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This document explains everything about OpenVino and OpenVinoDAO governance.
TL/DR summary
This “purple paper” covers the following topics:
What is OpenVino?
What problems does OpenVino solve, and who are our users?
What is the OpenVino business model?
How does the OpenVinoDAO governance model work?
How will we scale OpenVino into a global service for 1M users and beyond?
How we validate OpenVino?
The devil is in the details: answers to all of your questions.
What is OpenVino
OpenVino is a Web3 platform that provides Tokenization, Transparency, and Traceability services for the wine industry. A highly atomized industry, 70,000+ wine producers operate worldwide, representing $400B in annual revenue. OpenVino solves existing real-world problems that affect wine producers, the wine supply-chain, and consumers.
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OpenVino generates economic value from direct fee revenue, OpenVinoDAO token inflation, and composable data aggregation.
Tokenization
OpenVino enables wineries to mint fungible tokens backed by bottles of wine.
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The OpenVino MTB18 launch - May 6, 2018
Transparency
Wineries can self-certify their wine production using OpenVino’s “BioDigital Certification”. Certifications can include multiple attestations:
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Define, in simple terms, the certification requirements.
Map these requirements to immutable, self-attestation data on-chain:
Documents
IoT sensors
Images
Accounting data
Provide a challenge mechanism
Wineries deposit funds into a bounty for 30 days.
Any challengers who believe that the certification is fraudulent, can deposit funds into the bounty and upload their evidence of fraud.
The Kleros decentralized court determines if the certification is valid, and returns the full bounty to the winery, or to the challenger.
Traceability
OpenVino connects wineries with their customers.
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The winery receives the customer’s personal information and wine valuation.
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Why wine?
Wine is the IDEAL product for decentralized tokenization, transparency, and traceability. While many Real World Assets (RWA’s) are being tokenized today with web3 tools, wine has unique characteristics that match perfectly as a cryptoasset.
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This section concisely outline each of these characteristics. These qualities combine into a product ripe for tokenization.
Built-in scarcity
Whereas wineries can vary greatly in size, with larger wineries producing millions of bottles annually, across dozens of different labels, and the tiniest wineries producing only a few hundred bottles per vintage, wine production remains finite, and wine is a consumible.
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One wine token equals one bottle of wine from one particular vintage. As tokens are burned, and bottles consumed, the supply decreases. OpenVino dynamic token pricing accommodates scarcity. |
Wine gets better over time…until it doesn’t
Very few consumible products get better with aging. In between perishables and durables, we have products like olive oil, coffee, and spices, products that have a longer shelf-life than a vegetable, but nevertheless, lose quality over time. Coffee is never better than the day it was roasted, olive oil the moment after pressing.
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By combining real consumer feedback from “You Drink It, You Own It” traceability and dynamic token pricing, wineries and consumers can better appreciate a wines evolution, and value accordingly. |
Elastic Pricing
A bottle of wine represents neither a commodity, nor a unique object of art.
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Viral marketing campaigns and “You Drink It, You Own It” valuations can have an immediate impact on wine valuations. |
The friction-full supply-chain
The majority of wine sales pass through three tiers: importers, distributors, and retailers (wine shops, and restaurants), before reaching consumers. Only a tiny fraction of wine sales today are DTC (direct-to-consumer).
The reason you don’t see wine available on Amazon is because wine contains alcohol, and alcohol sales are highly regulated. The USA maintains regulations on the books, legacy of 1920’s prohibition, that prohibit some interstate alcohol sales. The European Union is an open customs zone for the sale of goods across borders, with the exception of alcohol, tobacco, and fuel.
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By segregating the value of a wine into two components, the physical bottle, and a digital token, the cost impact of import tariffs and excise taxes can be ameliorated. |
The wine pricing problem
Wine producers face a unique challenge, in part because they are beholden to this three-tier supply-chain. Despite built-in scarcity, elasticity, and quality variability, wine producers lack mechanisms for dynamically adjusting their prices.
