As you likely know already, recently, on September 30, 2020, DMCC, Al Khaleej Sugar and Universa Blockchain, working together, launched the online sugar trading platform, DigitalSugar.io. Lots of media coverage, especially in the Eastern media (Khaleej Times, 24.ae, MBC News, and dozens of other media), most of them basically quoting the same press release by DMCC – because that’s what is most interesting for random readers and passers-by. But our Universa community may be curious about more details – and here is some exclusive information for you to satisfy your curiosity.
You know that we have launched the trading platform. But why have we done this, and what targets do we pursue, venturing a project like that? Here is what Alexander Borodich, CEO of Universa Blockchain, says for Universa.today and for other interested parties:
The commodities market plays a leading role in the global economy as large corporations and governments trade raw materials such as sugar, coffee beans, grains, etc., which are transported worldwide by land, sea and air. But this well-established market is ripe for a massive upgrade that will change the way people all over the world issue, buy and sell commodities. Blockchain-powered digitized commodities are instrumental in providing fractional ownership of assets that enhance transparency, promote stronger liquidity, as well as supports faster and economical transfer of ownership over the secured decentralized global network.
DigitalSugar Trading Platform (DigitalSugar.io) was developed using Universa MainNet blockchain technology. Today is being launched together with the world’s largest sugar refinery Al Khaleej Sugar, that will be the first issuer of digital sugar in the project and the first industrial company to tokenize its Sugar Reserves on the platform.
DigitalSugar Trading Platform uses distributed ledger technology to represent physical assets in digital form of Sugar Electronic Warrant, making trading easier, providing almost instant transaction time and Daily Spot price for the sugar. DigitalSugar will help transform traditional ways of how the whole sugar trading industry is working now. Universa Blockchain and Al Khaleej Sugar plan to use the platform’s services to tokenize up to 1.5M tonnes of raw sugar, thereby providing a new class of product for a broad range of players eager to invest in digital asset markets. The issued electronic warrants will be backed by physical sugar reserves, which will undergo regular audit from DMCC.
DigitalSugar Trading Platform allows traders to buy and sell sugar’s title of ownership instantly and hold this title of ownership without any hassle of dealing with physical sugar for years, paying a small storage fee in the form of % sugar per year. Any trader can order delivery of the sugar on demand.
Global financial markets are massive and borderless, but they also have downtime outside operating hours. Digital markets never sleep. You can trade digital sugar any time of the day – there are slower hours and busier hours, but the digital market is always open for business.
Additionally, Universa has integrated an advanced Smart Contracts’ mechanism into Digital Sugar Trading Platform, making trading even easier and trustful. This unique consensus-building mechanism increases the platform’s credibility, makes transactions more transparent for investors, auditors and regulatory bodies, and also creates a foundation for further expansion to third-party traders. Universa deployed Digital Sugar Trading Platform into Universa MainNet network to provide the highest level of security by design principles was considered from the very first stages of the system’s development. Another feature of the platform is to help ensure trust is the mandatory identification of each user for KYC (Know Your Customer), KYB (Know Your Business) and AML (Anti Money Laundering) requirements.
The main idea of Digital Sugar is not in just buying or trading sugar; it lies in the creation of a modern and transparent mechanism for digitizing trade processes, and in the creation of new digital market, where tokenization is a service helping issuers transfer rights to their assets into a digital form, in order to add it into digital export/import contracts later on. I do believe that tokenization will make international trade more accessible, cheaper, faster and easier, unlocking trillions of dollars from illiquid assets and reserves, and vastly increasing the volume of trades.
But, besides the CEO’s plans and thoughts – wouldn’t you like to learn some technical details inside the DigitalSugar? Here is something for you.
One of the Universa products is a well-known UDC platform, basically a ready-to-deploy solution for launching the custom large-scale tokenization procedure (such as launching a new CBDC), which you may already know from its U-Dinar deployment in Tunisia.
What is UDC?
“Ah, it’s just yet another token constructor like numerous token/coin generators in 2017”, one may say. The reality is way way more interesting.
UDC does not (just) solve the problem of initial token creation. With Universa, “just creating a new token” is as simple as using the regular end-user web client – there are ready-made templates for new tokens there. UDC also solves the subsequent storage/transfer of the token smart contracts (remember “the money property of portability” from the recent article?); that’s how it extends the native Universa Blockchain capabilities of “just storing the validity of the contracts”.
And besides the deployment/transfer/storage, even more importantly is that UDC provides a ready-made solution for managing an issued token.
You see, when a government or a major enterprise (like Al Khaleej Sugar) issues a token, it is not like “some IT guy pressed a button and deployed/minted the initial contract”. Lots of security and management questions go behind that, something like:
- The appropriate company authorities issue (and sign off) the internal company documents describing who can do any operations related to the tokens (like, distributing them over the companies);
- The people (or even whole departments) receiving these roles are granted with the operational capabilities;
- The highest company authorities sign off some order “how many tokens should be minted” and do that.
