What is Boson Protocol?
The purpose of smart contracts is to automatically execute agreements, ensuring compliance with contractual terms, whilst minimizing exceptions and displacing intermediaries. Despite this promise, smart contracts are inherently disconnected from the real world. Smart contracts are unable to view the real world on their own, because they cannot trust external data sources. Instead they require data oracles in order to trust off-chain data. Similarly, smart contracts cannot reliably affect the real world, because they cannot trust that a given action will be executed off-chain. We refer to this as the physical asset oracle problem.
We present Boson Protocol v2 as a decentralized actuator oracle. That is, a decentralized protocol which enables the trust-minimized, automated execution of off-chain actions; which in turn can be seen as a general purpose solution to the physical asset oracle problem.
Connecting Web3 with real world commerce
The design of Boson’s core smart contracts is unopinionated, and therefore supports the execution of any type of off-chain action. Boson is therefore extensible to a wide range of domains and can support a myriad of use cases.
However, the initial focus for Boson Protocol v2 is decentralized commerce (dCommerce). Boson v2 represents a foundational primitive connecting Web3 with real world commerce. That is, Boson Protocol enables smart contracts to execute off-chain commercial transactions with strong and verifiable guarantees about payment for and receipt of assets.
A single digital market for physical things
Boson’s vision is to enable a single digital market for physical things (think ‘Uniswap for e-commerce’); where all the world’s products and services are listed and searchable, with commerce automated via code (think TCP/IP for commerce). Boson is built on decentralized infrastructure as a minimally extractive coordinator, with value mediated by the $BOSON token, ensuring that participants can share in the value they create.
In order to achieve the vision of a single digital market for physical things, Boson addresses three primary problems.
- Firstly, the physical asset oracle problem: if Alice tokenizes her car, and Bob buys the token; how can Bob be sure he will receive the car?
- Secondly, the fair-exchange problem: if Alice wants to remotely buy an item from Bob, how can they ensure that the exchange happens atomically (i.e either both parties receive what they are due or neither do)?
- Thirdly, how to digitally represent physical items.
The physical asset oracle problem
To address the physical asset oracle problem, instead of attempting to tokenize physical assets directly, Boson tokenizes commitments to trade. The protocol locks up parties' commitments to execute a commercial exchange as a type of forward contract, encoded within smart contracts and tokenized as a redeemable non-fungible token (rNFT).
Boson represents a novel solution to the fair-exchange problem and is described formally as a decentralized optimistic fair-exchange protocol. The protocol is optimistic, because it assumes that the exchange has successfully executed unless a dispute is raised within a specified period. This and other optimizations lead to efficient execution on decentralized infrastructure.
The main burden of dispute resolution is handled by an automated Mutual Resolution process which leverages algorithmic game theory to affect local remedy between parties. Exceptionally, unresolved disputes can be escalated to an independent (and potentially fully decentralized) Dispute Resolver, who will assess the agreement, evidence and claims before deciding on the division of locked-up funds. Dispute Mutualizers assess dispute risk and offer Sellers the option to spread the cost of disputes across multiple transactions.
Redeemable NFTs (rNFT)
Redeemable NFTs address the problem of how to digitally represent a physical asset, by providing assurances to the bearer of an rNFT that either they will receive the item or their money back. rNFTs represent the right to redeem physical assets on-chain, thus enabling the vision of:
“a single, digital market for physical things, built on Web3 infrastructure”
For more information, see the latest White Paper.