Crypto Veteran. Tokenization, DeFi and Security Tokens - Blockchain.
Ishan Pandey: Hi Tommy, welcome to our series “Behind the Startup.” Please tell us about yourself and the story behind WiV?
Tommy Jensen: I have a background in both technology startups and finance within Media, Mobile and wine.
We are a blockchain-based unique asset technology designed for the wine industry. By securitizing wine as NFTs and storing the physical assets in a bonded warehouse, we are creating an unparalleled transactional ecosystem where collectors, investors, and producers all over the world can interact transparently as fully trusted parties.
The protocol offers access, financing, and cooperation to all who want to be involved in this global industry. We are building in a new paradigm where it requires a more collaborative, more open business model than today’s archaic wine ecosystem. Our algorithmic approach only requires a small group of decision-makers to be able to make data-led decisions that can iterate products until one establishes fit.
Creating a new user experience for collecting wine and this experience is a fun, expressive, and financially accessible way to invest in wine. Through ownership of the token, we provide investors with unparalleled access to the global wine world, access that no other company can match.
Ishan Pandey: Other traditional investment industries, such as art, real estate, gold have already been transformed by these technologies, such as blockchain technology. What has been the impact of blockchain technology on the wine industry?
Tommy Jensen: We believe that the evolution of wine trading to the blockchain is helping reduce significant risks that have been an issue for many centuries. Creating a virtually immutable token that is directly associated with a specific bottle or case of wine, means it can be traded with confidence, particularly when that wine is stored professionally at globally recognized warehouses. Because tokens of ownership are stored digitally, trading will be a great deal faster, with no need to wait for paperwork to make its way through a global postal system.
In addition, what we do is create a totally new marketplace/window for both wine sellers and investors. By purposefully focusing on the wine industry, we are on a mission to fully embrace, understand and deliver on its vision to make a difference. As the platform matures and the network grows, other similar verticals can be expanded into.
Ishan Pandey: The blockchain’s well-known distinctive characteristics were crucial in attracting investors: tamper-proof identification markers that guaranteed token access to the token holder on a traceable decentralized, freely accessible platform. How can blockchain help the wine industry with tamper-proof identification and authentication?
Tommy Jensen: Blockchain can be used in various ways in the wine industry. For example, the platform we have designed allows users to securely collect and store information about each wine’s provenance and transaction history, whilst holding and insuring the wine in a professionally managed storage facility. Each wine is allocated a corresponding digital token that can be securely traded without the need for bureaucratic paperwork and for a fraction of the current transaction cost.
Ishan Pandey: The wine industry’s attraction to NFTs extends beyond entertainment and financial gain. Every time an NFT is sold, the event is permanently recorded and stored in blockchain, providing collectors with provenance. Do you think NFTs can help combat fraud in the wine industry?
Tommy Jensen: Blockchain can be used in various ways to secure the authenticity of wine in the supply chain. For example, 20% of the investable grade wine in the world is copied at one time or another. Blockchain solves this problem as it keeps an immutable record in the supply chain. At our organisation, for example, we secure the wine, guarantee provenance, and track the wine throughout its lifecycle with an original certification linked to the blockchain.
Ishan Pandey: What are the major hurdles in the industry that impact the full-scale adoption of blockchain technology within the ecosystem?
Tommy Jensen: Geography - meaning the wine world is global and you will find everything from big corporations to small farmers in this ecosystem. So it is very fragmented. One has to play the long game. Building trust and educating the market. The wine industry is built upon centuries of traditions so one has to respect that and study the trends and gradually bridge them into the metaverse. First and foremost by bringing new liquidity and new audiences, secondly but as important making it possible for everyone to invest in wine.
Ishan Pandey: In addition to acceptance, one of the biggest challenges for cryptocurrencies in the wine industry is their long-term viability. Crypto mining, or the process of keeping the blockchain ledger up to date and adding new currencies to circulation, might necessitate the employment of huge, advanced processors that consume a lot of energy. In this regard, what are your views on the sustainability aspect of blockchain within the wine industry?
Tommy Jensen: Sustainability and efficient business practices matter a lot to us. While historically crypto mining has consumed large amounts of energy in order to verify transactions on the blockchain, we are witnessing a movement away from that proof-of-work model to a much more sustainable proof-of-stake concept. Through this migration, layer 1 blockchain protocols like Ethereum, will offer a clean and energy-efficient verification process that makes us confident in our ability to be a sustainable wine solution.
