The Battle for the Soul of the Vehicle Title | Shahar Abrams - 404DAO

the battle for the soul of the vehicle title thank you hello thank you all for being here and welcome to the battle for the soul of the vehicle title the battle that we are all in whether we know it or not I'm going to attempt to do three things in this talk one I'm going to talk about why I think the use case of putting vehicle titles on chain as rwa is critically important one for us to undertake and and fully realize I'm going to also talk about our approach to solving this problem as well as our approach to getting this technology into state governments around the US um and I'm going to finish off with sort of a bit of a call to action on the importance of this and what you can do to to make this actually happen so very quickly about me um I'm shaar Abrams I have a background in Federal IT consulting so I worked for IBM for seven years and worked on with a lot of government clients building it systems for them and I sort of Saw firsthand how shitty and broken it is and um and so that kind of led me to uh co-found Cario in 2022 so let's talk about the problem um and it's very simple okay vehicle titles and the whole titling process are paper okay and they have been paper for at least the last 75 years you see here at title a California title from 1956 even before that back to the 1920s they were putting vehicle ownership on it was it was like a bill of sale but it was still paper right so almost a hundred years right we are still recording um our critical right to the ownership of the vehicle on a piece of paper and what that means is that the entire automotive industry has to manage down to this piece of paper so if you're a dealer you can't legally sell a vehicle until you have that piece of paper title on it that means you're relying on UPS FedEx and the Postal Service okay you literally have to get that title in the mail if you're a lender who finances Vehicles you literally have filing cabinets full of titles and a fire suppression system and the whole nine yards okay and then for all of us we have to take this paper into the DMV to get our car titled kind of kind of silly right um so by taking by by changing the paper process we can introduce massive efficiency to the entire automotive industry so I want to talk about specifically this as a web3 use case okay okay and there are a few things I want to mention so one is property rights I think that property rights are an excellent use case for blockchains and for web 3 and in fact we've been recording property rights uh for a long time this is the code of hamurabi this is the first um evidence we have of societies actually recording down property rights and the rules around those property rights in something tangible okay and and so this was 18th century BCE okay so about 4,000 years ago we are still sort of of recording property rights the same way I.E we're writing them down and then we're enforcing them through violence right or the threat of violence okay so this hasn't changed in 4,000 years um but putting property rights you know somewhere public and the rules around it somewhere public pretty good idea okay been around for a while I really ascribe to the idea that blockchains are here to solve coordination problems so here is what we're coordinating okay what you see here are the eight use cases of Vehicle Administration everything all of these things the DMV does okay the DMV has authority over everything from buying a new car from a dealership to a dealership selling a car to another dealership to um a a a finance you know a company financing Vehicles perfecting their leans making sure they their interests are secured that happens on the title okay and then uh the end of life right parting it out selling it to a salvage yard that also gets recorded as a title uh transaction right so there are a lot of parties involved in this right and a lot of needs to be coordinated and what you're doing by the way when you go to the DMV with your title with all your paperwork you're proving to the DMV that all the parties are coordinated so that the DMV can approve it right you have your bill of sale you have a a lean release letter from the bank and the bank's letter head you're proving to the DMV hey the bank is coordinated the dealer is coordinated we did this transaction just approve it okay it's all coordination problem this is a highly tangible use case almost everyone drives a car so if we're talking about how do we bring web 3 and blockchain to the masses what what's a killer app what's something that will make people believe in this Tech I think this is a pretty good uh place to start all right because this affects everybody and it creates massive inic none of us want to go into the DMV right we all want this to be better there's a highly tangible use case and therefore I think it's a great use case that can prove out our value proposition as blockchain as web 3 if we can create if we can replicate this process in smart contracts which is what we're trying to do right and we can give everyone um a vehicle title that's digital and or on the blockchain right that's a tremendous proof point I think for the industry and there are lots of other government services I think we could apply this to so I want to talk a little bit about our approach and I'm going to spend a couple minutes on this because I think you all will be very interested in it um we use a hybrid private and public blockchain solution okay so we use a private blockchain to actually affect the titling right so all of the titling that you're going to do think about filling out the bill of sale think about getting the lean release right that all is going to happen on a private blockchain because there's a lot of pii flying around in this process and I don't think we want to have that on a public chain but we do want to be able to verify that it happened right if we're in that Network um the way that the DMV works today right you have to be a registered dealership with the DMV in order to sell a car so that's an example of permissioning that needs to occur in this use case now once the DMV approves the title package right we will create uh a public blockchain asset an nft right now we're using Bas okay and we put that nft on base that becomes an rwa that can interact with other um uh web 3 daps and applications okay and then we have built uh some tech with hash timelock contracts or like a bridge between the private and public network so that they are automically in sync okay so if you see something on the public network it means it was approved by a DMV on the private Network and if you need to you can verify that we use this model to get direct attestation from all the parties right so rather than you having to go into the DMV and have collected all the paperwork from the lender from the dealer Etc these parties now run a node on the private Network and they can directly attest to what they did within the titling transaction so the lender can directly attest to the DMV hey I released the lean on this vehicle the dealer can directly