18 February, 2022
Some thoughts on why we won our rum awards and what we are thinking of doing next
This is a very long article. We apologise. But it is foundational to what we are thinking now and for the future.
Some pointers to maybe why our rums did so well
Our rum gets aged in previously used, 100-year-old oak vats that have stored Madeira wine. This amazing method is just one of our techniques that gives our rum its incredible taste.
The terroir of our rums is also important. Like most good island rums our soil is of volcanic origin giving it that particular good chemistry for our raw source materials.
If any of you understand quantum mechanics you know how important and related the sense of taste and smell is vis-a-vis authenticity, and how in the quantum world molecules of our rum volatiles vibrate (or “sing”) to our taste and smell receptors. You need to be authentic to get that molecular chemistry to do work wonders on the palate and “sing” as our rums do!
(We apologize for going off on this technical tangent! But we are so excited. What our reference to the quantum physics of rum production means is that you cannot cheat your way into quality by trying gimmicks such as using colorants, added sugars, or any one of a litany of other cheats to get into the top! You have to be honest with the process, even if it is more profitable to add artificial improvements and enhancers to the thing you are making. This is what authentic artisanal production is all about. Being brutally committed to the correct process of doing things the right way.)
So..., what next for us?
This was initially a throw-it-into-the-wind-and-see-where-it-lands experiment for us. The rum serendipitously coincided with the founding of Cardano. Both Cardano and this award-winning rum were born in the same year!
We only intended to launch this rum as a commemoration of the momentous event that was the Alonzo Hard Fork. The single most important event in Cardano that defines the type of blockchain that it is: a smart contracts platform.
"By the way, the Cardano Foundation was delighted we took this initiative and thought it a great idea to marry this special Rum Commemorative to the 6-year inception of Cardano!"
However, a surprising and unintended consequence of our launch of this unique and once-off NFT was that a whole, but not unrelated problem, fell into our lap that needed a solution. A solution that neatly gets resolved by using the Cardano blockchain. That problem was related to how to get collected valuable bottles of wine, whiskey, and rum onto a secondary market in a relatively trustless and permissionless way. A huge problem when you consider you are dealing with physical items that are notorious for being easily counterfeited.
Moreover, and further to this problem, was how to unlock the vast reserves of “collectible” bottles of rare wine, rare whiskey, and rare rums that sit hidden away in private home cellars, and even in vaults - all out of view to the rest of the world. By unlocking this vast resource of stored wealth, and by potentially creating a whole new market for collectible rare artisanal products that are, and this is important, authenticated and cross-referenced by having their own digital NFT footprint on the blockchain, we can unleash a whole new type of activity between owners and collectors of these valuable products.
"Think of a people-powered “Etsy” but in a secondary market with their own digital footprints and decentralized."
This vast store of hidden wealth, once the domain of auction houses and exclusive liquor stores, or pawn shop collections, can now be traced, observed, admired, traded, and even collateralized for loans via blockchain mechanisms and smart contracts.
Think about the last feature mentioned above. Collateralizing your rare wine, or even your rare piece of jewelry in a trustless, permissionless way.
We have realized in finding a solution to this problem that you cannot totally get rid of third-party agency in the real world though. For example, using the minimal and desired agency of, say, a location to securely store the collateralized item in the real world. A sort of escrow that both buyer and seller trust but without the excessive intervention of a party to store and sell on the seller’s behalf charging exorbitant fees (sometimes 30% on items sold on auction).
Our idea is that there would be a mix of blockchain and the traditional brick-and-mortar world. A “realfi” if you will. Having the blockchain part between the individual buyers and sellers being the most important. Transforming but not obsoleting traditional third-party agency.
In short, traditional third-party agencies can become a significantly cheaper expense than it is now - especially in blockchain peer-to-peer transactions. Agency prior to authenticated NFTS was slow, cumbersome and very expensive. We want to eliminate some of the friction there exists in the flow of valuables and collectibles in the secondary markets that will, ultimately, help said agencies too. Especially since we expect there to be a surge in foot traffic to their stores and services.
This agency is not required if both buyer and seller trust each other enough though. Like an eBay.
However, some form of agency would be necessary if parties in an exchange of valuable wines or similar collectibles want to remain anonymous or still have some doubt as to the risk of counterfeit goods.
As long as the collectible is authenticated on the blockchain and can be inspected at a physical location such as a validator (auction house, pawnshop, or other approved third-party validators and world-renowned authenticators) then the potential buyer can have a high degree of confidence using a great system of reliability at a fraction of the cost it took in traditional commerce.
Further thoughts on planning and building this idea out
We are cognizant of what a huge problem this is to solve. It is trivial to inspect and trust digital items on the blockchain. It is certainly not trivial to inspect and trust real-world physical items off-chain even if they have their digital double.
We intend to pursue this avenue of problem-solving by first applying for funding via the Catalyst Fund initiative on Cardano. Then, if we see the viability of this project as a great solution to the aforementioned “problem-needing-a-solution-on-the-blockchain” we will pursue this further. For example, to create a system or DAO on Cardano with its own tokenomics and software infrastructure.
We want to reiterate that we do not want to obsolete auction houses, pawnshops and similar agencies. What we want to do is augment them into the new world of blockchain. To open a whole new market that has been patchy and difficult to open up. Institutions such as pawnshops and auction houses will most certainly benefit from increased traffic - albeit less profitable for them, but enough to not cast them into obsolescence. They have a valuable resource that plays well with realfi: they have a secure and physical venue to store, to trade, and provide “collection point services” for collateralized valuable bottles of wine and whiskey.
Another interesting resource and market that opens up is the unlocking of domain-specific individual experts. So say, for example, any world-renowned sommelier being able to plug themselves into the DAO and become a valuable and on-demand authenticator or trusted validator for physical goods to be registered on the blockchain. Another example would be an import or customs expert in a geographical area that has regulations on the sale and transport of alcohol (just think of how many issues arise with so many “dry” counties in the USA and how it is a minefield to navigate for the common citizen to be able to buy and sell his single bottle of Chateau Margaux to somebody in another state or country.)
There could be quite a few “cottage industries” built and plugged into this DAO. Interestingly enough, we have been contacted quite a few times to explore and assist in other physical NFT projects. Cigars, other liquor and even cocktail recipes! There seems to be a great opportunity here to make something very useful on the Cardano blockchain.
"There are still about 90 bottles of our commemorative rums left on TOKHUN.IO - our exclusive partner platform for the initial sale of our rums."
List of links related to this article
Our three takeaways from the awards we won for our rums
A list of articles we have published over time on our web site