Blockchain’s Arianee Will Track Luxury Items To Halt Counterfeiting

Blockchain, Crime | June 14, 2018 By:

The International Chamber of Commerce claims counterfeiting may cost the global economy up to a trillion dollars a year. Arianee is a blockchain protocol focusing on the luxury goods market that hopes to curb that.

Already backed by many luxury groups,  Arianee will be able to track exactly what has happened to a product after its purchase.

“Buying valuable assets can be stressful in a digital world because of counterfeits and stolen items; accordingly, we have created Arianee and backed it with blockchain technology, which allows it to  be decentralized, independent, and secure,” says Christian Jorge, co-founder and former SVP at Vestiaire Collective, one of the world’s largest luxury second-hand marketplaces, and a co-founder
of Arianee.

Luc Jodet of Arianee talked with Block Tribune about the luxury goods market and blockchain’s role.

BLOCK TRIBUNE: Okay, after all that, we’re underway. So, walk me through how this works. Someone would get a serial number basically from an item and then go to your app and check things out?

LUC JODET:  Yeah, so there’s two ways. The first one would be that you need a serial number on the device, on the product, for sure. And now there’s two ways it can work: so, behind the scene, on the blockchain, we assign a new unique ID on the blockchain that is linked to this serial number, and either the smart asset is created at the brand side, where they just generate the smart asset, which is like an ERC721 nonrefundable token, and as an already preassigned with the ID, or the ID that would be on the device (so it can be either a watermark, engraved, or even an NFC if the product has it). And then they would just transfer that through to you, just send that token, or that smart asset, to the owner.

If we’re talking about products that are non-pre-registered by the brand, then as an owner you would just go in the app, enter the information about your product, enter the serial number, and then we will reach out to the brand to get it certified. If the brand doesn’t exist anymore, or the brand is not yet working with us, we can ask a third party expert to; think Sophie’s, The RealReal, Vestiaire Collective, or any company like this that does audit and checks that products are real, and they would actually issue a certificate of authenticity. So we always have this third party, or this true way of validation that a product is authentic.

BLOCK TRIBUNE: Is there a price threshold for using this service? Obviously you don’t want people checking out a pack of gum.

LUC JODET: Yeah, so one reason was of course we’re targeting the luxury industry in the first place. And the main reason was because we need a serial number, and the high end luxury goods do have serial numbers by default. So, short term, this is really how we want to do it. Long term, there is a possibility that we’ll allow more. I don’t think we’ll check in or register a pack of gum, but you can imagine some high fashion business would have a serial number. But here we will not do authenticity anymore; it will now be more of a proof of ownership of a product without the proof of authenticity. But in the short term, really we’re only focused on products that have a serial number, so we can establish a proof of authenticity and a proof of ownership linked to the…

BLOCK TRIBUNE: What are the products that are being monitored?

LUC JODET: It hasn’t been monitored, but their history has been recorded. The product that we have right now, that we’re mainly working with, are watches and handbags. Those are the two main products that we are actually working with brands to put on the blockchain.

BLOCK TRIBUNE: Why did you choose those?

LUC JODET: Once again, because they had a serial number, and a fairly high value item, so there is an incentive to register those products. And third, it’s also a product, a high end product like this tends to two things. First, be resold. There is a lot of resale for watches and handbags. And second, they also can gain value based on its history. So, history can be anything from how you actually took care of it, like how the maintenance was done, or who owned it, if really it is a historical piece.

BLOCK TRIBUNE: How will your company make money?

LUC JODET: So, we have two things here. The protocol itself is in blockchain. The idea to use blockchain is you create a protocol that is not the property of the company anymore, that has its own economy. There is a token called the Aria that will be used to feed this economy to pay for the people maintaining the infrastructure. The Aria is actually paid by brands when they’re issuing those tokens, those smart assets. And another feature that we have is the brand, when it certifies the authenticity of an asset, can maintain a communication link open with the smart assets and by ricochet with the owner, and those communications would incur a fee paid in Aria as well. So that’s how the protocol itself is self-sustaining.

The company, on the other hand, we know that the blockchain part is a fundamental piece, but a big part of the early development is going to be developing interfaces for companies and for users. So, here, the company, once the protocol is up and running and working on its own, the company ReNi would then transform or be solely focused on developing interfaces.

So, the two first things that we were already building are the owners app, which is an app for owners, like a cell phone app, for owners to have all their products on, and the brand terminal, which is a way for them to view all their smart assets and manage the communication and their retailers. Those two things (those two interfaces that are using the blockchain, connecting to the blockchain, that are more classical interfaces), those would be developed by third parties, and ReNi of course, the company, would have a great experience building those things, and so we will continue building those interfaces.

BLOCK TRIBUNE: What’s your competition in this sector as far as counterfeit ID?

LUC JODET: There are a few things that exist on the blockchain, and there are some companies that do this, and so we can see today – I think, like Seal, like Luczo, that have some similar idea. One thing that are really missing, we believe, in here is that they’re really solely focused on the idea of fighting authenticity, and they’re really missing what we think is the real value in here, which is for brands to keep a connection with the product owner.

It’s a real problem for brands today who have some difficulties with their CRN because, first, a majority of their products are sold at retailers, and the retailers do not share the data they collect on their customers. And even when they felt in store, like in their own company-branded store, there are a lot of intermediaries that can happen, that can take place, like Daigou’s in China, are a big problem. They are a big phenomenon, where a Chinese citizen would go to Korea or Japan, to Europe, buy a fancy bag in a store, keep it wrapped, bring it back to China and sell it for a profit, because there is a glut, or there’s not enough demand, or some models are not available in China. And here, if you have a Daigou or some informal intermediary in there, you would probably collect some information on Daigou. You would not get the information or you would not have that connection or an email, or however you would talk in your CRN.

Another thing is that about a third of products are actually bought to be gifted, so same thing here; you’d actually talk to the person who purchased the product, not necessarily the person who uses the product and really values it. And the third one is just the resale market. The used market is becoming bigger and bigger, and it’s being organized in companies like The RealReal or Chronos24 for watches, and it’s becoming some place, a big market.

BLOCK TRIBUNE: What effect do you anticipate having on the market if you gain traction?

LUC JODET: Yes, the idea here is to become the fundamental protocol, like the universal product protocol for the digital identity of products, starting with the luxury industry… meaning a universal protocol the same way a text message is a universal protocol, or TCPA.