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With dynamic tokenized pricing, wineries no longer have to “enforce” suggested retail pricing (SRP) upon their supply chain. |
Attestations
Consumer consciousness increasingly focuses on traceability and provenance, understanding where the things that we buy come from and how were they made. This focus is especially acute when it comes to wine.
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BioDigital Certification eliminates the cost of wine certifications and increases confidence with retailers and consumers about authenticity. |
A Highly Regulated Product
As a foodstuff and an alcoholic beverage, wine is scrutinized by public health authorities. Additionally, wine often serves as a token of regional and national cultural identity.
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BioDigital Certification provides wine regulators with a free mechanism for certifying wines, reducing the economic burden placed upon their wineries, thus increasing competitiveness for their region. |
Fungibility
Wine is a fungible product: one bottle should taste the same as any other bottle of the same label and vintage. As such, wines can be tokenized with fungible tokens (i.e. ERC-20).
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OpenVino combines the benefits of fungible tokenization with NFT traceability and customer engagement. Wine drinkers receive economic value and become members of an exclusive community in exchange for their feedback. |
Cultural Significance
Wine drinkers represent a passionate audience, who search uniqueness. Golf, cars, and wine are internationally seen as a status symbols, but of the three, wine is the most accesible. Wine drinkers prize the uniqueness, those qualities that differentiate one wine from another.
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“You Drink It, You Own It” provides the status wine drinking conveys, both by documenting their drinking experience with an NFT, and by connecting drinkers to wine makers in the OpenVinoDAO community. BioDigital Certification assures consumers of the authenticity of their purchases. |
What problems OpenVino solves, and who are our customers.
OpenVino provides value to everyone in the wine ecosystem. This section enumerates OpenVino’s benefits for:
customers (wine drinkers)
supply-chain partners (importers, distributors, wine shops and restaurants, influences, brand ambassadors, wine regulators)
wine producers
wine partners (winery service providers)
the cryptosphere: token speculators, RWA funds, web3 protocols
For the winery
Access a broader market
Even people in Iran can buy wine tokens.
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Why do chicken coops only have 2 doors? |
For the supply-chain
Risk reduction
A wine distributor or retailer who purchases large volumes of tokens at an attractive price, can choose to redeem small amounts at a time, maintaining the option to liquidate the tokens if the wine is not selling as expected, or if the token price increases beyond the threshold they consider acceptable.
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The wine industry if fraught with fraud. BioDigital Certification reduces fraud.
For the consumer
Price authenticity
The OpenVino.exchange decentralized marketplace provides consumers with a “real” price for wines, as determined by supply and demand.
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OpenVino gives people the chance to learn about “liquidity farming” with a REAL farm.
For OpenVino partners
Onboarding services
OpenVino partners can deliver training and onboarding services to wineries, and keep %100 of the fees for their services. Partners decide their fees based on what pricepoint their market will support.
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OpenVinoDAO brings together wine producers, drinkers, and investors in a token gated community. As OpenVinoDAO members, OpenVino partners gain access to this community.
For the cryptosphere
OpenVino has the power to transform an industry that has existed since the dawn of civilization, and provide a desperately needed real-world use-case for web3.
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Wine tokens that are BioDigital Certified as “carbon-neutral” could be used within composable tokenized carbon credits.
The OpenVino Business Model
Wineries can use OpenVino Tokenization, Traceability and Transparency for free!
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Direct Revenue
OpenVinoDAO inflationary token
Composable wine data
Direct Revenue
OpenVino generates revenue from two primary sources: token swaps, and YDIYOI data fees.