Ishan Pandey: How does the use of blockchain technology help or accelerate in identifying counterfeited products? (Please cover different aspects – not to repeat previous answers)
Tommy Jensen: 1 - Tokenise your asset at the source: Once tokenised, distributors will gain value from your investment as it is possible to view the entire chain of custody through to the end customer (or consumer).
2 - Play the long game: Measures taken today to mitigate fraud will have a lasting effect on future and growing generations of asset buyers and their interaction with your brand. As bottles age and increase in value, the true benefit (such as increasing the value of genuine bottles and tracing the number of bottles in circulation) of these measures will become apparent.
3 - Visibility of the chain of custody: enables more understanding and effective management of distribution partnerships, stock management and sales/marketing resource globally.
3 - Create a gold standard for your brand to reduce fraud risk for your customers: To deliver market confidence to buyers, brands need to empower fast processing of data that is trusted from the source. It is imperative that this standard is verifiable by the consumer, not only by specially qualified auditors (such as auction intermediaries) who are currently barriers to high-frequency stock movement, liquidity, price competition and accessibility.
4 - Grow your customer base and market reach: With Gen Y and Z by transacting through a faster, flatter mobile settlement platform that integrates supply chain and brand. Sales speed drives consumption and trade, creating liquidity and demand for more stock.
5 - Communicate more effectively with your customers: By knowing who they are, where they are and leading them to your brand. Control and customization are two prevalent behaviours to take note of with all consumers in Gen Y and Gen Z. Tokenisation delivers control to the consumer because it removes the need to use trusted sources as intermediaries. Commercial transactions can still be channelled through current global distribution systems, but no one has to rely solely on the supply chain to be watertight anymore. Customization is delivered by creating choices for customers around supply chain flexibility: does the stock need to move? Are there equivalent tokenised units available locally?
Ishan Pandey: How has the pandemic and the persistent lockdown across the globe affected the wine industry?
Tommy Jensen: Access to financing has always been a significant challenge for wine producers given the length of time that it takes to produce and then sell a bottle of wine. This finance gap has been so significant that many wine producers have only had two options. They could either reduce the quality of their wine so that it could be produced more quickly, or they could face the realistic prospect of financial collapse despite producing exceptional wines. Traditional sources of funding are simply not flexible enough to suit their needs.
This challenge has been further exacerbated by Covid-19 which has dramatically reduced both restaurant and the tourist trade from the equation, causing a rapid deterioration in finances in many wine-producing regions around the world. We are solving this challenge by letting producers borrow against the future value of their wines so that producers can avoid having to face the stark choice of either reducing quality or ceasing production.
We want to be able to support vineyards by using our collateral to bring in finance. It is an approach that will enable them to invest in their operations and produce exceptional wine without having to worry about how they will support themselves during the wine production process. Making fine wine is incredibly hard work and we want to become a credible market participant that helps bring liquidity to vineyards.
Finding a market for wine can be a complicated, time-consuming process. Our global network creates a simple path for consumers all over the world. It also removes much of the bureaucratic burden and marketing rigmarole from the producer’s to-do list. This lets vineyards focus on what they do best: produce exceptional wine.
Ishan Pandey: According to you, what are the next trends that we can see in the blockchain industry?
Tommy Jensen: It's hard to predict what the next cycle will look like. However, we will see a better user experience on the different NFT marketplaces, also more verticalized marketplaces. Like the one, we are launching for wine. In addition, I believe you will see more Play2Earn games and a bigger move toward the metaverse, i.e. the Axie effect. For the Defi part, I do think Real-World Assets, RWA assets will play a bigger role and get to more mass acceptance bringing more of the TradFi world into Defi. Lastly, I believe that one has to focus more on usage, given usage is utility. In terms of Crypto and trading, we see more and more growth and the new low was the old high, more people getting in, governments and institutions getting into the game - besides that digitization and bankless adaptations are happening faster than we realize. After all, code is the law.
Disclaimer: The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence by asking the right questions and equipping readers with better opinions to make informed decisions. The material does not constitute any investment, financial, or legal advice. Please do your research before investing in any digital assets or tokens, etc. The writer does not have any vested interest in the company. Ishan Pandey.