Industry Cases

Logistics and procurement is a complex industry that includes the purchase, transport, and orchestration of the movement of goods. The typical supply chain involves many different participants, including financial institutions (supply chain finance), supply chain management professionals, and service providers.

The advent of blockchain technology provides a unique opportunity to improve efficiency across all aspects of the supply chain. The ability to design a shared system where information can be trusted and shared securely between multiple participants allows for an alternative to siloed data systems where information is not easily transferred to other parties.

• Freight management with IoT devices
• Automation of compliance and paper processes
• Automation and integration with financial institutions, insurance, and more
• Blockchain integration with 3PL/4PL and big data analytics

Many consumers are not aware of the origin of the products they consume. As health food stores gain traction and demand for fresh, healthy products, blockchain promises a way to help consumers enjoy and understand the farm-to-table journey.

In addition to providing a superior experience to end consumers, blockchain facilitates supply chain management and can increase efficiency and visibility in the product life cycle. Farmers, packagers, logistics providers and retailers can all benefit from increased transparency and communications.

• Increasing value of products by providing a superior customer experience
• Real-time supply chain audits and insights
• Increased efficiency with greater supply chain visibility
• Integration with IoT devices to ensure quality control, compliance, and minimized recall damage

Companies in the food and beverage industry are always seeking ways to increase efficiency, reduce costs, and provide greater value to customers. As blockchain can provide an increase in supply chain efficiency while offering end consumers with trustworthy information about the provenance of the products they buy, many enterprises are turning to blockchain as a potential solution. Other benefits include:

• A way to communicate sustainable business practices with end consumers
• A transparent trail of events from farm to table
• Verifiable certifications by third party providers (i.e. GMO-free verified)
• Reduction in risk and scale of recalls and supply chain interruptions

Supply chain visibility is the key to maintaining the supply/demand balance under changing market conditions. When a significant event such as a natural disaster occurs, supply chain systems may be interrupted, and it is essential to know where and under what circumstances the interruption occurred. With a shared infrastructure on blockchain, supply chain systems can communicate efficiently and securely while conveying important information about supply and demand across the entire supply chain.

Providing a way to prove the authenticity of prescription drugs and medications substantially reduces the risk of patients buying or receiving potentially dangerous substances. In many countries, the population does not trust the quality or authenticity of the drugs available on the market. Using blockchain-based signatures, companies can issue products marked with a tag that proves the origin of the product. When combined with analytics, alerts, and third-party verification, this offers a powerful solution to the problem of counterfeit substances.

Smart contracts are programs stored on a public or private blockchain that automatically execute when certain conditions or criteria are met. Smart contracts can be audited and executed without placing trust in a single participant, making them an efficient solution to systems where multiple parties are involved in sharing data or executing transactions.

• Smart metering can enable automated billing for consumers and distributed generators
• Smart contracts simplify and speed up switching of energy suppliers
• Smart contracts can be used to automate tedious paper processes, providing real-time energy audits and meaningful energy consumption insights

Blockchain allows for multiple parties to transact directly with each other, without relying on an intermediary. In the energy sector, this means that it is now possible to buy, sell, and trade energy between peers while maintaining an immutable record of events and transactions. When combined with smart contracts, it is possible to build a smart grid where energy is traded by participants and the connection with the main grid is mediated automatically.

In a blockchain-enabled smart grid, participants can produce, store, and trade excess energy with their neighbors. Micropayments for units of energy form the basis of accounting and can be settled whenever a participant wishes.

Just as the energy industry continues to find innovative approaches to sourcing new energy, blockchain provides unique advantages to creating investment opportunities and sourcing funds.

• Sourcing funds for microgrids and local renewable energy projects, with perks for microgrid participants
• Fractional ownership of equipment (i.e. solar farm equipment) or a claim to revenue that can be traded with early liquidity on the blockchain
• Making investments in energy projects accessible to a broader and international audience
• Raising funds with innovative investment vehicles (i.e. tokenizing a share of revenue on a single energy product line)

There are multiple ways in which blockchain can be employed to facilitate energy the trading, sale, and bidding processes, including:

• Using smart contracts to automate the real-time settlement of trades
• Automating compliance requirements
• Maintaining immutable records
• Providing real-time trade and marketplace audits
• Tokenizing energy, carbon credits, and other securities
• Increasing liquidity and market efficiency with fractional ownership

As demand for faster settlement increases from institutions, trading firms, and consumers, blockchain offers a practical and reliable solution to accounting and automation of trades and money transfers.

• Reduce settlement period from T+2 to T+0
• Reduce paperwork and compliance work with self-regulating systems and smart contracts
• Eliminate risk of error from manual reconciliation
• Allow for greater interoperability with other financial institutions and systems

Compliance in the financial sector is complex and relies on ensuring that customer identity is verifiable and that customers are authorized to trade a wide range of financial products and engage with certain services.

This creates the challenge of maintaining secure records of customer data, records of agreements and permissions, and frequently-changing financial status. Blockchain-based identity provides institutions and companies with a way of securing customer data, managing and querying customer permissions and KYC procedures in real-time, and automating compliance procedures.

The tokenization of an asset is the issuing of a blockchain-based token that digitally represents the underlying asset. As this encompasses any asset type, blockchain-based tokens can be used to represent any type of financial security or physical asset.

• Equity in a company
• A share in a company’s revenue
• Debt and bonds
• Derivative contracts
• A share in the ownership of a racehorse
• Options and complex or custom financial instruments
• Diamonds and gems stored safely in a vault

After tokenizing assets, investors and traders can benefit from greater liquidity, transferability, fractional ownership, and increased access to novel types of investments.

There is significant demand from retail investors for greater access to investment opportunities in early stage and high growth-potential companies.

With the maturation of the blockchain sector, legislative clarity, and a more robust infrastructure, there is growing interest in using security token offerings as a way of sourcing capital.