But the solution is not exactly simple.

Boson Protocol, a project that seeks to connect the real world of physical trading with smart contracts, announced on Monday a successful $350,000 seed round.

The project is creating the „building blocks for next-generation dCommerce applications“ by providing a way to redeem blockchain tokens in their real-world physical counterpart.

The project received a round of over-subscription investment led by Outlier Ventures, along with Trent McConaghy of Ocean Protocol and others. The funding will be used primarily for operating costs and the construction of a working pilot, the company said.

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Justin Banon, the founder of the project, told Cointelegraph that Boson’s purpose is „to allow decentralised trade with minimal arbitrage, like a DEX for physical assets“.

The solution, based on Ethereum, is based on non-expendable token vouchers that can be described as a claim on the underlying product. The FTN represents a two-way collateral deposit between the buyer and seller, which seeks to ensure that the exchange of the physical good takes place in an orderly manner. „Mediation, arbitration and reversal are automated in a dynamic game where incentive rewards reduce the need for human arbitration over time, allowing for progressive decentralisation,“ Banon added.

One of the use cases described by Banon is a loyalty program based on blockchain, as the system allows „sending rewards such as tickets or shirts directly to wallets“.

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Boson Protocol is outside the traditional approach to financial markets seen at DeFi. When asked if it could be used as a DeFi bridge to centralised financial platforms, Banon responded that „this is potentially one of many use cases where Boson could be useful, but this is not Boson’s main purpose“. However, the project is designed to be compatible with other protocols in the DeFi space:

„Boson’s most important bridging function is to connect the physical world with DeFi, allowing users to purchase physical goods and services directly through an intelligent contract, in a completely unauthorised way.
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Boson’s untrustworthy exchange mechanism, as detailed in its technical paper, involves a complex interaction between various parties in many different scenarios. Monetary incentives are required to maximise the number of successful transactions, requiring more funds to be committed than in a traditional escrow.

The mechanism seems to show similar benefits and drawbacks as tBTC, a reliable bridging mechanism between Bitcoin and Ethereum. The project has often been criticised for being much more complex than centralised solutions such as Wrapped BTC, but this seems to be dictated by a desire to keep it completely untrustworthy.