A Bizdev Study: RM2 & Chainlink

It’s been a year since Chainlink Labs began laying off much of its sales team amid the market downturn. During this time, Chainlink wisely continued hiring for technical roles. Since then the team has made considerable progress in staking, CCIP, and in collaborations with large institutions.

Considering that this refocusing effort can be considered a success, perhaps a sales and outreach effort may be warranted in the near future. Especially because CCIP has big implications not only for traditional finance and traditional enterprise as a whole.

Below is a mock Q&A of what an exploratory business development discussion might look like with a modern logistics or supply chain company. IoT-enabled cargo and other shipping technology, such as RM2’s embedded autonomous IoT sensor, have a natural synergy with decentralized systems that are worth exploring. Note this example was not an actual discussion that took place. As a reference point, an operational company helps to elucidate this topic, and makes for a more practical study of decentralization potential in modern supply chains. Here is the Q&A:

Introduction

Q: Can you explain what Chainlink Labs does and how it could benefit RM2?

A: Chainlink Labs specializes in decentralized oracle networks that enable smart contracts on blockchains to securely access external data feeds, web APIs, enterprise systems, and new markets. This aligns well with RM2’s expertise in IoT trackable pallets and supply chain platforms. By integrating Chainlink oracles, RM2 could leverage real-time data like weather, transport updates, and market prices to give customers enhanced visibility and drive data-driven decisions.

Q: What are some specific use cases where Chainlink could add value for RM2 customers?

A: Chainlink oracles could empower RM2’s IoT pallets with real-time data feeds for tracking and monitoring. Chainlink could also enable RM2 to utilize blockchain’s benefits like transparency, traceability and immutability to further secure the pallet pooling system. Verifying pallet movements and sensor data via Chainlink would ensure data integrity and build customer confidence.

One prime example is the capital available on blockchains today. In many ways, the risk appetite that we see in crypto is the perfect match for marine cargo insurance traveling along risky trade routes. Many traditional insurers won’t give marine cargo insurance for these ships. Crowdsourcing these risks on decentralized protocols seems to be a great opportunity for development.

The same insurance products can be applied to damage, or spoilage of goods, as well as trade credit insurance, where a receiver of goods fails to pay, and the seller is able to be reimbursed.

Q: How could a proof of concept collaboration help demonstrate the potential of this partnership?

A: A POC integrating Chainlink oracles with RM2’s ELIoT platform could showcase real-time tracking abilities of RM2 pallets, powered by Chainlink data feeds and blockchain integration. This pilot would tangibly exhibit the capabilities unlocked by combining RM2’s composite pallets and supply chain services with Chainlink’s decentralized oracle networks and blockchain technologies.

Q: What are the next steps you would propose to potentially move this partnership forward?

A: I suggest we initiate discussions to scope out details for a POC project. This will allow us to demonstrate the value of bringing together RM2’s offerings with Chainlink’s capabilities. We can then explore how this collaboration could potentially be expanded to additional use cases to create an enterprise-level solution that provides supply chain visibility, integrity and efficiency. I’m excited to further discuss forging this strategic partnership between Chainlink Labs and RM2.

Alternative Rebuttal

Q: Why not just use a centralized, 3rd party approach to track and reconcile everything?

A: I understand the perspective on using a centralized software approach, but allow me to present some counter arguments in favor of utilizing blockchain technology:

Q: What are some of the limitations of centralized software for supply chain management?

A: Centralized systems have some inherent drawbacks:

• Single point of failure vulnerability
• Lack of transparency into data and transactions
• Manual verification and auditing needed
• Biases and control by a single centralized entity
• Possibility of tampering through hacks or manipulation

Q: How can blockchain technology help overcome these limitations?

A: Blockchain provides several key advantages:

1. Enhanced Security: Blockchain technology provides a decentralized and tamper-proof system for data storage and transactions. By leveraging blockchain, we can ensure the integrity and immutability of the data, reducing the risk of unauthorized access, fraud, or data manipulation. This is particularly crucial in supply chain management, where data accuracy and security are paramount.
2. Immutable Audit Trail: Blockchain technology creates an immutable audit trail of all transactions and data changes. This feature is valuable for traceability and accountability in supply chains.
3. Smart Contract Automation: Smart contracts automate processes like payments, QA, and compliance. This reduces manual work and errors.
4. Collaboration: Blockchain enables secure data sharing and interoperability between entities, improving communication and efficiency.
5. Future-Proofing: Embracing blockchain now future-proofs RM2 as the technology advances. It establishes industry leadership.

Q: How do these blockchain benefits specifically address RM2’s supply chain requirements?

