Open Enterprise Logistics (OEL) Foundation- A revolutionary new ecosystem in the blockchain sphere

cryptoguru1 (47)in #blockchain • 6 years ago

Source: Kriptonoob, (2018)

Introduction

Hey guys, it is Cryptoguru1 back with yet another exciting project. This time I am writing about Open Enterprise Logistics Foundation (OEL). Basically, OEL is a non-profit organisation which will provide coherence and resources for the development of an open enterprise logistics blockchain ecosystem. (OEL, 2018). This is perhaps one of the most exciting projects I have written about in a long time. You all know by now that I am big into these projects which aim to drive the world forward by utilising the amazing technology that is blockchain.

Open Port, (2018) announced the launch of the OEL Foundation on April 19th, 2018. For those of you not familiar with Open Port they are a digital logistics platform which is utilising blockchain to advance domestic distribution within emerging markets. OEL will bring the supply chain industry from an outdated off-ledger structure onto a “distributed ledger”. As we all know, blockchain is the technology of the future. Smart contracts will facilitate this change in an industry which relies heavily on records for cash flow. In my opinion, the OEL architecture will spark the change within the transport supply chain and cause a feathering out effect to other supply chains. OEL tell us in their own words that they will solve the complex system which exists in the industry today, which is driven by subcontracting and paper-based proofs of delivery; all of which blockchain can make a lot more streamlined and efficient. I believe they can achieve this.

As always with my work, I am going to provide you an in-depth overview of this projects whitepaper in this article. I will leave an abundance of additional reading/links to the projects official channels, for those of you who like the project and wish to continue researching it.

Pain point which OEL aims to solve

This project is all about solving the inefficiency in the enterprise logistics supply chain. It is my firm belief that blockchain is the solution for big data, this is yet another use case for this technology. As per their whitepaper, this industry conforms to a mainly manual process currently. OEL, (2018) further exclaim that often is the case with these manual processes, that disputes arise between shippers and transporters over “cash flow”. I believe blockchain is the solution we all need, as it is fully secure, trust-less and reliable. OEL will solve this pain point by doing just that, utilise the blockchain.

OEL, (2018) exclaim in their whitepaper that logistics/transport management equates to an astonishing 13% of global GDP, further claiming that research has shown that by 2021 B2B in retail will be valued at 15.5 trillion dollars. They further talk about how road freight accounts for a huge amount of this logistics supply chain, a fact which I agree with. OEL also tell us that in Asia, retail road freight spend is about 143 billion per year, which services a 6 trillion retail goods transfer supply chain (3% of freight value). This supply chain is seriously impacted by this outdated logistics management system, and OEL claim that the negatives of using a mostly paper-based system are late delivers and lost sales which results in penalties. The hardest part of logistics should not be the “distribution of information process”. Again, I see blockchain as the solution here.

From their whitepaper, OEL also tells us that this industry faces numerous growth restraints. They attribute this to the ever-increasing consumer class, as sales increase this puts enormous pressure on existing supply chains. Logistics is becoming a real nightmare for companies. This is an increasing problem all over the world.

OEL tell us the logistics: sales ratio cost is far too high to be sustainable and that the reliance on using 3rd party distribution networks is the reason for this. OEL, (2018) add in their whitepaper that most road transport is handled by 3rd party logistics providers, sub-contractors (3PLs) or 4PLS who manage these 3PLS. As can be seen from this, by the time you receive a product/item it will have passed through many logistic companies, and I can bet none of these share any similar type of IT structure to provide real efficiency in the process. This fragmentation makes this a very hard industry to control.

OEL also state that late or missing proof of delivery results in delayed invoicing, stating further that up to 1% of revenue is lost this way. This is just crazy in my opinion. I find this industry very inefficient as it relies on outdated systems to operate. The fact that in this day and age we rely on “paper “, shows the need for change. OEL, (2018) adds that this paper proof of delivery method can result in “shadow credit” meaning that no invoicing can take place for long periods of time on all sides until the goods are received, thus affecting cash flow. This also means deliveries cannot be verified quickly and in my mind is extremely inefficient. The very nature of blockchain would allow transparency where all parties can witness transactions.

