Q U O RU M , C O D EFI , A N D D I L I G EN C E C A SE ST U DY

Covantis Case Study:

Modernizing Global
Supply Chains with
ConsenSys Blockchain
Solutions

by ConsenSys

Covantis Case Study April 20 21

1
Key Highlight s

- Int er nat ional t rade operat ions have not seen - Blockchain solut ions from ConsenSys
major t echnological innovat ion since t he mass product s Quor um, Codefi, and Diligence
adopt ion of email 30 years ago. Meanwhile, enable Covant is t o creat e a global net work
global supply chain management has become for efficient execut ion of bulk agricult ural
increasingly challenging wit h t he need t o t rack t rade operat ions? including not ice issuance
more par t ners, suppliers and end- point s; And and visualizat ion, user product ivit y management
post t rade execut ion remains highly complex, and in t he near fut ure, document ar y inst ruct ions
wit h repet it ive, manual, cost ly, and and document management .
t ime- consuming operat ions.
- The Covant is blockchain plat for m will
- The Covant is init iat ive was joint ly founded allow indust r y par t icipant s t o collaborat e
by ADM, Bunge, Cargill, COFCO, Louis Dreyfus and seamlessly exchange document s and
Company and Vit erra. It s plat form is focused informat ion. The t echnology will work t oward
on digit izing global t rade processes t o make achieving t he following efficiency gains in t he
t hem more simple, secure, and efficient . It s fut ure, as est imat ed by Covant is:
goal is t o minimize operat ing risks while
- 60% of execut ion t asks aut omat ed
increasing market efficiency for t he
agricult ural t rading and shipping indust r y, - 70% increase in t ransact ion speed

by working t owards t he following: - 90% reduct ion in rekeyed ent r ies

- Reducing paper based processes and - 80% decrease in error rat es and
t he amount of email exchanged bet ween inconsist encies
mult iple par t ies

- Providing a t rust ed single source of

informat ion t o securely share document s
and coordinat e high seas logist ics from
por t t o por t

- Giving mult iple par t ies t he abilit y t o share

real- t ime t ransact ion dat a

Covantis Case Study 2

B U SI N ESS C H A L L EN G E

A global t rade syst em reliant on paper-based processes

and manual operat ions
Over t he last decade, global t rade leaders have at t empt ed t o drive st andardizat ion and
simplificat ion across t he agricult ural commodit y t rading indust r y wit h t he use of e- BLs and
elect ronic document s, wit h limit ed success. Today, indust r y processes remain complex and
inefficient due t o:

- M anual pr ocesses: Post - t rade processes for bulk shipment s remain labor int ensive and
manual wit h paper work couriered around, and oft en repeat edly re- ent ered? increasing
bot h operat ing cost s and risks of human error.

- Reli ance on emai l: More t han 275 million emails are exchanged annually t o process t he
est imat ed 11,000 worldwide shipment s of grain t ranspor t ed across t he oceans (Source:
The IPPC ePhyt o Solut ion, The Food and Agricult ural Organizat ion of t he Unit ed Nat ions).

- Ineff i ci ent dat a exchange: Paper- based cer t ificat es and bills of lading are not easily
exchanged among mult iple par t ies. It is cost ly t o replace paper- based cer t ificat es if
t hey are misplaced.

Specifically in t he cont ext of COVID- 19, agricult ural commodit y supply chains have been
disr upt ed by int errupt ions t o paper document deliveries, and t he increasing necessit y t o
work from home. The global pandemic has accelerat ed t he impor t ance of t he indust r y?s digit al
t ransformat ion, necessit at ing an easier way t o elect ronically exchange document s and dat a.

The Covant is init iat ive was creat ed t o facilit at e post - t rade execut ion: t he movement of
cargo from por t of origin t o por t of dest inat ion aft er buyers and sellers have agreed on
cont ract t er ms. The solut ion aims t o simplify coordinat ion bet ween st akeholder s and various
count erpar t s across t he processes of invent or y ownership ident ificat ion, goods char t ering
from or igin t o dest inat ion, impor t regulat ion compliance, final collect ion, and ever yt hing
in bet ween.

In order t o overcome barriers t o indust r y- wide adopt ion, t he founders of Covant is recognized
t he need for (1) adopt ion of emerging t echnologies, (2) collaborat ion wit h key st akeholder s,
and (3) t he creat ion of a solut ion- focused ent it y t o drive t he init iat ive for ward.

Covant is marks a first - of- it s- kind collaborat ion bet ween 6 of t he indust r y?s largest
agr icult ural t raders working t o build a solut ion for t he ent ire indust r y. Toget her, t hey
aimed t o simplify global t rade by providing a secure, efficient , and collaborat ive environment
in which all st akeholders could seamlessly int eract .

