Harvard Business Review

Introduction I: What is Web3
a. Bitcoin introduced the world to blockchain and peer-to-peer value exchange. Richness provided by blockchain technology and how this is disrupting the financial system.
b. How blockchain tackles the leviathan and other examples of proxy trust (notaries, auditors and validators).
Introduction II: Costaflores and the OpenVino Project
1. Costaflores / MTB
2. OpenVino
  1. Tokenization
  2. Transparency
  3. Traceability
How this paper is structured: “Five problems faced by Costaflores, resolved through decentralization”
1. What price a bottle of wine? (Key point: value enhancement)
2. Who is telling the truth? BioDigital Certification
3. Who owns the Identity? (OpenVino v Intel) and Mike Tango Bravo™ - SSI?
4. Who does the winery belong to? (OpenVino Fideicomiso)
  1. YDIYOI - challenging the Howie test
  2. security token v utility token?
  3. Where did our investment come from? (Unisocks story)
5. What is a company, anyway? - Opening up the OpenVinoDAO
Problem One - What price a bottle of wine? (Key point: value enhancement)
1. Unique characteristics of wine
  1. highly elastic price
  2. incorporated scarcity
  3. highly regulated and controlled
  4. Gets better over time…until it doesn’t
  5. Compared with other pieces of art…our best metaphor for a token
2. How we tokenize wine
  1. Harvest
  2. Make wine
  3. Declare wine
  4. VCO
  5. Viniswap
    1. Sidebar - how does a decentralized exchange work?
  6. Redeem - burn token
  7. Liquidity farming
3. What problems does this solve for the producer
  1. Immediate liquidity
  2. Segregate value between bottle and token
    1. Wine shops / restaurants
    2. Importers and distributors
    3. Brand ambassadors and influencers
  3. Create own asset backed currency for payment of services
    1. marketers
  4. Enable future supply chain mechanisms through smart-contracts (hint at DAO)
    1. The logistics nightmare…the 19th problem we have yet to solve.
Final words + leaving the conversation open for problems 2, 3, 4 and 5.

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Problem Two - “Who is telling the truth?”
1. The claims about wine today: attributes, quality, price
  1. Today’s claims
    1. organic, fair-trade, carbon-neutral - how these work today: give funny examples
    2. wine claims: single-vineyard, AOC/DOC, grape varietals, biodynamic, vegan, kosher
    3. The marketing dilema facing large wineries...
    Awash in bogus claims, fake news, and counterfeit products, consumers today are suspect of the authenticity of their purchases. These suspicions go beyond increased environmental and ethical concerns around manufacturing methods, to include questions of provenance, quality, and honesty in marketing.
    
    Wines are particularly vulnerable to these suspicions, given the multiple unique characteristics that marketers imbue upon wines. Unlike most other foods and beverage, where homogeneity and consistency are appreciated, wine buyers are messaged to seek out unique characteristics: grape varietals and blends, regional climate, geography and the influences of terroir, artisanal wine-making practices, variations in vintages, ageing processes, and storage methods, to name a few.
    
    As a result, wine produces endow their bottles with a plethora of claims. Vinification methods can be categorized as conventional, organic, biodynamic, natural, single-vineyard, vegan, kosher, estate bottled, fair-trade, or carbon-neutral, using indigenous or imported yeasts, fermented in stainless steel, clay amphoras, egg-shaped cement pots or oak barrels, all stored for different lengths of time in different types of oak and oak treatments, and of specific grape varietals or blends according to the authorship of the oenologist or attending to strict rules imposed by local appellations or regulators.
    
    Add to this the subjective nature of wine tasting and appreciation, the volatility of individual wine bottles, the broad elasticity of prices for wines non-binding to a price/quality ratio, and a substantial amount of counterfeit product in the marketplace, it is no wonder why someone might wonder if that expensive glass of single-vineyard, biodynamic tempranillo from Ribera del Duero, ordered at the restaurant in Shanghai, is really all that it claims to be.
    
