Synchronizing Systems of Records between Enterprises at Scale on Ethereum Mainnet.

What does this mean for Enterprises & Global Supply Chain Traceability?

The typical Blockchain/DLT use cases of enterprises fall into one of two categories: financial services and supply chain. Many enterprise projects have implemented solutions in those two areas. However, these have been almost exclusively on private blockchains and not Ethereum Mainnet.

The two primary concerns of enterprises in adopting the Ethereum Mainnet have been both transaction scalability and privacy. Both of these can now be addressed with Layer 2 solutions such as zk-zk Rollups or zk-Optimistic Rollups

B2B transactions have traditionally been fraught with issues around data synchronicity between two systems of record because there is no guarantee that contract terms are properly represented in an ERP system — addresses, product numbers, or payment terms come to mind — or that the history of commercial transactions (Orders, Invoices, Credit Memos, etc.) are accurately reflected in both ERP systems — incorrect tax calculations or incorrect application of volume discounts to pricing are classics. These issues lead to hundreds of billions of dollars in opportunity costs every year across the nearly three trillion B2B transactions a year globally. Larger organizations with thousands or tens of thousands of business relationships globally not only have the headache of the opportunity costs but also the challenge of maintaining one-to-one integrations between many systems of record, often with arcane technology.

Through design patterns and protocols, L2, and other scalability solutions that support both complex EVM-type smart contract logic aligned with the business rules around commercial documents such as Orders and Invoices and privacy preservation through zk-proofs are:

• Enabling the synchronization of systems of record by enforcing data consistency through zk-proofs that can only be generated correctly if the submitted commercial documents comply with the relevant business rules and data encoded into its zk prover systems’ program circuits,
• Enabling full B2B transaction audits by anyone, anytime, in real-time based on onchain recursive zk-proofs,
• Making it virtually impossible for counterparties to cheat since all zk-proofs need to be validated before being finalized on-chain, while
• Maintaining complete confidentiality through the very nature of the zk-proofs

What does this mean for Enterprises?

Now, for the first time, enterprises have the opportunity to combine the best of both worlds — applications that meet enterprise security, privacy, and compliance requirements while also enjoying the enhanced economic security assurances and digital asset network effects of Ethereum Mainnet. Even though the technology is still rapidly evolving, and the underlying cryptography is still “young” by enterprise standards, enterprises are advised to get “into the action” now. Why? To take advantage of new DeFi opportunities to drive net-new revenue such as building enterprise appropriate and regulatory compliant products from those new asset classes, or mixing and matching new and existing asset classes into new financial products at scale.

Global Supply Chain Traceability

Lastly, global supply chains have always been a focus of blockchain projects, and some programs have gone into production such as Marco Polo, Trade Lens, or the Morpheus Network. Yet these have primarily been on private networks, despite some notable exeption such as Morpheus.Network.

Among the many different blockchain-based solutions on offer today, still surprisingly few offer real-world applications which are proven and in demand. It’s great to see the future potential in the most innovative conceptual projects — but Morpheus.Network has here-and-now benefits, in one of the world’s most complex and urgent challenges: global supply chain logistics.

Morpheus.Network is a blockchain-powered supply-chain platform, exploiting the power of distributed ledger technology to make logistics easier and more secure. Morpheus.Network is leading the transition into the new decentralised reality for logistics businesses, achieving this through a seamless symbiosis between both legacy and emerging technologies — Blockchain, IoT, SMS notifications, and more.

Morpheus.Network platform can be connected to numerous separate systems and trigger actions depending on predetermined circumstances, allowing users to automate and optimize their manual, error-prone operations. The platform’s fundamental functionality is to construct a modularized, adaptable digital twin of supply chain processes and workflows. It unifies seemingly separate systems and layers for payments, warehousing, shipping, documentation, and manufacturing into a single source, allowing for complete transparency and process automation from beginning to end.

Their middleware approach enables them to layer in a variety of technologies as part of the workflow, including SAP, Microsoft Dynamics ERP systems, UPS Package Tracking, SWIFT international wire payments to over 1,600 banks globally, and even rapid and low-cost cryptocurrency payments. Further integrations and standards like US Customs, IoT, DCSA, ePhyto, HS Codes, Geo Tab, Clouds, WMS, TMS, CRM, RFID, QR, AI, ML, etc, over 100 Global Carriers including most major shipping lines allows further supply chain integrity and automation. They gather data from various sources and stakeholders as needed. Morpheus.Network is using different technologies to get reliable data for any sort of supply chain, including ocean clearances, cold chains employing IoT devices, cross-border clearances, etc.