Solution

The OEL ecosystem will solve all of these pain points discussed above. OEL, (2018), say their “ecosystem” will comprise of a platform, protocol and network, which will allow “OEL Foundation Alliance members” and other users to utilise their products/services.

The token itself (OPN) is a utility token which will act as the transfer of value across this ecosystem. I believe it will also act as a reward mechanism and allow for staking. The alliance I just mentioned is made up of supply chain participants, and the platform provides the infrastructure needed to streamline this industry.

OEL, (2018) acknowledge the advancements taking by the industry in their whitepaper, such as the rollout of Integrated Transport Management Systems and the emergence of online marketplaces. One just needs to think of Amazon to the see how successful online marketplaces can be. Blockchain is now providing us with the next technological revolution, some companies are actively working with blockchain in the supply chain, which shows that the benefits are there. OEL, (2018) give IBM’s food traceability for safety as a great example, showcasing the fact that larger technology companies are beginning their blockchain revolutions.

So, saying all of the above, this is where OEL comes into play. As explained in their whitepaper, even with all these advancements in technology, the one fault is none of them work collaboratively with one another. OEL believe a common standard is required to bring real efficiency to this industry, I tend to agree with this assessment. OEL’s enterprise architecture, I believe will tie all of these players together in one combined “push” for true change.

One thing is for sure, blockchain will without a doubt solve the pain points in the supply chain, we are already seeing many projects developing their own blockchain solutions. I am also a believer that IOT technology can be combined with blockchain to further enhance this industry, movement of goods is always going to be a huge industry, which will only grow year on year. OEL is the solution this industry requires.

The OEL Proof of Concept

This concept is already proven. OEL, (2018) tells us of the “Proof of Concept” was rolled out by “Open Port” in May 2018, who used blockchain for transactions via their “Acudeen Technologies marketplace”, in the shipping industry, requiring no intermediator. I believe Open Port were contracted by OEL to provide development and admin support on the OEL ecosystem. From what OEL tell us in their whitepaper, they have a private blockchain in place already.

This has won me over because of the team involved in this project. From the OEL whitepaper, I understand that Max Ward (founder/ CEO of Open port) and Nicolas Husson (CFO of Open port) decided to set up OEL Foundation as a separate entity, as they believe this is the approach required to make the technology a success. I also believe these will sit on the board alongside other leading professionals in their respective industries. I also believe from reading this whitepaper that a service agreement exists between Open port and OEL in terms of providing “staff resources and licensing of intellectual property” (OEL, 2018). What this all means guys, is that Open Port expertise will handle the development of the OEL enterprise architecture and the OPN token. What is also interesting, is that once OEL is up and running, then Open Port will transition from its current Ethereum TMS/EPOD network onto the OEL network.

What we all need to know is that this concept has been proved to work, but OEL want to go further than this, they wish to implement IOT technology into their ecosystem in future. For those of you who are not familiar with the Internet of Things, this is an emerging technology which is very exciting. One application specific to transport is that products can interact with their surroundings via sensors, the implications of this in the shipping industry would be immense. Imagine being able to gather data from containers and generate vital data. This is very exciting stuff and has a huge amount of conceivable use cases across all industries.

OEL Foundation Alliance

The OEL foundation was set up in March 2018 to govern OEL’s vision. This separate entity will push the vision of the OEL enterprise in the transport industry and promote the use of OPN tokens as the economic value on the ecosystem. They will also make all the decisions in regards to development on the platform and have an “online presence” to provide communication channels. As touched on above, the foundation will also consist of a board of specialists in the transport, supply chain and blockchain/crypto industries. They will also drive memberships to the OEL foundation alliance. I even believe members will have a say with the council members to ensure a truly democratic system.

Furthermore, the Foundation will provide the resources/ support needed to make the OEL platform a success. In OEL’s own words, they wish to empower the transport industry, by providing an ecosystem which will allow a shift from the traditional paper-based recording system to blockchain. After reading this whitepaper I personally believe OEL could be the streamlined platform needed to make the transport supply chain more efficient.

