Optimizing supply chain workflows, Microsoft, EY, and ConsenSys build new protocols for enterprises based on Ethereum.

ConsenSys and EY announced that they will collaborate to build a new protocol designed for enterprises – Baseline Protocol. The new protocol allows enterprises to synchronize data with collaborators or partners on the Ethereum blockchain without the need to disclose all business records publicly. The project has now received support from 12 other companies and organizations.

New Applications of Blockchain

In the past, enterprises typically viewed blockchain networks as a place to store the final state of transactions, also known as the settlement layer, which is currently the most common use case. However, this is not what the Baseline Protocol aims to do. The Baseline Protocol treats blockchain as middleware rather than a settlement layer, allowing data to be synchronized on the blockchain with collaborators using privacy protection technologies such as zero-knowledge proofs. John Wolpert, the head of ConsenSys' Enterprise Mainnet, stated:

“Many people think of blockchain as a place to record transactions. But what if we think of the mainnet as middleware? This approach leverages the mainnet's strengths while avoiding its weaknesses.”

Data Synchronization and Privacy Protection

To protect internal data, enterprises have spent billions of dollars on internal record-keeping systems (such as ERPs and CRMs), but this has made it difficult for enterprises to synchronize data with external vendors or third parties, leading to unnecessary disputes and costs. While blockchain offers a potential solution in this regard, the public and transparent nature of blockchain makes business secrets vulnerable to potential competitors, making public blockchains less attractive to enterprises.

This pain point prompted ConsenSys and EY to develop a new protocol - the Baseline Protocol, to achieve zero-knowledge collaboration between collaborators. The protocol utilizes messaging, digital signatures, zero-knowledge proofs, and other technologies to create a public reference framework for data synchronization between enterprises and external collaborating vendors.

At the same time, the development team stated that each step in the workflow is separate, and only those involved in certain parts of the workflow will not have access to information from other steps. For example, downstream vendors will not be able to access data from upstream vendors.

On the other hand, to ensure the neutrality and sustainable operation of the Baseline Protocol, the protocol will be built on the Ethereum mainnet, as it is always operational and never shuts down, and enterprises will not be locked in or restricted from use.

Specific Use Case in Procurement

The Baseline Protocol does not build a set of generic tools but chooses the procurement field as a specific use case for the protocol. Paul Brody, EY's Global Blockchain Leader, used bulk discounts to illustrate the use case of the protocol. Assuming that buyers or sellers are not independent entities but are composed of subsidiaries or business partners, when they want to authorize their master purchase agreements, they can use the Baseline Protocol to convert legal agreements into fully confidential digital smart contracts. Paul Brody said:

“If you're just a contractor working for me, then when you place an order, the smart contract on the chain will tell you the correct price, but it won't provide details about discounts on goods or other information. For example, detailed discount tables, past purchases, or who else is buying.”

These companies state that the ultimate goal of the Baseline Protocol is to open up to current enterprise system suppliers, solution companies, and cloud service providers to allow them to improve their products according to the protocol. The code will be donated to the public domain through the non-profit standard organization OASIS. Currently, about three-quarters of the work has been completed, and the project is transitioning from a tight-knit team consisting of only two companies to a larger development team, known as the Technical Steering Committee (TSC), whose members include Microsoft, AMD, ChainLink, Core Convergence, Duke University, Envision, MakerDAO, Neocava Splunk, UniBright, Provide, and W3BCLOUD, among others.

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