Emil Frey Group: Tokenized Vehicle Identities & Maintenance Logs - Guaranteed minimum of 40,000 vehicles up to millions

[GENERAL] Name and surname of main applicant

Patrick Tobler

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

Entity (Incorporated)

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

12

[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)

Emil Frey will create a blockchain-based system that assigns each vehicle a secure digital record, allowing easy access to the car’s full service history. Then roll out to at least 40,000 cars.

[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

Our project outputs will be be open source, we have not decided on the output format or license yet.

[METADATA] Horizons

Tokenization

[SOLUTION] Please describe your proposed solution

Introduction

We recognize that vehicle service records are often unreliable, fragmented, and susceptible to fraud. This creates significant challenges for car owners, potential buyers, and service providers, leading to distrust in the used vehicle market. By addressing these challenges, we aim to enhance the credibility of vehicle histories and improve transparency in the automotive sector.

Company Overview

Europe’s largest car dealer.

Founded: 1924 by Emil Frey in Zürich, Switzerland.

Structure: Emil Frey operates within four key business areas:

Einzelhandel (Retail): Focus on sales of various automotive brands, ensuring brand uniqueness and customer satisfaction. They offer a complete online car purchasing experience through Emil Frey Digitale-Autohaus since early 2020, facilitating sales, leasing, financing, and insurance services online.

Import: Exclusive importer for brands like Mitsubishi, Subaru, and newer entries like GWM (ORA and WEY).

Teile und Logistik (Parts and Logistics): A comprehensive parts specialist offering efficient logistics, individual service, and a wide range of automotive parts and accessories. This includes services for contract dealers, service partners, and independent workshops.

Services: This includes back-office support, financial services, and insurance options, enhancing the complete automotive service ecosystem.

Operational Scale:

Locations: Presence in Switzerland with 14 importers and a network of 1,250 retailers and operates at over 100 locations across Germany.

Employees: Approximately 22,000 employees in total.

Vehicles: More than 10,000 vehicles instantly available, combining both new and used cars.

Annual Revenue: Exceeds €15 billion

Business Strategy and Market Position:

Digital Transformation: Significant emphasis on digital solutions for car sales, which caters to changing customer expectations towards online services.

Customer Focus: Aims at providing a full-service experience around vehicle ownership, from purchase to maintenance, and from financing to insurance.

Concept

Objective: To innovate vehicle service record management by leveraging blockchain technology for transparency, security, and immutability, starting with an MVP focused on tokenizing 40,000 vehicles.

Project Overview:

Background:

• In collaboration with Emil Frey, this project aims to revolutionize vehicle documentation by integrating blockchain technology to ensure service records are tamper-proof and easily verifiable.

Tokenization Process:

• Digital Asset Creation: Each vehicle within the pilot project will be tokenized, creating a unique digital identity on the blockchain, correlated directly with the Vehicle Identification Number (VIN).

  

• Implementation:
• a) Every tokenized car will be issued a QR code, replacing or supplementing the traditional paper-based or digital service book.
• b) This QR code, when scanned, will link to an online portal displaying the vehicle's service history, accessible by potential buyers, service providers, and the vehicle owner, ensuring transparency.
• c) Service partners will utilize a dedicated mobile application to scan QR codes and log service entries. Each entry creates a new transaction that updates the service book's current state. The system maintains an immutable audit trail by retrieving historical data from previous transactions.
• d) To ensure legitimacy, all entries must be made by users verified through Decentralized Identifiers (DIDs). This verification system guarantees authenticity and prevents unauthorized modifications to the service records.

Technology Utilization:

• Blockchain Choice: Assuming the use of a suitable blockchain (like Cardano for NMKR API), the tokens representing each vehicle will be minted, ensuring each car's digital twin on the blockchain is unique and secure.

  

• Leverage NMKR's API:
• Token minting: Creating vehicle tokens upon vehicle registration into the system.
• Immutable Entries: Logging service records onto the blockchain, ensuring each maintenance or repair entry is timestamped, unalterable, and attributed to verified service providers.

Scale of Pilot:

• Tokenization of Vehicles: A budget of 80,000 ADA will be allocated to cover the costs associated with minting tokens for 40,000 vehicles. 

Benefits:

• Increased Trust: Enhance trust among buyers and sellers by providing an immutable record of vehicle history.
• Operational Efficiency: Streamline service documentation for Emil Frey's workshops, reducing administrative overhead and potential for human error.
• Market Differentiation: Position Emil Frey as a pioneer in adopting blockchain technology in the automotive sector, potentially attracting tech-savvy customers and partners.

Phases:

• Proof of Concept: Initial phase to tokenize 40,000 vehicles, testing the system's functionality, security, and user acceptance.
• Full Implementation: Upon successful POC, expand to encompass more vehicles within Emil Frey's inventory, potentially integrating with other digital services like sales or financing.

