CoinMarketCap takes a deep dive into a protocol that aims to decentralize e-commerce.
Intermediaries. Right now, they’re a necessary component in most commercial transactions — after all, when money is on the line, a trusted arbiter is needed to ensure deals go through without a hitch.
But they can be costly and inefficient, posing a barrier to getting a deal done, while sometimes adding additional hurdles to jump over.
Boson Protocol, a decentralized platform that aims to revamp the way we purchase and sell goods and services, might just be set to make e-commerce a whole lot more efficient. Here, we take a look at how.
What Is Boson Protocol (BOSON)?
Boson Protocol aims to reshape the e-commerce landscape by providing a solution that bridges traditional and digital marketplaces through a unique tokenization solution for products and services.
The protocol has set out to eliminate the intermediaries that generally make e-commerce a complicated, expensive process. It achieves this through a novel commercial interface that uses tokenized futures contracts (wrapped as stateful non-fungible tokens) to represent a commitment to purchase and sell goods or services at a later date.
These NFTs can then be redeemed for the physical good or service. This applies to whoever owns the NFT, which means they can be traded, staked, and more in the DeFi landscape as a speculative instrument before they are eventually redeemed for the underlying item.
Beyond this, Boson Protocol is also looking to disrupt how customer and user data is used and monetized, by providing what it describes as a "planetary-scale Web3 commerce data marketplace" — essentially a marketplace for user data, in which sharing is completely voluntary, and users receive an equitable reward for contributing their data.
The platform was founded in March 2019 by multiple-time entrepreneur and strategy consultant Justin Banon, and Greg Borosa — a heavily experienced software engineer and blockchain technologist.
How Does Boson Protocol Work?
As we previously touched on, Boson Protocol provides the infrastructure for DeFi commercial transactions and data transfers. It achieves this through the use of tokenized exchange vouchers, known as commitment tokens.
These NFTs employ a type of game theory that incentivizes both sides of a transaction to complete their respective roles. Both buyers and sellers (or service providers) must transfer to escrow a deposit that is forfeited to the counterparty if they renege on their agreement to complete an exchange.
This process is handled trustlessly by smart contracts and provides a new financial primitive which can be used as a building block in other DeFi protocols. It also includes an arbitration system used to resolve any disputes between buyers and sellers, to determine which counterparty (if any) is penalized if a fault is reported.
BOSON is the native utility token of the Boson Protocol ecosystem. It can be staked, providing buyers and sellers a fee reduction for coordinating transactions, and is also used for governance of the network — giving holders a voice in how Boson Protocol operates and how funds from the dCommerce DAO are used.
These tokens accrue value which is derived from the "minimally extractive" fee generated when each transaction is processed. They also benefit from the fee that third parties pay when purchasing data from Boson Protocol's Web3 data marketplace.
As of April 2021, Boson Protocol is still in the earliest stages of its roadmap. The platform completed its final token raise through a Gnosis auction, selling a total of 6 million tokens. By the end of 2021, Boson Protocol aims to be capable of supporting e-commerce transactions for NFT art, gaming, DeFi and CeFi loyalty reward schemes.
The full Boson Protocol marketplace and dCommerce ecosystem are slated to launch in 2022.
Fungible vs. Non-Fungible: What’s the Difference?
In general, cryptocurrencies can be divided into one of two classes — they’re either fungible or non-fungible. This distinction is based on whether the cryptocurrency can be replaced with another equal and identical unit or not — similar to the way in which one dollar bill has equal spending power to any other.
Most cryptocurrencies, including Bitcoin (BTC), Litecoin (LTC), Binance Coin (BNB) etc., fall into the fungible category. You can substitute any unit for any other and the value will be unchanged. However, this isn’t the case with non-fungible tokens (NFTs). These have unique properties which prevent them from being duplicated or replaced. This uniqueness is often what gives many NFTs their value.
What Makes Boson Protocol Unique?
Boson has set out to build a bridge between real-world commerce and user provided data with the burgeoning decentralized finance (DeFi) space. It incorporates several unique features which help it fill this gap. Some of which include:
dCommerce DAO
The dCommerce DAO is a community-governed organization tasked with deciding how to develop Boson Protocol’s dCommerce product stack.
The community will vote on which projects building core applications, tools and integrations on/for Boson Protocol should receive funding, as well as on changes to growth policies among other things. The dCommerce DAO is funded through a fee derived from transactions and data monetized on Boson Protocol.
Web3 Data Marketplace
Boson Protocol wants to change the way users think about their individual data by providing a solution where they can voluntarily share select data in return for economic incentives.
Boson leverages Ocean Protocol, a platform that unlocks the value of data, to provide a Web3 data marketplace where data buyers can purchase data collated from voluntary participants.
Thing Tokens
Thing tokens are ERC-20 tokens which are used for buying particular commitment tokens. Unlike commitment NFTs, these are fungible tokens, and can be traded using standard DeFi protocols and platforms — such as automated market makers (AMMs) and open lending platforms. These are the third type of token in the Boson Protocol ecosystem — the others being the BOSON utility token and stateful NFTs. Thing tokens will be introduced in phase 2 of Boson Protocol’s development.
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