Blockchain for Contracts: Indonesia

[IMPACT] Please describe your proposed solution.

Project Objective

Build a proof of concept with one notary to demonstrate feasibility for a nationwide blockchain network in Indonesia for the storage and management of digital contracts.

Use Case

Migrate from storing paper original copy contracts in safes in notary offices to storing digital original contracts with digital signature, e-seal, and digital meterai on blockchain.

Solution Overview

The Problem We Are Solving

In Indonesia today, contracts are paper based. Originals are stored in physical safes in notary offices.

• Single point of failure. Subject to loss due to natural disaster or notary business failure / closure
• Paper agreements can be altered, deleted, or lost

The authoring, reviewing and negotiation of paper contracts is cumbersome and time consuming.

• Difficult to track changes and ensure all changes are agreed and included. Versions must be physically exchanged during the review process.

Over time, signatories and interested parties can lose track of the location of contracts.

Signatories can lose track of the clauses that require to be triggered if/when certain events occur.

• Manual process to remember triggered clauses.
• If an event occurs requiring action to be triggered as per the contract, then it can be difficult for impacted parties to initiate the action, and/or contact all interested parties, particularly after time has passed.

Proposed Solution

Build a proof-of-concept and pilot with a single notary to demonstrate the technical, business and regulatory aspects of the solution.

• Original copies of executed contract are stored securely and permanently on a blockchain in a digital format - "single source of truth".
• Contracts can be accessed and viewed online at any time by authorised parties - notary, signatories, and interested parties.
• The blockchain also represents an immutable audit trail of contract lifecycle from initiation, through execution, to renewal and termination.
• Digital signatures, e-seals, and meterai for contract execution (* meterei is Indonesia stamp duty)
• Smart execution of contract clauses triggered by events.
• Smart execution of renewal or termination.

Creating a Business Driver Through Network Effect

The success of creating a national blockchain solution for the digitization of legal contracts depends upon encouraging individual notaries to join the service.

At an individual notary level - benefits are created for a single notary and its clients through the digitization of legal agreements.

• No storage of paper
• Automation of contract management
• Automate notifications to clients of contract triggered events
• Invite parties to view / action contracts.
• Delegate contract work to other notaries
• Improved service to clients
• Increased integrity and trust with clients as contract on block chain represents "single view of the truth.

By joining multiple notaries into an ecosystem for the digitisation and management of legal agreements we create benefit greater than the sum of the individual parts through network effect.

• The networked notaries become a "super notary organisation"
• Easier to collaborate between notaries.
• Notary can delegate to other notaries
• Notaries can receive more business through easier method of delegation
• Better time/work management
• Better industry service to clients.

This greater benefit can be shared back to the ecosystem participants through a DAO - an alternative management structure to allow peers in an online digital ecosystem to share ownership, allocate resources, and distribute rewards.

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

If this project is successful, it will create a significant use case for Cardano blockchain in SE Asia, and specifically Indonesia.

• It will demonstrate the feasibility of a use case that has the potential to introduce many users to Cardano for a use case that will create significant benefit and utility.
• There are many 1000s of notaries across Indonesia that serve millions of clients for the creation and management of contracts. Population of Indonesia is 270 million.
• Every contract that is created and stored on the Cardano blockchain leads to increased adoption and usage of the Cardano blockchain.
• With DAO and tokenomics, there will be wallets required for each user participating in the ecosystem.

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

There are three main risks identified:

1. We cannot demonstrate a benefit for a single notary, and so notaries resist migrating to the service.
2. We cannot demonstrate a shared benefit for multiple notaries using a DAO management structure with tokenomics.
3. Regulatory barriers and/or obstacles which could include prevention of storage of Indonesian contracts on an international public blockchain.

Our mitigants to these risks are as follows:

1. Notaries resist migrating to the service:
2. Create a business model (DAO) and utility tokens where notaries actually earn from their participation in the service, as opposed to paying a service fee.
3. Through the DAO, notaries become both a user and an owner of a giant "virtual" notary service in Indonesia where contract work can be easily delegated to between notaries, where one notary does not have available bandwidth, and all notaries benefit as the number of users, and therefore network effect grows.
4. We will focus on willing notaries first, growing notary by notary.
5. We are planning to deliver the proof of concept and pilot with a single notary. However we wish to deliver a DAO structure and design a successful tokenomics economy. If this is not possible with just the initial notary, we will add one or more additional notaries to the pilot.
6. Regulatory barriers and/or obstacles which could include prevention of storage of Indonesian contracts on an international public blockchain:
7. If regulators refuse to allow Indonesia contracts to be stored on a public blockchain, because confidential data could exist on servers outside of Indonesia - then we modify the design to store the contracts on servers in Indonesia, and store the verifiable proof (signatures) of the contracts on the Cardano blockchain.
8. If regulators simply refuse to allow the service to be run on Cardano as an international public blockchain, then we modify the design to build a L2 private permissioned "Indonesian" blockchain on top of Cardano.

