Elementh

Introduction

Steve Jobs once said: “Great things in business are never done by one person. They’re done by a team of people”. And we totally agree.

Our team’s story began five years ago when Russian enthusiasts Sergey Ryabov (Elementh CEO) and Dmitriy Bereznitskiy (Elementh CTO) undertook one of the biggest challenges in the market: arranging to work with wholesale suppliers.

In 2012 they set up a number of online shops and found out that all suppliers sent their price lists in .xls format, with thousands of names of the same goods. Then they were faced with the nightmare of comparing the same items for days on end. Drawing on their significant experience in development, Sergey and Dmitriy decided to break this mould. Using machine learning algorithms, they solved the problem of matching price lists of various companies.

A year later, in 2013, the shops were sold to a partner. This allowed our team to concentrate on the development of new B2B project Miiix [1], and we achieved a new goal: the creation of a unified product classification that would become standard across the e-commerce market.

Concept

Since Satoshi Nakamoto created Bitcoin in 2008, crypto-currencies and blockchain technology have become more and more a part of everyday life. The various limitations of Bitcoin's blockchain resulted in the emergence of a large number of blockchains. One of these was Ethereum [2], which enables smart contracts to be created in the Turing-complete programming language, EOS [3], which uses dPoS protocol to increase the throughput of the blockchain technology thousands of times over. Blockchain technology is coming closer to the real sector of the economy, with an ever-growing number of people talking about the potential for blockchain to be used in sectors other than financial.

Nowadays, Blockchain is not an enigmatic, technical term for many people but rather a technology that has become a part of our everyday life. There are myriad new projects and ideas appearing, among them imaginary models and directions applicable for blockchain. In late 2017, blockchain began to attract many ambitious people to the industry.

Blockchain and E-commerce

Blockchain technology, despite its prospective viability for the economy, is just at the very beginning of its technological cycle.
Blockchain has the potential to completely change the entire economic activity.
The most advantageous feature of blockchain is that it can ensure trust in the Web without centralized management.

Now, economic centralism is the dominating organizing principle when communication and operation costs are high. However, this centralism is gradually changing and there will be far-reaching effects for the society. The emergence of the Internet saw an abrupt fall in communication costs. Blockchain will have the same effect on operating costs.

Blockchain is an economic infrastructure which enables combination of both physical and digital assets, and to send them to the required recipient, without central management. Blockchain reduces marginal operating costs to almost zero; for example, it is just as easy to sell a house as it is to pay for a blog subscription. Blockchain provides a scalable business model for all Internet users.

E-commerce Challenges

The main goal of e-commerce is to simplify the entire process of buying and selling goods and services and to make this process as transparent as possible at a low-cost. However, the existing technologies do not fully meet these objectives.
For the moment, e-commerce has a number of sticking points that are significantly impacting its efficiency.

1. One of the most important obstacles is the non-transparency of information and the complexity in obtaining it. The sheer number of e-commerce participants (brand, manufacturer, distributed retailer, delivery, consumer and regulator) creates the necessity for constant data exchange. In addition, different participants of this market commonly require different parts of the data. That is why, in processing this information, it is always necessary to do the same work many times, which leads to high processing costs, data duplication and loss or partial change of this data. It allows harmful participants of the market to carry out fraudulent schemes, such as fakes, counterfeit, evasion of taxes, illegal import/export, etc.
2. Lack of a unified standard. E-commerce market was formed arbitrarily. The more it grew, the more traditional companies were engaged in online trade. Unfortunately, lack of unified regulations and standards led to chaos in offering products on the market. The same goods in Internet shops, even within one country, have different names and categories. It causes difficulties not only for the final customers, who need to spend considerable time comparing offers from various Internet shops, but for B2B sector as well. Retailers examine offers from various suppliers with a fine-toothed comb in order to find the best deal. It is so due to different formats of data on stock and goods. Marketplaces invent high priced solutions to match goods from the supplier whose data they collect. In such cases, these solutions are a serious restraint for connection to the marketplace.

Elementh Solution

One of Elementh’s main objectives is to implement the blockchain technology into e-commerce. In setting this kind of objective, Elementh aims to fully utilize the advantages of the technology and make e-commerce as efficient as possible. Step-by-step introduction of the blockchain technology into trade will promote global expansion of Elementh. This combination does not require a drastic change of business processes of the market participants.

Vision of Transparency as the Future of E-Commerce

Elementh’s vision is to create a completely transparent, trusted ecosystem for the e-commerce market, which is built on the blockchain principle: self-regulated and easily scalable.

This is how the Elementh team sees the future of the e-commerce market:

• Unified product classification standard used worldwide with unique codes for each product item.
• Completely transparent system of market transactions.
• Each participant of the system can completely trust other participants. Value contributed by each participant leaps into a new quality. At that, high-level service rendered by the participants is of greater importance than possession of exclusive information.
• All market participants make their own contribution to the system development and receive rewards for this contribution.
• Blockchain technology works not only as a database, it also becomes the basis of business processes of companies.
• The whole market is an open transparent database permanently enlarged by an inflow of new participants, with high speed of any transactions inside the system.

