Decentralized Ecommerce on Blockchain




Blockchain is having a profound impact on various industries globally. One of the industries where blockchain is still in infancy is ecommerce. Decentralized ecommerce (Decom) has lot of benefits like:

  • Easier international ecommerce
  • Faster payments especially cross border
  • Lesser payment charges and lower marketplace commission
  • More transparency on seller and buyer ratings
  • Better dispute resolution

Blockchains like Ethereum have built-in smart contract support using which we can create a smart contract between a buyer and seller easily for a single order or a group of orders. These contracts ensure payment is automatically released as soon as a promised asset is delivered by the seller. Best part is these contracts are immutable and visible to everyone so it is transparent for all the parties involved.

We can envisage a host of contract types in ecommerce between a buyer and seller. Below are three basic types of contracts we will talk about here in this article.

Ecommerce Full Buy Contract

ecommerce full buy contract on blockchain

This kind of contract is for a transaction where the full asset like a mobile phone is being bought by a single buyer. Below is transaction flow of this type of a contract:

  • Seller agrees to sell a full asset at X price
  • Buyer agrees to buy at X price or offers a Y price
  • Seller proposes return and refund terms to the buyer
  • Buyer agrees to the terms of sale
  • Seller agrees to deliver the full asset
  • Buyer agrees to accept delivery of the full asset
  • X or Y price is locked in the contract
  • Seller delivers the full asset
  • Buyer or an Oracle confirms delivery of the full asset
  • X or Y price minus a commission is released to the seller

Ecommerce Fractional Buy Contract

Ecommerce  fractional NFT contract

This kind of contract is for a transaction where a fractional part of an asset like a fractional ownership of an NFT is being bought by a collection of buyers with a buy back clause so that seller can regain control of the whole asset if need be. Below is transaction flow of this type of a contract:

  • Seller agrees to sell at X price a fractional part of an asset
  • Fractional part is represented by an asset linked token Alpha
  • Buyer agrees to buy at X price or offers a Y price
  • Seller proposes buy back terms to the buyer
  • Buyer agrees to the buy back terms of sale
  • Seller transfers token Alpha equal to X or Y price agreed
  • X or Y price minus a commission is released to the seller

Ecommerce Staking (Renting) Contract

ecommerce staking contract

This kind of contract is for a transaction where an asset is staked or rented for a reward like an NFT is being staked for gamers to use or a gown is rented for wedding. Below is transaction flow of this type of a contract:

  • Seller agrees to stake (rent) an asset at X price reward for a period P
  • Buyer agrees to give staking reward of X price or offers a Y price
  • Seller accepts staking reward terms from buyer
  • Buyer agrees to the staking reward terms
  • Seller agrees to deliver the asset
  • Buyer agrees to accept delivery of the asset
  • X or Y price is locked in the contract for a period P
  • Seller delivers the asset
  • Buyer confirms delivery of the asset
  • X or Y price minus a commission is released to the seller as reward

We have discussed only three types of ecommerce contracts here. We will discuss more contracts in detail in our next article in our newsletter

If you have any questions or comments, feel free to write to me at manoj@plotch.ai