Creating a Blockchain-based Platform for the Green Community
Oxyn's CEO Bacho Khachidze and CTO Lasha Kvantaliani talk with Forbes Georgia about their groundbreaking initiative.
Oxyn links consumers, businesses, and the environment through a smart blockchain-based Corporate Social Responsibility platform. Its CEO Bacho Khachidze and CTO Lasha Kvantaliani talk with Forbes’ Inge Snip about their groundbreaking initiative.
Setting up a time and place to meet with Oxyn’s founders isn’t easy. The three impact entrepreneurs fly around the world to run their latest impact-driven project Oxyn. We finally manage find time in early May, and I meet with its two founders Bacho Khachidze and Lasha Kvantaliani, the company’s CEO and CTO, in Fabrika - a post-industrial design hostel and art community in a charming old neighborhood of Tbilisi, Georgia.
“I know flying is extremely bad for the environment,” Bacho laughs, “I understand the irony. But reducing your carbon footprint - even if you have to travel - is one of the things we are working on to simplify for people.”
Bacho just came back to his home country after several months in Silicon Valley, where he secured funding and designed a solid business plan with the help of their advisors. He is about to set out again, this time with his family, to Padova in the Venice area of Italy - where Oxyn takes part in the ECOSTAR Nature accelerator, a program cofunded by the European Commission and powered by the internationally well-known impact accelerator Fledge.
And while Bacho spends time in Italy with experts in entrepreneurial, technical and scientific fields to boost the development of Oxyn, Lasha is planning to travel to LA, while the company’s third founder, Leo Dvalishvili is in New York.
Oxyn is Bacho and Lasha’s second green initiative, they explain to me. Their first one is Treepex, an innovative tree-planting platform allowing businesses to plant trees in endangered forests through their loyalty programs. But in their efforts to expand their successful startup Treepex outside of Georgia’s borders, they soon understood that - with their knowledge and background - they could do much more than just planting trees. “We founded Treepex, because we were concerned about disappearing forests and increased emissions,” Bacho says, “but running Treepex, and working directly with companies and consumers to make the world a bit greener, we realized that there was one major issue with the current CSR world: as customer you don’t really know what kind of projects are being supported, and you also can’t influence which - specific - projects the company includes in their CSR strategies.”
And that is what Oxyn aims to solve, Lasha adds immediately, explaining me how Oxyn handles smart contracts for social responsibility.
The Oxyn founders explain how the CSR field is not fully understood and commercialized enough, especially by Small and Medium Enterprises (SME). “We take CSR as a new marketing tool,” Bacho says, “a key for brand’s reputation as well as customer equitization and retention.”
But I wonder why the team has chosen blockchain technology to base their platform on.
Well, we have to get into how the platform works, Bacho tells me, as there are two aspects of their platform - interlinked with each other - which utilize this groundbreaking technology.
First of all, consumers buy products and services from brands through Oxyn. Instead of banking fees, businesses are charged a 0.5% transaction fee which is donated directly to environmental initiatives. And consumers can choose which of the vetted environmental initiatives receives that donation. Blockchain provides the perfect structure and transparency for this, Lasha says.
Secondly, Oxyn works as CSR platform and dashboard for managers to plan and implement better CSR campaigns. This fully customized dashboard allows CSR managers to build loyalty programs, distribute loyalty points among their customers, and it allows them to understand which environmental causes matter to their customers most. The dashboard provides full access to blockchain based analytics, measures end-user involvement and helps marketing managers to design specific offers for each cluster of brand’s users.
“The underlying technology of cryptocurrencies, the blockchain, actually is a technology undeniably the future of transactions, registration, id-verification, and much more,” Lasha explains.
For Oxyn, the fact that blockchain works as a database, comprised of an organized and globally distributed network of computers working together to establish a transaction ledger that is completely secure and transparent, is what makes the technology so fitting for Oxyn. “There is no need for payment processors, or any third-party verifiers, for that matter,” Lasha tells me, “so we can cut costs by cutting out the middlemen, while offering a incredibly transparent and secure system.”
However, crypto and blockchain are known to need to generate a lot of computing power, which in turn, needs a lot of electricity.
And the founders are well aware of this issue, but have figured out a way around. Not only do financial institutions use a similar amount of computing power, they explain me, but Oxyn itself is developing a new algorithm to even lower the amount of computing costs necessary. They call it TACT.
“It’s a specific consensus algorithm to match our network and node requirements using smart allocation, distribution and the timely matching of signers and transactions within predetermined chunk of time,” Lasha says, explaining it “allows for immediate transaction validation and execution.” My mind boggles a bit, and I ask him to explain it to me in non-tech terms. He laughs.
“Sure, so, it basically works faster, and because of that, it needs less power,” he tells me.
It is clear from our conversation that Oxyn benefits consumers and businesses, there are lower transaction costs - and these costs go straight to environmental organizations instead of financial institutions. So it actually supports green initiatives. But how does Oxyn make money if they don’t take transaction costs themselves?
Bacho says that they are working on several different revenue streams, but the most important one currently are monthly subscriptions for a fully customized dashboard for brands’ managers: where brands can access all kinds of analytical tools to measure the success of their campaigns, eliminating time and costs, while simultaneously increasing the effectiveness of their campaigns.
Currently, Oxyn is working hard on fundraising for their platform. That is why the founders are travelling all over the world. Because other than most blockchain-based initiatives, Oxyn isn’t planning on a regular ICO, when people can buy your tokens (cryptocurrency) to support your project.
“Many cryptocurrencies are used by people for manipulation and speculation,” Bacho says, “But we have a radical approach to ICOs. We understand how markets work, but instead we are only inviting impact driven funds, research institutions, and people who appreciate and value Oxyn, to be part of it.” And that is how the founders believe they can take Oxyn to the next level and radically change the CSR landscape. Bacho adds proudly that they are already have involved a major research institution.
The impact entrepreneurs see a bright future for their platform, but they are not only in the game to create a scalable and profitable business. They are in it to create a better future for next generations.
“There’s no planet B, we don’t have another, this is our only one,” Lasha says towards the end of the interview. “And we share this planet. It’s not mine, or yours. It is ours. And it’s our responsibility to take good care of it. And I really believe that with Oxyn we can make a real difference.”