attest yes I sold the vehicle to um to Shahar right um so that gives you a a really great it means you don't have to go to the DMV it gives you a direct way you know to interact without having to leave your home right and it's very accountable transparent and verifiable another thing that we're doing which I'm actually very excited about uh uh with my background in government is we're actually providing this for free for the government we're we're telling state governments we will give you this software for free you don't have to procure it you don't have to do an RFP normally how this works for those that that have had the fortune not to have to interact with it is the government when they want to do a procurement they issue what's called a request for proposal to make sure it's fair all of these contractors can bid on it that process takes months two years okay and then they make a decision they locked into a single vendor right they write a eight n figure check sometimes right and then they're stuck with that vendor and then anytime they want to change something in that system they have to go to that vendor and this is how you wind up with government contracts and government systems becoming increasingly clusie and and costly and they don't actually work very well um in our case our model is let the end users pay right the dealers the lenders they have tremendous pain points around paper titling so why don't they pay they're actually begging to pay right so we'll give it to the state government for free we'll upgrade it for free right and the end users pay that creates great incentive alignment right because now we're incentivized to provide the best service there's no vendor lock in for the end users right and and everything is great we're incentivized to make the service better for the government for free so and I think this goes to a goal and I put for all of us as a question mark because I think you know this is something we all want right we want to showcase a model for a new type of government service one that is underlied by this technology one that is transparent and accountable and verifiable to the people who are paying for it the taxpayers all of us right something that's really a public good a public utility I think these that's how these things should work there are tremendous implications to having a vehicle title as an rwa I'm going to be very quick about this but you know we can get if we want to have a programmable asset future we need these types of rwas we want to have a digital property rights layer right that's on blockchain right that we can help unlock that and a digital government services layer as I was saying earlier I think this is what government services can and should be accountable transparent and you know and with maximal incentive alignment okay now I have some bad news everything I just talked about is pro pretty unlikely to happen okay and I I should say it won't happen unless we make it happen Okay ladies and gentlemen welcome to the DMV okay DMVs have a reputation for a reason and I'm you know and I've met lots of DMV employees that are great okay but nobody joins the DMV to innovate okay it's just not how it works so unfortunately the DMV's sort of status quo point of view of this is that well let me start with you know digital tiling is happening right the DMVs know that this system sucks the dealers have been saying you know and the lenders have been saying this system sucks for a long time e titling will happen but it might not happen the way we want and it actually in the current status quo it is not happening the way that I think any of us want the DMV's point of view is that the new e tile is just going to be data in their database right it's just going to be a an entry in their centralized database you'll be able to access it if you log into the DMV but you will in fact lose your paper title you'll lose your bare asset title okay and all these things will go away and you won't have an rwa I sort of re I always assumed you know I've been working on this for two and a half years always assumed that someone would do this even if we failed you know someone would do this eventually just make so much sense but then I had a meeting actually last year with the head of the there's a there's an organization called the American Association for motor vehicle administrators this is like the DMV trade Association they throw conferences I don't recommend going to them but I go to all of them and the guy they hired a guy to do a two-year study of e titling and I met with this guy and he basically told me this to my face he said the way that we're currently thinking about it the title will just be data in the database and you won't get any of this and that was a real wakeup call for me like holy you know we need to make this happen and and the window of opportunity is now okay because once DMVs pay to change their systems they're not going to do it again for 10 10 20 30 40 years really okay so we have a critical window right now um to get this done and we have to make it so it's not going to happen by itself so what we're doing to to change this we're making the case for the digital title asset and the importance of having a digital title I go around I show on my phone a digital title pass that's like a web two version right I talk about the web 3 use cases that will that will happen right and I think it's it's it's starting to work cautiously right I will say DMVs state legislators that I talk to they get it right they get that there needs to be the this future Innovation unlock right and that we'll really miss a big opportunity and that it's important to maintain the beer asset quality of the title okay it's important for people to to maintain that so that's starting to work I think um we are also working with Partners in web 3 um a good example is company called demo they do vehicle telematics data we're exploring how we can connect their telematics data asset to our title asset and now when you transfer your vehicle when you sell your car you also sell the the his the driving history of the car the rights to the data for the car all of that comes together what does that do for the used car market right that's transformational so but I can talk about these use cases all day long to leg to legislators to DMVs it's a whole another thing to be able to show them so my ask for everyone here if you're building something that you think could benefit from a vehicle title as an rwa let's do a proof of concept right let's let's do something where we can show I can show these legislators that this is real okay um we are digitizing titles today um so we've launched we have a URL digitize my tile. us you can go to it upload a picture of your title we OCR it we'll create you an nft on base you'll be one of the first people with an nft and we'll know who you are we'll we'll reward you later hopefully right so so please do that you probably don't have your title with you right now that was that was our friend and and here are theodes you can go to if you want to help thank you please give him a hand [Applause]