Bengaluru-based KoineArth has created frameworks for optimal asset sharing and creating trust in a multi-party and multi-transaction ecosystem.
Founder: Praphul Chandra
Founded in: 2017
Where it is located: Bengaluru
The problem it solves: Uses Blockchain for optimal asset sharing between governments, citizens, and industry
Investment: Bootstrapped ($100,000)
Revenue: Less than Rs 1 crore
India is scripting a renewable energy story. The government is keen to ensure 200 GW of solar power by the end of 2021, up from the current capacity of 23 GW. Cashing in on this enthusiasm, several companies are trying to tap this market by setting up rooftop solar panels to generate electricity and power factories and electric vehicles.
On this note, consider what would happen if the average house owner decided to power many electric vehicles. If and when this happens, Blockchain can solve the “trust” and “reward” elements for citizens and the government.
This is exactly what Bengaluru-based KoineArth wants to do – provide Blockchain technology to citizens and government services to track how much “electricity” individuals have shared with the city, and ensure they are rewarded with crypto tokens of a particular value. The person who draws the energy pays the home-owner through KoineArth, which essentially means converting fiat currency to crypto tokens, whose value is set by government, banking, and citizen bodies.
With the central government pushing for electric vehicles to become a mainstay of urban mobility by 2030, there will be a frenzy to set up electric vehicle infrastructure. With KoineArth’s technology, a city’s electric supply can be hard-wired to serve the mobility of its citizens.
KoineArth is the brainchild of Praphul Chandra, a game theorist and engineer. Praphul has a PhD in Game Theory - the science of strategy where conflicts between several stakeholders are resolved with optimal decision-making - from the Indian Institute of Science, Bengaluru. His thesis focused on “private provisioning of public goods”, how current models of governance can be disrupted by Blockchain, and creating “trust” by enabling citizen’s bodies to work jointly with public institutions in managing public goods.
Praphul also has a degree in computer science from Columbia University and has earlier worked in HP and TI; he quit HP in 2017 to set up KoineArth.
“If one has to understand Blockchain, start with token economics and how it can be used by every stakeholder in the city,” he says. KoineArth has built its Blockchain tech on the Ethereum and Hyperledger system.
The pricing of the tokens, also based on the same platform, will be decided by clients KoineArth works with. Think about a token as a loyalty point, which has a value assigned to it and can be exchanged for goods or for currency. Consider basic loyalty points and how the corporate retailer values each point at 0.25 paise a point – that is simple token economics that can be converted into several business possibilities.
“Blockchain and token applications can benefit society by creating trust mechanisms and creating a value of exchange,” Praphul says. He adds that a lot of attention is focused on coin trading, which adds no value to the society in terms of economics and progress.
KoineArth has funded itself with about $100,000 – the founder’s own money - and has generated revenues through a couple of commercial applications.
What does KoineArth do?
KoineArth provides three solutions. The first is an asset-sharing solution framework that enables easy creation of a two-sided marketplace where unused assets can be shared among a community. An underlying token economic model incentivises sharing, rewards positive behaviour, and penalises negative behaviour.
A solution developer can create a sharing economy for any asset by registering assets, specifying community members, and configuring the incentive mechanisms from the solution framework. This can work for large conglomerates and government bodies.
Its second solution is the cE-Commerce solution framework, which enables the creation of shared, trusted asset registries within a commercial network. Say something like a Flipkart or Amazon, which has several vendors and consumers to work with. It further enables the easy creation, management, and execution of commercial contracts where payments may be tied to performance. Since the contracts are deployed on a distributed computing framework (Blockchains), they are guaranteed to execute as per the encoded terms.
The community consensus solution framework uses tokens and incentive mechanisms to aggregate information and preferences of community members. Using this framework, solution developers can create schemes for participative democracy, loyalty point programmes, and tradable credits. The company will make money in managing the Blockchain for the stakeholders, and will charge for managing the movement of tokens from one crypto account to another.
KoineArth began by working with a large global conglomerate with 70 companies in its fold to understand how loyalty programmes can be provisioned between customers in each company. In the old days, companies faced a nightmarish situation because they did not know how much each company was provisioning for customer loyalty in the balance sheet, and how much was transferred to other companies.
KoineArth came up with a Blockchain system to track and provide a single window for the chairman’s office to see and reduce liabilities at a group level. “This allowed the group to manage its companies better. Its companies can be valued better and raise capital,” Praphul says.
With KoineArth, Praphul and his 10 member team want to transform the way people take responsibility over public goods and convert them to a community-based approach. These contracts with several stakeholders will be automated contracts on the KoineArth platform. They already have a couple of corporate clients who work with them.
The way ahead
Over the next two years, KoineArth aims to sign up with government and industries. It is currently building Blockchain for corporations, but its end goal is to create the sharing economy and providing a Blockchain and token system for electric vehicle charging business – this is the primary business model the startup is working on.
“Blockchain is based on algorithms that create value for businesses, governments, and citizens. Eighty percent of ICO launches are not to be trusted, yet people go buy them without knowing what the technology or the trade in crypto means,” Praphul says.
Today, a close-loop Blockchain has been created by Infosys and SBI individually for their partners. Blockchain truly enables the sharing economy to go one step up.
Praphul feels the government was right to ban crypto trading, and that it will come back with a regulation that helps the sharing economy.
Varun Mayya, Co-founder of Avalon Labs, says: “Blockchain is the future because of smart contracts. It is coming and governments will adapt to it. The only thing is Blockchain should be able to handle thousands of transactions a second because it loops in multiple parties in a chain and that requires computing power to be beyond anything of what is available today.”
KoineArth has placed its bets on the future and seems to be on to a good thing. And as we all know, a game theorist functions like a chess player; he would never expose his king or queen!