Crypto 🤝 ONDC : A crossover you didn't know we need
Crypto 🤝 ONDC : A crossover you didn't know we need
A bold pursuit at building a vital digital public good & how crypto can help it succeed
In this essay we’ll deep-dive into the Open Network for Digital Commerce (ONDC) , a GoI initiative to build an open protocol for e-commerce.
The easiest analogy is to think of ONDC as the UPI for e-commerce. A digital highway with a dual mission - firstly to spread the impact of e-commerce to merchants who’ve been deemed too small by the current market & secondly to level the existing playing field.
This is a worthy but daunting mission. A key distinction is that UPI operated purely in the digital space whereas e-commerce requires the physical movement of products as well. Additionally, UPI was relatively early - banks and new fintechs were quick to rally behind it. However e-commerce has matured over the last decade and there are established incumbents with deep pockets and a certain level of customer expectations that any new system will need to meet on day 1.
We believe that the use of smart contracts, integrating with India’s upcoming CBDC and the global crypto ecosystem can turbocharge ONDC and set it up for success. More importantly, we argue that without automated digital enforcement of certain key policies it will be very difficult for ONDC to build sufficient trust necessary to unlock critical mass. There is a real risk of it either dying out or getting captured by an oligopoly of players, neither of which outcome is aligned with the goal the team has set out to achieve.
This essay is structured in the following sections
ONDC as a vital (digital) public good
Overview of ONDC
Ideas to Improve ONDC
Request for Proposal - Apply for a grant to build an ONDC gateway using Solana
Let’s dive in.
ONDC as a vital (digital) public good
If you’re reading this it is likely that you, like me, have been a beneficiary of the e-commerce boom of the last decade.
Not so long ago it wasn’t possible to just open an app, tap on the screen a few times and have virtually anything show up to our doorstep within a day. Platforms like Flipkart, Amazon, Snapdeal, etc have pioneered and evangelised e-commerce relentlessly to a point where even our parents and elders are comfortable shopping online today. No doubt the spread of UPI & Jio played a major role in building the payments and internet infrastructure that enabled this.
Here’s a reminder of what the Flipkart ads looked like, not so long ago.
This has been fantastic for consumers, unlocked massive distribution for sellers, created a new class of D2C brands, etc. However, it has also created private network effects within the few companies that own and operate these networks. This is problematic long term for the following reasons,
These platforms can unilaterally dictate terms to sellers wrt onboarding, listing, censorship, commission, etc. Speak to anyone who sells on these platforms and they’ll tell you they live in constant fear of their products being taken down or banished to the inner pages.
Opaque algorithms drive merchandising, visibility & recommendations of products, which drives bulk of the shopping behaviour. Sellers are forced to guess and pay monopoly prices for boosting visibility with no other options.
Because they’ve captured the network, the pace of innovation is restricted to the few teams within these companies. For e.g. anyone who wants to build products on top of transaction data, seller tools, etc needs to ask permission to get access to APIs.
Platforms continue to vertically integrate services like selling white label products, logistics, credit, etc thus increasing their monopoly power. Regulations preventing or restricting sale % can be easily bypassed.
Don’t get me wrong, I love Flipkart & Amazon and use their services regularly. They’ve earned this monopoly by being early and painstakingly building out the infrastructure needed. However, what was once innovative is now rent-seeking.
The key benefit of building an open network for digital commerce is that no one entity will own the real underlying asset - the network of buyers, sellers and service providers. This is a critical piece of infrastructure to further the digital India mission.
There are three key goals ONDC seeks to accomplish
Onboard Kiranas (small neighbourhood stores) and other smaller merchants
Increase choice for existing buyers, sellers and service providers
Spur innovation in ecommerce software
Let’s examine each of these in a bit more detail.