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

Timeline and Project Stage Overview

1. Contact Signed
2. Funding approved through Cardano Catalyst
3. Agreement between ChainSmart, Digisign, and Trimitra Bisnis Solusi (initial notary)
4. Design
5. ChainSmart, Digisign, and Trimitra Bisnis Solusi work together to design the solution
6. ChainSmart - Blockchain technology / DAO / Tokenomics economy
7. Digisign - digital signature, e-seal, digital meterai
8. Trimitra - notary contract requirements
9. Design and requirements complete and agreed
10. ChainSmart, Digisign, and Trimitra Bisnis Solusi sign-off on design
11. Build
12. ChainSmart and Digisign build solution on Cardano
13. Unit test
14. Integration testing
15. Test
16. User acceptance test (UAT)
17. Solution signed off by stakeholders
18. ChainSmart, Digisign, and Trimitra Bisnis Solusi sign-off on UAT
19. Pilot
20. Pilot solution with Trimitra Bisnis Solusi (Notary) and clients with contracts
21. Pilot success criteria monitored and measured:
22. Technical - no technical show-stoppers
23. Customer adoption - high customer acceptance proven at one notary
24. DAO management structure with tokenomics economy validated
25. We can demonstrate the proof of concept to the regulators and that they agree it can be deployed nationally.
26. Decision to launch
27. If pilot success criteria satisfied, then launch
28. Recruit more notaries (this step is beyond the scope of the funding request)
29. Recruit more notaries
30. Sales targets

[FEASIBILITY] Please provide a detailed budget breakdown.

The budget is required to fund resources to achieve the project plan outlined previously. Funding estimates for resource is based on Indonesia salaries.

[FEASIBILITY] Please provide details of the people who will work on the project.

ChainSmart - blockchain technology company

• Project manager - Paul Brisk

https://www.linkedin.com/in/paulbrisk/

• Blockchain programmer - Riyanto

https://www.linkedin.com/in/riyanto-riyanto-7a6874243/

• FE programmer - Luthfi Aziz

https://www.linkedin.com/in/luthfi-aziz-b572831b5/

Digisign - Digital identity solution provider

• CEO - Adi Prawiro (2 resources to be assigned)

https://www.linkedin.com/company/digisign-id/

Trimitra Binis Solusi - notary that has agreed to participate in the initial proof-of-concept pilot.

• Notary - Taufan Priananda

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

Possibly yes, but to be confirmed.

We are seeking initial funding to build, test, pilot and launch the service initially with one notary. We will then grow the service one notary at a time.

We may need to seek a second round of funding to promote and advertise the growth of the service to the notary industry in Indonesia.

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

We will assign a senior project manager (from ChainSmart) with overall responsibility for delivering the project and measuring progress.

Progress will be measured across two broad phases of the project as follows:

Phase 1 : Design/Build/Test (6 months)

Phase 2 : Pilot (1 month)

The measurement of project progress and associated criteria for these two phases is different as follows:

Phase 1: Track progress against detailed project plan during each step to meet the 2 key milestones:

1. Design and requirements complete and agreed by ChainSmart, Digisign and Notary (1 month)
2. Solution completed UAT and signed off by ChainSmart, Digisign and Notary (6 months).

Phase 2: Measure pilot progress against the 4 defined key success criteria:

1. Technical - no technical show-stoppers. The notary agrees that the solution is a suitable replacement for the storage of paper based contracts.
2. Customer adoption - high customer acceptance proven at one notary. The notary agrees that there is sufficient benefit to adopt the solution for all contracts going forward.
3. DAO management structure with tokenomics economy validated.
4. We can demonstrate the proof of concept to the regulators and that they agree it can be deployed nationally.

[AUDITABILITY] What does success for this project look like?

A successful project will be we have proved through a pilot the proof of concept with one notary that we have a product that we can rollout to notaries across Indonesia. We will know this based on the measurement of 4 specific criteria during the pilot:

1. Technical - no technical show-stoppers. The notary agrees that the solution is a suitable replacement for the storage of paper based contracts.
2. Customer adoption - the notary agrees that there is sufficient benefit to adopt the solution for all contracts going forward.
3. DAO management structure with tokenomics economy validated with the notary so that they agree they will achieve benefit from adding more notaries to the blockchain.
4. We can demonstrate the proof of concept to the regulators and that they agree it can be deployed nationally.

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

This is a new proposal.