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Breakout target | 3 years |
Total Wineries in the world | 64,255 |
Critical Mass for Network Effect | 300 |
Max Market Penetration % | 4.00% |
OpenVino Wineries in 10 years | 2570 |
Wine Labels per year | 3 |
Label and certification registration fees | $0 |
Total annual label registration | $0 |
Bottles per label per year (tokens) | 20,000 |
Average token price | $15 |
Token Swaps
Whenever someone purchases or sells a wine token issued on OpenVino.Exchange, a transaction fee (swap fee) equal to 1% of the value of the token is levied.
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Year | Wineries | Swap Fee |
1 | 10 | 67,500 $ |
2 | 100 | 675,000 $ |
3 | 300 | 2,025,000 $ |
4 | 624 | 4,214,121 $ |
5 | 949 | 6,403,243 $ |
6 | 1273 | 8,592,364 $ |
7 | 1597 | 10,781,486 $ |
8 | 1922 | 12,970,607 $ |
9 | 2246 | 15,159,729 $ |
10 | 2570 | 17,348,850 $ |
10 Year Total | 78,237,900 $ |
“You Drink It, You Own It” (YDIYOI) NFT data fee
As a wine producer, how much would you pay to receive a photograph of your customer drinking your wine, their personal information, and answers to five questions about their drinking experience?
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Year | Wineries | YDIYOI fee |
1 | 10 | $450 |
2 | 100 | $6,000 |
3 | 300 | $38,400 |
4 | 624 | $74,918 |
5 | 949 | $213,441 |
6 | 1273 | $458,259 |
7 | 1597 | $718,766 |
8 | 1922 | $1,210,590 |
9 | 2246 | $1,886,544 |
10 | 2570 | $3,855,300 |
10 Year Total | 8,462,668 $ |
Secondary Revenue sources
OpenVInoDAO token liquidity farming
Given the estimated volume of OpenVinoDAO token swaps, this will represent a considerable amount of revenue from liquidity farming, both for the liquidity providers (Wineries, Investor pool, and OpenVino DevOps wallet), as well as directly paying into the OpenVinoDAO revenue wallet.
BioDigital Certification Yield
When wineries complete BioDigital Certification, they must stake a bounty (equivalent of 5,000 USDC) during the 30-day challenge stage. OpenVinoDAO can leverage these funds during the bounty period by staking with external lending protocols.
Inflationary OpenVinoDAO token
100,000,000 OpenVinoDAO tokens are initially minted with a nominal value of $0.10.
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(insert OpenVinoDAO token inflation projection)
Composable wine data
What is the value to the wine industry, to know in real-time:
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Regardless of whether or not OpenVino, or a third-party monetizes this composable data, the ability to answer the question, “How do your wine sales rank with your competitors?” is monumental. Any increase in wine value for OpenVino wineries and partners will positively impact OpenVino revenue and desirability. Even providing OpenVinoDAO members this information for free produces a win-win outcome.
Attracting and onboarding customers
Currently, there are wineries waiting to be onboarded for OpenVino services. The current plan is to onboard 10 of these wineries in one batch, followed by 100 wineries 12 months later, with the goal to reach 300 wineries in three years. This gradual approach will help insure that all of the initial wineries are successful in their implementation of OpenVino, and can serve as beacons for other wineries, combined with a concerted marketing and communications push.
Leveraging winery marketing budgets
OpenVino empowers wineries with new sales and marketing tools. As such, OpenVino takes advantage of the individual winery’s marketing efforts around tokenization, transparency, and traceability. Also, wine drinkers engaging with “You Drink It, You Own It” become natural brand ambassadors.
The main marketing and communications efforts of OpenVino are focused on onboarding the first 300 wineries to reach network effect.
Reaching the network effect
To reach the network effect where wineries will have already heard about OpenVino, two things need to happen:
Reach a critical mass of wineries.
We estimate 300 onboarded wineries, worldwide, to guarantee enough exposure to create FOMO for other wineries.Automate the onboarding experience.
Currently, given the lack of knowledge surrounding web3 tools, needed improvements in the OpenVino UI/UX, and the absence of engaged winery examples to draw from, the onboarding process requires a hands-on approach.
