Building an Open Tokenised Economy for Commerce
Bitcoin’s original mission was to deliver a decentralised digital cash system and DeFi has since…
Bitcoin’s original mission was to deliver a decentralised digital cash system and DeFi has since emerged to enable decentralised capital markets. As these systems evolve and mature, the next natural evolutionary step is to enable decentralised commerce. The Boson Protocol has been designed specifically to tackle this vertical but, like all of these new technologies and use-cases, it comes with its own set of challenges. Boson Founder and CEO, Justin Banon, joined Paul Gordon to explain what it is they are developing and share his vision for the future of commerce in this episode of Meet the Founders.
(00:36) Justin started his education with a degree in Physic and ended up working for a company called Priority Pass which was selling airport lounges as paper and plastic vouchers. After his masters in digital technology, he digitized these vouchers into a whole host of products and grew the business as MD from USD 50million to a billion-dollar turnover digital voucher platform. Then he did a second masters in to put these products and services he had built on the blockchain and that was the genesis of the Boson protocol.
How the Boson Protocol is Different
(01:25) The goal of the Boson protocol is to demonopolize commerce, a different route compared to the approach of emerging companies focusing on solely DeFi and demonopolizing traditional financial markets. Justin is taking a slightly different approach for two reasons.
“One is I had the experience of creating systems that represent real-world products and services digitally so that’s good domain expertise…As things stand at the moment, we’re heading on a path where commerce will be owned by a very few multi-trillionaires and that’s great for them but it’s not good for all of us. It’s not good for all the retailers and firms because essentially the whole infrastructure is gravitating towards the likes of Amazon and Alibaba, and all the value that’s being created is just being sucked into making these
rich people,” Justin explained.
(02:54) The vision for Boson protocol on the contrary is to create this foundational infrastructure upon which instead of two trillionaires we could have maybe thousands of millionaires and thousands of people opening and running commerce businesses that are profitable with a more equitable distribution of value yeah.
The Design of the Boson Protocol
(03:45) The Boson protocol is designed to automate the coordination of transactions between buyer and seller. By putting commerce on the blockchain, Boson is not trying to just place a business model inside technology and still use humans to manage any escrow or dispute. It is instead trying to cut the friction, reduce the cost, and offer massive gains of efficiency to commerce operators. Instead of having humans arbitrate disputes, Boson uses game theory.
(04:46) “We use a piece of game theory which I initially designed but it is in the process of being revised and enhanced by some of the world’s top game theorists and mechanism designers. We’ve got Dr Akaki Mamamgeishvili from ETH Zurich who’s got a postdoc in sequential game theory, together with Dr Zainab Gertrude from Imperial College who’s a behavioural crypto-economics expert. We’ve also Aditya who’s one of …r mechanism designers..So, we’ve got one of the strongest teams in the world designing game-theoretic and behavioural mechanisms,” Justin elaborated.
(05:40) Boson is automating that exchange between buyer and seller using incentives encoded within the blockchain, Justin said.
How Users Are Incentivized on Boson
(06:34) The game inside boson is a kind of sequential game involving a commitment deposit. It’s similar to the game that we play when we book an expensive restaurant.
(06:55) “When we book a cheap restaurant or you an everyday restaurant typically you’re not asked to put a deposit down. If you don’t show up, some people walk past and take your place. There’s no loss on either side. When you book an expensive restaurant and if you don’t show up at table 7, then chances are they’re going to have an empty table. That could be quite expensive for the restaurant. The standard game is that the restaurant asks you to put a non-refundable deposit for the table and if you don’t show, you lose that deposit that probably doesn’t cover the loss of the restaurant but the restaurant knows it’s going to reduce the number of times the probability of someone not showing,” Justin explained.
(07:45) Boson’s game has two deposits, one from the buyer, and the other from the seller. The buyer, very much like the restaurant has a deposit that’s “slashable” or non-refundable if the buyer doesn’t show up. Also, the seller has a deposit which is held as a commitment against the seller delivering the service and to an agreed-upon level of quality.
The buyer and seller make these commitments and then depending on
whether the buyer complains and the seller accepts that complaint, the deposits are returned in a way that incentivizes good behaviour on both sides.
