer collude to manipulate product prices and hurt consumers.
- Tokenization of Consumer Product Interactions: Taps on smart tags can enable a “Pay per Tap” metric for advertisers similar to “Pay Per Page View” and “Pay Per Ad Click” in the digital ad space. Vera’s decentralized oracle (more on this later) verifies each interaction in a trustless manner, enabling a new generation of creative smart contract applications.
- Tokenization of Consumer Brand Value: Brand value is a function of consumer engagement with the products. Since Vera supports smart tags integration, Vera can enable calculations of a product’s brand value from both online and offline consumer interactions.
Omnichannel Value Liquidity
Once various units of value are captured in decentralized marketplaces powered by Vera, liquidity for this value representing things such as product orders and inventory or consumer product interactions can be traded in the ecosystem with our shared infrastructure. Vera will also incentivize different marketplace organizations to fulfill each others’ orders via a fee-splitting affiliate program.
Building Blocks for a Decentralized P2P Retail Ecosystem
An open protocol serves as a building block for the entire decentralized commerce ecosystem by allowing anyone to build innovative, censorship-resistant, next-generation decentralized applications. Using these building blocks, Vera-powered applications can align ecosystem incentives between sellers, consumers, and advertisers and retail marketplaces.
Examples of other use cases for Vera include:
- Decentralized advertisement and consumer engagement monetization.
- Authentic customer reviews.
- Product insurance and extended warranty services.
- Dispute resolution and fraud prevention.
- Decentralized insurance and warranty services.
- Tokenized non-fungible physical goods or assets.
Projects exploring the use cases above don’t have to worry about building the infrastructure to be able to securely exchange products or values associated with products because they use the Vera Protocol.
How does Vera work?
Vera is an application protocol that consists of five technology layers that enable decentralized P2P retail and marketplaces for physical goods:
- Decentralized Smart Tag System
- Decentralized Oracles Layer
- Decentralized Data Layer
- Decentralized Services Layer
- Decentralized Applications
Decentralized Smart Tag System
We have built an open-source, enterprise-tested, smart tags system using the latest tamper-proof, RFID technology that serves as the cornerstone of the Vera Protocol. Sellers configure, purchase, and attach these smart tags to the products they are selling. Data stored in smart tags may include the identities of products, sellers, manufacturers, and consumers, tamper-proof status, and histories for interactions, location, and temperature. An NFC-enabled mobile application built with Vera’s SDK turns any smartphone into a compatible scanner which allows users to interact with the smart tags.
Decentralized Oracles Layer
Because blockchains and smart contracts cannot fetch nor verify off-chain data on their own, they require “oracles” as agents to provide real-world data. Since centralized oracles can be dishonest, bribed, untrustworthy (i.e. hide data breaches or corruption incidents), censored, and ultimately a single point of failure, Vera uses decentralized oracles as the safest way to verify and send real-world data on-chain. This data may include but not limited to:
- Smart tags data
- Mobile phone data
- Shipping courier and supply chain data
- Financial markets and exchange rates data
Our development team has researched extensively over the past few years the many strategies to build a cost-effective, scalable, and secure decentralized oracles system. A key innovation is the use of cryptographically-secure Verifiable Random Functions (VRF) to ensure off-blockchain data sources are sent randomly and securely to Vera decentralized oracle nodes so the nodes remain collusion-free. What we believe to be the best most effective standard for decentralized P2P retail will be published in the upcoming technical whitepaper.
Decentralized Data Layer
This layer stores all the data needed to power all decentralized applications built on the Vera Protocol such as product listings, order transactions, reviews, smart tags, product and customer journeys, and user identity data for sellers, consumers, and customers. Unlike today’s centralized P2P e-commerce retailers, data is owned by users and they are given the option to share that data with third parties in exchange for rewards and promotions.