In addition to improving the OpenVino UI/UX, and listing the initial 10 reference wineries, the onboarding process for the 10-100 wineries will be done through a distributed partner network. Individuals and small businesses in different wine regions of the world (i.e. USA, Germany, Spain, Portugal, Chile, Mexcio) have already expressed interest in onboarding local wineries to OpenVino.
OpenVinoDAO will provide these partners with materials to educate and onboard these wineries. In exchange for engaging with these wineries, OpenVinoDAO partners will receive OpenVinoDAO tokens.
The OpenVino onboarding process.
Tokenization
Wineries select a wine vintage, based on existing bottle stocks or newly fermented wine, and define their tokenomics and branding:
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minting new tokens
creating redeem and revenue wallets (non-custodial, owned by the winery)
Registering tokens on etherscan, and other registry platforms
Provisioning on the OpenVino winery dashboard (ferment.openvino.org)
Providing operational training and support to early adopters.
Transparency
BioDigital Certification requires that wineries provide information substantiating their certification claims (i.e. organic, DOC/AOC, carbon neutral, vegan, etc.).
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Despite the straightforward approach BioDigital Certification provides, many wineries will still need assistance achieving their certification status. This is a role for OpenVino partners. Existing certification companies can find a home, providing these services, as OpenVinoDAO members.
Traceability
Wineries employing “You Drink It, You Own It” traceability simply need to download and print the NFT QR codes produced by OpenVino, or buy QR stickers from an OpenVino partner. Data collected from YDIYOI drinkers is accessible on the OpenVino dashboard (ferment.openvino.org)
How OpenVino attracts users
OpenVino will proactively search out the initial ~300 wineries required for Network Effect engagement. Some of the actions planned for this attractor campaign include:
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For the most part, attracting token buyers and YDIYOI users (wine drinkers) is the responsibility of OpenVino wineries.
The OpenVinoDAO Governance model
OpenVinoDAO brings together wine producers, drinkers, and investors in a token-gated community. As OpenVinoDAO members, OpenVino partners gain access to OpenVino’s tools and the community.
https://youtu.be/LnIALGnXYv4?si=l3nztXNytpGXXQAj
Scaling OpenVino into a global service, 1M users and beyond
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In 2024, web3 tools have matured sufficiently to provide value to the very traditional wine industry. Our years of effort validating the OpenVino business model, both with Costaflores and wineries worldwide suggests that now is the time to scale, and maintain first-mover advantage.
What does OpenVino need to scale?
For OpenVino to become the global flag bearer for tokenization, traceability, and transparency in the wine universe, five attack vectors need to be addressed:
Make it easy and fun for non-crypto people to use, and make it pretty (The UX problem)
This involves, hiring a good designer, enabling a fiat on-ramp/off-ramp, activating account abstraction, and improving ferment.openvino.org - the winery dashboardTell the world about OpenVino
Attracting wineries and partners through a comprehensive, metrics-based, marketing push.Fill the moat - build the community that insures growth through the network effect
Deploy OpenVinoDAO and collaboration tools like telegram, discord, or commonwealth.imEnsuring OpenVino is Always-on and Secure
Work with web3 security professionals to go beyond The Rekt Test.Availability and Recoverability
Decentralize OpenVino web2 components across OpenVino Netrabrick nodes deployed at wineries.Autonomous (the importance of self-running)
Insure OpenVino is a “Self-Driving” platform with automated provisioning and a robust partner network and community.
Who are we up against? The competitive landscape
Several web3 projects exist in the wine world. But to date, these are all focused on collectible NFT’s and wine clubs, or traceability.
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None of these projects provide full-vintage tokenization, nor do they integrate extreme transparency with traceability. OpenVino enjoys a first-mover advantage.
How have we validated OpenVino?
OpenVino development over the past six years involved tokenizing 100% of Costaflores Organic Vineyard’s production. We understand the friction and pain points of the wine industry.
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