Unicorn 5ire bets on proof-of-benefit for platform adoption

Blockchain unicorn 5ire, which achieved $1.5 billion valuation on 15 July with a $100 million fundraise, plans to use the fresh capital to hire retired government officials and former C-level executives of Fortune 500 companies, among other tasks.

The company will allocate the funds into four buckets including research and to strengthen its technology infrastructure, chief executive Pratik Gauri said in an interview.

The unicorn currently has about 65 developers in-house, besides 50-60 consultants under chief technology officer, Dhanraj Dadhich, based in Mohali, he said.

“We’re going to add more people in our technology teams,” said Gauri.

By hiring C-level executives and retired government officials, 5ire aims to make deeper forays into corporations and governments. It has a total of 10 stakeholders currently, including government agencies and corporations, who are testing its upcoming 5ireChain blockchain. This includes consumer electronics firm Intex, men’s personal care firm Vi-John, Muzaffarnagar police in Uttar Pradesh and the Nebraska police in the US.

“About 10 stakeholders are already testing the product and we plan to go from 10 to 100 large stakeholders apart from developer adoption,” Gauri said. “They (the early stakeholders) are mostly going to be validators, but they’re testing multiple use-cases. With Eagle Hunters (a manpower services company), we’re testing an employee records use-case, where all of their 120,000 employees will go on the blockchain. Once we test with them, we want to go directly to the railway ministry, for instance,” he said.

5ire mainnet, the blockchain network that is part of the company’s core product offering, is set for launch in November. The company has built on top of the Proof-of-Stake (PoS) consensus mechanism used by platforms such Solana, Cardano, and Ethereum, it said. The company plans to provide this to stakeholders for decentralized storage, healthcare, telecom networks and more.

Its key offering is a new “proof-of-benefit” mechanism that it has built on top of the PoS system, it said.

PoS is a comparatively new consensus mechanism used to validate entries into distributed blockchain-based databases. The older proof-of-work system invited all miners on a network to validate a transaction and rewarded the one who was the fastest. In PoS, miners are invited to stake their own tokens on the network and only the top stakers are allowed to validate a transaction, thus reducing the overall computing power needed to validate each transaction.

A variation of PoS is called nominated proof-of-stake (NPoS), which is used by networks such as Polkadot. This adds a set of nominators to the network who select the validators.

According to 5ire, its new proof-of-benefit system is stacked on top of the traditional NPoS mechanism.

To become a validator on its network, the company’s algorithms take into account a variety of data to determine their “sustainability score”. “If you have money, I’m going to definitely give you points, but I’m also going to give you points if you’re sustainable,” Gauri said.

The company said its algorithms create a weighted average score based on a corporate governance records, along with data points from the Global Database of Events, Language, and Tone (GDELT) project, and the sustainable development goals of the United Nations.

The company plans to allow others to access the sustainability score through software development kits.

To be sure, 5ire isn’t the only sustainability-focused blockchain platform globally. Platforms such as SolarCoin and Powerledger also incentivize sustainability initiatives. Cardano and Solana and many others, on the other hand, are based on the energy-efficient PoS system. 

In October last year, 5ire received a $100 million capital commitment from investment group Global Emerging Markets (GEM), which the company is only allowed to draw if it goes public. Gauri said that 5ire doesn't have plans to IPO at the moment.