An Enhanced CoD System Leveraging Blockchain, Smart Contracts, and NFTs: A New Approach for Trustless Transactions

Abstract

The global transportation of goods has evolved in response to varied economic demands. The rapid progression of modern scientific and technological innovations offers a shift from traditional shipping paradigms. Current systems, whether domestic like Cash-on-Delivery (CoD) or international such as Letterof-Credit, necessitate trust-building through an intermediary-be it a carrier or a financial institution. While these conventional systems provide certain benefits, they inherently present several challenges and potential vulnerabilities, affecting both sellers and buyers. The introduction of blockchain technology and smart contracts has been explored as a viable alternative to bypass these intermediaries. However, simply removing the shipping intermediary presents its own set of issues, particularly when disputes arise. Notably, the shipper remains unaffected in situations of contention. Consequently, some models are now incorporating the shipper's role, either as a singular entity or in collaboration with others. Yet, a considerable number of these models still depend on an external trusted party for conflict resolution. Our study introduces a unique framework, blending the robustness of blockchain, the enforceability of smart contracts, and the authenticity assurance of NFTs. This system creates a streamlined CoD operation encompassing the seller, shipper, and buyer, using NFTs to produce digital receipts, guaranteeing both proof-of-purchase and a security deposit. Furthermore, our system provides an inherent mechanism for dispute resolution. Key contributions of our work including i) The design of a novel CoD system anchored on blockchain and smart contract capabilities; ii) The incorporation of Ethereum-based NFT (specifically, ERC721) for securely logging package information; iii) The development of smart contracts that facilitate NFT generation and transfer between transactional entities; and iv) Performance evaluation and deployment of these contracts across multiple EVM-compatible platforms such as BNB Smartchain, Fantom, Celo, and Polygon, establishing the optimal environment for our innovative system.