Decentralized economy and shopping seem at first an unusual combination. How can liquidity pools help you save money in the fund? But if you go deeper, there are some compelling uses for DeFi. The retail sector is going through one of the most difficult times in the life of a new generation, so here are the main challenges that e-commerce faces today … and how DeFi can fix them.
A battle made in heaven?
Companies such as Amazon, eBay and Shopify have changed the way we shop for everyday products. Now anyone can become a trader – and when the exotic item reaches your door within a few hours. But the emergence of these e-commerce platforms created some new problems and exacerbated the old ones.
Small businesses that sell goods through online shopping giants often end up paying commissions from 15% to 20%, and consume little profit. It is inevitable that some of these costs will end up with customers, which means that they pay much more for goods than they do in a decentralized environment.
Some blockchain platforms are already addressing this issue – and situations are beginning to change. PayPal has already started rolling out a cryptocurrency trading service, which means that millions of sellers will soon be able to accept digital assets as a method of payment. Deutsche Bank also warned that cash days are numbered and criticized such as Visa and Mastercard in a recent report. The German financial giant wrote: “They have great price power, which is uncomfortable for retailers or consumers.”
DeFi deals with cost cutting, and it already eliminates brokers for those who want to move their cryptocurrencies from point A to point B. But there are other benefits that can be achieved by removing some of the pain points that decentralization cannot fix. …
Loyalty schemes top this list. As Deloitte recently noted, the proven approach to protecting against repeat custom buyers requires a thorough reassessment, warning that traditional schemes are “tired” and lack adaptation. His report says that customers now expect rewards tailored to their personal tastes, and young customers want their favorite brands to use appropriate technologies.
“Businesses need to adapt to the digital age by adopting flexible and flexible solutions that enable them to adapt the customer service program to customers’ ever-changing expectations and needs,” Deloitte added.
One of the biggest disadvantages of loyalty schemes is how fragmented they are. Many retailers have their own systems, so customers have no choice but to register separately. This can be incredibly inefficient, not least because hungry consumers are more likely to decline discounts if a different order form is required.
But DeFi can help remove the friction by creating a world where customers only need a single address to earn reward points where they shop. Smart contracts can ensure that these loyalty schemes also cross borders, which means that a British tourist who buys a Costco in the US can earn points in the same way he comes home. All of this can help make loyalty programs more meaningful and transparent. Encouraging retailers to work together can also make these schemes more financially viable – which is important given how Deloitte describes current measures as “risky and expensive”. Just as DeFi can help 1.7 billion unbanked consumers access financial services, it can also open much-needed doors to the e-commerce world.
DeFi’s retail trade goes far beyond discount shoes. If done correctly, the protocols can also give the sellers a better deal, so that they can withstand difficult economic conditions (such as those caused by the coronavirus pandemic).
These small businesses face a dilemma every day. Flawless payment makes it easier for buyers to buy impulses, but they can increase fraud – and in many cases, sellers are expected to bill the bill in case of chargebacks. According to a Nilson report, $ 32 billion was lost due to card fraud in 2019, and it is a problem that persists through 2020.
Smart contracts and smart shopping
Uquid aims to bridge the gap between DeFi and e-commerce with Defito, a new ecosystem of concepts that has never been seen before in retail.
Commercial mining means that new tokens or coins are created every time a customer buys an item, and smart contracts are used to ensure that these assets can be used for further purchases in the future. This process is automatic and immediate, and offers much-needed improvements that address some of the flaws associated with loyalty plans today.