Even from just this description (“signing off”, “granting roles”, “authorities”) you may easily see that these operations, typically performed “offline” and by “signing the official papers”, also perfectly fit the operational area of blockchains, making it a great case for so-called “DAO” (decentralized autonomous organization – an organization which roles are controlled through the blockchain, typically using some smart contracts).
Of course, there is something ritualized and ceremonial in all of these operations – you know, the top management getting together in an upscale briefing room; some cameras filming the ceremony for the future historical purposes; luxury Montblanc pens signing the official paper; shaking hands and smiling to the camera… well, most of these, unfortunately, became things of the past in 2020. People got used to electronic signatures instead of a fountain pen; getting a lot of busy top-management persons together in a same room (and sometimes even in a same country) became an unnecessary waste of their precious time; and shaking hands became outright dangerous. Even our signing for the national blockchain launch in Tunisia has happened online.
Thus UDC also utilizes a DAO-style approach to token management, with electronic documents (smart contracts) controlling the operations, and electronic signatures of these documents. You can read our KB to learn more on that (what are the roles; what the “Supervisory Board” is for; who is a “Chief Financial Officer”); but in general, the main fact you should know about UDC is that the whole role-based access control system built into our smart contracts is working to its full potential here, to ensure the whole chain of control in token generation and deployment is not ever violated. Up to the point that the UDC backend itself is not even the highest authority.
Yes, you’ve heard it right. It is normally assumed that “who controls the system, controls everything”. A naïve hacker may try to break into the UDC servers and get control on the token issuing. “I’ve hacked the coin/token servers, now I am rich”. Even if he succeeds (what would be extremely hard, considering the combined security experience of our team), the saddest fact he realizes will be: the UDC system has lower rights than the token supervisory board.
It is pretty unusual to see in IT systems. Typically, if you “got root access” to the system, you can do everything, “enter a god mode”. Not in UDC though – it works like it is intended to work in the real offline world: it is the company top management who can sign the most important documents (being the “supervisory board”); and “the regular IT systems and personnel” are just the subordinates. Even if UDC is hacked, broken, or its operational personnel went awry and started signing the wrong smart contracts here and there – the supervisory board can just sign some new smart contracts and revoke all the UDC’s (and personnel) rights, and assign the new rights to, well, “some new UDC personnel”.
The management manages. The IT system does its subordinate job. The whole Universa smart contracts security enforces that. Just like it should be.
How is UDC related to DigitalSugar?
After this long introduction, you may already guess the answer. Yes, inside the DigitalSugar platform runs the well-known UDC kernel, with all its management and DAO features. So the supervisory board (containing the stakeholders from Universa and Al Khaleej Sugar) can setup and sign the overall requirements, and sign off all issues of the new sugar tokens (binding the appropriate raw sugar warrant documents to the smart contracts, and making sure that all of the issued tokens are really backed by the sugar); and the DigitalSugar’s UDC kernel becomes their operational subordinate.
Therefore, it’s not just that every deal on the exchange ends with some smart contracts registered in Universa blockchain; but the management operations also get reflected and validated by the Universa blockchain.
Running on Mainnetwork
Previously, we have confirmed already, that no matter if any Universa-based solution is running on Universa Mainnetwork or using the private network, it would still require and create demand in UTNs to deploy the nodes and to pay for the transactions (you should expect an article on that a bit later). In terms of UTN demand, it doesn’t actually matter which approach the solution is using (whether Mainnetwork or a private net) as long as it is an official partnership with Universa.
Probably this is not an article to dive in deeper details (how many transactions are expected; how many Us are used by every one of them – especially as this is fully usage-dependent; and what are the specific smart contract structures, and changes in them, which get registered in the network). Still, it is rather curious to know – and you may have noticed that in the CEO intro – that DigitalSugar actually runs utilizing all the proven and stable infrastructure of the Mainnetwork nodes, rather than a private network.
Using Universa Mainnetwork is a good and smart solution for many enterprises who are looking for features of smart contracts, but prefer not to focus too much on the infrastructural topics (having other areas of interests and specializations than to run infrastructure themselves). Well, that’s exactly what Mainnetwork is for: to give you the network of smart contract validation, which just works; which you don’t need to deploy yourself, but which is running already, stable and accessible all over the Internet.
Not just the token, but the whole turnkey solution
If you look at the footer of DigitalSugar.io site, you’ll notice the words “© 2020 All Rights Reserved by Universa Sugar Trading Co Ltd”.
It is easy to underestimate what has been launched on September 30, and what’s the role of Universa team in it; but, with reasonable guidance, you won’t do it.
Has Universa launched a “stable coin” (actually, a token, “a tokenized sugar”) based on raw sugar in UAE jurisdiction? No, not just it.
Has Universa provided the blockchain solution for it? No, not just it.
Has Universa assisted in creating the smart contracts, not just of the “tokenized sugar”, but of the DAO management system, to control the issuance of these tokens? No, not just it.
Has Universa provided the trading exchange backend solution, and helped to launch the real sugar-trading commodity exchange in UAE jurisdiction (rather than “some uncontrolled cryptoexchange”)? No, not just it.
But all of that.