ONDC’s Blockchained Avatar Might be E-commerce GameTransformer

By Dev Chandrasekhar

Early January, the Open Network for Digital Commerce (ONDC) made a quiet announcement that it is introducing the blockchain-powered solution which it has named Confidex. But lurking in those cryptic few 11 lines is the game-changing key that might unlock ONDC’s transformative potential.

By tackling the trust issues that have hampered ONDC’s initial growth. ONDC’s blockchain, if and when it goes full throttle, will take the value proposition of not only ONDC, but also of India’s digital public infrastructure. The consequences and implications will be global.

ONDC’s blockchain leverages CORD, the open-source framework that has been described as “a tokenless distributed ledger network designed for population scale” by its developer, Bengaluru-based Dhiway.

Imagine a giant, shared notebook that everyone can use, but no one can own or control. This notebook is super secure, and every time someone writes something new in it, everyone else gets a copy of the update–a “distributed ledger network.” Now, imagine this notebook doesn’t need any special coins or tokens to work. It’s free for everyone to use, and it’s “designed for population scale”—millions or even billions of people!  Which is why ONDC says that its blockchain promises to enhance transparency and accountability across the entire ONDC ecosystem.

The Open Network for Digital Commerce (ONDC) is a government-backed initiative to create an open and interoperable e-commerce ecosystem in India. This ambitious initiative was announced in April 2022 to upend India’s e-commerce by injecting an elixir of openness into the closed ecosystems dominated by giants like Amazon and Flipkart, and to democratize online commerce, empowering small businesses and consumers alike. It was positioned as a revolution, not just in e-commerce, but in the very fabric of the nation’s digital public infrastructure.

But, now well into its second year, ONDC has struggled to find its footing, grappling with skepticism and inertia from the very businesses it seeks to liberate.  Businesses, accustomed to the streamlined operations of established platforms, have hesitated to embrace the complexities of ONDC.

The unfamiliar landscape of open protocols has raised questions about data security and the reliability of transactions. ONDC’s unbundled architecture, while empowering, exposed businesses to perceived fears of price wars, data leaks, and lack of control over customer relationships.

ONDC’s decentralized nature has been perceived to mean a lack of control, leading to concerns about accountability: How would disputes be resolved? How practical would it be for businesses to navigate a myriad of buyer and seller apps?

The absence of a centralized rating system in ONDC has created concerns about trust and buyer confidence. How would buyers assess the quality and reliability of sellers in this open marketplace? And would ONDC’s security protocols be robust enough to combat fraud, data breaches, and cyber threats? Businesses worry about the reliability of buyer reviews and the potential for manipulation in a decentralized system. Established platforms, with their established reputation and robust grievance redressal mechanisms, offer a safer harbor.

Because of these concerns, echoing across businesses of all sizes, ONDC’s initial journey has been marred by skepticism and slow adoption—it has remained far from achieving the critical mass needed for a true revolution.

This quiet announcement, cloaked in a cryptic eleven-line statement, might just be the game-changer ONDC desperately needs.  Establishing trust without a central authority might no more be a wicked challenge for ONDC.

Here’s how:

Imagine a network-wide rating and scoring system for everyone – sellers, buyers, apps, logistics providers, even delivery agents. ONDC’s blockchain creates this immutable ledger, a single source of truth, fostering transparency and accountability across the entire ecosystem. Instead of opaque algorithms and blind leaps of faith, trust becomes woven into the very fabric of the platform.

Because the ONDC blockchain is built on the open-source CORD framework network, it empowers the community to be at the helm, shaping its development and governance. This not only ensures a secure and reliable platform but also fosters a sense of shared ownership and responsibility.

ONDC’s game-changing move might also lay the foundation for a multitude of trust-building mechanisms – loyalty programs, badges, certifications, the list goes on. Trust will not remain, therefore, just a mere metric, but will evolve into a dynamic ecosystem fostering growth and engagement.

The impact and implications of getting its blockchain going might extend far beyond ONDC and even India, as truly sovereign digital infrastructures that are for, by, and from their respective citizebns become a plausible reality. It could signal a paradigm shift in global digital commerce, paving the way for a more transparent, inclusive, and equitable global digital marketplace on digital public infrastructure.

(The author is Dev Chandrasekhar, and the views expressed in this article are his own)