Coffee goes onchain as Agridex settles first-ever transaction on Solana

Solana-based real-world asset (RWA) platform Agridex has facilitated its first onchain coffee trade, a move it said could open the door to more cost-effective agricultural commodity transactions.

The transaction was executed by Tiki Tonga Coffee, a United Kingdom-based coffee brand, which exported premium coffee from its home country to South Africa. The payment was made in South African rands and settled in British pounds using the Agridex blockchain.

Tiki Tonga claims the transaction only carried a 0.5% transaction fee, which is a fraction of the 5%–7% fee on typical cross-border transactions involving agricultural commodities. The settlement was also instant versus the typical five-to-12-day turnaround times using traditional systems.

“Not only have we saved significantly on transaction fees, but the cognitive burden of managing documentation and compliance has been lifted,” said Tiki Tonga founder Brad Barritt. 

In addition to coffee, the Agridex platform provides instant settlements on various agricultural commodities, including livestock, wine and olive oil. The company said it has $4.5 billion in pending transactions from agricultural partners. 

As Cointelegraph recently reported, the Solana-based marketplace raised $9 million in funding, with major backers from Citadel, Goldman Sachs and Palantir. 

Tokenizing agricultural trade: A trillion-dollar opportunity

Asset tokenization is considered one of the leading use cases of blockchain technology, and the agricultural industry could benefit the most.

The process of converting RWAs into digital tokens can potentially make assets more accessible to a wider audience while also reducing barriers to investments and helping companies transact in a more cost-effective way. 

RWA tokenization “bridges agriculture and blockchain by tokenizing assets like crops, land and carbon credits,” Jon Trask, CEO of agriculture technology company Dimitra, told Cointelegraph. 

Bringing agriculture onchain also addresses “key challenges such as inefficiencies, lack of technical assistance, environmental degradation and supply chain opacity,” said Trask. 

Blockchain platforms can also be used by farmers to sell their products directly to buyers without expensive intermediaries, said Agridex co-founder and CEO Henry Duckworth.

According to the Bureau of Economic Analysis, agriculture contributes roughly 5.5% to US gross domestic product. Meanwhile, the total value of US farmland has eclipsed $3 trillion.