Covantis Case Study 3

 ?Two years ago, we set out on a journey t o t ransfor m a syst em of global t rade
t hat had changed ver y lit t le for t he last cent ur y. It ?s been an excit ing process,
as we advanced from ident ifying t his cr ucial need, t o working wit h indust r y
par t icipant s across t he supply chain t o explore and under st and t he needs of
t he market , t o building a secure and t r ust ed digit al net work? We look for ward
t o working wit h our par t ners t o use t his t echnology t o enhance efficiencies
and reduce operat ional r isk.?
Petya Sechanova, CEO of Covantis

B L O C KC H A I N SO L U T I O N

An innovat ive blockchain t echnology plat form t o

modernize global t rade operat ions w it h great er
ef f iciency, t ransparency, and t raceabilit y
In par t nership wit h ConsenSys, Covant is sought t o develop t he digit al foundat ions t hat
would improve workf lows and preser ve document at ion int egrit y and dat a qualit y along
t he value chain.

Bui ldi ng t he Covant i s Blockchai n St ack

Covant is chose t o build it s plat form using blockchain t echnology in order t o enable great er
t ransparency, immut abilit y, and audit abilit y across all t ransact ions? securing informat ion
exchange bet ween mult iple par t ies.

Aft er considering several business blockchain opt ions, Covant is opt ed t o build wit h
t he Ent erprise Et hereum open- source prot ocol, Quor um, for t he following reasons:

- Advanced privacy and permissioning capabilit ies

- High- performance and scalabilit y for large workloads
- Size and diver sit y of t he Et hereum developer and ent erprise communit ies
- Est ablished governance st andards t o promot e ent erprise adopt ion
(Ent er prise Et hereum Alliance)
- Cost - effect iveness compared t o ot her vendors
- Open- source framework t hat prevent ed vendor lock- in

On t op of Quorum, Covant is chose t o ut ilize Codefi Orchest rat e t o manage t he complexit ies
of blockchain t ransact ion management . Yuriy Obriza, Covant is?Head of Deliver y, applauded
t he f lexibilit y and int eroperabilit y enabled by Codefi Orchest rat e.

In addit ion t o Quorum and Codefi Orchest rat e, Covant is ut ilized Codefi Workf low, t o facilit at e
document sharing across par t icipant s t hrough chat/ messaging funct ionalit y, and ConsenSys
Diligence, t o audit and secure it s smar t cont ract code.

Covantis Case Study 4

 ?ConsenSys is at t he forefront of t he ent er pr ise blockchain
ecosyst em, building product s t hat facilit at e inst it ut ional
adopt ion. ConsenSys does t his by enabling fast er, easier, and
more scalable blockchain int egrat ion.?
Yuriy Obriza, Head of Delivery at Covantis

M oder ni zi ng Global Tr ade Wor kf lows Key Plat for m Benef it s

Indust r y Pain Point s - A common t rust ed plat form facilit at ing

t he following t ransformat ions:
- Inefficient manual processes and repet it ive
- Digit ized document s and aut omat ed
paper- based document s necessit at e heavy dat a
reconciliat ion, int ensive audit s, long processing business processes

t imes, and high operat ing cost s - Improved securit y and reliabilit y of
document s and dat a
- A lack of common st andards and disjoint ed
coordinat ion bet ween mult iple st akeholders - Reduced need for manual dat a re- ent r y
result s in slow clearance of goods and review

- Lack of t ransparency and limit ed visibilit y over - Secure and seamless informat ion exchange
t racking of goods and set t lement of t rades among plat form part icipant s
reinforces count er part y risks
- Real t ime visibilit y of informat ion among
plat form part icipant s

- Secure and audit able t ransact ions

- Great er visibilit y across supply- chain movement s

underpinning t ransact ions, leading t o reduced
cost s and operat ional risks associat ed wit h
shipping, st orage and wait t imes

- St andardized dat a t o drive furt her efficiencies,

reducing manual errors, and risks of fraud or
dat a manipulat ion

- Increased supply chain efficiency, t ransparency,

and t raceabilit y, enabling t he indust r y t o bet t er
serve it s cust omers and consumers.

Covantis Case Study 5

M oder ni zi ng Global Tr ade Wor kf lows

Diagram 1: Typical global t rade and shipping workf low

Diagram 2: Indust r y t ransformat ion wit h t he Covant is plat form

BEFORE

A FTER

Covantis Case Study 6

Diagram 3: Covant is is focused on six int ernat ional t rade processes

Covantis Case Study 7

 ?We hope t o advance t he indust r y by encouraging collaborat ive,
indust r y- wide par t icipat ion. We are working wit h a mult it ude of
st akeholder s t o ensure Covant is increases compet it iveness, speed
of dat a and infor mat ion exchange, and reduces operat ional r isks.?
Petya Sechanova, CEO of Covantis