The Alliance itself will be made up of various stakeholders (Freight, 3PLS, retailers, suppliers etc…) OEL, (2018) also tell us there will be an ancillary section made up of technology providers, financial services and developers. I further understand that the Alliance is hosted by the foundation within the ecosystem. Once you become a member and adopt the OEL architecture you will be utilising blockchain technology. What I am also glad to see is that buying tokens does not give automatic access, as I believe this platform needs to grow on the merits of its platform and prestige. OEL, (2018) tell us memberships will be made up of 3 tiers:

General members: According to OEL, these have access to information on the platform which is produced by the foundation and have access to applications.
Premium members: These will have quarterly access to the development team and software development kits. They also have access to beta releases.
Enterprise Council members: OEL tell us that these can influence decisions on how the platform will operate and can co-author publications. These also receive full technology access (same as premium members).

An in-depth look at the OEL ecosystem architecture

This platform incorporates the necessary industry standards. OEL, (2018) states these are:

The Enterprise Ethereum Architecture Framework.
The On-chain Distributed Networks Architecture.

From my understanding, these are the underlying standards which allow this platform to operate, as we can see they will be using the Ethereum blockchain to distribute this platform at the beginning. The consensus will be a proof of stake consensus, according to Open Port, (2018).

Further to the above standards, OEL has created 3 tiers or layers within their architecture:

Source: OEL, (2018)

The open enterprise logistics platform (OEL Platform): According to OEL, (2018) this is effectively the “application and tooling layer of the Ethereum architecture and services on the on-chain DNA services layer. Essentially this hosts the dApps, tools, smart contracts etc…
The open enterprise logistics protocol (OEL Protocol): OEL state this layer hosts the components in the “tooling and privacy scaling layers of the Ethereum architecture” and services on the on-chain DNA services layer. This is the framework for APIs, encryption, scaling and smart contract templates. I believe also that JSON will the norm, but they plan to cater to other user’s requirements also.
The open enterprise logistics network (OEL Network): This all relates to the “core blockchain and network layers of the Ethereum architecture and services within the on-chain DNA core /cross chain layers. This will essentially give the platform its private blockchain, smart contracts, virtual machine, consensus algorithms (POS & dBFT) and off chain storage.

OEL use what is called a hybrid blockchain model, as described in their whitepaper. Essentially running a main chain, side chain and inter-chain connectivity with other service providers running on other blockchains (OEL, 2018).

Additionally, they exclaim in their whitepaper that the foundation will operate under industry standards where possible, thus providing interoperability with other 3rd party service providers to alliance members. This is very important in my opinion as I believe this needs to be in place for adoption of this platform. I can also see from the whitepaper that the team have extensive experience with various software development methodologies, such as Agile, DSDM, RAD and LD, for those not familiar these are some of the most popular development methodologies out there. This ecosystem will provide the following criteria, as described by OEL, (2018):

Scalability: I have spoken about this numerous times within my articles, I personally feel that until somebody gets scalability right then we will see no use case for blockchain. Scalability refers to the ability to manage a large amount of data/transactions; something which many blockchains cannot achieve to date when you compare them to more traditional, centralised networks. OEL, (2018) tell us that they will offer consistent speeds with the ability to scale to traffic, I believe they will tackle this via on-chain and off- chain solutions such as sharding.
Confidentiality: As we all know blockchain is probably the safest way to carry out transactions. Putting aside the possibilities of double spends attacks etc… which require a majority of control of nodes etc… blockchain in my view is in-penetrable by any technology known to man today, not even supercomputers can hack into what we call the public/private key structure of blockchain. OEL will offer this and give people full confidentiality over their own data.
Governance: OEL tell us in their whitepaper that their Foundation will govern this platform, in short, they will maintain it and offer GPL licenses to third parties wishing to use it.
Sharing: What I find very interesting is that OEL will implement a rewards-based scheme with their OP token to entice sharing of data between members.

This is a very exciting architecture guys, I believe they have a very good ecosystem designed here which should be able to handle the huge amount of data which this supply chain industry operates with.

