Daml Conversations: Smart Trade Finance Daml Project [2022]

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From digital asset i’m here in singapore and one of the most iconic places in singapore it’s called gardens by the bay and i’m here to meet one of the participants that took part in our hackathon and we could not have picked a better place this place is beautiful and it’s one of the ah top five top three places that you have to see when you’re in singapore and

You can’t miss it because if you look up you’re gonna see this a huge surfboard in the air in the sky it’s one of our signature postcard places and obviously the gardens have it’s a reason to be called a garden because if you look up you’re gonna see some pretty interesting looking trees so i’m excited to meet with gorath i’m going to meet him in there

And we’re going to talk about demo we’re going to talk about smart trade finance and most importantly we’re going to talk about food all right join me don’t go anywhere we recently invited developers from around the world to view any smart contract solution using damo we show them the fundamentals and show them how to use the sdk tools the results were stunning

There were projects covering sustainable fishing state trip finance and more now i’ve traveled to where these developers are to meet them face to face and talk about them their passion in software development their demo projects smart contracts and practically anything that motivates us challenges us and makes us human this is demo conversations yeah and that

That’s uh some non-bread rice some curries and some mint and onion yeah it’s food for royalty so are you familiar by now uh not much yeah it’s a it’s a malay dish nasi means fried i think it’s rice and rice this is rice goring is to fry nasi goreng will be fried rice okay so nasi is rice and lemon is uh i think it’s the chicken the chicken i don’t think so

Because chicken is a yum i no there’s no requirement that you must have chicken i like it i eat it growing up and you’ll find chinese vendors selling it too typically for food like that like um have you had prada yeah many many times yeah the prada i prefer eating it from uh indian vendor yeah because the chinese try to make it it won’t bless mbs tasty sure

So hey take it man thank you yeah hey so you are from india right yeah uh born and raised in india yeah and you came to singapore for professional to go to work when did you come here i came in november 2018. and is your family here with you yeah my immediate family my wife two kids yeah that’s true everything you talked about yeah so your kids are enrolled in

Local schools no they didn’t get that admission okay in the local school so they are going into the private place have you always been intact me i am not always in tech i started my working journey at the age of 12 oh my and after doing a lot of odd jobs for my formal education so that i can fulfill the needs of my formal education then eventually i’ll end up

Into the the tech side in 2009 2009. yeah yeah this is right yeah that’s all in there oh wow so the in your hackathon project you picked smart trade financing you explained to me very very well did you have background in that i’m sure because the way you describe it sounded like you have deep knowledge on like the middle man and all the process and all that

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In between yeah so during my my overall tenure i got a chance to work in one of the largest automobile ancillary company in india so i was in their i.t division and for the for more than five years we were building the solutions around supply chain systems the trade systems how the transactions involved in multi-party systems can be accomplished in an efficient

Manner but the challenge that i foresee was uh how to onboard all those parties on the same thing with equal trust and understanding yeah because ultimately you will get a lot of integration challenges practically technically along with that uh there is always uh always a issue of trust and understanding that why would i spend money for your system to integrate

With it right right because any system cannot be integrated with itself right yeah other systems they also have to have that adaptation for that system but the domain knowledge i had was was great over there i learned how these multiple parties actually interact involved even the financial institutions the financial entities how they how they really bring up into

The these transactions how they add values right so from that background i i have i can blindly draw down the entire manufacturing assembly unit how you can run it yeah in a simple flow in a very lemon language sure so that’s the experience i got i see so before the hackathon was that something in your mind that you’ve always wanted to solve or tackle from

Those days i always wanted to you know solve this how we can you know make these multiple parties collaborate uh in a well informed manner yeah so that they can trust and they can easily integrate themselves with each other right yes and there was another very interesting fact the more multiple parties you have the more trust issues you have and to settle those

Trust issues the more middlemen you need to have in your entire system yeah and the more middlemen you need to have the more money you have to spend to settle the entire end-to-end transaction yeah yeah so from those days i always wanted to solve one one thing for sure that somehow can we can we build something to cut down all those these middlemans and their

Commissions and those are very heavy you know from 3 to 15 yeah it’s very heavy very big yeah so if we can cut down somehow we can cut down the overall cost for both the parties in that way we can achieve some goods that can be sell to the end user with much cheaper price than what it is right now true because ultimately the end user the consumer pays the price

Right nobody yep it’s a saying on past the savings to the consumer yeah do you have a little bit of knowledge on demo prior to the akapa no wow i i was introduced in a tech talk about devil was within a company where i i came to know about them in that tactic then i thought it well wow this is something i really want to look into it because i’m following

The blockchain space from quite some time more than three years so i i was quite aware about that how the things can be built but i didn’t know before demo that we can build something so easy so quickly and the best part what i really loved about it you can spin off a full stack application in very short period of time applications you can demonstrate the core

