If we were to look into the future, I believe that it is one where blockchain technology wraps around most existing businesses. The potential is immense, leading to improved processes and capabilities and transparency of how transactions are lodged.
The quick definition of blockchain is a shared, immutable ledger that can facilitate the process of recording transactions and tracking assets in a business network. Therefore, almost everything significant or has business value can be tracked and traded on a blockchain network.
Lendor is a circular platform for tech devices. Whether consumers want to rent the latest technology or end-of-life devices, Lendor has something for everyone on any budget with a flexible schedule.
This meant that we were serving B2B and B2C customers, managing thousands of transactions yearly on short term rentals and long term leases and partnering with multiple merchant partners. It is currently still on Web2 hosted on cloud-based servers.
Sustainability concerns
Moving Lendor from Web2 to Web3 has always been on our minds since 2018 when we were awarded the second runner up in Dsion Blockchain startup challenge in 2018.
As an impact-driven tech startup in the circular economy space, it was difficult to consider blockchain as a viable technology one or two years back. Our focus on solving SDG goals 11,12 sustainable cities and communities, responsible consumption and production meant that tracking carbon savings and/or output is a key metric.
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Ethereum, the most popular platform for DApps, was great from a technology standpoint, but each transaction with Ethereum is equivalent to running a refrigerator for 35 days. We want to have all the good work we have done in circularity and carbon savings be completely negated by the technology we have chosen to use.
Blockchain technology is fundamentally bad for the environment due to the nature of cryptocurrency mining through Proof of Work (PoW), where miners have to compete against each other to solve complex problems through the utilisation of high-power computers.
It requires the use of significant energy resources. PoW rewards miners with the greatest computing power, which inevitably burns more greenhouse gasses to facilitate additional processes.
Proof of Work vs Proof of Stake
In the last two years or so, the idea of Proof of Stake (PoS) emerged within the community that allows miners to pledge a “staked” digital currency where they validate transactions.
The benefits of Proof of Stake (PoS) are that it requires less energy, is more secure and is scalable. The ecological footprint is also lower, making it more feasible for startups to adapt this into their systems and solutions in the near future.
Ethereum, through this shift in consensus from PoW to PoS, allows energy consumption to be reduced by 99.5 per cent, which is scheduled to happen by the end of 2022. The PoS aims to fix many common issues with the PoW system. Other popular staking systems to build DApps include Cardano, Solana and EOS.
Moving from Web2 to Web3
For a startup or business to adopt blockchain technology, the various chains, protocols, and consensus, must be sustainable not just on a cost per basis but also have the potential to solve a major pain point for the industry.
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At Lendor, how we plan to leverage this technology would be for us to have this information being sharable and made transparent for our vendors and customers where they can be granted and allowed access to this information stored on the ledger.
The benefits of having a blockchain network could also be to track orders, payments, accounts, productions, logistics, and much more. The members that are all on our network are thus able to see all the details of transactions from end to end, leading to better processes, and transparency, and leading to lower attrition rate.
Another example would be that business partners who are seeking out a short-term rental partnership are now able to look at the transaction movements through Distributed Ledger Technology (DLT) and would be able to identify to see if our merchant partners have the quantity and inventory models to support their rentals, and how best it could be to facilitate their requests and commercial needs.
These partners who are operating on a global level could also work together with Lendor to further facilitate higher ticket size and bulk quantity movements through the implementation and introduction of smart contracts where parameters and definitions such as duration of use, the annual contract value, renewal rates, attrition percentage could be pre-set.
We also seek to work closely together with our partners to incorporate this process to create further efficiencies with the verticals that support our circular platforms, such as insurtech, logistics, procurement, and accounting, to name a few.
We are excited at how the blockchain landscape will develop in Singapore and Southeast Asia for the next decade and think that there is tremendous potential for impact and climate tech companies to take the bold move to Web3.
I look forward to speaking with experts in this space to enlarge my circle of competence further and connect with industry leaders.
This post was co-written by Tay Han Jie.
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