📋Market Opportunity and Solutions

In total, the global wine market holds about $1 trillion worth of wine at any given time, most of which is luxury or investment-grade.

Primary Opportunity: The Amount of Wine That Can Be Added and Traded On-Chain ($1 Trillion)

The global wine industry is massive, generating $485 billion in annual turnover. Within this market, luxury wines (priced at $30+ per bottle) account for $100 billion per year, while investment-grade wines contribute $10 billion annually.

But here's where it gets interesting: whereas annual turnover is the main driver for many industries, for luxury and investment-grade wines, what matters is the value of the entire asset class at any given time. Think of it this way, the total value is the key factor because it represents the amount of assets that need to be added on-chain, as a result of tokenizing bottles of wine.

To give you a better understanding of this specific segment of the wine industry, luxury wines are typically stored for 3 to 5 years before they're enjoyed. By multiplying the storage time by the annual turnover, this tells us that the size of the luxury wines asset class ranges between $300 and $500 billion. As for investment-grade wines, these are kept in storage from 5 to 30 years, with the average sitting at 15 years, which means their true value as an asset class is close to $150 billion. This brings the total value of both asset classes to $650 billion.

In total, the global wine market holds about $1 trillion worth of wine at any given time, most of which is luxury or investment-grade. These high-value wines represent a significant asset class, one that can be tokenized, traded, or even used as collateral. This perspective shows that the total value of these assets is just as crucial - if not more so - than the annual turnover, highlighting a major market opportunity in the wine industry. A market opportunity that $VIN and the dVIN protocol is strategically capitalizing on.

By adding this asset class on-chain, luxury and investment-grade wines become more accessible to Web2 and Web3 investors that seek to diversify their portfolios with alternative assets. As a result, the market for these wines becomes more liquid, facilitating easier transactions and enabling better price discovery, which further enhances market dynamics and value.

This first step not only enables winemakers to be exposed to on-chain liquidity, but also allows new consumers to access luxury and investment-grade wines.

Additionally, given that this innovation better helps to understand real-time scarcity, it makes secondary sales more transparent. It also creates the opportunity for winemakers to profit from those sales, which can be achieved by programming smart contracts and without the need of middlemen.

Unlocking more opportunities: solving problems that are costing $30 billion a year

As dVIN protocol continues its journey to reach critical mass adoption among winemakers and wine lovers, and as more bottles of wine are added on-chain, this gives rise to solving three major bottlenecks that are costing the industry $30 billion a year, as outlined below.

Consumption data and customer acquisition - the first $10B opportunity

Imagine a world where the winemaker knows exactly who is drinking their wine, how much is left, and who should be prioritized for future releases. A world where consumer loyalty is recognized and rewarded with guaranteed access to the next exclusive collection.

Through a “Digital Cork” attached to each bottle, consumers claim $VIN provided by the winemaker when they open each bottle. There is a simple mobile action the consumer does to “open” the Digital Cork, send relevant data to the winemaker and claim the $VIN. This in-app experience establishes a direct interaction between winemakers and consumers, eliminating the need for middlemen. The collective data gathered over time will bridge the knowledge gap, empowering winemakers to gain deeper insights into their target audience.

This ability for winemakers to directly purchase consumer data will allow them to understand demographics, have direct consumer feedback and other engagement metrics, which will be beneficial to improve product design and mix go-to-market strategies and enable winemakers to find their true fans.

Customer Acquisition Costs (CAC) in the wine industry average $400 for luxury brands, mostly because there is no effective way for wine brands to advertise. To acquire 25m new customers each year (barely replacement level for the 250m existing consumers), aggregated CAC would be $10B. With $VIN, winemakers pay a fraction of that cost (only and if the consumer claims their $VIN).

Supply Chain Efficiency and Provenance through DePIN - the 2nd $10B opportunity

Through the use of blockchain technology in association with Decentralized Physical Infrastructure Networks (DePIN) asset tracking and connectivity technology, it’s possible to increase supply chain efficiency and ensure provenance.

By tokenizing each bottle of wine, $VIN allows for a meticulous tracking system from grape to glass, ensuring the authenticity of each product. This tokenization disincentivizes counterfeiting and fraud, and preserves the brand equity of luxury winemakers. By using RFID and decentralized interrogators, bottles can be tracked, and proper shipping and storage conditions incentivized through the use of $VIN. This results in significant efficiencies in the supply chain, as well as the reduction in waste and fraud.

As a result, this model will benefit retailers, restaurants and even some consumers, who will pay a small fee to ensure authenticity and high quality wine.

Decentralized Finance (DeFi) as a way to increase operational efficiency - the 3rd $10B opportunity

The use of blockchain technology, particularly Solana, offers a proven solution for inefficient and expensive transactions, through the use of $VIN and stablecoins, mainly due its security, speed and low-cost transactions.

Secondly, once adoption of the protocol reaches critical mass among winemakers and wine lovers, it will be possible to financialize this asset class.

For context, let’s look at wines from the region of La Rioja, Spain. There are rules and regulations in place that determine the criteria to produce Rioja wines. For example, Gran Reserva Rioja (red wine) needs to be aged for at least five years, of which at least two years in oak barrels and at least two years in a bottle. Accordingly, there’s a period of time in which those assets (Rioja wines) cannot be bought or sold. This also means that, at any given time, producers have 5 vintages of Gran Reserva in stock which cannot be traded.

The opportunity lies in registering the value of those assets on-chain (the same way futures operate) so that producers can start using them as collateral for working capital and further increasing the operational efficiency of their business. Similarly, for accounting purposes, this opens the door to being able to register those assets for their real value. This is the top of the iceberg in terms of the benefits of financializing the wine industry.

The growth trajectory of DeFI in Solana, and the support dVIN is receiving for being part of the Giant Unified Market (GUM initiative) launched by Jupiter Exchange, more specifically under the Real-World Assets vertical, are key factors in making this possible

Furthermore, because of the atomization of the wine market, with 30,000 independent winemakers and ten million independent middlemen, more than twenty million inefficient international transactions each year bear a significant cost to the industry

Between counterparty risk, high bank fees, foreign exchange slippage and cross-border settlement delays, nearly $6.10 on each $50 bottle of wine goes to the banking system. In a $100B industry, that’s more than $12B in costs and fees that could be eliminated with on-chain transactions.

Share wine, earn $VIN

The dVIN solution includes, in addition to $VIN, two Non-Fungible Tokens, the Digital Cork NFT and the Tasting Token NFT.