Onboarding Kiranas
Here’s the size of the opportunity as per the ONDC strategy paper, “Around 1.2 crore Kiranas (hyperlocal neighbourhood provision stores) account for 80% of the retail sector in India, with 90% of them being unorganised, or self-organised and most of them digitally excluded. As of September 2020, India is estimated to have 4.25 crore Micro, Small and Medium Enterprises (MSMEs)6 that have the potential to flourish with innovative sales and marketing efforts but are not part of this digital revolution. Even on the consumer side, only a small portion (~20%) of the internet users in India are online shoppers.”
Bringing these smaller merchants online can be a vital tool in ensuring more people share in the economic prosperity to come instead of becoming dark-store operators for large platforms.
In the recent bull market we’ve seen many companies focusing on “Kirana-tech” raise large rounds at unicorn valuations but most have since moved away citing low willingness to pay and poor adoption. On the other hand, instant grocery and delivery services are competing with neighbourhood stores by setting up their own dark stores which are proving more cost efficient with platforms having more control on inventory and demand prediction.
These problems are neither trivial nor automatically solved by having an open protocol. Visa Kannan outlined the challenges that hyperlocal services faced in setting up store-fronts and thus pivoted to dark stores. She talks about challenges with maintaining updated inventory, pricing, product quality, etc in her blog post and this twitter thread.
These are valid criticisms and surprisingly the ONDC strategy paper doesn’t articulate how or why it will be successful at onboarding smaller merchants. I think it could be, so I’ll make the argument on their behalf.
E-commerce marketplaces are supposed to be another distribution channel for sellers. However the dominant model so far has been one where the platform was able to own inventory itself, the biggest sellers of Amazon and Flipkart are …. Amazon and Flipkart owned. Maybe Kirana stores should only exist in catchment areas where people prefer visiting familiar physical stores and e-commerce is just another supplementary channel.
This isn’t sustainable for platforms which aim to capture maximum value , but it might be for networks which are enabling the flow of value while being minimally extractive. In other words ONDC can create a digital sales channel for Kirana stores for the least necessary fee unlike platforms which would ideally want to charge a take rate of 100% (i.e. sell their own white-label products). These seller apps may never end up being as large as the e-commerce players we know of today. Just because the last few decades were built on the back of private network effects doesn’t mean the coming ones will be too.
Supply Side
Maintaining updated product listings & pricing. To deliver a reliable shopping experience it is critical to have updated records of products available, their description, pricing, etc. This has been a major challenge for hyperlocal and Kirana tech players. This is also why many of them quickly migrated to dark stores.
Each seller only needs to use a single seller app & their products will be discoverable across ALL buyer apps on the ONDC network. Maybe sellers will be motivated to learn and use a single system for inventory, listings and pricing backed by the government instead of multiple proprietary systems from companies like Big Basket, Grofers, Instamart, Zepto, Flipkart, Amazon, etc. The overhead is real, for e.g. if you have one cap available and it sells on amazon it won’t get auto-delisted from all other networks. From my time at building products in the hospitality space I can tell you that even hotels with sophisticated inventory management software struggle with this.
Because the network is a public good, GoI can legitimately subsidise the onboarding costs & leverage its massive distribution infrastructure that it built for Aadhar and other programs.
Instant Settlements. A big driver of seller growth and compliance can be the possibility of offering instant settlements. In platform driven e-commerce the consumer pays the platform and the seller receives payment several days later - basically giving free credit to the platform.
Platforms have used their central position to maximise this. This HBR article from 2014 which attributes Amazon’s growth to its ability to generate free cash that could be reinvested in the business. They were able to do this by having a negative cash conversion cycle. This is MBA-speak for taking money from customers as quickly as possible but paying sellers as late as possible. They often took as long as 95 days to pay sellers for goods they’d already sold. The current standard in India is 3-15 days, driven possibly by competition and seller expectations combined with world-class payment infra that makes it impossible to justify longer cycles.
