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The conglomerate of luxury brands LVMH, owner of the iconic Louis Vuitton label, is preparing to launch a chain of channels to prove the authenticity of high quality products, CoinDesk learned.
The AURA cryptographic platform, which owes its code name, should be operational in May or June with Louis Vuitton and another brand of LVMH, Christian Dior perfumes. It will then be extended more than 60 LVMH luxury brands, and possibly those of its competitors.
LVMH has recruited a full-time blockchain team that has been working in stealth mode for over a year and works closely with design studios ethereum ConsenSys and Microsoft Azure, according to two people close to the project.
AURA was built with the help of an authorized version of the ethereum string chain called Quorum, which is focused on data privacy and was developed by JPMorgan.
Neither LVMH nor its partners, ConsenSys and Microsoft, would comment before the official launch of the project. But a source involved in the construction told CoinDesk:
"For starters, AURA will provide proof of the authenticity of luxury items and will trace their origin from raw materials to point of sale and the second hand goods market. The next phase of the platform will explore the protection of creative intellectual property, exclusive offers and events for each brand's customers, and anti-advertising fraud. "
White mark
In withdrawal, LVMH controls more than 60 luxury brands, including many famous brands such as Dior, Dom Pérignon and Hublot. The group recorded revenues of $ 53 billion in 2018.
But it is not the first to propose a blockchain of authenticity monitoring; there have been other platforms of luxury provenance and mini consortiums, such as Arianee or Vechain.
According to the source involved in the project, LVMH asked why this would allow third parties to position themselves between its brands and their partners, all the more so as the blockchain is supposed to be a technology that allows the company to make a difference. eliminate intermediates.
The source added:
"This should be done in the form of an industrial consortium rather than a third-party player entering the market."
As such, LVMH intends to offer the white label service to other brands, including the group's competitors. So, rather than creating any application, AURA will work behind the brands that use it.
"So, if you are a luxury brand customer, you will not see AURA; you will see the Louis Vuitton app or that of another luxury brand, "explained the source.
Equal foot
All this sounds good – in theory. But it can be difficult to place your competitors on a blockchain platform, especially if you are as big and influential as LVMH.
To avoid the kind of problems LVHM will donate all intellectual property (IP) to a separate entity, which in turn will belong to the participating brands, said the source, adding that,
"So, Gucci, for example, could decide to join the platform and be a shareholder. In this case, their claim on intellectual property would be as great as that of Louis Vuitton on intellectual property. This is the main difference between this project and the IBM Maersk project. which, hopefully, makes it much more comparable to Komgo, the trade finance consortium. "
In addition, Quorum's data privacy tools should ensure that no information will be disclosed between brands or their customers.
To further facilitate cooperation between companies, the project is fully in line with the standards of the luxury industry, said the source, and in particular with the recent efforts to combat counterfeiting of the Office of Intellectual Property of the European Union.
Beyond cryptoKitties
It is not surprising that LVMH chose a variety Ethereum company, because it is the blockchain that gave birth to the standard ERC-721 non-fungible token (NFT). This allows for digital representations that are not only immutable, but that characterize a unique and unique element.
Although the most famous example of NFT is the whimsical CryptoKitties game, this type of token has considerable commercial potential.
For example, it is conceivable that it identifies an individual handbag and traces the entire life cycle path from an alligator farm to the store where it was sold for the first time, and then to multiple chains of owners who owned and sold it.
Another fundamental reason that led LVMH to choose Ethereum is that the group believes that today's authorized version is only an intermediate step towards a broader vision, once the technology has matured, the company added. source.
"They [LVMH] see downstream that public and authorized networks must be interoperable if they have to restore power to their customers. It's also a way for a global network of distributors and resellers to connect to an unrestricted network. "
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