Insights
One of the most exciting projects launching later this year in the world of decentralised finance is the Splyt project, founded by blockchain veteran Cyrus Taghehchian. Describing the project in a nutshell, Splyt promises to integrate an NFT infrastructure for e-commerce, allowing affiliate brands to seamlessly dropship products from the parent site and subsequent payment to occur either via traditional or cryptocurrency means. Splyt additionally takes caution to validate transactions, manage disputes and build transparent reputations for sellers.
One keystone development in the service’s conception is their integration with the multi-billion dollar e-commerce giant, shopify.(1, 2) This provides both great scope and credibility to the company straight from launch.
“Splyt’s goal is to improve commerce for everyone involved” Whitepaper, P6.(3)
This article will delve further into each of these aspects of the Splyt platform.
The story so far
The idea for Splyt was conceived in 2016 in an effort to solve the problem of cross-database issues with e-commerce affiliate marketing.(1) Tokenisation and the first Splyt smart contract followed in 2017 (right at the beginning of when NFTs appeared on the scene) and initial investment followed in 2018. In 2019 Splyt won the RISE Startup Programme and went global in 2020.(1)
Making bold moves in the first quarter of 2021, Splyt now have full Shopify integration through the Shopify app store.(1, 3) In the next quarter, Splyt will move from Ethereum to Polkadot,(4) in order to facilitate cross-blockchain payments. With Woocommerce integration and establishment on the DeFi marketplace over the third and final quarter of 2021,(1) 2021 is set up to be Splyt’s biggest and boldest year so far.
How it works
Splyt uploads products as shoppable NFTs attached to physical goods. For any item to be uploaded to Splyt, it must be connected through a node running the Splyt SDK (software development kit), which integrates incoming data on the blockchain.(5)
Therefore, multiple affiliate websites independent of each other can display and sell the exact same products through Splyt, all running through the same node.(5) Sellers can incentivise affiliates and subsequently build networks of affiliates through setting up “rewards” for third parties who sell any of their given items.(5)
Upon purchasing a product, the value of the purchase is held in escrow until the transaction is complete.(5, 6) At this point, held funds are distributed automatically and instantaneously to the seller and affiliate.
A key advantage of this escrow system is the capacity for “pre-dispute resolution”, without unnecessary intermediaries.(6) If an item is not delivered, the buyer has the option to initiate a dispute protocol which is designed to resolve issues through automated means. This additionally has the advantage of reducing the cost and time barriers associated with traditional arbitration.(6)
Another problem solved by the integration of NFTs into e-commerce is the longstanding issue of double spending on inventory.(7) Without NFT integration, double spending can result in unfulfilled orders and negative consumer feedback, and is not uncommon.
Their one-pager is outlined below.
Figure 1: Splyt one pager (source: https://docsend.com/view/eap4yhisax2mitdn).
Empowering ethical e-commerce
Splyt support sustainable and dignified business models, and they hope their protocol will empower small business owners. To quote their protocol:
“The protocol is designed to place buyer, seller, and marketplace interests ahead of middlemen services that currently dominate the industry”.(5)
One of the ways they intend to achieve this is through creating collateral-based loans to help emerging brands expand their businesses, or as they tweet, “we’ve solve[d] off-chain DeFi!” (@splytcore).
Overarchingly, the incorporation of Splyt into e-commerce as a whole would aid a move towards unbiased marketplace efficiency, in an effort to empower the masses. It is this almost humanitarian statement that Splyt hold central to their mission statement,(3) advocated across their various platforms (twitter: @splytcore @cyruskind).
Polkadot and Splyt
Splyt is currently transitioning from Ethereum to the Polkadot blockchain (DOT).(3, 8) Polkadot, recently dubbed as the “Ethereum killer” by Forbes,(9) is a newer altcoin with multiple unique features that prime it for “security, scalability and innovation”;(10) Splyt’s decision to move to Polkadot is a testament to its forward-thinking and innovative core team, and is worth elaborating upon.
Polkadot introduces the idea of parachains (short for parallel chains), which run a higher transaction throughput compared to Ethereum by spreading transactions across multiple computers.(11, 12) Its advantage is quite apparent in the current climate where throughput capacity is proving an issue for Ethereum in recent months. It is known that levels of supply and demand in the Ethereum network are the predominant factor affecting the latency of transactions,(13) forecasting further problems as the networks popularity grows. Polkadot was incidentally founded by Dr Gavin Wood, one of the founding fathers of Ethereum, and boasts other highly experienced and successful team members.
