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Cardano based smart contracts plaftorm for auctioning Vietnam state-own assets

Problem

An auction involves the bidder, the seller & the auctioneer. Each party can collude with anyone on the opposite side or on its own side in a variety of manners → collusive bidding & shill bidding.

Solution

Creating a functioning connection platform by integrating smart contracts into our current centralized auction platform.
Proposed the B2E business model to bring more users to the Cardano space.

Total to date

This is the total amount allocated to Cardano based smart contracts plaftorm for auctioning Vietnam state-own assets.

₳393,100

Total funds requested

194

Total votes cast

₳26.3M

Votes yes

₳150M

Votes no

About this idea

blockchain dapps localization smart-contract

[GENERAL] Name and surname of main applicant

Le Minh Tuan

[GENERAL] Email address of main applicant

tuan.le@lacviet.io

Additional applicants

1) Do Thi Hong Hanh, hanh.do@lacviet.io, https://www.facebook.com/hong.hanh.16547

2) Nguyen Trong Hung, hung.nguyen@lacviet.io, Linkedin: https://www.linkedin.com/in/nguyen-trong-hung/

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.” .

No dependencies.

[GENERAL] Will your project’s output/s be fully open source?

[GENERAL] If NO, please describe which outputs are not going to be open source. If YES, please write “Project will be fully open source.”

Fully open source: Blockchain-related parts such as wallet creation, smart contracts,...
Not be open source:
Web 2 related parts such as KYC, user's dashboards & reports, mobile apps...
Ommni-channel experience management & users' profiles data model,..it is built on the Salesforce platform so can not be open source.
Securities-related code on Samsung devices.

[METADATA] Category of Proposal

dApp

[IMPACT] 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

Business's point of view

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

b. System's point of view

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.

3.1. System solution

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.

3.2. Business solution

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.

[IMPACT] 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.”

[IMPACT] 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.

[IMPACT] 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.

[CAPABILITY/ FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability?

We are the first & authorized by the Vietnamese government to manage, and operate the online platform for auctioning state-own assets ( 10+ years experienced in state own assets auctioning).
Experienced core team in Auction Industry, Public Relationships, Software development & Fund management.

[CAPABILITY/ FEASIBILITY] What are the main goals for the project and how will you validate if your approach is feasible?

The main goal of the project is the solution to restrict collusion and reduce prices, especially for government properties being auctioned off.

The table below are objectives that we are trying to achieve with the project, compared with our previous version.

[CAPABILITY/ FEASIBILITY] Please provide a detailed breakdown of your project’s milestones and each of the main tasks or activities to reach the milestone plus the expected timeline for the delivery.

Milestone 1: Requirements Gathering - 1 month

Main tasks:

All elements of the scope will be clarified and we will gather the data required to start the design and build. This will include processes, data requirements, and much more.

Set up an entity in Singapore to receive bidding deposits in ADA. ( Cryptocurrency being used as payment or deposit does not allow in Vietnam).
Acceptance criteria: Authorized entity document, issued by the Singaporean government.
Agreed on sales commission and incentive with the strategic partner ( Lac Viet auction house).
Acceptance criteria: Commercial contract with Lac Viet Auction House
Partnership with Samsung on co-marketing
Acceptance criteria:
Commercial contract with Samsung Vietnam ( Samsung's Knox authorized re-seller vendor)
Success story on Cardano-based smart contracts auction platform for state own assets to be added to Samsung R&D Center's official slides in South East Asia ( Samsung R&D Center in Indonesia, 3 months after go-live).

Milestone 2: Design & Requirements Sign Off - 1 month

Main tasks:

Getting the look and feel right ensures the most important information is where we need it.

Requirements Sign Off with software vendors.

Build a co-marketing & reciprocal marketing plan with the strategic partner in detail
Acceptance criteria: Marketing plan ( on Google slides).
Design user journeys in detail
Acceptance criteria: Blueprint for user journeys
AWS or Microsoft Azure infrastructure design
Acceptance criteria: Blueprint for infrastructure on AWS or Azure
Establishing good governance for project build in detail:
Identified roles, responsibilities, and accountabilities
Meeting & reports
An agreed way of working together
Raising issues & managing change
Risk management
Acceptance criteria: Governance Document
A design data model for customer 360 degrees view on the Salesforce platform.
Acceptance criteria: Signed Business Requirement Document with Salesforce's ISV

Milestone 3: Front-end build - 2 months

This is one of the largest parts of the project getting front-ends works.

02 mobile apps on iOS & Android
01 responsive project website
Acceptance criteria: 02 mobile apps ( Android & iOS) & 01 responsive website

Milestone 4: Back-end build - 2 months

Main Tasks:

Creating or partnership with a Cardano Stake Pool
Acceptance criteria: An working Cardano Stake Pool.

Back-end:

Off-chain code runs on AWS or Microsoft Azure infrastructure
Receipt from AWS or Azure and source code on GitHub
Smart contracts & transaction data is on-chain code on the Cardano blockchain network.
Acceptance criteria: Source Code on GitHub.

User data model & on-boarding process:

Built on the Salesforce platform

Acceptance criteria:
Software on Salesforce Sales Cloud ( Lac Viet Technology org).
Contracts with Salesforce and Salesforce's ISV.

Integration:

Integrate user data model & onboarding process on Salesforce to the auction platform.
Integrate & audit smart contracts
ADA staking pool & DEX integration
Acceptance criteria: Report from smart contracts auditing company ( ex: CertiK, Hacken,..)
Integrate back-end & front-ends.

Milestone 5: QA/UAT Testing, Fixing, Training & Go live - 1 month

Main Tasks:

Published 02 front-end mobile apps on Apple Store and Google Play
System testing and bug fixing.
Getting user's & community's feedback and making changes
Build training documents & user guides
Go live event
Acceptance criteria:
Report from security & smart contracts auditing company ( ex: CertiK, Hacken,..)
02 mobile apps on Stores and 01 website
Documents for training & guide
Testing report