Point being that platforms will default to maximising their own cash flow instead of that of their sellers. There’s an argument to be made for holding back payments until delivery is confirmed or the return window completes. But I’ll be surprised if there isn't a way to do this through insurance funds, escrows, reputation systems etc which are more capital efficient for sellers instead of platforms.
ONDC could potentially set a new standard for payments and settlements that realigns incentives. This comes at an opportune time where RBI is piloting a CBDC that can be used for automated settlements, more on this later in the essay.
The larger point is that transparency and speed of settlements will be a major factor driving the enthusiasm of sellers to adopt new technologies. The distrust of private, opaque and delayed settlements is really high. For example - uber and ola drivers to this day maintain notebooks where they track their rides, tariff displayed to customer, their share and compare it against the final settlement. A govt backed network that provides instant (same-day) settlements will see significantly higher trial willingness from smaller merchants.
The current ONDC architecture aspires to achieve 24 hour settlements using special bank accounts that can be programmatically operated. Later on in the essay we’ll propose what we think is a better way for doing this.
Demand Side
The major benefits on the demand side come from aggregating supply into dark-stores or warehouses. This makes it easier to automate & forecast demand which improves fulfilment rates. It also reduces operating cost because dark stores don’t need to pay premium rents, and this is passed on to customers. Furthermore these services aggregate their delivery fleet resulting in a more predictable and superior delivery experience. This is why the dark-store-deliver model works better than the storefront model.
However, ONDC has the potential to solve both of these problems.
Pricing. Seller & Buyer apps can be reasonably sized profitable businesses without having to charge the hefty commissions that e-commerce platforms do. By socialising the network it reduces the margin that each player can charge. Service providers get paid but the rest is split between consumers and vendors. Amazon doesn’t need to charge 30% to run their e-commerce business, but it sure helps send their founder to space :)
Service Levels. By providing logistics as a service for the entire network it becomes possible for players like Shiprocket, Dunzo, etc to provide logistics services to these stores without needing to generate demand or onboard them to the network. In today’s world all of this is bundled together.
Every founder and investor speaks of building for Bharat, the India opportunity and the benefits of digitisation. The reality is that without the ONDC, Kirana stores will be pushed out of the market in the next few years. They’ll be replaced by dark stores and delivery fleets of hyperlocal services.
This is not a moral comment. I’m not saying one option is better than the other. Through the course of history some jobs are rendered redundant and newer ones are created.
But, ONDC is the fighting chance Kiranas and small merchants need if they are to have a chance at surviving. By altering the market structure to remove competition at the network layer and shifting it to the product and services layer it becomes economically viable to service smaller merchants. It isn’t a given that they will, by any means. Dark stores could still prevail in majority metros and tier-1 cities.
Only time will tell.
Reduce barriers to entry
From various conversations, I’ve gathered that there is a cohort of maybe 20k sellers out of a total ~5 Lac who drive 80% of the marketplace volumes across all platforms. They need to maintain dedicated inventory for each platform, manage their listings/reviews/returns across them, negotiate commercials separately, etc. Platforms seek to lock these sellers in by offering better commercials if they list exclusively or prioritise a given platform.
ONDC abstracts this out into a single seller app. At the very least this unlocks huge operating efficiency for sellers because now they need to maintain their entire inventory and listings only once.
The larger benefit is that sellers don’t need to depend on a single platform anymore. Once their inventory is plugged into the ONDC network they are by default available on all buyer apps. So even if a single one of them de-lists their products or charges extractive commissions, the cost of switching is zero. This incentives buyer apps to both behave and appear fair, shifting the balance of power. Today, “buyer apps” are e-comm platforms which can lock-in and dictate terms to sellers.
From a consumer’s point of view this could mean better prices and easier discovery. However, the bar for customer service set by today’s platforms is hard to beat. We are used to no delivery fees, paying after delivery, instant returns and vast selections. This is not trivial or easy for a distributed network to match. And without this, today’s e-comm savvy customers won’t use ONDC powered products.
