Non Fungible Tokens, commonly referred to as NFTs, have been one of the most talked about topics of the past year, we have seen them applied in art, luxury, fashion, and a host of other sectors. NFTs are also one of the building blocks behind Web3, the new Web revolution that sees a democratization of online content management, avoiding the Intermediation of large platforms. With Trusty, we decided to bring these concepts to the agribusiness sector by putting Blockchain technology at the service of transparent information. NFTs have features that allowed us to demonstrate how to make certifications truly digital and universally verifiable.

In this article, we will introduce what NFTs are, what are the advantages of using NFTs in the certification industry, and introduce the concept of ClaimNFT, or how to represent a certification in Blockchain. We will complete the article with a practical example of operation on a Public Blockchain.

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What are NFTs?

Non Fungible Tokens (NFTs), which in Italian could be translated as non-copyable tokens, are digital "ownership" certificates. NFTs are composed of a part of data recorded on Blockchain (on-chain data) and a part of data recorded externally (metadata).

The following image simplifies the difference between on-chain data and metadata:

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Data that is recorded on-chain (data recorded on Blockchain) guarantees immutability and can be publicly verified without the need for any intermediary, but simply by exploring the Blockchain platform through a Blockchain Explorer or other method of exploring a Blockchain platform.

Metadata (externally recorded data) typically are publicly accessible data through a url, this url gives access to NFT-related information such as name, description, image, and features.

Certifications in the agribusiness sector

Certifying a product, process, or company means wanting to increase transparency to provide consumer confidence and decrease uncertainty. A certification is a process through which a company undergoes a verification procedure that allows it to obtain a certificate "which can be used as a symbol of quality in the market to reduce consumer uncertainty and, in this way, reduce transaction costs."

Although there are a large number of certification schemes in Europe and Italy (we are second to Germany) these can be confusing to the end consumer. Certifications can be divided into:

• Product and process certifications;
• Mandatory or voluntary certification;
• Methods of application;
• Purpose of certification;

But in the end, all certification can be defined as: "An act by which a third party independent of interested parties (certification bodies, testing laboratories, certification centers, and calibration centers) certifies with sufficient confidence that a particular product, service, or process conforms to a given standard or technical rule." Typically following the certification process, a mark or claim can be used to distinguish the company, process or product.

However although there are now methods for verifiability of trademarks and claims, these are not always accessible and publicly available, claim or certification verifiability is something not easily accessible. Below we will look in detail at what it means to verify an organic product and what a protected geographical indication (PGI) product with publicly accessible tools.

Verifiability of Biological

In Italy, any farm that wants to be certified organic must follow this process:

• Send all documentation concerning the farm to one of the bodies recognized and certified by MIPAAF
• Notify its region that it has initiated the procedure
• from the time the notification is sent, the farm is required to comply with all rules under the organic regulations
• wait for the conversion to take place

The conversion period is by no means short, lasting an average of two or three years, and serves to ensure that soil, livestock and all production processes are no longer contaminated with all those harmful substances that are strictly prohibited in organic farming.

To obtain BIO certification, a farm must comply with the following principles:

• no GMOs, all planted seeds are derived from other organic farming;
• no CHEMICALS AND TOXIC SUBSTANCES such as pesticides, preservatives, dyes and herbicides that are not of natural origin;
• FARMED ANIMALS must have a DIGNIOUS LIFE characterized by large spaces, open air and feeding organic fodder;
• Use of CULTIVATION TECHNIQUES such as green manure or rotation that keep soils healthy while respecting their natural cycle.

Compliance with these principles is carried out by certified operators (you can see the list on the website of ACCREDIA-the single national accreditation body) through periodic inspections and laboratory testing.

A company that has therefore obtained BIO certification can display the BIO mark on its label with indications of the operator number and body number that carried out the certification. At this point the consumer can verify that the producer is certified through SIAN or through portals such as organic-bio.com.

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As you can see SIAN offers much more information including the certifying body (also shown on the label with the initials IT-BIO-007), the expiration date of the certificate. The interesting thing about SIAN is that it also allows you to download the pdf of the certificate in which you can see all the information related to the certification, including the dates of the checks. However, the lack of a universal register penalizes the consumer who wants to independently verify the product and the company. National or regional registries penalize international consumers in a market where independent verifiability of information in a global context is essential. Even worse is the situation if we put ourselves in the shoes of distributors or companies that choose products to put on their shelves based on certifications. In this case the absence of REST-API, the absence of event-driven architectures make this kind of process manual and penalizing for virtuous companies.

Verifiability of PDO, PGI and TSG marking

PDO (Protected Designation of Origin), PGI (Protected Geographical Indication) and TSG (Traditional Specialty Guaranteed) certifications were created to protect the typicality of certain agri-food products and are regulated by the European Union through EC Reg. 1151/2012.

These certifications protect specific products which are publicly available on the Mipaaf website:

Where in addition to being able to look up the different products that have obtained PDO, PGI and TSG status, it is possible to look up the specifications, or rather the "contracted" documents that stipulate when a particular product can be defined as I.G.P. or D.O.P. or S.G.T. The specifications and requests for publication of a new product are also recorded in the Official Journal of the European Union(example on Piadina Romagnola).

