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Blockchain coffee: the way to explore blockchain landing

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The essence of blockchain coffee is the Token of coffee, which can help coffee growers to get working capital quickly.

Blockchain coffee: exploring the road to blockchain landing
Blue fox notes

Human beings have two most important tools of cooperation, one is language, the other is money. Humans are always looking for the collaborative work that best suits them. Just as languages have varied and evolved over time, money has ranged from shells, cows, precious metals to paper money... It has been evolving, and as humans enter the digital age, money will evolve into digital money, and bitcoin is a native digital currency, opening a whole new monetary experiment. On the basis of bitcoin's monetary experiment, along with the block chain technology.

Blockchain brings us a whole new way to record the truth through cryptography, consensus mechanisms, and peer-to-peer networks. But with the exception of digital currencies and daos, it seems like we're having a hard time getting the blockchain down in the air. Where does blockchain go in the New Year? From the observations of the blue fox notes, there is no doubt that the New Year is in digital currencyIt will be easier to make breakthroughs in native digital areas such as open finance and gaming. But at the same time, its connection to real assets is beginning to move into an experimental phase, whether it succeeds or not, and let's see how it works.

Blockchain coffee

Blockchain coffee sounds completely off base. But let's see how they do it. Abroad have startups found coffee growers in Honduras, EL Paraiso region Oscar Ramirez, and issued the CAFE coffee growers belong to their tokens (coffee) in Spanish, the current issued a total of 200 tokens, a total of 200 pounds, a pound of a token, a token of the current price is 0.098 ETH, price will change according to the demand. (note to the blue fox: el Paraiso is one of the coffee producing regions in Honduras. The coffee here is mainly sour, such as green apple, peach and other flavors.)

At present, it has only 200 CAFE tokens in total, and its main purpose is to try to land blockchain coffee to run the whole process, which is far from a mature model.

The CAFE is currently in tokens erc-20, and the 200 represent 200 pounds of coffee produced by Oscar Ramirez, a coffee grower from EL Paraiso, Honduras. In other words, if you buy a CAFE token, you get a one-pound call on the coffee.

In the generation of CAFE tokens, each CAFE token is secured by a pound of green specialty coffee and Dai at a rate of 150%, based on the current coffee commodity price *150%. In other words, CAFE is not created out of thin air. First, it needs Dai collateral, which means that later when CAFE trades on Uniswap, it is liquid and it is also supported by physical coffee.

When these CAFE tokens are generated through the collateral Dai, they are deposited in the wallet of the coffee grower, and the physical coffee is given to the verifier who generates the token, allowing the CAFE token holder to trade or destroy the physical coffee at Uniswap.

The fact that you can trade on Uniswap also means that CAFE prices change dynamically, depending on the transaction demand, and if the demand increases, CAFE prices will go up, and vice versa. In this way, CAFE can not only be used to exchange physical coffee, but it may also be able to obtain a premium through trading.

In a word, the essence of blockchain coffee is the token of coffee, and the token helps coffee growers to get the working capital quicklyTo reduce the need for high-interest loans and thus escape poverty, as will be mentioned later.

区块链咖啡：关于区块链落地的探索之路

As can be seen from the figure above, it has not run through the process, and is still in the sales phase of CAFE tokens. The whole time cycle is about 2 months, and CAFE tokens can be bought, sold and traded. However, it is not yet possible to trade on Uniswap.

区块链咖啡：关于区块链落地的探索之路

(the exchange price is related to demand)

After two months, a CAFE token can be exchanged for a bag of freshly roasted specialty coffee either at the ETHDenver location (blue fox notes: ETHDenver is a block chain community in Colorado, us, where you can exchange it for free) or worldwide, at your own cost. In order to get the freshest coffee, CAFE token holders are advised to redeem the coffee with their tokens after two months or sell CAFE tokens to the Uniswap mobile pool.

What are the benefits of blockchain coffee for growers?

The biggest benefit of blockchain coffee for coffee farmers is that it can solve their financial liquidity problem. Through CAFE tokens, you can obtain funds in advance, which is equivalent to pre-sale. You can get rid of high-interest loans and avoid the trap of poverty cycle.

Coffee growers often sell their beans at rock-bottom prices, say less than $1 a pound, and do not have enough cash flow to continue processing green beans, which can increase the price of the beans and make the growers more profitable. But that requires more capital, and growers often struggle to get credit, and when they do get it, the interest rate is high, often at an annualized rate of more than 18 percent. As a result, coffee growers have become more expensive, profitable and even unaffordable.