The ideal target cohort here is players who are large in adjacent businesses like technology, finance, etc but haven’t yet been able to crack e-commerce. This is why banks (IDFC, Kotak), fintech apps (PayTM, PhonePe) and technology companies (Microsoft) are some of the early network participants in ONDC.
ONDC hopes to move beyond just e-commerce and hyperlocal into food delivery and other categories too. It is after all just a “pipe” for the trading of goods and services, anything can flow through it. This opens up the possibility of building newer and richer experiences on the consumer side which don’t exist today.
Spur Innovation in Ecommerce Software
Have you ever noticed that there are very few businesses built on top of today’s e-commerce marketplaces? For example, why isn’t a tool that allows you to search for a product across all platforms to find the price, delivery time, make, etc that you are looking for?
The reason is that access to the underlying network is closed. So either teams within each company can build products or external players need to depend on API access that is restrictive and can be taken away. This is why no one wants to build on top of private networks.
ONDC is building a public network. This opens the floodgates for a bazaar of e-commerce products and services to be built by independent players because they can be assured that they won’t lose access to the underlying network of buyers, sellers, etc.
These are lofty goals and it is by no means certain that they will be achieved. End users don’t care about the “democratisation” of e-commerce, consumers care about the products, price and service they get and sellers care about revenue. The idea behind ONDC is powerful, it all comes down to the execution.
ONDC Overview
Now that we’ve outlined the “why” let's understand the “how”.
At a high level, ONDC aims to achieve its goals by restructuring the e-commerce market from gated platforms to open networks. Let’s take an analogy of a railway service to understand this better. There are three ways it could operate:
Fully private: For profit companies build infrastructure (railway tracks, stations, overhead cables, etc) and operate their own train services. They decide which routes to cover and how much to charge.
Fully public: The government owns and operates all railway infrastructure and services.
Hybrid: The government builds the infrastructure, has a national carrier service but private players are also allowed to operate their own services.
Different countries follow different models depending on their specific needs, income levels, etc. The trade-offs are clear, if a private company builds the infrastructure they will maximise the profit that they can make from there. They won’t build the infrastructure in areas where it isn’t profitable to do so. And will charge the maximum possible fare they can. On the flipside, private companies are more motivated to find innovative ways to provide better service to edge out competition (assuming they don’t have monopoly capture on the tracks).
India runs a fully public railway service and rightly so because a significant % of our population is poor and depend on subsidised fares. On the other hand, Japan has a well developed private railway system known for its high speeds and punctuality. However, for the aviation industry which caters to the more affluent segments, India follows a hybrid model. The government builds the airports but allows private carriers to operate. It mandates them to cover certain low traffic routes via the DGCA.
What does any of this have to do with e-commerce?? There is a well articulated Digital India mission, its goal is to “to transform India into a digitally empowered society and knowledge economy”. And to be fair, the government has done an amazing job building and driving adoption for the India Stack, which includes flagship projects like Aadhar & UPI - among many others. Commerce is an integral element of a digital nation. And today - our commerce infrastructure and operators are wholly owned by two private companies.
They operate everything from the apps we use, the payment methods, logistics, warehousing, and even selling. Until now, the government has tried to regulate marketplaces, for e.g. ,by restricting % GMV that a subsidiary can sell. But these are easy to workaround through legal loopholes. A much better approach is to nationalise the infrastructure and make it easier for people to compete with these companies. ONDC is an attempt at building the infrastructure needed to power all digital commerce (food, travel, movie tickets, fashion, etc) as a public good.
But what exactly is the “infrastructure” of e-commerce? This is hard to visualise because until the tracks and the train, Well, the team behind ONDC has articulated their vision in this strategy paper. Tbh if you read it without knowing it was for a national protocol, you wouldn’t be remiss for thinking it's a web3 protocol whitepaper. In many ways it is, the key difference being that it is coordinated through trusted parties not a permissionless blockchain.