Technical Structure

The entire Elementh structure can be represented by the following scheme:

The project is based on several systems providing the framework for the project's future structure. These systems guarantee robustness and operability of the entire platform. The whole structure implements chains of blocks based on needs and requirements. This solution saves a lot of storage space and system resource costs. Besides that, the protocol allows the Elementh network to operate significantly more efficiently while maintaining a desirable level of security.

Blockchain basis layer:

1. EIPC, EESN is a system of unique numbers to identify goods and SKU;
2. ESCS(g) is genesis of smart contracts to perform basic operations with data;
3. EAS is an addressing system for delimitation of addressing spaces of various data structures.

Blockchain abstract layer:

1. ESS is a multi-purpose system for data storage with the ability to select a storage location (from direct links to external distributed systems for data storage);
2. EANS is a service to select names for different data structures (wallets, products, etc.);
3. EOTS is a complex of tools to process information on ownership and transfer of property;
4. ESCS(u) are user-created smart contracts to perform operations with data;
5. EPCM are prediction services and metadata to automate categorization and attribute extraction from vendor input data;
6. ESNS is a service to validate and generate unique serial numbers for SKU;
7. EPS is a service to check and validate the structure of a product card.

Business basis layer:

1. MasterNodes - masternodes are used to speed up transaction confirmation and IPFS data caching in order to accelerate access to the data;
2. Wallet is an application for carrying out all main operations, including creation of goods, statement and transfer of ownership;
3. Blockchain Explorer is a web tool for searching, browsing and checking all data transactions and blocks of the Elementh blockchain;
4. API is a web application developed on servers of the Elementh Foundation that allows access to all blockchain methods used to create light-clients and dAPPs.

Business abstract layer:

1. EOTS (client) is a complex of methods used to obtain information on SKUs ownership history;
2. dAPPs - with implementation of the Elementh technologies, it becomes possible to create many companion dAPPs. For instance:
1. Decentralized marketplaces - having used the EPCM technology, EOTS allows for the quick establishment of a marketplace with high-quality data.
2. Tracking a movement of goods - through EOTS an item can be tracked from its manufacturer to the end user.
3. Search for goods - the EPCM system uses high-quality data on goods, which is suitable for systems searching goods by different criteria.
4. Fake searcher - EOTS will establish whether the product is fake or not.
5. Banking scoring - the availability of transactions will make it possible to calculate the rating of each system user.

System of Goods and Unique Identifier

Historically, the EAN / UPC code is the most commonly used in commerce [4]. The original American UPC system contained 12 digits for encoding goods and it gained such popularity that European countries focused on it. However, the entire range of codes was already involved in encoding goods in the USA and Canada while the goods and firms were exclusively registered in the USA. The developers of the European encoding EAN-13 faced a serious task: to extend the range of codes and organize an independent US registration system while simultaneously ensuring maximum compatibility with UPC encoding. The solution was to add a thirteenth digit to the leftmost position (it is usually indicated by the Arabic digit to the left of the barcode) using 12 digital templates like in the UPC. At the same time, it was possible to maintain the backward compatibility of EAN-13 with the UPC coding - the latter became a subset of the EAN-13 coding with the first 0 digit.

Matching

The product matching problem is an issue that many have not heard of but solving it will allow for analysis of the contemporary e-commerce market. When someone is looking for an item on any online store, he or she does not want to see duplicates of the same product in the search results. When an online store works with suppliers, it wants to know what kind of product it will receive from each of them and where they could find the same product at a cheaper price. There are many similar cases in the e-commerce market.

Roadmap

The Elementh’s technology team has three main goals:

1. R&D: priority is given to the bottom level of technology and development, it employs the most advanced technology analysis and experiments. We will draw up plans for development of the next generation of the technology and conduct a feasibility study.
2. Development: On the basis of R&D results, we shall carry out development until the initial testing result is obtained.
3. Testing, deployment and maintenance: Having obtained the development result, the R&D team must improve and correct the testing results as well as proceed to relevant deployment and maintenance.

Applications

In general, there are two types of applications built on top of Elementh. The first category is financial applications that provide users with great opportunities to manage and participate in contracts using cash, including buying and selling products and online and offline content, as well as tokens built on the Elementh software. The second category is non-financial applications, such as identifying fake/counterfeit goods in the supply chain, etc.

