The Boson Protocol, a project designed to connect the real world of physical commerce to smart contracts, announced a successful $ 350,000 investment round on Monday.
The project creates the “building blocks for dCommerce apps of the next generation” by offering a possibility to redeem blockchain tokens for their real physical counterpart.
The project received an oversubscribed round of investment led by Outlier Ventures, along with Trent McConaghy of Ocean Protocol and others. The funds will mainly be used for operating costs and building a working pilot project, the company said.
Justin Banon, founder of the project, told Cointelegraph that Boson’s purpose is to “enable decentralized trading with minimal arbitration, like a DEX for physical assets”.
The Ethereum-based solution is based on non-verifiable token vouchers that can be described as a claim to the underlying product. The NFT is a reciprocal deed of escrow between the buyer and seller, the purpose of which is to ensure that the physical goods are exchanged properly. “Mediation, arbitration and reversal are being automated in a dynamic game where incentive rewards reduce the need for human arbitration over time and allow for continued decentralization,” added Banon.
One of the use cases described by Banon is a blockchain-based loyalty program, as the system makes it possible to “throw rewards such as tickets or t-shirts directly into wallets”.
The Boson Protocol does not fall within DeFi’s traditional focus on financial markets. When asked if it could be used as a DeFi bridge to centralized financial platforms, Banon replied, “This is possibly one of the many use cases where Boson could be useful, but this is not Boson’s primary purpose.” Nevertheless, the project is designed in such a way that it can be combined with other protocols in the DeFi area:
“Boson’s main bridging function is to connect the physical world to DeFi so that users can buy physical goods and services directly through a smart contract in a completely permissive manner.”
Boson’s trustless exchange mechanism, as described in his white paper, involves a complex interplay between different parties in many different scenarios. Monetary incentives are required to maximize the number of successful transactions and more funds must be committed than with a traditional escrow account.
The mechanism seems to have similar advantages and disadvantages as tBTC, a trustworthy bridging mechanism from Bitcoin to Ethereum. The project has often been criticized as being much more complex than centralized solutions like Wrapped Bitcoin (WBTC), but this seems to be dictated by a desire to keep it completely trustworthy.