At its heart, commerce is about connecting buyers and sellers. So keeping them in mind, we can breakdown (or unbundle) e-commerce into the following independent functions
For Buyers:
Buyer should be able to search for products they need
Buyers should be able to trust that the product they see is genuine and fairly priced
Buyers should get the product delivered in working condition to them once they place an order
Buyers should be able to raise a dispute or request a refund under specified conditions.
Buyers should be able to pay using the method of their choice
For Sellers:
Sellers should be able to list their products and inventory such that buyers discover them
Sellers should be able to deliver the sold products either via managed or their own courier services
Sellers should be able to collect payments for sold products
Sellers should be able to promote their products to relevant audiences, for a fee.
Sellers should be able to implement a fair return and refund policy
When you really think about it they don’t all need to be carried out by one company. ONDC has defined three types of “Network Participants”,
Buyer Apps: Consumers like you & me will continue to use these and ideally have exactly the same shopping experience as we have today
Seller Apps: Merchants who currently list their goods and services on platforms can now choose to list on a ONDC seller app. The key distinction here is that they only need to list once and will instantly appear across all buyer apps on the ONDC network.
Gateways: These perform the broadcasting and matching function. If a customer searches for “shoes” on any buyer app, they find all sellers who list shoes and display products to the buyer. If you’re into finance, think of these as market makers.
Here’s a diagram to illustrate the difference in a platform-centric vs network-centric approach. Most names in the second image are listed from the Network Participants section of the ONDC website
As a customer when you place an order from an e-commerce app, all of the functions we listed above happen in the background. And there is one single entity accountable for your overall experience. However, the ONDC approach splits these functions across multiple entities and it is currently unclear who is accountable for the end user experience.
In the short term most likely the buyer apps will need to do this because they are closest to the customer. In the medium term, newer models for distributed dispute resolution will need to be implemented. Doing this well will be critical to the success of ONDC.
Here’s a quick overview of what happens in the background when you place an order whether via an e-commerce platform or an ONDC powered app.
ONDC is an attempt at defining a standards that many independent businesses can use to co-ordinate commerce across categories including food, transportation, apparel, electronics, etc. They do this by defining network policies and clear roles for buyers, sellers, technology and logistics service providers. The real test of the protocol is whether it enables these distinct actors to coordinate as well as single platforms.
Ideas to improve ONDC
The team at ONDC put out a public consultation paper, requesting for inputs from the public about how to build trust within the network. I’ve submitted responses via their google form but I’ll include our key suggestions on how we think ONDC can be improved in this section.
At a very high level, we think that for the ONDC to succeed it needs to ensure digital enforcement which is truly automated and instant. Far too much of the network today relies on participants adhering to network policy in good faith. It is impossible to enforce digital behaviour at scale using analog rules and techniques. Traditional systems will be unable to detect and too slow to respond even when they can detect. This will erode trust in the network and kill it before it ever reaches critical mass.
We argue that instead of trying to build trust through regulations, they should automate it through smart contracts on a public blockchain.
Here are 4 specific suggestions on how the team behind ONDC can do that.
Search, Sort and Delisting via public blockchains
Search.
As you might recall from the previous section, gateways perform a crucial function of broadcasting buyer queries to all sellers across the ONDC network. So when you (a consumer) search for a phone or shoes or groceries, gateways find relevant sellers and showcase their products.
It is important that these gateways be neutral while doing this to prevent unfair advantages to certain sellers. This may occur either because of some commercial relationship outside the network or vested interest (i.e. same company operating a buyer and seller app). This can be a huge problem of front-running orders and driving merchants off the network.
Sort.