Producers who want to obtain the possibility of displaying the I.G.P., D.O.P. or S.G.T. mark on their products are subject to controls and/or inspections by Public Control Authorities (PCAs), which may be territorial agencies or certification bodies.

However, the situation regarding verifiability is quite emblematic for these products, for although the logos are widely recognizable:

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There are no codes on the product or label to verify that the company follows the specification and is authorized to display the mark. Again, the consumer has no tool to verify information and concessions related to the trademark. In some cases there is the possibility of verifying the mark thanks to the great work carried out by the Istituto Poligrafico Zecca di Stato, which through the D.O. marks allows the consumer to verify that indeed the product and producer are entitled to the mark and follow the specification. However, the mark is not available on all products and especially products that do not have consistent numbers are penalized by making it difficult to access this type of service.

Considerations on the two examples

In summary, we have seen how it is amply described and documented how the two certifications are to be issued, yet the burden of verification is simply left to the inspection bodies. At a time when consumers need to verify information themselves and there is a need to automate checks in order to ensure sustainability-related business policies from an ESG perspective, it is crucial that the certifications can be verified without intermediation.

Benefits of Blockchain in agribusiness

As also covered within this blog, Blockchain precisely because it allows for notarization, i.e., ensuring the identity of the person who has declared a certain piece of information and the time stamp of the same, is repeatedly being integrated into traceability projects in the agri-food sector(you can learn more here). The goal of this article is to take a step beyond simple traceability and thus introduce the concept of NFTs in the agribusiness sector.

Starting from the definition again:

Non Fungible Tokens are a way to publicly prove ownership of a digital asset, of which always publicly all transfers can also be seen.

Trusty's ClaimNFT

In light of all the considerations made above, a Digital Claim / Mark / Stamp that protects the consumer and enables new services to be built, must be:

• Verifiable independently and universally;
• Interoperable with external services (including real-time mode);
• Be done following a standard certification or inspection pathway;
• Issued by the same body that issued the certification or is in charge of proceeding with inspections at the company;
• Assigned to the company to which the certificate/mark or stamp refers;
• Have the validity period in a public and unchanging manner;
• Being able to be suspended at any time by the certifying body;
• Ensure information on:
  - Type of Certification (e.g. EC Reg. 834/07 and 889/08 s.m. and i. ORGANIC PRODUCTION METHOD)
  - Company data (Name, Address, VAT number and company code)
  - Certified product data (only if it is a product certification);
  - Supporting document;

In light of these considerations, we introduce ClaimNFT, an extension of the ERC-721 Standard (the standard behind NFTs) with some modifications.

Specifically:

• The token must not be transferable;
• The token can only be issued by Certification Authority (at this time since there is no public registry that associates Accredia-accredited entities with a public key, the Authority will be the same one that will deploy the contract);
• Among the data handled there must also be the reference related to time validity;
• The status of the Claim ("ACTIVE", "REVOKED" and "SUSPENDED") must be publicly managed;
• It must be possible to receive real-time changes on the status of the Claim.

Below is a simplifying diagram of the operation of ClaimNFT:

The contact (smart-contract), the interfaces (dapp) and all the tools for testing ClaimNFT have been released by Trusty in an Open Source manner( Codehere ). What we will illustrate now is how ClaimNFT is viewed through a public network.

Operation of the Public Contract ClaimNFT

Below is the Smart Contract released on Polygon(also viewable at the following link):

As you can see on the contract a transaction was made:

The transaction represented in the screenshot sees the creation of an NFT token (called "CLAIM") with identifier 1, which is transferred to 0x9d...36 (representing the company receiving the certificate). The transaction is done by 0xf8..4f (representing the certificate authority).

Since the Claim is an NFT it is also possible to view it on the main Marketplaces(link on OpenSea), in particular the Metadata are also displayed where it is possible to see:

• The type of certification;
• Corporate information;
• The type of production;
• The date of first issue;
• The validity date;

The following screen displays all this information:

Also directly from the contract page (on the Blockchain Explorer) it is possible to read the status of the token:

Final considerations

In summary, what we have seen represents how a certification can be verified without intermediaries with the help of Blockchain technology and more specifically NFTs.

The ClaimNFT is a Smart Contract that allows any certification body to assign a certificate to a company, which once received can display it on its communications ensuring verifiability and demonstrating the process through which it was obtained.

Today, organizations around the world are pressuring companies for greater transparency and verifiability on the information that entitles them to use a claim. The ClaimNFT does not eliminate the role of Control or Certification Bodies, but it does increase the perceived value of companies having a standard method of demonstrating the verifiability of the information behind the use of a particular mark or claim. The ClaimNFT is issued following a certification and must be issued by the same Entity ensuring anyone verifying a piece of information.

If you are a company and would like to obtain a ClaimNFT for the certifications you hold, or if you are a certification body and would like to learn more about the service contact us here.

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