Global supply chains are hugely complex and interwoven, involving multiple participants and stakeholders in diverse markets and technological circumstances. Any disruption to these complicated webs of moving parts and actors causes huge problems of a ‘butterfly wing’ chaotic magnitude — from contractual failure due to a hidden time slippage, to the devastating impact of a product recall. In a globalized business environment, however, even highly-successful, multinational corporations often lack insight into the provenance and journey of their products’ components and raw materials — which leaves them vulnerable to risks of product contamination, and unknown involvement with modern slavery, environmental abuse and simple theft and corruption, at any stage in their complex network of transactions.

What is lacking is a core point of connection to provide accountability for the entire chain, and this is where the blockchain power of Morpheus.Network comes to the fore. Morpheus.Network clients use the network to secure and monitor all the relevant metrics and touchpoints, customizing their workflow using smart contracts, to create oversight of the entire supply line. It is easy to integrate all the relevant services and partners and their unique tracking systems, which are implementable as separate modules within the system, to map the entire journey of a completed product and all its elements.

The present Morpheus.Network system: Power dashboard for users

Morpheus.Network clients oversee their supply chains from a customized dashboard which enables complete workflow customization, using powerful automation engines to trigger actionable events and alerts for each stage of the process, with the native MNW token allowing access to the platform and validating transactions. Each part of the process is driven by smart contracts in a tamper-proof chain of accountability, enabling total oversight and tracking by the supply chain owner and providing them with greater visibility into their supply-chain operations.

They can oversee the process of every workflow in real time, and know the status of every component and actor in the entire supply chain.

Decentralizing Morpheus.Network: Addressing limitations

The existing system already offers greater insight and accountability into global logistics than any other single overview.

However, there is still a high degree of centralization inherent in the process design, and for this reason Morpheus.Network is committed to overcoming these inherent single points of failure, which are transparently owned.

Morpheus.Network 2.0: Putting the power of the distributed ledger to work

In order to offer clients the very best in robust, future-proof and tamper-evident logistics services, the Morpheus.Network team is making critical changes, which will actively mitigate the risks identified in the previous section. This action is in line with decentralisation principles and prevailing trends, in order to best serve the needs of our customers and all stakeholders.

Decentralizing validation: Node operators

There are further features of blockchain technology which strengthen the distributed nature of the zero knowledge validation, and the resilience of the network as a whole.

The validators network: Operating a Morpheus.Network node

This will underpin an integral token economy, creating an incentive system which rewards validators for the energy they spend, as well as disincentivizing malicious actions (for which their stake and access can be promptly lost). This is a new usage for the MNW token, boosting its network effects and desirability — attracting future expansion of the node operator’s network, which further increases the stability and decentralization of the network as it proliferates.

The Morpheus.Network V2 system architecture achieves further decentralization by replacing the Morpheus.Network EVM Network with a roll-up network of validators and Zero-Knowledge Proofs (ZKP), based on smart contracts on the Ethereum side. The roll-up validators network is a network of special nodes designed to relay proofs of successful observation of events by the client server.

Initially, the roll-up nodes commit to the time and the type of observation they have seen by signing a special message with a unique key. Subsequently, the nodes generate a ZK proof that can be submitted to the public Ethereum blockchain, guaranteeing the consensus of the time of the events with a tamper-proof verifiable TX, and confirming the correctness of the sequence of events.

In the final analysis, the nodes provide the network supervision to keep each other honest so that no other node can become a bad actor on the system.

In this way, the integrity of the real-world supply chain is underpinned by the staking of the node operators’ assets, securing the zero-knowledge confirmation accuracy, and ensuring congruence between the smart contracts in the ledger and the single source of truth it represents, and the real-time status of goods in the physical world.

Zero Knowledge Proofs

The single point of failure that is most important to overcome is the usage of Morpheus’ permissioned network. For this purpose, we will leverage Zero-Knowledge (ZK) roll-ups. With the implementation of a roll-up network, we will be able to guarantee that the workflows have happened in the correct order at a certain time and also to prove provenance.

The beauty of deploying ZK proofs is that we can prove that an event has happened without revealing the information about it, which ensures that sensitive information is protected and adds an additional level of security. The exchange of verified credentials, through public-private key cryptography, has underpinned the integrity of blockchain technology since its inception, ensuring the validity of every interaction without disclosing the source of the verification.

Source: MN Medium (https://news.morpheus.network/), EEA (https://entethalliance.org/)