The Digital Commons for Ethical Commodities - TOKEN2049 Singapore 2022

hey good morning everyone so I'm going to talk to you about what I think are the most essential dilemmas of our time and I'm gonna try to convince you to care and then I'm gonna try to convince you that defy all of the talent in this building all of the talent in this room the infrastructure and business models you guys and girls are creating are actually a core part of our next iteration in commodities so without further Ado let's get into Commodities and what that actually means my name is Mariam until about two years ago I ran an origination and Investments for Shell trading looking after a global crude oil oil products and environmental products growth as well as everything we ever did in blockchain and infrastructure in that space and so a lot of what I'm going to talk to you about is born out of that experience and the opportunities we saw at being able to scale beyond the closed ecosystems we were then creating looks like we found um the deck we wanted to talk about let's talk about Commodities and what it is and why I think you should care for those of you who don't know it is literally the Bedrock of our global economy we we talked about growing crypto to 19 trillion 20 trillion 30 trillion we do that by becoming relevant to the real world assets that need to move the supply chains that are consumption finances and fuels everything from agriculture thinking about food security and the water you're drinking the bottles the water is in the energy that's keeping all the lights on the metals that that power every every transition we need to electrification Cobalt covert copper lithium ion for the batteries aluminum all of that comes from mining energy resources and so the the question really is do we play a role in getting that to a place that's more efficient more ethically sourced and friction free and then bundling that with a carbon economy and a voluntary carbon Market that really needs to come into play to help us achieve a more sustainable future while continuing to grow the prosperity that resources bring to us does that make sense to anybody I want to see some nods there we go I got three big Wards defining dilemmas of our time I think it's really important in rooms like this to consider the power and potential our work can have in some of the really big dilemmas of our time if you think about war the frictions in all of our supply chain post-pandemic and climate change and the need to do something about that that Trifecta of dilemmas has really highlighted the scarcity in our resource Supply chains and our essential resources while we're seeing consumers shareholders corporates organizations actually care more and more about the environmental social and governance footprint of what it is we consume and what it is financiers finance what does that mean that means do you want it how do you make sure that the the laptop you're using doesn't have conflict aluminum on it does isn't doesn't come from child labor that the lithium ion that that is fueling all of the batteries you're using has a footprint you can live with right and and that transparency isn't there today and so there's a huge gap in financing Commodities which then exacerbates the fact that the costs are going up and the supply chains are disrupted today there is a 1.5 trillion dollar Gap in financing Commodities 1.5 trillion that's probably bigger than much of what we're looking at today in tackling in this room and that Gap really comes from the inability to match provenance and ethics and especially governance compliance with the supply chains that are being financed so financiers are pulling away and there's just a shortcom of capital because it's getting more and more expensive it's resulting in a commodity price store which means all of the large energy companies mining companies of this world are having record profits while prices are going up and the rest of the Market's crashing those are really interesting dilemmas to think about and from my vantage point of having sat on the other side of the table for so long my team likes to say decades it's not true I'm not actually that old but for having sat on the Commodities side of this ecosystem for so long and looking at what this world does in in 2016 I co-founded some of the very first industry coalitions that leveraged blockchain for post-trade processing of Brent crude oil portrayed Finance etc those launched to majority shares in the markets we targeted which is huge if you think about it 17 trillion dollars Brent crude Etc and so if you look at that and you look at what's happening the potential in this room the potential in defy and the gaps in Commodities and the new business models it's evident that we're in a moment that's once in a generation There's an opportunity to bridge those worlds to bring them together and build industry defining coalitions what does that mean we've been working for the last two years to build what we call the digital Commons for ethical commodities digital Commons because we want you to think about the physical comments you think of when you go to a park or something that's community-owned community-led but really for the greater good in this case it's also for profit so let's not let's not forget that part of it because we need to incentivize the best talent and all the best organizations and entrepreneurs to come and build for a triple bottom line outcome people plan it and profit so the digital Commons for ethical Commodities ethical not that we tell you what is good there's nothing centralized about this ethical in that we Empower an ecosystem of developers dapps and organizations to start to self-define in a sovereign manner what they believe the values are they want to consume so for example you might care about child labor in the Congo that should drive what electric car you by you might not know that today you might care about women being abused in a certain country that should make an impact on which gas station you pull into you might know not not know that today so how might we create the transparency so individuals organizations and governments can make the decisions they want to based on their values the comments that we are building start with infrastructure it's a layer one protocol called Water Protocol we're open we're public we have some amazing Partners we are built with in polka dot where polka dot parachain in partnership with parity Technologies who really are helping us work through all of the development the technology and the r d required to bridge the world of Enterprise and Retail in a safe but open space where I also have co-founding Partnerships from trust token who are the the creators of the first US