Cardano based smart contracts platform for auctioning tangible assets

[GENERAL] Name and surname of main applicant

Tuan Le

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Co proposers and 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)

5

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

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

1. Integrating smart contracts into our current centralized auction platform to increase trust and transparency
2. Propose a business model to convert existing users to the Web3 space & accelerate adoption

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

No

[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?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

Yes, it works under the GNU General Public License (GPL) v3.0 License

[SOLUTION] 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. Since 2019, we have been selling state-owned 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.

On Aug 08, 2023, we were the first Auction House who apply blockchain technology to the online auction platform in Vietnam.

2). Existing problems

1. 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.
• The Bidder, the Seller ( government & individual), and the Auctioneer's point of view
• According to the Law on asset auction: Tangible assets that as prescribed by law must be sold via auction comprise State-owned assets,...
• The seller is looking for a solution to restrict collusion and reduce 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 Cardano 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.

1. 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.
2. Account registration & bidding deposit are a must for auctioning state-owned assets according to the Vietnam Law on asset auction.
3. A Cardano-based wallet address will be created during account registration. The address will be used for receiving deposits or earning rewards.
4. 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-owned 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.
5. 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.
6. 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 Cardano 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 finds 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 new 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 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] Please define the positive impact your project will have on the wider Cardano community.

The success of the project will be measured as follows:

1) Product Development & Quality

• Go live on time ( 5 months).
• CSAT: 4.2/5 ( 3 months after go-live, it will be sent to bidders for rating once per month).

2) Product Marketing ( Branding)

• At least 10 articles about the Cardano & the auction platform reached at least 500.000 views.
• At least 30+ tangible assets are being auctioned off in 6 months. Transaction data is transparently shown on the Cardano blockchain.
• Responsive web: 3.000 unique visits/month ( 3 months after go-live)

3) Drive Cardano adoption ( Performance)

According to our data below.

• There are 12,000 paid users on our Web2 platform, and 80% of them will be converted to the Web3 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.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

• On Aug 8, 2023, we launched the first BSC-based smart contracts platform for auctioning tangible assets. It made a buzz and was widely broadcast on VTV1, the most popular channel in Vietnam, operated by VTV, the national broadcaster.
• The 02 apartment buildings have successfully been sold via the system.
• The 02 Vietnam state-owned used cars have successfully been sold via the blockchain system. Pls, refer to the Reference section for detail.
• Press release: https://lacvietauction.vn/chi-tiet-tin-tuc/1162725-Press-Release-Blockchain
• We are the first & authorized Auction House by the Vietnam government to manage and operate an online auction platform with 10+ years of experience.
• Experienced core team in the Auction Industry, Public Relationships, Software development, and fund management.

The main goal of the project is the solution to restrict collusion and reduce prices, bringing existing Web2 users to Cardano Web3 space via tokenization ( blockchain-complete solution). The BSC-based version ( blockchain-inspired solution) has not been tokenization yet.

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

References:

The tangible & state-owned assets have successfully been sold via our BSC-based auctioning platform.

1. https://lacvietauction.vn/tai-san-dau-gia/1002398-lo-356---b1.2--khu-dan-cu-phan-lang-1,-phuong-an-khe,-quan-thanh-khe
2. https://lacvietauction.vn/tai-san-dau-gia/1002378-xe-o-to-hieu-mercedez-benz-e240bks:-80b-2817-cua-van-phong-trung-uong-dang
3. https://lacvietauction.vn/tai-san-dau-gia/1002372-xe-o-to-hieu-toyota-zace-1.8bks:-80b---3856-cua-van-phong-trung-uong-dang
4. https://lacvietauction.vn/tai-san-dau-gia/1002281-qsh-can-ho-1904a---toa-nha-hh02---chung-cu-eco-lakeview

[Project Milestones] What are the key milestones you need to achieve in order to complete your project successfully?

• 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.

• Agreed on sales commission and incentive with the strategic partner ( Lac Viet auction house).
• Acceptance criteria: Signed commercial contract with Lac Viet Auction House
• Partnership with Samsung on co-marketing
• Acceptance criteria:
• Signed commercial contract with Samsung Vietnam.
• Success story on Cardano-based smart contracts auction platform for auctioning tangible assets. The story is 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).

• 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: Signed co-marketing plan in detail with partners ( Samsung Vietnam B2B team & Lac Viet Auction House).
• Design user journeys in detail
• Acceptance criteria: Blueprint for user journeys
• 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-degree view
• Acceptance criteria: Signed Business Requirement Document

• Front-end build - 1 month

This is one of the largest parts of the project getting front-end work.

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

•      Back-end build - 1 month

Main Tasks:

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

Back-end:

• Smart contracts & transaction data are on-chain code on the Cardano blockchain network.
• Acceptance criteria: Source Code on GitHub & video demo.

Integration:

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

• 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:
• Reports from security & smart contracts auditing companies ( ex: CertiK, Hacken,..)
• 02 mobile apps on Google Play and Apple app stores
• Publish 01 responsive website
• Publish documents for training & guide
• Publish testing report
• Press conference: 10 newspaper articles.

[RESOURCES] Who is in the project team and what are their roles?

1. Tuan completed his Ph.D. with many publications, he was with Nokia, Microsoft and now is Vietnam Managing Director for MediaMonks, a world-leading digital transformation consultancy & implementation company. Linkedin: https://www.linkedin.com/in/minh-tuan-le-9210448/
2. Hanh is a government-authorized Auctioneer & CEO of Lac Viet Auction House for 15+ years.
3. Mr. Hung is a blockchain developer with 8 years of experience. Who built successfully the largest government-authorized auction platform. This is his patent https://bit.ly/3HVEMhs

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources.

The total requested is 111,500 ADA. Please see below for an estimate in detail.

Cost breakdown of the proposed work

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

Below is our proposed rate card

• 40$/hour for backend & database developer
• 45$/ hour for a mobile application developer
• 45$/hour for a smart contracts developer
• 30$/hour for QA/QC, UI, UX designer
• 50$/hour for solution architecture
• 40$/hour for Project Manager

1 ADA = 0.4$ ( Mar 12, 2023 - Coinmarrketcap reference).

[IMPORTANT NOTE] The Applicant agrees to Fund Rules and also that data in the submission form and other data provided by the project team during the course of the project will be publicly available.

I Accept