Future Scalability:

• Explore further blockchain applications like vehicle title transfers, warranty claims, or even integration with smart cities for traffic management or automated toll payments.

Conclusion:

This proposal outlines a pioneering step towards modernizing vehicle management systems using blockchain technology. By starting with service records, Emil Frey not only enhances the credibility of its vehicle data but also sets the stage for a digital transformation in vehicle lifecycle management. This initiative could serve as a model for the automotive industry, showcasing the practical applications of blockchain beyond cryptocurrencies.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

Value to the Cardano Community

Our project aims to significantly impact the Cardano community by showcasing the practical applications of blockchain technology in the automotive sector. By tokenizing 40,000 vehicles, each with its own transaction for every service record update, we will:

1. Enhance Credibility: Establish Cardano as a trusted platform for secure, transparent applications in critical industries.

2. Drive Adoption: A successful pilot can lead to widespread adoption within Emil Frey’s entire vehicle management, promoting Cardano’s technology for innovative solutions across the automotive industry.

3. Attract Partnerships: Foster collaboration with automotive businesses and service providers, expanding Cardano’s ecosystem and user base.

Measuring Impact

We will measure our project’s impact through:

• User Adoption Metrics: Tracking the number of vehicles tokenized and service history accesses via the mobile app.

• User Feedback: Conducting surveys with vehicle owners and service providers to gauge satisfaction and insights.

• Partnership Growth: Monitoring the number of new partnerships formed within the automotive sector as a result of this project.

Sharing Outputs and Opportunities

To maximize our project’s benefits for the Cardano community:

Open Communication: Regularly update the community through blog posts and social media about our progress and findings.

Collaborative Opportunities: Encourage other projects and developers to adapt our model for different industries, driving innovation and blockchain application expansion.

By demonstrating the value of Cardano’s blockchain in the automotive sector and facilitating its adoption, we will enhance Cardano’s reputation and lay the groundwork for future innovative projects.

[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?

As NMKR, we bring a proven track record in blockchain technology and tokenization, uniquely positioning us to execute this project with high levels of trust and accountability. Our collaboration with Emil Frey AG, a leader in the automotive sector and Europe’s largest car dealer enhances our understanding of industry challenges, allowing us to develop a tailored solution.

To validate our approach, we will initiate a Proof of Concept (PoC) to tokenize a subset of vehicles, gathering feedback from Emil Frey AG and potential users to ensure the system meets industry needs. Our skilled team will conduct thorough assessments of the blockchain infrastructure to ensure scalability and security.

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

Milestone 1: Project Kickoff and Initial Planning

Outputs: Comprehensive project plan outlining objectives, timelines, and responsibilities. Completion of the Proof of Concept (PoC) framework.

Acceptance Criteria: Approval of the project plan by all stakeholders, including Emil Frey AG.

Evidence of Completion: Signed project plan

Milestone 2: Development of Tokenization Framework

Outputs: Completion of the tokenization framework and the blockchain infrastructure setup, including API integration and decentralized identifiers (DIDs).

Acceptance Criteria: Successful deployment of the tokenization system on a test network, demonstrating functionality with a sample vehicle.

Evidence of Completion: A demo presentation showcasing the framework’s capabilities.

Milestone 3: Development of Workshop Application and Service Record Viewer

Outputs: Development of a mobile application for service employees to log service entries and a web-based viewer for accessing service records.

Acceptance Criteria: Successful testing of the application with Emil Frey AG, allowing service personnel to log entries and users to view service histories effectively.

Evidence of Completion: Application demo and URL to viewer.

Milestone 4: Testing of Vehicle Tokenization

Outputs: Tokenization of a selected group of test vehicles.

Acceptance Criteria: Successful tokenization of test vehicles on the blockchain.

Evidence of Completion: Transaction records on the blockchain for tokenized vehicles.

Milestone 5: Feedback Integration and Service Record Logging

Outputs: Integration of service record logging to assess system functionality. Collection and analysis of feedback from users and stakeholders.

Acceptance Criteria: Logging of service records for tokenized test vehicles. Gathering of user and stakeholder feedback on the system's performance.

Evidence of Completion: Summary report of user feedback with recommendations for improvements. Detailed service record logs for test vehicles.

Final Milestone: Full System Implementation, Training, and Project Close-out

• Outputs: Complete tokenization of all 40,000 vehicles, provision of training sessions for Emil Frey AG staff, and a final project report including lessons learned and recommendations for future enhancements.

• Acceptance Criteria: Successful tokenization of all vehicles, completion of training sessions with positive feedback, and acceptance of the final report and project close-out video by stakeholders.

• Evidence of Completion: Confirmation of vehicle tokenization records, training completion certificates for staff, and submission of the project report and video to the funding body and Emil Frey AG.