    This attraction to uniqueness in wines also creates an interesting scaling problem for wine producers. As wineries grow and produce larger volumes of wines, they understandably tend to optimize, standardize and out-source production methods. In other words, as wineries become bigger and more successful, they become more “industrial”, distancing their wines from the hand-made unique artwork their marketing department has crafted. The large winery producing millions of litres of juice can no longer honestly claim the traditional bucolic nature once associated with the label. Where a successful brewery might claim, “Number one in sales! Brazil’s best selling beer!”. For a winery to triumph volume is anathema to the claims of uniqueness.
2. How is this validated today?
  …. The Costaflores Organic example.
  1. 10 years, annual inspection, easy to cheat
    1. no chemical analysis that matters
  2. examples of environmental analysis
  3. mis-aligned incentives
  4. private certifiers
  5. high cost
  6. paper audit
  7. no-in-real-time “best practices”
3. Using BioDigital Cert
  1. Clearly defined objectives
  2. blockchain for the non-repudiation of facts
    1. Sensor data
    2. Image data
    3. Accounting data
    4. Work log data
    5. Analytics
  3. Kleros - Smart-contract staking modes for solving this problem…
4. Why this is important -
  1. supporting ethical, sustainable claims, rewarding good actors, real-time best practices
  2. The benefits of an open-source ecosystem

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Problem Three: OpenVino v. Intel Corporation, Identity.
1. How Intel Corporation nearly usurped the OpenVino brand, a David & Goliath story, blockchain instead of stones
2. The Genesis of OpenVino -
  1. Presentation of OpenVino In New Delhi (2017) - segway from Problem One
  2. Domain, github, social media, youtube, etc…
  3. Token issuance on 6 May, 2018: brief intro to wine tokenization - to revisit in detail in Problem Three
  4. Intel press conference on May 8, 2018, claiming TM…but no registry on USPTO
  5. OpenVino applies for USPTO - Intel claims registry in Jamaica, May 7, 2018
  6. Sidebar - why Jamaica? - a quick trip to Kingston
  7. Using a mark doesn’t matter…commerce matters - the Nike case
3. Using blockchain to demonstrate commerce
4. OpenVino is the first case where blockchain is used to demonstrate commerce
5. Goliath is still Goliath…an amicable resolution is met…besides, OpenVINO for OpenVino?

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Problem Four: How can we understand our drinkers, and change our relationship? OpenVino Fideicomiso
1. How do we measure “quality” today
  1. Individual experiences
  2. Wine experts
  3. Crowd sourcing
2. You Drink It, You Own It
  1. Capturing consumer experiences
    1. Drinking as a truly intimate experience. Wine is food. Wine creates and destroys cells. Wine builds experiences.
  2. Turning experiences into NFT’s
  3. Converting NFT’s into shares
  4. Compensating customer participation and feedback with shares
    1. Every wineries own “currency”
    2. Brand ambassador…”what do you think about OUR wine?”
  5. Gameifying the experience
    1. A real farmville.
    2. Validating our sensor data (turk machine)
    3. Learning and earning.
    4. Sidebar - “What is The Howie Test?”
  6. Fideicomisos, experience NFT’s, and desafiando el Howie Test.
Problem Five: Are we really investing? And where does the money come from?
1. Are we really investing? Do we really have the money?
2. Where does the money come from?
  1. Sidebar - “Unisocks!!!”

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OpenVino DAO

Closing summary:
1. Bitcoin removed the friction of moving money from A to B, and eliminated the need of a trusted third-party. It removed the Leviathan.
  1. The El Salvador GDP bump.
2. Smart-contracts enable new business models, where eliminating the need of a trusted third-party is essential.
3. The friction of simply being in business…Argentina’s “red-book” problem.
  1. How many documents - redbooks - signatures, apostille’s, hand-written garbage?
  2. How much money per year on accountants, lawyers, notaries…
  3. How many hours spent on these processes…and none of these activities make our wine taste betters, sold any bottles, ,.,.. or improved our business knowledge! (you would think the accountant’s would at least provide a lens into our finances).
  4. The accounts, inspectors, natories, lawyers, regulators….did nothing to add to our business. For a PYME, this is a substantial burden.
4. The future of DAO’s
  1. “Corporate” governance replaced by smart-contracts, openly published rules, and methods of dispute resolution and validation.
  2. Contracts between entities can be streamlined with smart-contracts, dispute resolution mechanisms, and social pressure.
  3. DAO’s don’t need to ask permission to open a new business.
  4. They don’t need to be registered in particular jurisdiction.
  5. The founders don’t need to be public or known
  6. The employees, DAO members, can come and go, based on rules defined by the DAO.
  7. Compensation can be paid to anonymous wallets.
5. OpenVino has accomplished (restate the five problems)
6. The future of OpenVino
  1. Opening up to new wineries
  2. Validating information with regulators
  3. Engaging logistics forwarders