Winding Tree Whitepaper - Travel Distribution Market

Winding Tree Whitepaper - Travel Distribution Market

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Currency
Winding Tree
Symbol
LIF
A Practical Application of Blockchain for the Travel Industry
Winding Tree is a decentralized travel distribution network. It is built on top of Ethereum platform and owned by the community. The network connects buyers and sellers via a set of smart contracts and open-source tools in a non-rent-seeking manner without taking a transaction fee. At the same time, the participants of the Winding Tree platform are able to govern the platform collaboratively.

We are creating the next-generation decentralized travel platform on Ethereum, allowing for a true peer-to-peer economy to free up creativity and innovation in the travel industry.

Overview
Winding Tree offers a decentralized alternative to GDS and OTA distribution with a reduced cost of distribution and more packaging flexibility than traditional platforms. The following features aim to address current issues and enable an unprecedented surge of permissionless innovation in the travel industry.

The Winding Tree team has more than 40 accumulated years of architecture and programming experience in the travel space with leading incumbent travel intermediaries.

Winding Tree will not charge suppliers any distribution fees and will only charge a minuscule transaction fee to incentivize miners to give computational power to the network. These fees will be automatically calculated by the blockchain at the time of transaction and will have no correlation with total booking price or complexity.

Suppliers will have the option to set a default referral commission if they wish to do so. If a referral fee is set, any individual who refers a customer to the supplier will automatically receive the referral amount set by the hotel – if they voluntarily decide to set one. Hotels can also set up individual referral rates for different entities if they wish to do so. Winding Tree will be deployed on one (or several) of public blockchains, which guarantees 100% uptime. Winding Tree is a fully-automated solution, integrating directly with the reservation systems of travel suppliers. Transactions on our platform happen within a few seconds, determined simply by the time needed for the blockchain to mine a block.

One of our development goals is to build a state channel on top of a public blockchain, in order for participants of the network to make multiple thousands of transactions per second. Travel industry transactions require this level of speed.

Travel is also all about bundling. Whenever you book a trip, it’s not just a flight or a hotel room, but often a combination of multiple different segments.

Bundling is extremely simple with Winding Tree. Whether you have a pre-existing relationship with a provider of a service that complements yours, or would like to establish one, our platform will help you do so simply given that the provider also uses Winding Tree.

Participants in the ecosystem can see how their partners perform over time and how reduced distribution costs affect their financial bottom line and relationship with travel partners.

Winding Tree’s code is open-source and completely transparent for anyone to study and propose changes. It's the first open-source project in the travel space and the first truly decentralized blockchain solution.

The platform, more importantly, will be owned by the community itself. Participants in the marketplace will be able to create and vote on proposals to change the marketplace code, using governance tools we’re currently building for the platform.

All travel firms will soon have to become software companies in order to adapt to rapid change in the industry’s technological landscape. Both suppliers and sellers of travel have to embrace this new reality driven by technology; this is why our platform is built by engineers for engineers. Labor cost is the top expense on the P&L of any software company and working with legacy systems slows down software development tremendously.

Security of the data transacted on our marketplace is our top-priority. We use public-key cryptography to ensure that no one but the parties immediately involved in a transaction can see its details.

One of the most important aspects of Winding Tree is that it is a public decentralized computing platform with the open consensus model, as opposed to the consortium model or complete centralization. We are convinced that only permissionless architecture, where anyone can freely participate in the network, will solve the problems described above.

The consortium consensus model will inevitably lead to censorship where its members will decide who can or can’t access the platform, and the mere need for that process will drastically slow the advance of such platforms. Some of the companies in a union like this will be able to adopt new technologies faster than others. At the same time, however, they will have to use the same standard, leading to the whole consortium moving only as fast as its slowest member.

Winding Tree facilitates travel distribution in all of its different aspects by making it cheaper, faster, more enjoyable for consumers, and easier for new business models to emerge in the travel industry.

