Lagan

Demo link: https://drive.google.com/file/d/193EIRe55HxUAX8OgDu5lbinJHdf628Fg/view?usp=sharing 

Lagan

A New Dawn in eCommerce

Abstract

Lagan, in essence, is the bridge Web2 brands have been waiting for to venture into the uncharted territories of Web3. Its purpose is to turn the traditional growth and loyalty programs on their head, using the power of Non-Fungible Tokens (NFTs) to drive product purchases in Web2. This solution brings Web3 technology to the biggest eCommerce platform on the planet, Shopify.

Imagine shopping as a language. A language so universal that it can introduce new users to the Web3 world with ease. 

Historically, retail models have followed a linear path — you pay, accumulate points, and then spend more money using these points. This model is simple, but lacks depth and a sense of ownership.

By injecting NFTs into this mix, the game changes. When we tie an NFT collection to a brand's reward program, we are, in effect, giving customers a stake in the brand. This method transforms the one-dimensional loyalty program into a shared experience, fostering a unique sense of ownership. Customers become co-authors of the brand's story, establishing a reciprocated flow of value. This unique connection is capable of redefining the retail industry, particularly when infused into growth and loyalty programs underpinned by NFT ownership.

While eCommerce brands view loyalty programs as an important tool for customer retention and engagement, the economic burden of such programs is often overlooked. The cost of setup, along with ongoing operational costs including rewards, can lead to significant outlay before a return on investment is realized.

Lagan offers an alternative perspective. Instead of viewing these costs as business overheads, we transform them into a potential income source. By integrating NFTs into the loyalty program, customers gain a sense of ownership, fostering a willingness to invest in the brand's program. This flips the traditional cost-income equation on its head, transforming what was once an expense into a revenue source.

Another upside of this strategy is the protection against bots. Bots, which often prevent loyal customers from purchasing exclusive products, are neutralized as brands can 'tokengate' their products, meaning only specific NFT collection owners can buy them. This ensures true fans get the products they want, reducing the influence of bots.

Moreover, our solution eliminates the need for brands to create separate Web3 marketing strategies or to scour established Web3 markets to find customers. With seamless Web3 integration into their existing stores, the market essentially comes to them. This simplifies the transition to Web3, saving both time and resources while maximizing the brand's reach and impact.

Impressive data from NFT Miami and NFT NYC in 2023 stands testament to the efficacy of this approach. Over a one-year period, with around 30 clients from diverse sectors, an 80% conversion rate from NFT activation to purchases in Web2 was achieved. When compared to traditional Web2 setup, where a 10% conversion rate is considered impressive, and a loyalty program might boost that to 20%, this is a true game changer.

Technicals

Lagan is fundamentally a Shopify eCommerce app, designed to bridge the gap between Web2 and Web3, encompassing several features:

1. Exclusive Access Creation: Allows store owners to offer exclusive access to specific products for owners of select NFT collections, enabling a unique shopping experience.

2. UI Component Extension: Seamlessly integrates with existing storefronts, guides customers about the tokens needed to unlock specific products, and verifies customer's NFT ownership, ensuring a smooth and secure shopping journey.

3. Cart Checkout Validation: Works silently at the cart checkout stage to validate customer's token ownership, maintaining the integrity of token-gated access.

4. Custom Collection Creation: Lets store owners create custom NFT collections, which can be used for token-gating products, offering strategic flexibility.

5. Backend Minting Service: Supports the store's operations in Web3 space, with a backend service responsible for creating mint pages for the store.

Monetization

At the core of our monetization approach is Custom Collection Creation. The process is regulated by a 'Factory' smart contract that deploys individual store owners' ERC721 contracts. Each time a store owner creates a new collection, the Factory contract triggers the deployment of a unique ERC721 contract for the store. The Factory contract also has a critical role in revenue distribution, storing information about the distribution of minting price between Lagan and the store owner. 

Limitations

Despite the promising outlook, challenges remain. The complexity of wallet handling and the paradigm shift to Web3 can be daunting for newcomers. We could simplify this by making Web3 look more like familiar Web2, but that would lead to greater centralization, a dilemma in the blockchain domain.

Our solution is currently dependent on Shopify's infrastructure which uses unstable API versions due to ongoing development. Full blockchain support from Shopify is anticipated soon, which will enable our solution to be deployed in a production environment by store owners.

Scalability is another consideration, given the potentially high volume of transactions in eCommerce. Possible solutions include layer 2 solutions, interoperability and cross-chain solutions, and zero-knowledge proofs.

Improvements

While the current system represents a proof of concept, designed in 48 hours by a single developer, there is substantial scope for improvement:

1. Exclusive Access Creation: Enhancements in UX/UI can be implemented, providing additional perks like product discounts or setting a fixed number of possible purchases per NFT.

2. UI Component Extension: This can be developed further in line with the above-mentioned UX/UI improvements.

3. Cart Checkout Validation: An integral part of the system ensuring tokengating. Potential for expansion is significant as this element is vital for confidentiality.

4. Custom Collection Creation: Multiple improvements can be integrated here. Currently, the user can select common properties of an NFT collection like name, symbol, max supply, mint price, and max mint per wallet. Future enhancements could include the ability to attach collection images during the creation of an NFT collection. The two smart contracts involved (the factory contract and the ERC721 contract) could be refined, with the ERC721 potentially upgraded to ERC721A to reduce minting costs.

5. Backend Minting Service: At present, the service only creates mint pages. Significant upgrades can be made in terms of functionality and aesthetics. Besides expanding the customization options for users when setting up their mint pages (e.g., adding a banner image or collection image), this service could ultimately function as a platform for all eCommerce collections, facilitating both minting and marketplace operations.

Info & links

Discord username: Lagan#0291 

Demo link: 

https://drive.google.com/file/d/193EIRe55HxUAX8OgDu5lbinJHdf628Fg/view?usp=sharing 

Github:

1. https://github.com/djokem/lagan-hackathon (services 1-4)
2. https://github.com/djokem/lagan-mint-dynamics (service 5)
3. https://github.com/djokem/smart-contracts-brownie