Lightspeed Newsletter: Wine tokenization on Solana

25.07.2024

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I’d like to be more of a wine snob, but I’m useless at figuring out what the notes in a glass of wine are or whatever. I was once told that every red wine tastes like cherry, though, so I just fall back on that one if I need to pretend to know what I’m doing.

Anyways, wine, but on the blockchain:

DVIN wants to keep track of wine

It was a brutally hot afternoon as I sat in a midtown Manhattan office building with David Garrett and Jana Kreilein, the co-founders of wine tokenization platform dVIN. An unopened bottle of Spanish red wine sat between us on the table as Garrett embarked on a lengthy explanation of how data is tracked differently between wine and spirits sellers.

“I’ve been sort of obsessed with data,” Garrett confessed.

In the more-consolidated spirits industry, companies have access to pretty extensive business intelligence on liquor purchasing behavior, Garrett explained. Not so in wine, where a lot of diffuse “tiny players” come together to produce, import, and sell the product — with only a rough idea of where and when the wine is being consumed.

“A lot of [wine producers] are still keeping inventory on clipboards or Google Sheets,” Garrett said. “What that means is that while your Seagram’s guy knows the depletion report for the CVS on the corner, the winemaker, as soon as the wine leaves the winery, it’s gone, they have no idea.”

This is partly the problem Garrett and Kreilein are aiming to solve with dVIN, which uses Solana-based NFTs and tokens to incentivize consumers to share data with wine producers. DVIN launches from stealth for members of the platform today and for the general public on Friday, the team told Lightspeed exclusively.

DVIN works by pairing wine bottles with so-called digital corks. In the product demo I did with dVIN, the bottle of red wine had an NFC tag attached to it. When I put my phone near the bottle, I was redirected to dVIN’s platform, where I could view the digital cork and information about the bottle. When consumers open the physical wine bottles, a button on dVIN allows them to burn their digital cork in favor of a tasting token NFT, which is “soul-bound,” or non-transferable.

Garrett, who started his career in software before moving into wine two decades ago, has been mulling over the wine industry’s data problem since 2010, but “couldn’t think of a centralized way to [solve] it,” he said, adding that there was no other practical way to bring wine bottles and consumers together into a shared database.

In a nutshell, consumers would be incentivized with soon-to-launch VIN tokens to burn their digital corks, and wine producers would foot the bill for the VIN payouts in hopes of getting access to valuable consumer behavior data. DVIN Labs makes money by taking a percentage of digital cork listings and sales.

On first blush, I’m a bit skeptical about dVIN’s ability to draw users, since luxury wine and some of the platform’s launch partners (Madlads and Jupiter are a couple) don’t strike me as having very similar customer bases.

Garrett, who admitted he’s “kind of the opposite of a degen,” said that the platform is more of a bet on the preferences of soon-to-come digital-native wine buyers.

“They want transparency, they want experiences more than stuff … they want a direct connection to the brands that they love,” Garrett said. He also noted that dVIN — which he hopes can follow an adoption pattern similar to airline miles — is “not in a hurry” when it comes to company-building.

“We are the most boring project in blockchain, and we’re boring because we have a 25 year horizon,” Garrett said. “We don’t expect to take over the world tomorrow.”

— Jack Kubinec

Zero In

Solana has now surpassed Ethereum in trailing 30-day decentralized exchange volume, according to data shared by Blockworks Research analyst Ryan Connor.

Essentially, this means Solana has sustained its higher volume for an entire month — a feat that would have been all but unthinkable a year ago around this time. Importantly, the data cited by Connor does not include the large amount of trading that happens on Ethereum layer-2s.

Still, even with layer-2s lumped in, Solana is emerging as the blockchain to beat for DeFi volumes, as you can see in this chart posted by VanEck digital asset research head Matthew Sigel.

— Jack Kubinec

The Pulse

Real-world assets (RWAs) continue to be a hot topic, driven by the need for more stable and tangible investment options in the blockchain world. With that in mind, Huma Finance has rolled out PayFi, a new network that aims to supercharge global payment financing with instant liquidity.

Traditional payment systems (think credit cards and trade finance) are bogged down by delays, high costs, and compliance issues. They’re slow and clunky for today’s needs. For example, cross-border payments often require pre-funding accounts, tying up capital and causing delays. According to a recent blog post, PayFi solves these inefficiencies by using blockchain and stablecoins to enable instant settlements and financing for RWA transactions.

We’re already seeing industry players like Solana jumping on the PayFi bandwagon. Examples in action include Arf’s on-chain liquidity solutions for cross-border payments, @raincards’ USDC-backed corporate cards for Web3 teams, and @zeebuofficial’s on-chain settlement of telecom roaming invoices.

PayFi also introduces new use cases such as instant RWA settlements, which drastically reduce the settlement time for real-world assets, and DePIN financing, which allows the cost of building infrastructure to be covered by its future value. The latter idea being to let projects fund their current infrastructure costs with future expected earnings, speeding up adoption. Huma also introduced the PayFi Stack, an open framework that helps build and support compliant payment financing solutions, ensuring they meet regulatory and industry standards.

On X, @edithyeung congratulated the Huma Finance team for their launch and partnerships with Solana, Stellar, and Circle. @zengjiajun_eth and @ynonestop remarked that “PayFi” is a catchy new buzzword, set to become a key term in Web3. @neriah12345 agreed that PayFi could significantly impact how real-world assets are managed and financed. Huma Finance co-founder @wisdant expressed excitement about PayFi being the new frontier for real-world assets, emphasizing its potential to boost blockchain’s impact.

— Jeffrey Albus