Please describe your proposed solution.
1). Related works
Vietnam recently approved the National Digital Transformation Programme by 2025, with an orientation towards 2030. The National Programme prioritizes 8 different sectors for this digital transformation, auction industry is one of the most promising areas in the e-Commerce sector.
Digital transformation is a must-have battle for auction houses, it helps them keep up with emerging customer demands and therefore survive in the face of the future. The Sotheby auction house is focusing on adapting digital technologies to their online art auctions. Christie's approach is auctioning NFT artworks via their own marketplace called "Makersplace".
We are Lac Viet Technology JSC, a company that belongs to Lac Viet Auction House, the owner of the first patented and government-authorized auction platform in Vietnam. From 2019, we are selling state-own assets via our online auction platform on behalf of the Vietnamese government. Below is a glance at the platform.
The below figure is the evolution of our platform with an O2O event.
2). Existing problems
- <u>Business's point of view</u>
- Auction industry's point of view
- According to scientific research, the main problems that need to be solved are:
- Auction fraud - 70% of bidders often worry that they aren’t paying a fair price and the result was cheated.
- Auction results depend on the auctioneer & auction house’s reputation
- Cryptocurrency deposit & payment.
- Cardano ecosystem's point of view
- According to dAppRadar, the ecosystem is lacking dApp and users in volume & quality
- No dApp for auctioning rare & extraordinary tangible items and state-owned assets
- Obstacles blocking the mass-adoption
- there is no enabling environment for cryptocurrencies to use in real life
- the complexity of using cryptocurrency.
- Vietnam government's point of view
- According to the Law on asset auction: Assets that as prescribed by law must be sold via auction comprise State-own assets,…
- Looking for a solution to restricting collusion and reducing price, especially for government properties being auctioned off
<u>b. System's point of view</u>
Both business and system problems show the huge need for a next-generation of auction platform in real life. That is why the smart contracts-based auction platform is proposed.
3). Proposed solution
The next generation of the auctioning platform comprises 03 pillars: Business solution, System solution, and solution for an acceleration of blockchain adoption.
<u>3.1. System solution</u>
By integrating Cardano-based smart contracts into our existing auction platform, the identity of the person who is a bidder or winner (successful bidder) is anonymous to everyone. Transaction data are stored on blockchain and the winner is decided automatically by smart contracts so the results can not be cheated.
<u>3.2. Business solution</u>
The goal for this section is to bring more users to both: the new auction platform & Cardano blockchain space and then keep them longer in the space.
Let's start with a simplified O2O ( online to offline and offline to online) user journey as below figure.
- New users can be acquired via both online (Google search ads, Facebook ads or download a mobile app via app stores,..) marketing campaigns and offline ( visit auction houses & our auction coffee shops ) events.
- Account registration & bidding deposit are a must for auctioning state-own assets according to the Vietnam Law on asset auction.
- A Cardano-based wallet address will be created during account registration. The address will be used for receiving deposits or earning rewards.
- According to the law on asset auction, the bidder had to deposit 20% ( 2-4 weeks in advance) of the price of the auctioning assets to be eligible for bidding. We accept ADA as a deposit. ADA will be staked to earn interest. Usually, the price of state-own assets is very expensive ( millions of USD), so earning interest is one of the main revenue streams for the platform besides the bidding transaction fee.
- Smart contracts will decide who is the winner ( successful bidder) and the bidding transaction will be stored on the blockchain for transparency. It also sends back deposits to unsuccessful bidders' wallets.
- State-own assets will be sent to the winner by one of our partners ( the auction house) via a traditional process.
We proposed the Bid-to-Earn model with B2E token to encourage bidders to use ADA for bidding deposits instead of using FIAT. It also brings new users and converts existing non-crypto users to crypto users via a rewarding program as the following figure.
The blockchain-based smart contracts auction platform operates as a generated sales for auction houses ( Partners). The partners will pay a sale commission when the platform found a successful bidder ( winner). The auction platform takes a small part of the sales commission ( 1 to 10%), the remaining will be converted to the ADA and then rewarded to the winner's wallet & newly registered users' wallet. It encourages existing non-crypto users to create newly Cardano-based wallets to receive ADA.
The platform also on behalf of the Auction houses takes bidding deposits, one of the advantages of using ADA instead of using FIAT for bidding deposits is the bidder's earning interest via the platform's staking pool. In the traditional way, the bidder had to deposit 20% in FIAT ( 2-4 weeks in advance) of the price of the auctioning assets to a locked bank account to be eligible for bidding. There is no interest and the process to return the deposit is time-consuming.
How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?
1). Impact on Vietnam's Government & local community
According to the Law on asset auctions in Vietnam, assets, as prescribed by law, must be sold via auction as state own assets, assets of enterprises or cooperatives declared bankrupt in accordance with the law on bankruptcy,…
The Vietnamese government is looking for a solution to restrict collusion and reduce prices, especially for government properties being auctioned off. The Cardano-based smart contracts platform for auctioning state-own assets best fits their needs. A friendly view from the government on blockchain technology will accelerate the adoption of Cardano in Vietnam.
2). Impact on the Cardano community
Bring more non-crypto users to the Cardano ecosystem and keep them longer in the space via a newly registered account, rewarding program, and using ADA instead of using FIAT for bidding deposits.
Accelerating adoption of Cardano: “by enabling environment and decreasing complexity for using cryptocurrencies in real life.”
How do you intend to measure the success of your project?
1) Product Development
- Go live on time ( 7 months)
- CSAT: 4.2/5 ( 3 months after go-live, it will be sent to bidders for rating once per month)
2) Product Marketing
- At least 10 articles about the Cardano-based smart contracts auction platform with at least 500.000 views.
- Acquiring 10.000 new users in 3 months after go-live.
- At least 50+ government properties are being auctioned off in 6 months. Transaction data is saved on the Cardano blockchain.
- Responsive web: 10.000 unique visits/month ( 3 months after go-live)
3) Drive Cardano adoption
According to our data below.
- There are 12,000 paid users on the legacy platform -> 80% of them will be converted to the new platform -> 9600 Cardano addresses will be newly created in 3 months after go-live.
- 1,000,000+ ADA will be staked in our Stake Pool in 6 months as a bidding deposit.
Please describe your plans to share the outputs and results of your project?
Below is our target audience & marketing roadmap for the Cardano-based smart contracts auction platform.
Digital Marketing Roadmap for the Cardano-based smart contracts auction platform for Vietnam state own assets.