In the third and final installment of our “Living Lucid” series, we dig into the journey of trust and how Altr brings authenticity to a sector that needs it.
“Trust me.”
It’s a phrase as old as most, with a history that’s anything but simple. In early societies, who and what did people trust? Religion and the gods gave way (not willingly) to political leaders and eventually science, and as humans acquired new means to communicate, learn, work, earn, and exist. In 2022, after thousands of years of scientific, economic, and technological evolution, you simply have to look around to see that the very notion of trust and truth is still deeply volatile — and evolving.
Nevertheless, trust is the foundation of many relationships, especially in business and commerce. Success is built on it and is part of how we care for our countless business networks. We use intermediaries in many of our relationships, which creates trust, and we must have trust to be deemed reliable and sustainable. Banks ensure that we deal with the correct counterparties and that the transactions are for the proper amounts. We employ lawyers to ensure our products are not copied or illegally distributed. Yet, using intermediaries is very complex, costly, and time-consuming. In a time rife with hackers, it also carries security risks.
The Journey of Trust from web2 to web3
From the rise of countless controversial political leaders and movements to the unbalanced control that is centralized by the world’s few dominant internet companies (i.e., MAANG: Meta, Apple, Amazon, Netflix, Google) hold over society, we don’t only live in a “post-truth” era, but in many ways a “post trust” era. A recent study from global communications firm Edelman found that in 2022 trust in the technology sector specifically reached all-time lows in 17 of 27 markets. Still, people buy iPhones and stream TV shows on Netflix. So is it all doom and gloom? Or does trust still have a fighting chance? Hello, blockchain.
As a decentralized, immutable ledger of information, blockchain, and its earliest use cases like Bitcoin, were popularized as systems that put trust and security above all else. Ironically, while “trustless” would seem to many as a system free of trust, in most blockchain systems, it means that you don’t need to place your sole trust in any person, institution, or other third parties for a network to function. From cryptocurrencies (which remove the need for a middleman — i.e., a central bank) to NFTs (which prove ownership and provide transactional data of an asset through a smart contract), blockchain provides trust through hard code that no one can tamper with. Now let’s talk about where Lucidao, and its first dApp, Altr, the marketplace for luxury collectibles fit into this journey of trust.
The Crucial Need for Trust in Crypto and Luxury
While decentralized finance (DeFi) has not been free of hacks and bad actors, it’s an industry where frameworks and mechanisms exist to automate trust and other complex processes. DAOs like Lucidao remove the need for human intervention and centralized decision-making to reach agreements (consensus) on key decisions. Participation in our DAO and voting power all starts with the Lucidao governance token, LCD, which allows the owner to delegate voting rights to the address of their choice; the owner’s wallet, another user, an application, or a DeFi expert. Additionally, anybody can make their voice heard and participate in Lucidao governance by receiving delegation, without needing to own LCD. Find more information on Lucidao governance and community votes on our website.
This process exists not only on Lucidao but comes to life on Altr, where voting helps introduce new Oracles, who will provide their product inventory to our marketplace and, thus, instantly verify its legitimacy. Trust achieved. Why is this technology so critical in the luxury space? Unfortunately, luxury goods are an industry plagued with fraud. Let’s look at the data. A study from luxury goods advisory Bain found that in 2020, fueled by the pandemic, the global luxury goods market drastically shifted to online, with online shares of sales in the luxury market nearly doubling from a 23% downturn of the global personal luxury goods market. In 2022, another Bain study found that overall, the international luxury market experienced a “v-shaped” rebound,” reaching €288 billion in value, likely further fueled by a shift to online sales.
While higher price points for luxury goods can mean higher margins, they also commonly lead to e-Commerce fraud: a rate of 4.81% compared to just 2% for mass-market products. Harvard Business Review found that counterfeit goods account for $450 billion of trades (2019 data), and fake luxury merchandise accounts for 60% to 70% of that amount, with 40% of the sales in luxury fakes taking place online. Blockchain and web3, an improved, more secure, and efficient internet of everything, provides a path for changing these alarming numbers, primarily through tokenizing art and luxury items through NFTs. On Lucidao and Altr, we do this all through our world-renowned Oracles, which we explained in detail in our last blog.
Lucidao’s Oracles: An Altr’d Path to Trust
Lucidao and Altr are a trusted match made in blockchain heaven. Our DAO instills automated trust in decision-making, opening the doors to a growing ecosystem of assets across the digital-to-physical bridge, accessible by customers who can trust their value and authenticity. We utilize the best part of blockchain technology to bring trust into the acquisition of value, without all the inefficiencies, data manipulation, and bad actors that have plagued technology and economies for generations.
On Altr, Oracles are vetted and voted on by the community before being accepted onto the marketplace. They must have a track record that meets specific criteria and a strong reputation in the luxury market. To access buyers, the Oracles must also invest in the DAO and hold a token allocation. As more investors want to shift their wealth into luxury assets and access the rarest items on earth, they can do so with the confidence that what they’re being sold is what they signed up for. It’s like a digital handshake that places remarkable and authentic goods in arm’s reach and, eventually, the palm of your hand, garage, wallet, and wrist.
Stay tuned for more, and become one of the first to join on https://altr.trade/.