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

Project Lead Blockchain : Patrick Tobler CEO NMKR + complete NMKR Team

Co-Proposer: Christoph Hug Business Owner Marketing Emil Frey Digital AG + Emil Frey AG Team

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

Budget & Costs

We are requesting 1,300,000 ADA to support the successful execution of our project focused on tokenizing vehicle service records. Below is a detailed cost breakdown reflecting the resources required at each stage of the project.

Project Management and Administration

• Project Management: 160,000 ADA
• Administrative Support: 60,000 ADA

Total: 220,000 ADA

Development Costs

• Blockchain Infrastructure Setup: 160,000 ADA
• API Development and Integration: 120,000 ADA
• DIDs Implementation: 80,000 ADA
• Workshop Application: 130,000 ADA
• Service Record Viewer: 100,000 ADA

Total: 590,000 ADA

Testing and Quality Assurance

• Tokenization Testing: 55,000 ADA
• User Acceptance Testing: 45,000 ADA

Total: 100,000 ADA

Training and Documentation

• Training Sessions: 135,000 ADA
• Documentation: 30,000 ADA

Total: 165,000 ADA

Marketing and Community Engagement

• Publicity and Marketing Materials: 120,000 ADA

Total: 120,000 ADA

Tokenization Budget

• Budget to Tokenize initial 40,000 Vehicles: 80,000 ADA

Total: 80,000 ADA

Grand Total: 1,275,000 ADA

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

Plan for 1 year of rollout:

Guaranteed Proof of Concept (40,000 tokenized cars):

• Initial transactions in the first year: 40,000 for minting the Digital Twin + 40,000 for workshop visits = 80,000 transactions
• Following years: 40,000 annual workshop transactions (no minting transactions needed)

Small Rollout (100,000 tokenized cars):

• Initial transactions in the first year: 100,000 for minting + 100,000 for workshop visits = 200,000 transactions
• Following years: 100,000 annual workshop transactions

Medium Rollout (500,000 tokenized cars):

• Initial transactions in the first year: 500,000 for minting + 500,000 for workshop visits = 1,000,000 transactions
• Following years: 500,000 annual workshop transactions

Large Rollout (1,000,000 tokenized cars):

• Initial transactions in the first year: 1,000,000 for minting + 1,000,000 for workshop visits = 2,000,000 transactions
• Following years: 1,000,000 annual workshop transactions

The assumption is that each car averages one workshop visit per year. These figures align with Emil Frey's annual sales numbers but could fluctuate depending on the actual demand.

In addition, there's a dark number of customers using the Emil Frey garages and are not purchasing cars from Emil Frey. These customers would also be able to create a digital twin for their car.

Estimated Numbers of Total accumulated Transactions (in case of success):

Year 1

• MVP: 80,000 (guaranteed) Transactions; 40,000 tokenized Cars
• Small: 200,000 Transactions; 100,000 tokenized Cars
• Medium: 1,000,000 Transactions; 500,000 tokenized Cars
• Large: 2,000,000 Transactions; 1,000,000 tokenized Cars

Year 2

• MVP: 200,000 Transactions; 80,000 tokenized Cars
• Small: 500,000 Transactions; 200,000 tokenized Cars
• Medium: 2,500,000 Transactions; 1,000,000 tokenized Cars
• Large: 6,000,000 Transactions; 2,000,000 tokenized Cars

Year 3

• MVP: 360,000 Transactions; 120,000 tokenized Cars
• Small: 900,000 Transactions; 300,000 tokenized Cars
• Medium: 4,500,000 Transactions; 1,500,000 tokenized Cars
• Large: 10,000,000 Transactions; 3,000,000 tokenized Cars

Year 4

• MVP: 560,000 Transactions; 160,000 tokenized Cars
• Small: 1,400,000 Transactions; 400,000 tokenized Cars
• Medium: 7,000,000 Transactions; 2,000,000 tokenized Cars
• Large: 15,000,000 Transactions; 4,000,000 tokenized Cars

The proposed budget of 1,300,000 ADA for our vehicle service record tokenization project represents excellent value for the Cardano ecosystem, particularly in terms of fostering large partnerships and driving adoption:

Major Partnerships: By partnering with automotive companies, we can significantly expand Cardano’s reach into the automotive sector. This collaboration will attract more businesses and enhance Cardano’s credibility as a blockchain solution for real-world applications.

Standardization of Tokenization: If successful, we aim to establish our tokenization approach as the standard at Emil Frey and potentially extend this model to other businesses within the automotive industry. This could encouraging widespread adoption of Cardano for vehicle service records across multiple organizations.

High Transaction Volume: With the project facilitating numerous transactions related to service history checks and verifications, we anticipate a significant uptick in blockchain activity. Each vehicle transaction represents potential fees for Cardano, boosting overall network utility.

Competitive Cost Structure: Our budget is in line with industry standards for development and project management.