A: Blockchain provides tamper-proof tracking of high-value RM2 pallets, reducing fraud/loss risks. Automated smart contracts improve operations. Cryptographic asset identities prevent counterfeits. Permissioned access ensures confidentiality. The transparency enables continuous auditing and rapid issue resolution.

Decentralized insurance, reinsurance, and liquidity:

Q: How could RM2 potentially utilize blockchain technology for insurance and risk management in its supply chain?

A: There are a few key opportunities to explore:

1. Decentralized insurance marketplaces – Blockchain enables direct engagement between parties without intermediaries, reducing costs and friction. RM2 could partner to offer innovative policies tailored to customer risks.
2. Reinsurance platforms – Blockchain allows decentralized reinsurance trading to transfer supply chain risks. Partnerships here would enhance RM2’s risk management capabilities.
3. Decentralized liquidity – Through DeFi protocols, blockchain unlocks lending, borrowing, and trading without centralized entities. This provides new financing options for optimizing working capital.

However, these areas are still evolving so careful evaluation of benefits and risks is needed before implementation. Engaging experts and staying updated on the latest developments can inform RM2’s blockchain strategy.

Q: What are some of the key challenges or risks involved with adopting these types of decentralized solutions?

A: Some challenges/risks include:

• Immature regulatory frameworks – Unclear regulations for decentralized protocols could expose RM2 to compliance risks. Engaging policymakers early is advised.
• Technology barriers – Blockchain solutions may require overcoming complex integration and interoperability hurdles with legacy systems.
• Adoption challenges – Limited adoption to date means decentralized solutions have fewer participants and liquidity currently. Engaging partners is key.
• Security risks – While lower than centralized systems, blockchain still carries cybersecurity and custody risks that require mitigation.
• Volatility risks – The volatility of cryptocurrencies/tokens used in decentralized finance can create financial uncertainty. Stablecoins could help.

Prudent risk analysis, partnerships, and staged experimentation/pilots can help successfully navigate these challenges.

What relevance does CCIP have to our business?

A: Specifically, we believe our progress with the Chainlink Cross-Chain Interoperability Protocol (CCIP) and Chainlink Functions could offer significant benefits to your business in the future. This is because financial institutions, importers exporters and other businesses involved in trade are implementing their own blockchains. These private blockchains will need connectivity, flexibility, and other features that chainlink offers.

Chainlink Cross-Chain Interoperability Protocol (CCIP)

CCIP is a global standard for cross-chain communication. It establishes a universal connection between any public and private blockchain, allowing for the transfer of arbitrary data, tokens, or instructions alongside tokens (i.e., programmable token transfers) between chains.

As an IoT pallet logistics company, RM2 can benefit from CCIP in a number of ways:

• Asset and Information Transfers: CCIP facilitates the transfer of assets and information across multiple blockchains, which can enhance the collaboration between developers from diverse blockchain ecosystems.
• Universal Connectivity: With CCIP, RM2 can leverage the strengths and benefits of different chains, thereby allowing your company to serve more users and provide additional features or products for them.
• Successful Testing: CCIP has undergone successful testing, including a recent Code4rena crowdsourced audit contest. It has also been tested across five testnets with a diverse range of use cases.

Chainlink Functions

Chainlink Functions is a powerful new Web3 serverless developer platform. It allows developers to connect their decentralized applications (dApps) and smart contracts to any Web2 API and run custom computations on API data using Chainlink’s highly secure and reliable network.

For RM2, Chainlink Functions can provide the following benefits:

• Connecting to Web2 Infrastructure: Chainlink Functions allows developers to connect their smart contracts to existing Web2 APIs to access services such as AI computation, messaging services, and more. This can help RM2 leverage its existing Web2 infrastructure when building a Web3 app.
• Custom Computations: With Chainlink Functions, developers can run custom computations on API data in minutes.
• Simplified Development Process: Developers can connect their dApps and smart contracts to any Web2 API with just a few lines of code, without the need to manage any additional infrastructure.

Q; Thank you for meeting with us. Any closing thoughts?

A: Collaborate with a World Class Team
With Chainlink, you’ll be working with a world class team of engineers and thought leaders. We have been actively hiring from Google, Amazon, Meta and other tech leaders. Many of our employees have an Ivy league or Top-ranked University Alma Mater. Our latest big tech hire is Kemal El Moujahid who was the head of product for Google’s Tensorflow. As you know, in a fast paced innovative field, it pays to work with poeple on the cutting edge of technology.

In conclusion, these advancements at Chainlink can provide RM2 with the tools needed to connect with any blockchain and run custom computations, thereby enhancing the potential of our partnership. We look forward to discussing these developments further and exploring how they can benefit RM2.