(08:26) “…it’s not that we eliminate human intervention completely. The game can escalate to human dispute resolution…There are whole areas of misbehaviour that are no longer viable because there’s a human escalation point,” Justin noted.
What Has Enabled Boson
Justin believes that while the programmability of these systems has become possible now, the business model is also important in creating Boson.
(10:09) “The business model of the Boson protocol is to tokenize real-world items as ERC20 tokens that you can then plug into NFTS. Instead of having to go to amazon and be in this closed environment to trade, you can buy these things using DeFi infrastructure,” Justin added.
The legality of Boson Protocol
(12:35) Apart from the game theory and the mechanism design at the heart of Boson, the other challenge is the legality, Justin said. Amongst the seven PhDs working at Boson, two of them are in the blockchain law and online dispute resolution and governance area.
(13:03) “There’s a huge amount of progress that has been made and that’s being made to aligning the obligations of parties and with their all of the various international rules on consumer rights…where there are gaps in the law, we will have to put some scaffolding in a place where we will have to have some entities that will have responsibility for curation and contracting with the big brands we’re working with.,” Justin explained.
Opportunities For Uses to Get Involved in Arbitration
(15:02) In a quiet permissionless way, anyone can come and analyze the track record of a buyer or seller and choose to effectively underwrite the cost of any future dispute resolution based upon their assessment of the probability of it occurring, Justin stated.
Boson offers several other opportunities to get involved and to share in the value that it creates.
(15:22) “For example, there is another actor type called an aggregator who goes around and finds sellers and brings them onto the protocol and if you find sellers that end up putting high-quality products and services that sell at high quantity, then you will make a return on basically curating and bringing that to the network,” Justin added.
Data Protection on Boson Protocol
(16:43) Boson protocol will be integrating with ocean protocol which will enable users to voluntarily share their data and for that data to then be accessible by third parties but in a complete privacy-preserving self-sovereign way.
(17:01) Third parties through Ocean Protocol can then buy access to that data which would give them important consumer insights. That value gets returned to Boson protocol and a proportion of that would then be shared with users that share their data.
(18:40) Justin is aware of the history of technology and how adopting different scalability solutions may not be that the best one so he is keen on interoperability.
For now, Ethereum is where all of Boson’s partners are and while they need to interoperate, they also need a solution
that’s available right now.
Justin believes polygon is a very strong candidate.
Progress and RoadMap
(20:30) Boson’s public sale has been completed, to enormous relief across the whole team, Justin said.
The company is now focused on recruiting, training and embedding people into different teams. It is also building products across three or four verticals, one of which is a loyalty program, Nifty Key, a crypto-native crypto-first loyalty. The team is also building Metamore, a freeport that will be a trade and innovation area initially in “decentraland” but soon expand to have “metamore” in every world and every game.
“This will connect in-world and in-game commerce so that you can buy one of our NFTs in-game and redeem it in the real world,” Justin said.
(21:55) Boson’s priority in this phase of development is to own the metaverse commerce and then expand from the in-world to an in-store
commerce, to a full decentralized commerce solution.
(22:25) Boson is also partnering with the token engineering academy to fuse e-commerce experts with token engineers and mechanism designers to discover and develop the modules that will be needed to replace the current Amazon, Shopify Alibaba platforms.
(22:44) Boson is also working with outlier ventures on an accelerator through the Basecamp accelerator for these d- commerce/decentralized commerce startups.
How To Get Involved in the Protocol
Right now, the best way to explore what can be built with the protocol is to join the ongoing token engineering academy, D-commerce workshops or join Boson’s Discord channel.
The Most Exciting Innovation in the Space.
(24:57) “I think the most important thing is consumers,” Justin said.
(25:01) ” We’re seeing this continued disillusionment with big tech and realizing that the myth of big tech and the sharing economy is a bit of a lie. It’s an extraction farm designed by tech to just extract value from us all… this kind of consumer paradigm shift we’re seeing. First, it was DeFi, then it was NFT, and now the next zeitgeist is this whole metaverse…so I think mainstream is here… and this is going to be a massive year for crypto,” Justin concluded.
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