Coffee is now traded around the world using coffee futures prices. According to Affogato, a start-up that issues CAFE tokens, only 30% of those buying coffee futures worldwide actually buy coffee, and 70% of coffee prices are set by people who are not actually in the business. It abstracts goods of different varieties and quality from dozens of countries into a single commodity price.

By putting a coffee tokens, one is the growers can be subject to sell directly to consumers or other demand, you can use the CAFE tokens as collateral to apply for a loan, can also be CAFE tokens into the liquidity pool, it can be open to booking out at any time, thus rapidly drained, and obtain a higher price, let the coffee grow business profitable.

At the same time, it is also good for consumers, because of the reduction of intermediate links, consumers can buy cheaper coffee, but also can distinguish between different varieties, different origins, different quality of coffee.

What's good for startups?

Entrepreneurship is not charity, so what good is it for startups that help coffee growers?

The startup, Affogato, is the team behind issuing CAFE tokens with the goal of providing decentralized financial infrastructure for millions of coffee growers around the world. CAFE gives them quick access to working capital to escape the cycle of poverty by freeing them from predatory loans, and as profits rise, they have more incentive to grow and process better coffee.

And for the startup, the ultimate goal is to try to build a decentralized coffee commodities exchange, which is by putting a coffee tokens, improving the current dynamic pricing coffee sales model, trying to according to different products, varieties of different batches of tokens, coffee, and ultimately achieve standardization, large-scale selling.

In order to achieve the sale of different coffees, Affogato intends to convert the token model from ERC20 to erc-1155. This token model combines the characteristics of NFT, the same batch of specialty coffee is NFT, but the batch of coffee is interchangeable.

As a business model, it would use Chai/rDai/cDai as collateral instead of Dai, which would generate sustainable returns, since all three tokens would yield interest. It is also a governance token, earning interest on a small percentage of coffee sales, which the token holder has recourse to.

What infrastructure does blockchain coffee use?

First, it issues ERC20 tokens through ethereum. That makes it a credible token. (erc-1155 technology may be used later)

Secondly, through the Uniswap exchange, CAFE tokens can be exchanged to realize circulation in advance, and part of the premium can also be realized. Uniswap is a decentralised exchange on which there is no need for a counterparty. It is a capital-pool model with an automatic market-making mechanism that can incentivize providers of liquidity, such as users who deposit tokens, to provide liquidity. As long as there is a price spread, liquidity providers will step in to provide liquidity. It is a decentralized liquidity that provides incentives. Subsequent opportunities will be provided for the blue fox notes to specifically analyze the mechanism of Uniswap.

What are the problems with blockchain coffee

Since blockchain coffee token redemption involves physical exchange, it is different from the exchange between usdt and the us dollar, not just the business of data information. The physical exchange of tokens involves the offline delivery of goods and the destruction of tokens. For example, if the user wants to exchange the physical coffee of 1 CAFE, how does it carry out the exchange process? If the token is first sent to the contract for destruction, what if the goods are not received? If the goods are shipped first and the tokens are destroyed by smart contract, then what if the holder does not initiate the destruction? If the redemption is done face to face, unless there is an extremely large offline exchange network or express delivery network (such as home delivery, in-person redemption of physical objects and destruction of tokens?). Otherwise, the efficiency is too low, so, is there a need for a third party to intervene? Similar to the payment intermediary, once the exchange and redemption is initiated, the tokens are placed in the custody of the third-party wallet, and once they arrive, the token destruction process is triggered. Right? These models are the traditional Internet model, is it the best model? Transition mode?

In addition, since coffee and other products are token, and is a specific type of coffee token, then, there will be speculation problem? How do you make sure it doesn't become a chicken feather?

Finally, one of the most important issues is the issue of trust. How can consumers trust that the tokens they hold correspond to 100% of the specific coffee, and how can they guarantee the quality? This is a completely unsolved problem of blockchain. No matter how to link data, it cannot solve the real problem of 100% goods, which is different from pure digital currency. So, the use of the third party quality assurance model? These are traditional solutions. Is there a better model?

These are realistic issues to consider.

conclusion

Blockchain coffee is just an exploratory attempt to blockchain agricultural products (or all physical commodities), and if it can find an operational path to maturity, it can bring benefits to growers, consumers, as well as entrepreneurs and participants in the blockchain system.

Of course, it is only a preliminary exploration at present, and it involves the exchange of physical objects with tokens. Before the exchange network of physical objects is formed, it will face low efficiency. At the same time, how to ensure the complete authenticity of the items corresponding to tokens is also a huge challenge. However, perfection is impossible, but every step forward is progress.

Source:mp.weixin.qq.com