Token economics

As always, for me to write about projects I need to be sure that the token has a real use-case within a platform. It is always the argument by sceptics that many of these new projects do not require tokens and are just shoe stringing blockchain into their business models because it is the new hot technology. It is my strong opinion that we must be vigilant when it comes to this, and I would argue that it is the most important thing to look out for when considering investing in a project. OEL, is in my view one of the projects with a real use case for blockchain technology and has a token with real utility.

OEL, (2018) explain in their whitepaper that their token, called “OPN token (OPN)” is simply a utility token for use in their ecosystem. As with any utility token, this essentially allows the ecosystem to operate. From their whitepaper, OEL list out the use cases of the OPN token.

Allows for smart contract validation: This is the underlying use of any utility token, as to allow a smart contract to operate once must pay transaction fees to nodes etc… OEL will require these fees to be paid in OPN.
Micro rewards & Incentivisation: As I mentioned above OEL plan to reward sharing of information on the platform. This is a vital business model by this team because the supply chain (and especially transport) requires many parties to operate and work together. By offering rewards for those who participate I believe OEL will change this industries culture. After all, money talks and I have found it is the only way to affect change. OEL, (2018) state any member can participate here, such as drivers who can provide information such as Geo data, capacity etc…
Access: OEL state that the OPN token will allow them to manage and govern this platform effectively. This is because it is essential for shippers/3rd parties to hold OPN tokens to carry out transactions. Then this feeds through the rest of the supply chain, as OPN is required for transporters to carry out smart contracts and offer rewards to delivery personnel. This will all lead to a staking culture from which users can obtain value and efficiency on the platform.
Staking/ Bookkeeping: I find this use case quite fascinating. From what I can understand, OEL will use OPN for staking rewards for nodes. As with any blockchain network fees and mining rewards go to “miners or operators of nodes”. OEL state that because they don’t require mining, then this staking phase is required to incentivise operators of nodes. Their business model is to utilise these stake rewards until such a time when adoption of the platform gets to a high enough level to nullify the need for this programme. This is great long-term thinking on the team’s part.

The token itself will be sold as follows.

Source: OEL, (2018)

According to OEL the OPN token will be generated in 2 phases:

Phase 1 token generation event is expected to take place in Q3 2018. This round of tokens will be on the Ethereum blockchain (ERC-20). I believe this will have both a private pre-sale and a public main sale. OEL, (2018) state the price will be 0.50 USD with a hard cap of 15 million. I am so happy the max cap is so low and see this as real value for investors. The soft cap is 4 million.
Phase 2 token generation will occur in Q2/Q3 in 2019. Information is a bit lacking on the details of this. I get the impression that the team is looking at “other” blockchain solutions from the vibe I get reading their whitepaper. OEL, (2018) state that if “changes” are made to their architecture and another solution is chosen then a token swap will occur for any tokens generated. If this occurs before or after phase 2 remains to be seen. They do state in their whitepaper that upon release of the main net (when all functions on the ecosystem are working) this phase 2 public sale will occur. Once started there will either be an issue of new tokens at the market rate or “other blockchain tokens”.

Both sales will require KYC, and furthermore, anybody wishing to contribute over 25k USD can deal directly with the team. Overall, I see this as a very well planned out token sale procedure. OEL will provide two releases of value to investors, essentially holding off on issuing new tokens until Phase 2 (Main net). I really like this model and would like to see other projects follow this.

The token distribution after sales is as follows, according to OEL, (2018):

33% of OPN tokens purchased in the public sale will be immediately released.
67% of OPN tokens, will be released over a period of 6 months, 30 days following Phase 1 public sale.
Any pre-sale bonus (whitepaper says 60%) will be released over this same 6-month period. This is great to see as an investor as it will prevent dumping.

Distribution of tokens

Source: OEL, (2018)

I am happy with the above distribution model. There are 100 million tokens in total (max supply), as mentioned above these will be released over 2 phases of sales. The team have 10%, which I feel is fair, I am always happy with a figure like this as I believe the team needs to be incentivised somehow. OEL suggest these will be released over a 30-month vesting schedule. Open port also gets 10% on a 15-month vesting schedule, this seems fair considering there is a partnership in place here OEL, (2018) state that there is a binding agreement for Open Port to use the OEL platform as its sole operating platform. This is great because Open Port has been quite successful to date, meaning OEL will be used by several large supply chains from day 1.