Sellers depend on buyers for ranking products and services that are being sold. For e.g. if I search for a water bottle and there are thousands of water bottles being sold by hundreds of vendors - who decides the ranking of these items for each user. ONDC is ok with proprietary ranking functions as long as they don’t prioritise sellers for being “exclusive” and clearly mark “promoted” listings. But it isn’t obvious how they will detect and penalise this in run-time? What evidence can sellers submit to make their case?
If you’ve worked in consumer tech you know how important this is. The holy area in the “first fold” or “above the fold” is limited and expensive real estate. As a consumer PM I can assure you that every click chart has an exponential decay as you go lower down the screen. If sellers don’t believe that their products are being fairly displayed they will leave.
Listing.
It is important to ensure that the product listings have adequate information, respect copyright and IT laws, and are not misleading, etc. Sellers should not be allowed to make incomplete or junk listings. At the same time it is important for there to be transparency around what is the criteria for a “valid” listing, why a listing was taken down and what needs to be done to bring it back up.
Speak to any seller on a marketplace today and they’ll tell you that they live in constant fear of their products being taken down, not having proper recourse beyond an automated chat system and lose lakhs in revenue until the product is restored often for no fault of theirs. Of-course platforms most likely do this to safeguard customers but a better system is possible and needed to implement this in an open network.
While ONDC has planned for steps to mitigate this, they seem insufficient.
Prevent buyer or seller apps from operating a gateway. This is naive and easily by-passable through complex ownership structures. Just like until recently the largest sellers on Amazon and Flipkart marketplaces were companies owned indirectly by these platforms (Cloudtail, Appario, WS retail)
Maintain independent registries of all network participants and require the gateway to make concurrent broadcasts to all of them. The problem here is that gateways are private companies and the execution of their search function is not auditable. It will be a long time before this can be caught, proven and corrected.
Require buyer apps to publish sorting algorithm parameters. This is hard to verify and the output is not reproducible unless you have the underlying models as well.
Require buyer apps to publish listing criteria. These are subjective and a lot will be lost in resolving disputes between buyers and sellers.
Recommendation: Mandate the use of a public blockchain to execute and log their search, sort and listing functions.
A key consideration is finding a blockchain that is cheap & scalable enough to support the massive commerce volumes that ONDC hopes to unlock. Blockchains like Solana & Polygon are strong candidates for this. Or maybe India’s Badal blockchain can be sufficiently decentralised and support this.
There are varying degrees of how to implement this,
Execute the search, sort and listing function on-chain. This makes it possible for anyone to quickly verify whether the execution is actually as expected. This will be expensive and possibly run into scalability issues.
Publicly log the execution and output to verify so that parties have verified receipts to seek recourse for any wrongdoing.
Instant & Truly Automated Settlements via India’s CBDC
We spoke about why reliable, transparent and instant settlements are critical to the mission of ONDC - specifically at onboarding smaller merchants.
The current approach relies on a special type of bank account that can execute transfers based on “system generated triggers”.
There are two problems with this approach. Firstly somebody at the bank will probably have an override switch to these accounts. Despite best regulations we have seen repeatedly that these systems are susceptible to corruption, side-deals and negligence. But secondly, and more importantly the applications are limited and consequences of default are not immediately implemented at the network. Given that the ONDC relies on so many run-time contracts between buyers, sellers and logistics providers a superior computation platform is needed.
Recommendation: Integrate with India’s CBDC for truly programmatic and automated settlements.
RBI is piloting the digital rupee and a major use case is intended to be wholesale business settlements. There’s a famous quote that “India doesn’t need crypto for payments - we have UPI for that, we need crypto smart contracts for better enforcement”. Better means effective and fast - because slow enforcement brings its own cost (delayed, denied etc)
Using a CBDC for settlement has the following benefits
It removes the need for complicated reconciliation and settlement agencies. Given that there is a bounded workflow here of an order being cancelled, returned or accepted - this should be simple to automated via smart contracts.
