Nfts
How AgriDex leverages NFTs to secure agricultural commerce: interview
In a move that could reshape the global agricultural landscape, AgriDex plans to integrate the $2.7 trillion agriculture industry with blockchain. In this exclusive CryptoSlate interview, Henry DuckworthCEO and Co-Founder of AgriDexunveils its vision to revolutionize the way agricultural commodities are traded and tracked around the world.
Fresh off a $5 million pre-seed funding round, AgriDex leverages the high-throughput, low-cost Solana blockchain to tokenize crops and streamline agricultural transactions. With promises of 10-40% savings per transaction and near-instant settlements, AgriDex aims to solve long-standing industry problems, from opaque supply chains to high transfer fees.
Duckworth’s innovative approach goes beyond simple digitization. By creating NFTs for every transaction, AgriDex creates an immutable record of crucial data points, from product origin to shipping details. This improves transparency and aligns with the EU’s strict disclosure requirements, potentially opening up new markets for farmers around the world.
In this interview, Duckworth shares his insights into AgriDex’s strategic choices, its unique market position, and the transformative potential of bringing real agricultural assets on-chain.
How does AgriDex plan to revolutionize the global agricultural industry through tokenization?
Let’s look at the current state of tokenization, which primarily targets financial assets such as Treasury bonds and private credit, among other financial applications. By 2023, the global market size for tokenized currencies is expected to be just over $17 billionwith tokenizable RWA assets that should be worth $26 trillion by 2030.
While these numbers seem impressive, the current RWA landscape continues to lack tangible, everyday utility beyond financial markets – a problem that can be addressed by integrating agriculture into the chain.
AgriDex, a Solana-based real-world asset (RWA) marketplace has raised $5 million in pre-seed funding, to bring the $2.7 trillion global agriculture industry on-chain. AgriDex’s platform leverages blockchain technology to tokenize agricultural products, making it easier to list and purchase various crops on its marketplace. Once the transaction is finalized, it is secured by creating an NFT that records all the key details of the transaction.
We achieve instant settlements, high throughput, and low fees because we leverage Solana. Every transaction on AgriDex is represented by the creation of an NFT that permanently preserves the product, price, payment, and any other necessary details. Layer 1’s ability to compress NFTs allows AgriDex to develop a scalable NFT-based supply chain solution and achieve cost savings of 10-40% on each transaction.
What specific crops are currently tokenized and traded on AgriDex’s Solana-based marketplace?
We will first symbolize and list agricultural products such as sugar, grains and olive oil, to name a few. The platform will support more products in the future as we gain new partners and investments.
Could you walk us through the process of creating a non-fungible token (NFT) to secure finalized deals on AgriDex?
The process involves the creation of an NFT order containing comprehensive information on global import and export standards. This includes product information such as documentation and certification to verify the quality, quantity and origin of the product. It also covers export details such as packaging, labeling and export requirements, as well as updates on shipment progress, bills of lading and insurance certificates. Additionally, it includes import clearance and customs requirements.
All transaction data and relevant transaction information is stored in the NFT, making it a legally binding document signed by the buyer and seller. This document includes buyer and seller contact information, product specifications, Incoterms, payment terms and necessary shipping, financing and insurance documents, as well as product certifications
What sets AgriDex apart in tokenizing real-world assets compared to other platforms?
IBM Trust and several other large institutions have attempted to tackle this problem. Their failure is partly due to people’s lack of confidence in their position as potential competitors. What sets Agridex apart is our comprehensive understanding of the agricultural sector and how to use technology to solve it. We’re focused on using blockchain to solve real-world problems, rather than just using it to draw attention to the project.
For example, we chose to build our marketplace on Solana, where transaction fees are typically 0.005 cents or less, compared to $8.90 for Ethereum and expensive percentage-based fees (6-10%) for international money transfers.
Additionally, autonomous verification of documents and data, such as origin tracking, has long posed a challenge to maintain transparency and accountability throughout the supply chain. We use blockchain technology to effectively address and solve these issues.
We support the disclosure of most of the 1,100 data points required by the EU as part of the 2023 sustainable finance disclosure requirements, to make it easier for farmers to sell their crops internationally.
Finally, only an internet connection and a wallet are required to benefit from AgriDex!
What motivated AgriDex to focus on the $2.7 trillion global agriculture industry for tokenization?
The agricultural sector, although valued at $2.7 trillion, is hampered by opaque and fragmented supply chains. These issues result in high transaction costs, slow settlement times, and a lack of transparency, leading to inefficiencies and potential fraud. Farmers often struggle to get fair prices for their produce, while consumers pay more than necessary. Remittances currently take 3 to 7 days to process, with fees averaging 6% and sometimes reaching as high as 10% per transaction.
Our goal is to solve a real-world problem, and that’s the only way for a cryptographic story to become mainstream.
How does AgriDex aim to contribute to wider adoption of tokenization in the agricultural sector and beyond?
RWAs continued to grow in popularity and were the second most profitable narrative in the crypto space in Q1 2024, according to a recent report from CoinGecko. Additionally, market capitalization is expected to reach $16 trillion by 2030, according to Boston Consulting Grouphighlighting the potential impact this will have on the global financial system.
However, tokenization is primarily targeting financial assets such as Treasuries and private credit, with a market size of over $17 billion in 2023 and tokenizable RWA assets expected to reach $26 trillion by 2030, as I mentioned. Despite these impressive numbers, the RWA landscape lacks everyday utility beyond financial markets, a gap that can be filled by integrating agriculture into the blockchain ecosystem.