Motivation Behind the Pilot

Dealer floorplan auditing (track-and-trace of vehicles at the dealership) is a critical activity for captive vehicle lenders (financial institutions, banks). Currently, this is a highly personnel-intensive process and requires individuals to physically go to the dealership to manually check each vehicle’s identification number (VIN), ensuring that all the vehicles are accounted for. Typically, lenders will leverage the services of a third party to carry out these audits.

Fundamentally, these auditors are providing a trust service. However, emerging technologies such as connected vehicles, embedded GPS, blockchain, and more combine to present a more seamless and efficient decentralized solution; one which preserves data privacy and enables trusted data sharing, thereby lowering the trust cost and the overall cost of vehicle ownership.

Modern vehicles have an array of sensors capable of producing large volumes of data about the vehicle’s condition, location, and more. These connected vehicles are able to easily share this data as necessary. Data privacy concerns prevent vehicle manufacturers, lenders, and dealers from sharing vehicle location data with each other. The Citopia vinTRAK pilot focuses on defining a blockchain-based automated process to securely verify vehicle location using self-sovereign identities and zero-knowledge proofs, thereby solving the trust and privacy problems of the floorplan audit process without manual verification. Dealer floorplan automation is the first (and foundational) privacy preserving vehicle-track-and-trace application of many such as road usage charge (RUC), tolling, and usage-based insurance.

The Innovation

Currently, lenders manually audit the vehicles in their floorplan. This manual audit is done by working with and audit provider, which send auditors to the dealership in person to physically verify the presence of the vehicles on the lot (or the existence of documentation accounting for the vehicle’s absence). Lenders are looking to the opportunity of utilizing connected vehicles to, instead, digitally audit their floorplan. By leveraging technologies that enable the vehicle to securely and verifiably communicate its geolocation, while preserving data privacy, Citopia vinTRAK seeks to enable lenders to transition to digital audits.

Citopia vinTRAK uses MOBI Standards, along with standards from W3C, ISO, IEEE, SAE. Citopia uses Zero Knowledge Proof cryptography to ensure that vehicle Self-Sovereign Digital Twins (SSDTs) can communicate and transact with other SSDTs in a seamless privacy-preserving manner.

Citopia vinTRAK leverages MOBI Trusted Trip™ Standard to link a vehicle’s self-sovereign identity with its time-stamped location and pertinent metadata into a verifiable trip, a W3C Verifiable Credential (VC). These trips, along with any transactions (VCs) made along the way, are executed on Citopia and stored in the vehicle’s SSDT. This enables connected vehicles on a dealer’s lot to create secure records of their geolocation and ensures that these attributes are digitally signed in the form of VCs, which any third party can easily verify.

The implementation of Zero Knowledge Proofs allows lenders to exchange verifiable claims of the presence or absence of vehicles on a dealer lot without revealing the geolocations themselves. Therefore, with Citopia vinTRAK, the entire dealer floorplan audit process can be automated while preserving data privacy.

The Integrated Trust Network (ITN) provides trusted decentralized identity services for stakeholders while Citopia facilitates the onboarding of SSDTs and issuance of VCs, together providing a decentralized, privacy-preserving framework for identifying and verifying vehicle identities and allowing for the creation of countless scalable V2X applications. The use of MOBI Web3 infrastructure, SSDTs, VCs, and DIDs prevent data correlation. Citopia and ITN are separated for decentralization, no one entity has all the information to put the pieces of the puzzle together.

What the Pilot Demonstrates, Progress, & Next Steps

The Finance, Securitization, and Smart Contracts Working Group has completed the entire user journey, user stories, sequence diagram, and screen wireframes. The screen designs are finalized, and development is ongoing for the pilot. A new program flow for carrying out a digital audit was also approved by the Working Group. Testing with members of the Working Group is expected to begin in mid-August 2022.

The FSSC Working Group is chaired by Orrick and RouteOne with the support from Accenture, Altaventure, Amazon Web Services (AWS), BMW Bank, CEVT, Connections Insights, CO-OP Financial Services, ConsenSys, D.E. Consulting, DENSO, Ford Credit, Global Debt Registry, GM Financial, Hitachi, Honda, IOTA, ITOCHU, On the Road Lending, Quant Network, Quantstamp, Reply, Southeast Toyota Finance, Spring Free EV, State Farm, Stellantis Financial Services, Tezos Foundation, Toyota Industries Corporation, and USAA.