Functionality using you deploy your contacts from your demo hub you can demonstrate to anybody in the world yeah yeah you won’t believe the first day i started understanding daniel to be very honest i said what the heck it is why because my entire journey is from an object-oriented background yes i whenever i start thinking about a problem i always think about

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Objects classes how can i organize them yeah that’s right and all of a sudden you land up in a in an ecosystem where you have a functional programmer which is itself and you are trying to understand that now initially there could be a challenge because you will feel like oh there should be a class dot or the object not some function or property yes but you won’t

Get it in there yeah then you eventually think about it understand it okay forget about this this is a script that i am writing actually yes and what i need to understand is that i’m calling this script into another script into another script with that mindset i started and eventually it ended up with a with a confidence that wow i can do something in that one

Yeah and that’s a great part it was so easy to learn it was very easy to learn tamil and more importantly it was so easy to implement and demonstrate it to the world yeah that was a beauty so smart trade finance uh what you did would you build a a contract that would facilitate which site did you start from the buyer or the or the seller site or was it both i

Started from from the seller mm-hmm so basically when a seller wants to sell something and a buyer wants to buy something first of all they they find themselves in an arrangement yeah okay i am ready to buy so that is a letter of intent or something yes that i want to buy or a po is raised yeah apache lottery so the buyer raised the purchase order and the

Seller accepts it okay considering that okay we agreed upon this quantity this amount this price these are the rates so that’s the first part in the real world it comes from both sides right the buyer can say i want to buy things from you the seller can say hey would you like to buy my product it could be both yeah it could be initiated from both parties yeah

Okay okay because as a seller i want to sell to as many people as i can sure as a buyer i want to buy from as many sellers with a competitive price that’s right that’s right okay so when they come into that arrangement then the the seller the buyer actually the importer it first sends a few which the seller has to accept yup once the seller accepted that then

It comes down to the further transactions that happens that then the buyer goes to the bank to accept arrange a letter of credit yeah the seller is waiting for that letter of credit so that once that letter of credit is received the seller can represent that letter to his bank yeah based on the acceptance of both the banks that okay we agreed upon these term

And conditions defined in the letter so there’s a bank on the on the seller’s side there’s a bank on the buyer side and then also you need to involve government agencies like the the port authorities like the customs and the goods department sure the tax department sure they are all also coming to this picture yeah along with that even for that there are so many

Middlemen for example like you as a businessman you don’t have that much credit worthy profile but you want this deal to be cracked up yeah so then you present your case with the help of a middleman or an agent which we call them like the trade finance agents yeah what they do on the behalf of the their client they represent the case the the transaction to the

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Bank and based on their based on their offerings so then the bank may charge higher rates based on those offerings they get them that credit letter of credit interesting yeah and that middleman also charged the buyer or the seller so these are this th this middleman will be the the party with the deep pockets to be able to guarantee yeah yeah if anything goes

Wrong yeah for a price for the power price sure question interesting interesting job same thing happens both sides actually yeah and also you will have to consider the logistic companies in between and there are so many dependencies so the overall end-to-end transaction of one transaction is in itself a very complex system so much paper trade so much uh the

Paper moves from so many hands that it’s very complicated because everything is estimated so every the whole process is step by step process yeah and every step has its own sla because of the dependencies on multiple parties right yeah yeah so that’s where actually the whole time and more importantly the most difficult part in this whole process is that there is

No transparency ah nobody knows that’s an issue where is the paper trail stuck or going huh because you don’t have that transparency you cannot any any point of time you cannot say how long will it take actually yes yes and it’s a this touches on the concept of like observers right you you have the right business right to look at certain things but not other

Things so you can set them as i need to look at this shipment but you don’t have to know the factory and how much money was transacted but you do need to know that it’s coming on this day this much quantity and all that it’s interesting and demo helps with the observer part of it and the fact they get control the authority authority and authorization down the chain

And fine-tune it is incredibly important the bank needs to know uh financial matters the middlemen may not need to know they just need to be able to stand in the middle the logistics have no business knowing how much money is transacted between they should concern only about the correct what is the package they are receiving that they need to deliver yeah yeah

Correct but apart from that so this is a limited liability or the need to know how basis yeah business should be there that’s right that’s right and this way it has been implemented in a way that we can give a transparency from end-to-end yeah we can drop down or reduce the number of uh middlemen correct reduce the number of the number the amount of pay or the

Payment that’s right and you you are reducing you your solution what it highlighted to was the reduction of potential errors of fraud yes because there’s no transparency no transparency right so it’s very easy for anybody in the middle to screw up or for a fraud to be committed actually this happens i’m sure then you buy insurance to cover the front okay there’s

More middlemen so hey thanks for taking time eating with me i hope this was good yeah great concealer ladies great conversation and thank you steve thank you for giving me time on this short talk it was a great opportunity for me to have a conversation with you absolutely absolutely if you come to the us i’ll take you out and we’ll do this again yeah i will essentially thanks you

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Daml Conversations: Smart Trade Finance Daml Project [2022] By Daml