Some current business practices and models will have to be removed or drastically changed, while some new concepts will finally be given a fertile ground for their growth, in order to achieve this goal.

Winding Tree, fundamentally, enables the conditions for the perfect competition of travel suppliers and provide perfect information to buyers. This will impact current market players and create new businesses built on top of the Winding Tree platform.

Today, booking an international flight involves a multi-currency transaction which can span a handful of countries for a simple flight. When booking a flight from New York to Barcelona through Reykjavik, a traveler will pay the ticket price in USD, while part of the ticket price will then be exchanged to Icelandic krona and other parts into Euro. The total ticket price also includes airport security charges, bag security charges, government taxes, embarkation tax, passenger service charge, and more. A single booking can involve more than five currency trades for a simple flight if third-party insurance or a car rental is added to a booking at checkout.

Winding Tree solves this problem by using blockchain technology to remove extensive currency conversion from the travel booking process.

How Blockchain Enables Winding Tree
Blockchains are designed to cut out the middlemen. Bitcoin, for example, is a financial system without one central authority, such as a bank or a government, and Winding Tree applies a similar logic to the travel industry using the universal smart contract platform that Ethereum has provided to decentralize the world economy.

It is important to note that only open, permissionless blockchains can reduce inequalities and change the balance of power because private or consortium-governed blockchains8 , by definition, are not able to provide the same level of trust and security.

Under today’s architecture, the travel industry bears a very high cost of verification. A traveler’s information often passes through many hands from the website it is booked, to the airlines, the payment merchants, airports, governments, border control agencies, and others. Not only is it costly to do so under a centralized system, but it also exposes the sensitive data to data leaks. Blockchain, instead, allows for costless verification.

How Winding Tree Enables Innovation
Winding Tree is a set of smart contracts on Ethereum with a decentralized autonomous organization (DAO) governance platform that allows for the holders of Líf tokens to participate in the development of those contracts.

Winding Tree connects suppliers (hotels, airlines, etc.) and sellers (travel agencies) to a single marketplace. Suppliers will put availability and price information into the database, where it is easily discoverable by sellers. Sellers then have the ability to buy that inventory and pay for it instantly. All these interactions are designed to be performed automatically, without human intervention.

The Winding Tree platform is built by engineers for engineers. It’s not our goal to build user-facing interfaces for the marketplace. We encourage the creation of those interfaces by third-party developers in order to increase competition and the quality of these products.

We also envision existing software products, like property management systems and travel agent interfaces, connecting to Winding Tree. Winding Tree faces a few exciting challenges that can be divided into two categories: technical and commercial.

In terms of technology, blockchains are still not capable of supporting the load that the entire travel industry requires. The Bitcoin blockchain can handle a maximum of seven transactions per second, while Ethereum can handle between 10 and 20 per second. The good news is that many people are working on scaling public blockchains and these improvements are well underway, like Lightning Network (Bitcoin) and Raiden (Ethereum).

Another issue that many bring up is the security of Winding Tree transactions. Security is our most important focus. All transactions will be encrypted so only the parties that are immediately involved in a transaction will be able to see its details.

One of the factors will be educating people and organizations in the travel industry about the possibilities of the Winding Tree platform as part of the decentralized cryptoeconomy.

Conclusion
The travel industry is in dire needs of innovation and decentralization due to a variety of factors including anti- consumer behavior by corporations, outdated infrastructure, and the business practices of influential travel companies which have little incentive to change the status quo.

Using blockchain technology, Winding Tree offers travel stakeholders a way to distribute their products with perfect competition and reduced costs. This new marketplace will inevitably provide consumers with more choice and travel companies with the opportunity to sell products outside of outdated, yet deeply entrenched, distribution platforms.

Owned and governed by its own community instead of rent-seeking gatekeepers, Winding Tree represents a more egalitarian and progressive way forward for the global travel industry. Join us on our journey to redefine the travel distribution landscape.