Decentralized Services Layer
This layer contains suite of service protocols to support innovation and growth of the open Vera application marketplace and ecosystem. Initial services may include:
- Programmable smart tags management (i.e. tag templates, encoding, printing, and ordering automation)
- Identity management
- Message formatting (creating a package of data that signals what a seller wants to sell, for what currency, at what price, expiration time and with whom to sell to).
- Contextual event rules engine smart contracts (see below for more details)
- Notifications management
- Order transactions management
- Reviews and reputation management
- Loyalty and rewards
- Smart tags and consumer behavior analytics and machine learning
- P2P payments and micropayments
- Tokenization and lifecycle management
- System integrations (e.g. social, cloud, ERP, CRM, etc.)
Decentralized Applications (vApps)
Decentralized applications, or dApps, are applications that run on decentralized peer-to-peer networks like Ethereum. Many dApps need other tokens to function and it’s unlikely that the end-user will go through the trouble to find, buy, or hold all these tokens in order to use the dApp. Therefore, Vera will enable token abstraction to allow any number of third party tokens to be used in its dApps, which are referred to as vApps. A high-level overview of how token abstraction works is as follows:
- End-user pays the vApp in with one token such as Ether or an ERC-20.
- The vApp uses a few lines of code to exchange Ether or the ERC-20 for the needed tokens in the background.
- The vApp runs seamlessly without the end-user knowing what happened under the hood.
Core Smart Contracts
Our core smart contracts can be broken up into two components:
- The business logic that accepts the signed data packets output from the decentralized oracles to process and settle the purchase order.
- The upgrade process to make sure the business logic is updated over time.
After the buyer(s) input their purchase requirements into the message format and sign it, anyone that owns the purchased product can fulfill that order by sending it to the Vera smart contract which completes the sales transaction by shipping out the product via a trusted courier service provider and sending payment to the seller(s) in the form of tokens.
Vera is proposed to initially be compatible with the Ethereum and Binance blockchains. In the future, other blockchains will be supported depending on market demand and strategic partnerships. Further details on how signed orders are broadcasted and settled using the Vera Protocol are currently in development.
The $VERA Token
VERA is the native token of the Vera Protocol. It is used primarily as a governance token to make the protocol future-proof and as a way for the network’s nodes to charge fees to enable the trustless, peer-to-peer exchange of physical goods between buyers and sellers. Over time, upgrades are necessary because of changes made to the protocol or the underlying blockchain. Vera’s development team has researched extensively the mechanisms for decentralized governance and have come up with the best, most efficient standard that will be published in the upcoming whitepaper.
We believe the right to own, barter, or dispose of one’s property is the most basic of human rights. No one shall be arbitrarily deprived of his or her property. Considering the increasing threats of censorship, deplatforming, and personal privacy abuses from governments and big tech, it would be prudent for us to develop an open and censorship-resistant, P2P retail infrastructure to enable anyone to buy, sell, or trade the physical properties they own. If Bitcoin is a peer-to-peer network to allow online payments sent between strangers without relying on a financial institution, then Vera will enable peer-to-peer networks to allow physical goods to be exchanged between parties without relying on a big tech oligopoly. We welcome you to join forces with our community to launch Vera, the protocol that empowers consumers and protects our universal human right to conduct commerce.
About Vera Protocol
Vera is a blockchain application protocol that enables decentralized peer-to-peer exchange for physical consumer goods. Founded by leadership from top universities and Fortune enterprises such as Berkeley, Stanford, Harvard, UPenn, Google, Samsung and Nokia with domain expertise in e-commerce, big data, IoT, and supply chain, Vera leverages the most advanced innovations in blockchain technology to enable P2P commerce as an alternative to centralized marketplaces and solutions such as Shopify, Amazon, and eBay. Supported by an advisory board consisting of an original founding investor of Google AdSense and PhDs with 20+ patents and award-winning research papers, VERA is the token used by the Vera Protocol to reward all stakeholders in the Vera Blockchain Ecosystem and empower billions of consumers and entrepreneurs around the world. Vera Protocol is based in Silicon Valley, California, USA.