A marketplace is an online platform where a customer can compare and buy a wide range of goods and services from several sellers at once. Marketplaces became a popular and necessary solution for SMEs (Small and Medium Enterprises) because they significantly extend their outreach to a global level and offer completely new methods for selling goods and services. Small enterprises found the idea that there’s no need to maintain and promote their online shop attractive, since those tasks can be rather expensive.
The key objective of early marketplace development is to extend the the availability and access to a range of product to the limit, which is not available for an offline retailer. The second stage of marketplace development is to enlarge the audience to an international scale. This is the stage where all marketplaces are currently. However, these stages imply a quantitative increase only, and it seems the next evolution will involve the qualitative optimization of the marketplace.
A decentralized marketplace
The bottleneck of the marketplace model, as we see it now, is the fact that they act as a centralized middleman between a merchant and a customer. Thus, they are subject to all of the cons of the centralized solutions such as:
- huge fees and membership contributions for the merchants
- a limited number of payment processors that they support
- small outreach, due to geographical and legal limits
Clearly, the next step of the marketplace business is to introduce decentralized token solutions based on a blockchain. Blockchain technology allows for a record of all the sequences of contracts and transactions, creating the basis for a transparent business and effective arbitration. Blockchain solutions make a shift toward global outreach easy due to fast cross-border transactions. They also make legal support from a third party unnecessary, as we mentioned previously in the article To Kill a Middleman: Why Blockchain is Vitally Important for Small Businesses. Blockchain will also solve the issues of high fees and membership contributions paid by the merchants, and the funds saved will become a part of their income.
DEX as the future of marketplaces
The most exciting thing is that the basis for implementation of the third stage of marketplaces already exists in blockchain protocols. It is DEX (Decentralized Exchange), which is currently used only for token exchange and is essentially no more than a decentralized counterpart to centralized cryptocurrency exchanges which only have practical value to speculators.
In the modern world, however, a token is not just a coin. It can be a product, service, supply guarantee, or any other of the numerous business process elements, which can be tokenized using custom tokens (created by blockchain members). Even one-of-a-kind goods or services can be tokenized after the non-fungible tokens implementation.
To make this all work, the internal infrastructure of the service should be organized in such a way as to protect a customer from unfair trade. An issued token should ensure that certain obligations are met and it also should have a legal value. DEX interface would require major enhancements as well in order to make this happen.
DEX integration with a marketplace will also increase the popularity of DEX. Despite the benefits of third party (middleman) exclusion, DEX hasn’t yet conquered a significant part of the market compared to centralized solutions due to its lower liquidity.
Thus, DEX may become a global marketplace of solutions, goods and services where real market players meet, instead of a place for speculative token exchange.
Gravity Business Framework: DEX module
Gravity Business Framework, as described in our Whitepaper, allows the creation of such a solution at three architectural levels:
- At the technical level, DEX module will be implemented including all the interface solutions for user-friendly tokenizations of goods, services, and real business processes.
- At the legal level, the legal significance of the blockchain documents will be implemented through Ricardian smart contracts, as we’ve described it in the article “Electronic Document Circulation: Gravity Extended Contract”. We will also develop the Gravity Extended Contracts Library, a library with legal templates for real business situations. The middleman will no longer be required for arbitration with the emergence of the Extended Contract.
- At the economic level, stablecoins will be implemented (see the “Gravity: Stablecoin Solutions” article), which will allow participants to perform the transactions without any special knowledge of cryptocurrencies and blockchain technology. We will also implement gates for the DEX token exchange for main fiat currencies in order to make the placing and withdrawal of funds easier.
News and Updates
As announced last week, the updated nodes have been introduced to the testnet. We fixed all of the sync and emission issues, and our testnet is stable and ready for work.
To all the existing witnesses who are out of sync! Please update your node up to the latest version and resync. If you prefer to use a previous configuration, you should first add this checkpoint: checkpoint = [3079462, 002efd26658683618e4a6ca886b6383b8119fc9f]. Once the synchronization is complete, please, send us a message so we can vote for you.
To those who want to become a witness!
Want to join our team?
See the previous articles
Gravity Protocol Intro
A Deeper Look Into Dan Larimer's radio
Gravity Protocol initial distribution
Adaptive Emission: Making Blockchain Economy Real
Gravity IPFS: Off-chain Data Storage
Gravity: Ecosystem Participants
Gravity: Stablecoin Solutions
Electronic Document Circulation: Gravity Extended Contract
To Kill a Middleman: Why Blockchain is Vitally Important for Small Businesses
📢 Gravity Launches Public Testnet
Telegram channel: https://t.me/gravityprotocol
Telegram dev chat: https://t.me/gravity_protocol