I am intrigued by the 40.1% for reserves and stake rewards. From what I can understand this is essentially the second sale and any unsold tokens in the first sale. These stakes will be vital to entice nodes to operate (discussed above). The team will also use these reserves to “best serve” the community, which is great to see from an investors point of view.

Use of funds

Source: OEL, (2018)

This all depends on reaching the 15 million cap, according to OEL:

0% to Platform development is a nice healthy figure, I would maybe like to see this pushed to 35% but the team seems to have this well covered.
30% to Open Port for services seems fair for the work they will be carrying out.
20% to OEL Foundation Alliance build out and marketing initiatives. Again, this is fair in my view.
10% to Admin and legal. This is vital for the success of any project.
10% to Reserves. This is important to have for any unforeseen circumstances, which there could be many.

For whatever reason, the project only reaches its 4 million soft cap, OEL state that 2.5 million will be allocated to platform development and the rest spread across the others until the second token sale occurs.

Roadmap

Source: OEL, (2018)

Guys, this is what I like to call a healthy roadmap. The team has provided ample time to roll out this project. I have said it numerous times, projects with short roadmaps can often miss their “agreed dates” and fail their investors. OEL have provided themselves with sufficient time to make this project a success and provided investors with great “value realisation dates”. As we can see from the above chart, by the end of 2019, we should have the release of “OEL protocol V3 release mainchain”. In the world that is cryptocurrency this may seem like a long way away, but believe me, projects which showcase their rollouts in this manner will be the big winners in the end.

Conclusion

When I look for projects to invest in I like to make sure that the project I am considering has a true value proposition. OEL wants to attract the attention of all supply chains, but they state in their whitepaper that they will initially focus on transport management. What they envisage is an ecosystem which centres around blockchain technology; this should provide a huge array of improvements and efficiency to the current systems, as discussed in this article. OEL is providing a one-stop solution for every party in the supply chain, to make some real change in the world today. This is what the blockchain revolution is all about.

OEL will provide a platform which will vastly improve the speed of payments across the supply chain and vastly improve information management. OEL tell us that their model will improve liquidity and cash flow for all parties in the supply chain, something which is long overdue in my opinion. What we all should know by now from reading my work is that smart contracts will be central to this, essentially allowing many of the middlemen to be forgotten. This is what change for the better looks like.

I strongly believe that supply chains and logistics in general, provide us with the strongest use-case for blockchain. My work centres around finding hidden gems in what you could call an “ever- increasing dilution of the cryptocurrency space”; I believe I have found one of these gem ICOs with OEL. OEL is a great example of a project which will make a real change to the world; blockchain is this new era after all and the OEL Foundation will be at the forefront of this change.

Lastly guys, I just want to stipulate to you that you should not take any of this as investment advice. I am not a financial advisor and urge you all to do your own research when considering any investment. Never follow somebody blindly, my job is to showcase projects I see with real potential, that is all. I hope you enjoyed this (long) article and I will aim to find the next amazing project in due course. I thank you all for your support and ask for you to share my work.

References

ICObench. (2018). OEL Foundation (OPN) - ICO rating and details. [online] Available at: https://icobench.com/ico/oel-foundation [Accessed 31 Jul. 2018].
Kriptonoob (2018). [online] Steemkr.com. Available at: https://steemkr.com/cryptocurrency/@kriptonoob/oel-foundation-reinventing-shipping-and-transportation-logistic [Accessed 31 Jul. 2018].
Oel.foundation. (2018). OEL Foundation. [online] Available at: https://oel.foundation/ [Accessed 27 Jul. 2018].
Open Port. (2018). Open Port Announces the Launch of the OEL Foundation to Promote Blockchain Innovation within the Supply Chain Industry - Open Port. [online] Available at: https://openport.com/openport-announces-launch-oel-foundation-promote-blockchain-innovation-within-supply-chain-industry/ [Accessed 4 Aug. 2018].

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