dollar-backed stablecoin and the creators of trufi which is a D5 lending protocol on ethereum and I'll talk about how that helps us do what we want to do and we also have industry Giants who are our partners and co-founders although I'm not allowed to mention names here but um that merging of Worlds allows us to build the basic infrastructure for us it's all of the stuff you see here but the thing to really call out is that the first class citizen on Water Protocol is identity decentralized identity to allow individuals organizations and assets to accrue Sovereign identity through a whole series of exercises they choose to undertake so should you come on to water and decide to be kyc your identity will carry that complication should you decide to go and be a participant in a liquidity pool your identity will carry the performance you've you've had in those liquidity pools you can opt out of that it's fully Sovereign but should you choose to use it what you're doing is bridging and creating interoperable identity for assets individuals and organizations across the depths of the ecosystem that's a huge piece for us to tackle when we're trying to bring regulated industry on chain if you want to buy and sell Cobalt and aluminum or trade it on chain the ability to make sure those who need it are able to have kyc AML and those who do not want it are able to opt out of that activity and still maintain the public openness of a public chain so identity is really big for us selective privacy so that we can have trade execution on chain and all of this really leads to a world where Commodities are are tokenized and programmable what do we mean by programmable we mean that we should be able to get in the next month to a place where you're no longer talking about physical Commodities as if they're fungible they're not right like I mentioned a copper and a Cobalt produced with a certain footprint whether that's environmental social or governance in a geography that you want to consume from or in a geography you don't want to consume from those aren't fungible and and I'm sitting in a room for full of people who understand what's possible when you start to tokenize and create non-fungible assets and you trade Buy sell them with decentralized exchangeability within regulated guardrails there's a really crazy cool world ahead and if you can convene the Giants of trade and Industry and you can convene this world you fundamentally have created an ecosystem of visibility visibility in that we can now see what it is our consumption finances and we can participate in our version of good without creating any more centralized intermediaries over time and even more immediately you're creating Financial inclusion through decentralized finance and liquidity you're creating that by the ability to a have people participate in the economy who are otherwise left outside of Commodities today none of you unless you're a broker can participate in the commodity Market but also you cannot finance activities that you want to finance without going through centralized intermediaries in a decentralized world all of that is possible and much more inclusive I want to give you a couple examples of what this means so you don't think I'm talking Theory and five years from now these aren't stock photos these are photos of farms that we are co-financing at the foundation in Nigeria Farm crowdy one of our partners is a farm to export a provider of crowd loans for Nigerian Farmers for the last six years they've been providing funding to buy seeds and then pre-purchasing the produce of a farm and getting it to the market before it rots for any of you who care about food security about 50 percent of the subsistence farmers in Nigeria today throw away their food because it never makes it to the supply chain the waste is immense think about what I said about the lack of food security marry those two and get it right you're changing the world and the lives of the farmers as much as you are high grading African and Nigerian agriculture to be able to service food security and fill the fill the Gap left by by others in in due to war agric is another one of our of our partners that are a spin out of Kobo 360 which is basically Uber Freight in Nigeria with agric we're financing from Warehouse to exports of Agriculture from Nigeria again you're bringing digitized efficiency but all of this is going on the trufi lending pools and they'll they're going to be liquidity pools set up to service financing of this so when one thinks about how might we drive a real world asset economy on chain I would want you to consider this because it's immediately impactful it allows you your capital and all of our Capital to do good while earning a profit none of this is charitable it is incredibly lucrative but it is also removing inefficiencies and creating profit in those inefficiencies another example of the work we're doing is around environmental products and bringing the voluntary carbon Market on chain will announce uh 8 A.M New York time today that flow carbon is one of our foundation Partners in our voluntary carbon ecosystem for those of you who don't know the voluntary carbon market today is about anywhere between two to ten billion dollars it needs to grow five-fold between now and 2030 to allow industry miners energy companies trading houses uh Food suppliers to meet their emissions reductions goals that they have made to their shareholders and investors needs to grow five-fold how is it going to do that in the next seven years yesterday I was speaking in a panel with with the mining companies and energy companies and I was inviting them to come across the the city and meet you guys and girls because the talent shortage on that side of the world and the opportunity shortage on that side of the world needs to be bridged by the decentralized talent the open source developer community and adapts in this room so that we can make this challenge come to life it is the biggest existential dilemma of our time and every piece of defy was made to tackle this tokenized carbon credits are the only way to be able to get that intimacy to source that we need to make the voluntary carbon Market come to life we're also announcing a hackathon and a developer program for the vcm on water with flow so if you want to be involved have to come find me or any one of our team and reach out we'd love to have you help us build us out and finally really this is a call to action these potatoes by the way are financed by by defy so we should all be pleased um but there's a there's a crisis all around us and I want you to think about that as the opportunity that I'd love every one of you to rise to and help us build this future help us build a future to live in and thank you