Key Plat for m Feat ur es

- Company r egi st r y: Cust omer regist r y and onboarding

- Ext er nal vessel r egi st r y: Connect ion t o ext er nal vessel dat abases
- Not i f i cat i on and t ask management : Transact ion not ificat ions and t ask progress t racking
- User and r ole management : Cust omer ident it y and role per missioning managed by
Covant is based on cont ext ual supply chain/ voyage roles
- M essagi ng t ool: Cont ext ual chat feat ure connect ing cust omers wit h ot her par t icipat ing
legal ent it ies in real- t ime.
- Document management : Document download, upload, and t ransmission t o par t icipat ing
legal ent it ies.
- Voyage management : A voyage dashboard summarizes all pending act ions and present s a
visualizat ion of cont ract execut ion progress. Users can input voyage det ails and manage
nominat ions including creat ion, for warding, wit hdrawal, subst it ut ions, and amendment s.

User Per mi ssi ons and Dat a Conf i dent i ali t y

While providing increased visibilit y on t he t rade execut ion process, t he plat form is built on
indust r y best pract ices. Each Covant is user is only ext ended per missions relat ed t o t heir role.
The plat form leverages st andard and reliable encr ypt ion algor it hms t o ensure t he
confident ialit y of t ransact ional dat a as well as t he non- repudiat ion of messages and
nominat ions. Each cust omer uses a pair of cr ypt ographic keys t hat unequivocally ident ifies
t hem and ever y act ion t hat is performed in t he syst em.

Encour agi ng Indust r y Adopt i on

Covant is aimed t o build a t ransformat ive solut ion for t he ent ire t rading and shipping indust r y
wit h agricult ure commodit ies as a st ar t ing point . To do so, Covant is has onboarded hundreds
of users from over 45 legal ent it ies. Covant is will work t o enlarge it s net work of par t icipat ing
companies and onboard more indust r y players.

Technology Par t ner s

Working t oget her wit h ConsenSys, Microsoft Azure provided it s market - leading cloud
solut ion, compliant wit h t he most demanding securit y st andards, and Cognizant cont ribut ed
it s human- cent r ic design approach t o t he Covant is plat form.

Covantis Case Study 8

RESU LTS

An orchest rat ed global t rade ecosyst em w it h

st reamlined post -t rade execut ion processes
The Covant is plat form went live in Februar y 2021, int roducing new levels of ecosyst em
collaborat ion and facilit at ing more efficient exchange of document s and informat ion across
t he global t rade indust r y.

As of 10 May 2021, aft er almost t hree mont hs of product ion, t he plat for m has achieved
t he following result s:

- St reamlined collaborat ion bet ween 45 legal ent it ies and 500 user s across 16 agri- groups
around t he world 185 voyages creat ed

- 343 voyages creat ed

- 3,850+ messages exchanged

- Increase in ?st ring processing speed?, enabling mult iple par t ies t o collaborat e in
a t ypical message st ring

- 528 nominat ions sent t o carr y cargo in specific per iod

- ~35 million t ons of cargo volume execut ed bet ween all t he par t ies in t he ?st ring?
(buyers, shippers, sellers) result ing in an overall decrease in cost per voyage due t o:

- Decreased count erpar t y risks

- Enhanced t racking of voyage complet ion st at us across par t icipant s

- Increased product ivit y wit h improved communicat ions

- 99.6% plat form availabilit y, which means t he plat for m meet s ent erprise- level
requirement s and is available t o cust omers and user s working across all t ime zones

Covantis Case Study 9

The t echnology will work t oward achieving t he following efficiency gains in t he fut ure.

Diagram 4: Est imat ed indust r y efficiency gains wit h Covant is

The progress so far demonst rat es t hat t he plat form is successfully connect ing
players responsible for moving commodit ies across t he world, and players who have
commodit y cargo at por t s of origin, await ing expor t . In t his early st age, t he plat for m
has successfully begun t o replace communicat ions t hat would t radit ionally occur
over email.

Covantis Case Study 10

N EX T ST EPS

The f ut ure of agribusiness: Building supply chain

consor t iums t o execut e bulk commodit y t rade operat ions
The Covant is plat form?s init ial scope covered t he shipment and execut ion of bulk commodit ies
such as corn and soybeans from Brazil t o any worldwide dest inat ion, opt imizing expor t t rade
execut ion processes by connect ing shippers, t raders and char t erer s.

Next on t he roadmap will be t o encourage fur t her adopt ion of t he plat form so t hat more
communicat ions t hat current ly occur over phone calls and email, can be digit ized, t racked,
and incorporat ed int o plat form workf lows.

Covant is will cont inue working wit h ConsenSys t o digit ize t he ent ire execut ion process
for int ernat ional agricult ural bulk commodit ies? from appoint ment of t hird- par t y providers,
sharing of document ar y inst ruct ions, and generat ing draft s and final document s.

Refer ences
Covant is
Food & Agricult ure Organizat ion of t he Unit ed Nat ions

Covantis Case Study 11