Alan Vey has found a way to make Ethereum much, much better.
Mr. Vey is the founder and CEO of Aventus, a two-layer blockchain protocol offering vastly improved transactional performance and scalability at a lower cost than Ethereum. Aventus’ AvN protocol is 133 times faster than Ethereum, and can scale up to 2,000 transactions per second at an average cost of a penny. Token transfers are processed in .13 seconds.
The idea for Aventus first came to Mr. Vey when he was studying at London’s Imperial College. He pitched a Bitcoin price prediction tool to a professor who told him to look to Ethereum to see where the nascent sector was headed.
His original vision was to develop solutions for creative rights but Aventus evolved into ticketing and delivery solutions as the founders grasped Ethereum’s limitations.
“Ethereum didn’t deliver on scalability and was lacking various components which were required to extend that vision,” Mr. Vey said. “As you can see today it’s still the biggest general purpose blockchain there is and we’re firm believers in public open blockchains. We think the industry will ultimately evolve to that.”
Released in 2018, Aventus Classic is an Ethereum-based ticketing protocol designed to alleviate fraud and ticketing in the event ticketing industry . The Aventus Network is a true scaling solution which is 100 times cheaper with more throughput and faster processing than Ethereum. Built on the Substrate blockchain framework and interoperable with Polkadot, it allows developers to plug into all blockchains.
Mr. Vey said one of the most useful applications for the AvN protocol is with loyalty points. Before the pandemic aviation was a great use case as there was one issuing entity but many different parties reconciling at different earn and burn rates. It’s quite a complicated process involving debt obligations.
Expand rewards into traditional vouchers, which while not a core loyalty program has strong applicability if you represent them as tokens, Mr. Vey suggested. Tokens offer increased utility and can be sold back and forth. That reduces the unused loyalty points which are a system inefficiency. By operating on a blockchain it enables rewards providers to work with microtransactions which can be spent, saved or sold. The technology makes it easier to deal with points, debt obligations and managing seasonal fluctuations which can affect cash flow.
“We’ve been able to restructure that debt obligation, remove it from the company because these tokens can be sold on secondary exchanges, they can be given out peer-to-peer,” Mr. Vey said. “No longer is it a debt obligation, it’s just an instrument you agree to accept back in return for getting something else.”
It operates on a fractional reserve model where 20 per cent of an issue is paid for while the remainder is addressed by increasing the program’s versatility and the number of buyers of the points. CashbackAPP increased their margins by up to 25 per cent in six months by restructuring their loyalty debt obligation, reducing transaction fees and improving treasury management. Payment times also decreased.
This can increase a reward program’s popularity because customers begin to think of the points as actual money due to their increased utility. Transfer or sell them with a better user experience and it’s a gain for the customer.
The AvN protocol was heavily tested before its debut, Mr. Vey said. More than eight million historical transactions were processed through private test networks and will be onboarded onto the public ones to make sure the software works alongside new transactions. Roughly 2.5 million AvT tokens have been staked and that allows holders to earn fees on both historic and new transactions.
Talking with prospective customers about the AvN protocol usually unfolds in two different ways, Mr. Vey said. The first is more straightforward as the customers understand blockchain and its use cases but haven’t taken the step due to high costs and scaling issues. Set them up with the infrastructure and they should be fine.
The second group has a problem they need solved and wants a SaaS model where they pay a monthly fee. The core pitch is they do not have to deal with the payments themselves.
Supply chains have tremendous potential, Mr. Vey added. Blockchain technology allows companies to manage stock, trace components and shipments, forward buy and address demand fluctuations. The core value add is in cross-business communication and interoperability and works best in complex systems with many interacting parties. Contract terms can be written directly into the smart contract.
“That’s where a blockchain-based platform that can bring the trust into it can really help,” Mr. Vey said.
Internet of Things applications may be further off than some think, Mr. Vey suggested. We are now only beginning to grasp the vast amounts of data connecting houses or cars and have to scale to that level, never mind all of the new devices checking in. But when it does, look for one place to driverless cars where you can auto-negotiate insurance policies for rides and facilitate payments from existing contracts.
Ticketing applications have utility and will bring trust to an industry where the big competitors have little for each other.
“When you have a platform that is openly auditable and truly fair; everybody can see what code is running; everybody can see what deals are done; it can’t be acquired (you can’t acquire a blockchain)…That helps you break into those kinds of industries,” Mr. Vey concluded. “It’s a strategic entrance to give security to those kind of players.”