Modern food supply and value chains operate under high systemic uncertainty caused by complex logistical architectures, cross-border transactions, strict regulatory requirements, and the need for complete quality control. These challenges are exacerbated by issues of informational asymmetry, data fragmentation, and substantial transaction costs arising from interactions among heterogeneous market participants.
The project TRUSTFOOD – Advanced Digital Skills on Blockchain for Trusted Food Supply Chains, implemented within the Digital Europe initiative, with 482.solutions as a participant, is designed to introduce digital solutions utilizing blockchain as a foundational technological infrastructure for establishing transparent, sustainable, and highly efficient food supply and value chains. This project integrates leading educational and technological organizations from Greece, Cyprus, the Netherlands, Luxembourg, Italy, Romania, Ukraine, Croatia, Slovenia, and Lithuania. Notable members include the University of Nicosia, the largest university in Cyprus and Southern Europe, Wageningen University & Research, a renowned university and research center in the Netherlands, and INSME (International Network for SMEs), among others. The project provides a pan-European e-learning platform focused on blockchain, offering specialized courses and methodological guidance for business owners, managers, and professionals to develop digital and blockchain competencies in supply chain management.
The objective of this article is to explore mechanisms for optimizing transaction costs through blockchain and develop a conceptual model of digital platforms that enhance connectivity and productivity in food value chains. Special emphasis is placed on the interpretation of Ronald Coase’s theoretical framework, Nobel laureate in economics, in terms of its applicability to digital institutional (market) structures.
This article will be particularly useful for SME owners in the Agri-Food sector, as well as systems engineers specializing in the development of digital solutions, platforms, and management systems for food supply and value chains.
The issues discussed in this article are covered in the training courses available on the TRUST-FOOD e-learning platform, particularly:
- Introduction to Blockchain in the Food Supply Chain: Building Trust and Ensuring Safety
- ESG and SDGs in Food Supply Chain using Blockchain Technology
- Blockchain Platforms for the Food-Supply Chain
Theoretical foundation of the research
The transaction cost economics theory represents a key methodological tool for analyzing digital transformations in the food sector. The conceptual principles formulated by Ronald Coase in “The Nature of the Firm” (1937) and “The Problem of Social Cost” (1960) allow for the identification and classification of transaction costs into two primary categories:
- Market transaction costs – costs associated with searching for counterparties, specifying contract terms, monitoring, and enforcing agreements.
- Intra-firm management costs – coordination costs incurred during internal resource allocation and governance.
A critical concept in this analysis is Coase’s theory of reducing external (market transaction) costs by transforming them into internal (managerial) costs within firms, leading to structural shifts in firms, industries, and markets. In the context of digital platforms, blockchain technology can transform the institutional architecture of the food sector, significantly minimizing transaction costs while enhancing connectivity across value chains.
Blockchain as a technological foundation for digital platforms
Blockchain is a decentralized distributed system that ensures a well-defined property rights structure, immutability of records, automation of contractual obligations, and elimination of information asymmetry. Its application in the agri-food sector establishes the basis for the formation of new institutions of digital trust.
Key properties of blockchain:
- Transparency – immutability of data accessible to all participants.
- Algorithmic trust – cryptographic protection of transactions and consensus mechanisms.
- Invariance of institutional norms – elimination of risks associated with contract manipulation.
Industrial applications of Blockchain in Food Supply Chains
- Digital Traceability – real-time tracking of product origin from producer to consumer.
- Asset Tokenization – digital representation of ownership rights over products, assets, and logistics operations.
- Capitalization – resource and asset management aimed at creating shared sustainable value.
Some key mechanisms for enhancing agri-food system productivity include:
- Reduction of transaction costs (Coase’s model) – reengineering verification and contract execution procedures and transforming them into digital platforms.
- Unlocking assets – incorporating previously inaccessible resources and assets into economic circulation.
- Scalability of platform solutions – integrating supply chain participants into a unified digital ecosystem.
Techno-economic platforms as a new institutional model
A techno-economic platform is a digital infrastructure system that integrates data governance mechanisms, contracts, and assets through distributed and blockchain technologies.
Programmed institutional resource management includes:
- Smart contracts – automated commitments with verifiable execution.
- Decentralized identifiers – mechanisms for digital identity and authentication.
- Asset tokenization – digital assets as instruments for supply chain governance.
One example of such a system is the ESG Cluster Hub, a platform and Data Space built on blockchain technology Electrodo, providing ESG data management and sustainable asset governance for industrial enterprises, parks, and clusters. In its initial phase, a pilot project Blockchain4ESG was implemented within the i4Trust program, developing the ESG.Electrodo application for ESG data management and reporting. This initiative facilitates the transition of industrial enterprises in the Agri-Food Industry (Ukraine and Spain) toward a low-carbon, sustainable economy using i4Trust (FIWARE and iShare) and Blockchain technologies.
The ESG Cluster Hub represents a scaled-up version of the initial pilot project and was recognized as a best regional practice within the AccelerateGDT (Interreg Europe) program, a key EU instrument supporting regional development and economic cohesion.
Conclusions and future research directions
The integration of blockchain in agri-food supply chains enables nonlinear reductions in transaction costs, enhances institutional connectivity and transparency, and lays the foundation for transforming industry standards.
Our future research directions include:
- Development of decentralized governance models for food ecosystems.
- Creation of new regulatory standards for digital contracts and transactional platforms in the food sector.
- Integration of IIoT, Digital Twin, and AI into blockchain platforms for autonomous value chain management.
The formation of new institutions for digital interaction opens prospects for restructuring global food markets, establishing new levels of economic coordination and food security.
About 482.solutions.
Established in 2013, 482.solutions is a Singapore-based international company with headquarter in Ukraine, specializing in the development of industrial blockchain-based solutions for the Green Energy, Green Fintech, and Sustainable Value Chain sectors. Leveraging blockchain technologies, we create industry-focused digital platforms for Transactive Energy, Voluntary Carbon, and Green Finance markets. Our solutions enhance traceability and transparency in ESG data management and sustainable digital asset management. Electrodo is a flagship product of 482.solutions.
Electrodo a Web3 platform for ESG data and asset management, helping industrial SMEs, clusters, and investors create sustainable value and improve the efficiency of sustainable capital allocation. Electrodo solves the problem of ESG data availability, completeness, integrity, and reliability for climate-related risk assessment and management, as well as contributes to the industrial resilience and sustainability. Electrodo has gained recognition from EUREKA, Sustainable Energy Association of Singapore (SEAS), Microsoft Innovation Center for Sustainability Solutions (MICSS) Singapore, i4Trust, Hyperledger, Polkadot foundation, Solana foundation.