It allows the enforcement of micro financial penalties for violating network policy. The benefits of a programmable rupee is that you can design it such that violations of network policy are automatically detected and penalised. So if someone manipulates search results, ranking functions, delisting criteria they can instantly be penalised. It is unlikely that the traditional financial system APIs can handle these kinds of use cases efficiently.
It is truly automated and free from corruption, capture and negligence. While of course it is prone to bugs and hacks, which are long term fixable compared to the former.
Enable self-custody of data and unlock composability
One of the caveats is that the ONDC protocols don’t store any transaction or customer data - it remains with the respective buyer and seller app. This is a huge problem in creating a seemingly unified shopping experience across the ONDC network. It is bad for customers because they get a less personalised experience. It is bad for the network overall because aggregated data leads to better insights, forecasting, etc.
One way this could play out is we have an account aggregator equivalent for ONDC which aggregates this data on behalf of users and provides API access to businesses.
Another approach is to enable self-custody of this data by end users themselves. Instead of getting limited access to licensed participants, people can give full access to any business that wishes to build on top of ONDC. This unlocks higher speed of innovation and invites more people to come and build for the ONDC network.
There are significant risks associated with this. Users need to learn the meaning of self-custody and the right tools need to come in place to facilitate this, there need to be checks and balances to ensure that user data isn’t stolen and is only used as intended by users. But this is not impossible, just like we educated the nation on OTPs and passwords, we can educate people about managing their private keys. It won’t be easy, but it’ll be worth it.
Integrate with Crypto to connect to the global capital
Inspired by Balaji’s essay about Adding Crypto to India Stack & iSpirit’s essay on unlocking global capital for Indian MSMEs - we extend that argument here.
As ONDC aspires to onboard crores of Kirana stores and smaller vendors, unlocking access to global capital is a vital catalyst to scaling this network. It might not seem like it right now, but as things improve there will be global interest in investing in Indian businesses. Especially as they have verifiable data against which lending can be done.
Keeping this in mind early on while designing the ONDC protocol can set it up in pole position as global crypto payments systems mature and become more mainstream. This would include integrating with the digital rupee and using smart contracts, enabling self-custody, experimenting with CBDCs of other countries, etc. All of this can be done in a way that complies with RBIs required capital controls.
Request for Proposal
We’re excited to support our community in building this future. To that end, we’re inviting grant applications for anyone who wants to build an ONDC gateway using the Solana blockchain.
To recap, a gateway is a node that multicasts search queries and collects results. In the previous section we spoke about how the problems related to trust in search can be solved by using smart contracts. There are two critical considerations,
Does the gateway broadcast search queries equally to all seller apps
Does the gateway return all results without filtering or manipulating them unfairly
A gateway build on a public blockchain should do this such that anyone can programatically verify it. We’d like to help talented teams acquire funding to actually build out the gateway and verification mechanism.
Additionally, if you have any other ideas for how a blockchain like Solana can help further ONDCs mission - feel free to apply with those too.
Apply for a Solana Foundation India grant here.
A long road ahead
ONDC is a bold effort at building a critical digital public good, one that is vital to unlock the next phase of growth in bringing commerce online and allowing millions of people to benefit the economic prosperity it brings. But the task ahead is daunting and it is not clear what the end state will look like. Here are three possible scenarios:
Bear case: ONDC becomes lower quality infra compared to platforms but makes commerce accessible for those current under underserved by marketplaces, i.e tier-2, tier-3 and rural areas use it but metros and tier-1 cities are dominated by existing platforms.
Moderate case : ONDC is able to deliver an experience at par with existing e-commerce platforms & it opens up competition to existing monopolies. This is hugely beneficial for sellers and slightly better for buyers. While I’m calling this the moderate case, it would be a huge win.
Bull case: A whole new suite of shopping experiences and B2B e-commerce software is created. E-commerce becomes more inclusive and less expensive.
Resources
Thanks to Srijan Shetty for his inputs to this essay & PP for designing the cover image.
Great Explanation....