Covantis, a trade modernization initiative from some of the world's biggest agriculture companies, has tapped ConsenSys to build its blockchain network.
Given that Covantis has already settled on a blockchain platform—J.P. Morgan's Ethereum spinoff, Quorum, which allows companies to create permissioned networks—it might come as a surprise that it's now relying on ConsenSys for implementation. (Disclosure: ConsenSys funds Decrypt.)
However, today's announcement specifically mentions several ConsenSys tools that it expects to be useful in the process, including Kaleido for crafting borderless business networks, MythX for testing smart contract security, and PegaSys Orchestrate for managing blockchain transactions.
“We’ve been partnering with industry leaders over the last two years who are running highly secure, compliant and performant enterprise production networks on Kaleido and have transacted over a billion dollars on blockchain to date,” Kaleido founder Sophia Lopez told Decrypt. “We are very impressed with Covantis’ vision to advance their industry ecosystem and look forward to a close collaboration going forward.”
You may not have heard of Covantis, but you've probably heard of at least some of its members (or eaten their products): ADM (Archer Daniels Midland), Bunge, Cargill, Glencore Agriculture, and Louis Dreyfus Company. They're all the companies that help get food to your table, whether by harvesting it, processing it, or transporting it. Sometimes all three.
For context, ADM, Bunge, and Louis Dreyfus are all listed onFortune's Global 500 for 2019, and Glencore Agriculture is part of Glencore, a mining and commodities firm that ranks as the 16th largest company in the world. All told, the companies within Covantis reported nearly half a trillion in revenue in 2018. Now they want to convert more of that revenue into profit by making their industry more efficient.
Of course, that's why they're exploring blockchain.
Covantis is essentially a way of replacing the agriculture supply chain's paperwork with a distributed ledger. The founding firms believe that, by leveraging blockchain tech, ships filled with grain or other commodities can get out of port easier because all the relevant information—changes to the contract or payload, say—are easily viewed by all parties.
It estimates that implementing blockchain and eliminating physical paperwork and emails can cut seven to 10 days off of documentation for the roughly 11,000 grain and oilseed shipments sent by sea annually. Faster deliveries mean lower costs and, potentially, lower consumer prices.
To ConsenSys founder Joseph Lubin, the partnership makes sense: “This platform is evidence that blockchain technology has started to deliver on its promise of unlocking value through collaboration and removal of information silos within and across industries,” he said in a statement.
Covantis, which was first announced in October 2018, expects the platform to go live in 2020. The caveat is that it's subject to regulatory approvals. So, since global trade is just that— global—it may take some time to get all the necessary governmental authorities on board.
Additional reporting by Ursula O'Kuinghttons.