Boson Protocol is the Web3 eCommerce Layer. With terms like NFT and web3 becoming more commonplace, what is the impact of these new technologies on eCommerce?
Lets start by looking specifically at the transition from todays eCommerce landscape (web2), to what a potential web3 eCommerce world would look like.
Boson Protocol: Web2 vs Web3 eCommerce
Web2 and Web3 refer to different stages in the evolution of the internet, and they have significant implications for eCommerce.
What is Web2 eCommerce?
Web2, also known as the second generation of the internet, represents the current state that most people are familiar with.
Web2 is characterised by centralised platforms where users consume content and interact with each other. In Web2 eCommerce, online marketplaces, retailers, and service providers act as intermediaries, facilitating transactions between buyers and sellers.
Within the current web2 technology landscape , a range of eCommerce and payment platforms provide this ‘commerce layer’ for businesses. Whether you are using Shopify, Adobe Commerce, WordPress, Paypal etc, the solutions do much the same thing in allowing people to exchange money for goods or services.
These platforms control user data and operate under a centralised authority, overseeing the exchange of money for goods, setting rules and regulations, and taking a fee in return for the management of these commerce transactions.
What is Web3 eCommerce?
Web3 eCommerce predominantly represents the vision of a decentralised web, using blockchain code as a progressive replacement for a centralised authority, introducing concepts like decentralisation, peer-to-peer interactions, and smart contracts. Web3 eCommerce aims to reduce corporate intermediaries by empowering individuals and promoting user ownership and control over data.
In Web3 eCommerce, the focus therefore shifts towards disintermediation, trustlessness, and the elimination of middlemen. Blockchain-based marketplaces and decentralized applications (dApps) enable direct peer-to-peer transactions, removing the need for intermediaries and reducing fees.
Alongside these fundamental concepts of web3, on a practical level, as our regular, ‘real-world’ lives become increasingly influenced by digital worlds, web3 eCommerce will be the connecting layer between digital worlds and physical goods.
What are the benefits of Web3 vs Web2 eCommerce?
In the web3 and blockchain space, the fundamental concept is taking back control from large corporate entities, giving both people and businesses more control over their data, business operations and ultimately profit.
Web3 eCommerce offers several advantages over Web2:
- Decentralisation: Web3 removes the reliance on centralised authorities, giving users more control over their data, privacy, and transactions.
- Trust and Transparency: Blockchain technology provides an immutable and transparent ledger, ensuring trust in transactions and eliminating fraudulent activities.
- Ownership and Control: With Web3, users have ownership of their digital assets, and they can control how their data is used and shared. Smart contracts enable automated and self-executing agreements, reducing the need for intermediaries.
- Lower Costs: Web3 eliminates intermediaries, reducing transaction fees and enabling peer-to-peer transactions without the need for third-party payment processors.
- Tokenisation and Cryptocurrencies: Web3 enables the tokenization of assets, allowing fractional ownership and new forms of digital currency. Cryptocurrencies are often used as a medium of exchange within Web3 eCommerce ecosystems.
What is Boson Protocol?
As detailed above, one of the fundamental concepts of web3 eCommerce is to remove the need for corporate intermederies to oversee an eCommerce transaction.
Boson Protocol can be thought of as the ‘commerce layer’ of this rapidly evolving Web3 space, using smart contracts as a replacement for these corporate intermederies.
The Protocol uses NFTs (Non-Fungible Tokens) to represent real-world items and services, enabling their purchase and sale within the blockchain ecosystem. It essentially allows for the tokenisation of real-world products and services, making them tradable in a decentralised manner.
What is a smart contract?
A smart contract is basically an agreement (contract) between two or more parties that is written onto a blockchain.
Smart contracts work by following simple “if/when…then…” statements written into code on a blockchain, automatically executing actions when predetermined conditions have been met and verified.
In the case of Boson Protocol, these actions refer to the various stages of a eCommerce transaction. A clear example would be the automatic release of funds to a seller once an item has been received by a buyer, an action executed automatically by the terms of a smart contract.
Smart contracts are self-executing, meaning that they don’t require any manual intervention in order to be completed. The code of the smart contract is automatically triggered when certain conditions are met, such as when payments are made or data is inputted into a system.
Therefore for a web3 eCommerce transaction, the Boson smart contracts enable the exchange of money for goods to be controlled and regulated by code rather than a corporate intermediary.
How does Boson Protocol work?
Built on blockchain, Boson Protocol enables the tokenisation, transfer and trading of any physical thing as a redeemable NFT (rNFT).
These rNFTs can be thought of as forward contracts for physical things. rNFTs can be held, transferred or traded like any other digital collectable, with each rNFT being redeemable for a physical item at a point in the future.
The core mechanism of the Boson Protocol is therefore a commitment voucher system.
When a purchase is made, the payment is held in escrow within a smart contract. The buyer receives a commitment voucher – essentially an NFT – which can be redeemed for the purchased product or service.
Once the product or service has been delivered, the payment is released to the seller. This system ensures that both parties hold up their end of the transaction, thereby removing the need for trust.
Boson Protocol aims to create a decentralised commerce ecosystem, enabling its participants to share in the value they create, rather than that value being captured by centralised entities.
What is the future for Boson Protocol?
Boson Protocol has recently come out of beta, making v2 of the Protocol from November 2022 publicly available.
With the aim of being the commerce layer for this new web3 world, Boson Protocol enable the selling of physical products as digital collectables (NFTs) anywhere:
- In the metaverse (e.g. Decentraland)
- In a game (e.g. Fortnite)
- On your own site
- In the Boson marketplace
- Through web3 marketplaces (e.g. Opensea)
Most retail and eCommerce brands are aware of the ‘metaverse’ and are likely struggling to comprehend this web3 world and the affect this will have on their businesses. Boson Protocol unlocks web3 eCommerce by allowing companies to sell physical product in a digital world, maintaining the decentralised foundations of web3.
Stay tuned for details on the eCommerce use cases for Boson Protocol. Coming soon.
Further Reading: Digital Fashion & Sustainability: How NFTs and VR can solve fashions sustainability problem. Read More