1. Decentralized marketplaces based on Elementh. Based on Elementh's blockchain any marketplace will be able to allow sellers to use existing merchandise cards without having to create new ones. Ownership data will allow you to get rid of counterfeit products sold on the marketplace. Unified merchandise cards will allow you to easily find the lowest price on any products. At the same time, you can pay using any cryptocurrency.
2. Track movement of goods. The complete producer - distributor - seller - buyer chain, stored in the Elementh blockchain, will allow you to find suppliers for any amount of products, even order goods directly from the manufacturer. We see it as the future of e-commerce.
3. Search for goods by geolocation. Seller information available in the Elementh blockchain allows you to find the most convenient places of purchase for any item.
4. Decentralized sending of messages. The ability to send messages allows you to directly contact anyone involved in the transaction. This will permit the setting up of exchange systems and bidding, obtaining of individual purchase conditions and so on.
5. Store designer. Having all the necessary data to set up a store, the system allows you to create individual decentralized showcases for any vendor in the system.
6. Fakes search. Data on all participants of the chain will allow you to identify counterfeit products at any stage of the transfer of ownership of goods.
7. Banking scoring. Access to the data of anyone on the system (on all transactions) will allow the seller to be instantaneously scored, enabling credit building and overdraft systems by the banking institutions.
8. Different vertical markets. Elementh blockchain can be used by any service provider, such as hotels or airlines that offer tickets, coupons or vouchers to store information and track ownership.

Establishment of Elementh Foundation

In March 2018, a non-profit enterprise called the Elementh Foundation was established in Singapore. The foundation’s core activity is to support and develop its blockchain in order to provide a transparent and safe environment for global e-commerce.

The decentralized nature of the Elementh blockchain allows everyone in the global e-commerce market to create various applications for their own needs and business processes. It’s an extremely convenient solution for everyone. But, it can also cause slow blockchain development and hard decision making at higher levels, since opinions may be completely different.

Sources of Funding

The main income of the Foundation can be divided into two areas:

1. Non-operating income comprising the initial ICO funds and the return on digital assets.
2. A part of fees for all transactions in the Elementh blockchain will be transferred to the Elementh Foundation and used for project development.

The following is a detailed description of the main sources of income:

a. ICO initial start-up funds.

Token and ICO information: EEE, ERC-20 standard
Total supply: 303 000 000 EEE
Token distribution:
217 500 000 (71,78%) EEE - purchasers
45 000 000 (14,85%) EEE - team
40 500 000 (13,37%) EEE - partners and advisors

private pre-sale/pre-ICO round: closed. Collected 910 ETH.

ICO prefund stage start date: 15 February 2018 00:00 UTC
ICO prefund stage end date: 31 March 2018 22:00 UTC

ICO start date: 1 April 2018 00:00 UTC
ICO end date: 30 April 2018 23:59 UTC
ICO soft cap: 10 000 ETH
ICO hard cap: 30 000 ETH
ICO price: 1 EEE = 0.0002 ETH
ICO bonus scheme: 1st day: 30% Tokens, 2nd day: 15% Tokens
There is no minimum or maximum amount to participate in the ICO stage.
Tokens will be distributed at the moment of purchase in the ICO stage. All unsold tokens from ICO stage will be burned.

Details:

The Know Your Customer (KYC) procedure, where contributors disclose their personal information, is mandatory in both phases before taking part.
At the prefund stage, contributors invest in a smart contract to make a shared pool that will be allocated as soon as the sale of tokens is opened to the public. It is conceived in such a way so that contributors will not miss the presale start on April 1st at 00:00 UTC. In addition, they will receive 30% of the first day bonus.

All tokens will be distributed after the completion of the last phase and will be locked (non-transferable) for the end of tokensale. After successful tokensale all tokens will be unlocked and become transferable.

There are tokens that will have a vesting period according to the following schedule:

• Tokens allocated to the team will have a vesting period of six months;
• Tokens allocated to the advisors will have a vesting period of six months.

Market

The e-commerce market has been developing for about 25 years. From the very beginning of its existence, it has focused on B2C trading. However, in recent years, creating a B2B e-commerce market has become more and more important. Elementh has created an infrastructure in which various people in the e-commerce markets, especially those from the B2B segment, can interact with each other. By creating a new standard of e-commerce that has significant advantages (market transparency, transaction cost reduction), we are planning to attract more B2B clients.

Competitors

Any B2B company, marketplace or online store in the world can use Elementh Blockchain for product classification. E-commerce is a growing market in all countries, and the popularity of decentralized marketplaces is advantageous to the Elementh Foundation. We are planning to collaborate with all new marketplaces so our blockchain can become the standard for the e-commerce market.

The direct competitors of the project are existing online B2B e-commerce projects, such as Indix. However, the Elementh project is innovative in that it employs blockchain technology and can be used by decentralized marketplaces that use cryptocurrencies for internal payments.

Customers and partners

The Elementh project grew out of Miiix [1], a product which has been in development since 2012. Miiix [1] is a full-fledged business in Russia, in which RSV Venture Partners and business angels have invested. It has formed solid partnerships and can boast more than 200 small and medium online stores and marketplaces as customers.

At the moment, its major clients are Sberbank-AST and Ulmart.

Its biggest partner is SAP Hybris.

We have established a connection to SAP Hybris and Ulmart, so they can our descriptions for goods on their marketplaces. We also discussed the opportunity to promote this solution among other SAP customers worldwide with SAP and SAP Hybris in Russia. In 2018, Elementh is planning to participate in the SAP COIL program to improve our SAP store.

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