Operating within their idea of parachains, Polkadot introduces the idea of bridges.(12) Bridges will connect other already running blockchains into the ecosystem (like a BTC or ETH) and allow for transfers of tokens between Polkadot and outside networks. This creates a vision for true cross-blockchain interoperability and opens the door for greater co-operation between chains and specialisation within chains.(12) Other unique features include easy upgrades that promise to avoid “hard forks” and increased ability to self-govern.(11)
Key stakeholders: Transparent, qualified and experienced
Splyt is as solid as it gets. Aside from full integration with Shopify and running on the impressive Polkadot technology, key information on the platform’s design, aims and technicalities are transparently and comprehensively outlined in their technical paper and whitepaper,(3, 5) the former of which can be found here (the latter cannot be linked for legal reasons but may be accessed via spl.yt).
Moreover, funding at seed stage is reported to have exceeded expectations, with huge success for the company at this stage of investment. They have an impressive group of partners that are well regarded in blockchain investment. These include Science Blockchain (some of their ventures can be found on their site here; Arca, an investment management hedge fund specialising in cryptocurrency; Master Ventures, a blockchain-focused venture studio with an impressive portfolio, headed by the CEO of the PAID network, and Krypton Venture Capital.
Finally, a strong core team and a seasoned panel of advisors with considerable experience spanning areas of finance, consulting, software development and blockchain adds reliability and a long-standing history of success to bolster the project.(3, 10) Under such capable hands, Splyt will surely continue to grow and develop into the revolutionary e-commerce NFT platform their value proposition promises it to be.
As of February 2021, Splyt report that they have integration with over 700 brands and 1100 affiliates.(10)
Look out for $SHOPX this year. Before long, we reckon it’ll find you anyway.
Author details:
Michael McLarnon
Linkedin: http://www.linkedin.com/in/michael-mclarnon-01
References
1. Foundation SyC. Roadmap 2021 [Available from: https://www.spl.yt/features. 2. Csiszar J. Shopify’s Net Worth: How Much Is Shopify Worth Right Now? 2020 [Available from: https://www.gobankingrates.com/investing/stocks/how-much-is-shopify-worth/. 3. Team SC. Whitepaper. spl.yt; 2021. 4. NETWORK P. medium.com2021. [cited 2021]. Available from: https://paidnetwork.medium.com/splyt-the-next-gen-e-commerce-supply-chain-powered-by-polkadot-launches-ido-on-ignition-289c0fe2a81f. 5. Spl.yt Decentralised E-Commerce Protocol for a Global Inventory and Affiliate Marketing System. spl.yt/features; 2021. 6. Token Mechanics spl.yt2021 [Available from: https://www.spl.yt/features. 7. Bankless. Zero to One with Splyt -Part 1 medium.com: medium; 2021 [updated 12/02/21. Available from: https://bankless.medium.com/zero-to-one-with-splyt-part-1-d8c108379cbc. 8. Spl.yt. Spl.yt Core: The E-Commerce eNFT® Infrastructure Migrates to Polkadot: medium; 2021 [Available from: https://medium.com/splytcore/spl-yt-core-the-e-commerce-enft-infrastructure-migrates-to-polkadot-604efe52ba36. 9. Rapoza K. ‘Ethereum Killer’ Polkadot: What’s So Great About It, And Why Buy It? Forbes. 2021 21/02/21. 10. Foundation W. Homepage 2021 [Available from: https://polkadot.network/. 11. Polkadotters. What is Polkadot? : medium; 2020 [Available from: https://polkadotters.medium.com/what-is-polkadot-85d4af1b2fe7. 12. Polkadot. What is Polkadot? A Brief Introduction 2020 [Available from: https://polkadot.network/what-is-polkadot-a-brief-introduction/. 13. Spain M, Foley S, Gramoli V, editors. The impact of Ethereum throughput and fees on transaction latency during ICOs. International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2019); 2020: Schloss Dagstuhl-Leibniz-Zentrum für Informatik.