Introducing Fishare, a new way to manage fisheries. The core design is based on individual fishing quotas, a type of catch share system. A total allowable catch is set, which is divided into shares and distributed to fishermen. Each share represents the right to catch a portion of the total quota. Fishermen can acquire shares in the initial allocation or by acquiring shares from other fishermen, as shares are tradable.
The goal is to promote sustainable stewardship of fisheries by incentivizing individuals to protect the value of their stake in the fishery. Instead of a rivalrous race to fill the total quota before the season limit is reached, fishers can take time filling their quota, knowing that nobody can deprive them of their share. While the supply of quota shares remain fixed, the total allowable catch may change from season to season, meaning the allowable catch per share may also change. If the total allowable catch increases, perhaps due to healthier stocks, the quota per share will also increase, allowing fishermen to directly benefit from the increase in value. Catch shares have been in use for decades around the world and have shown success in reducing damage to fish stocks, fostering safer fishing conditions, and reducing overcapitalization.
Fishare is built on the Ethereum blockchain, a global computer network that allows for many novel innovations in fishery management. Today, separate databases are used for managing catch shares, fish sales, payments, and taxes. This separation leaves room for inefficiency, errors, and fraud. Fishare integrates these aspects into a decentralized virtual computer, eliminating the need for reconciling separate data silos.
Fishare features a market for catch shares including an order book, market orders, and limit orders.
In addition to the catch share market, Fishare features a fish market. When fishermen acquire catch shares from the initial allocation or built in market, they automatically receive title to the fish. The title is separate from the rights to catch the fish, allowing the fishermen to retain the rights to catch fish while transferring title to buyers. The title can can be transferred down the supply chain as the physical fish are sold from fisher, to processor, to retailer, to consumer. The deeds accompanying the fish could be one part of a digital passport, which contains other information specific to that fish, like when and where it was caught.
The fish market provides escrow contracts for use in sales, with arbitration and automatic tax collection. An escrow contract specifies the buyer, seller, quantity of fish, price, fraction of payment to be made up front, arbiter, and if tax is included. These contracts can be digitally signed and managed using the same Ethereum address which manages their catch shares, deeds, money, and other assets. Escrow contracts allow the buyer and seller to exchange payment for fish in an atomic transaction, without the need for a third party clearing house.
Escrow contracts can behave like limit orders. If the counter-party is left blank it signals that the contract is an open offer for anyone to sign. Users can fill a posted offer or post their own. Alternatively, the creator of the escrow contract can specify the counter-party’s identity (Ethereum address), in which case only that address can sign the contract.
The fish market features arbitration. An arbiter is chosen when the escrow contract is created. It could be a government agency, private arbiter, or even a judicial DAO. If either party disputes the contract, the arbiter can allocate the assets in escrow (payment and fish title) between the buyer and seller. It is up to the buyer and seller to communicate with the arbiter on how this allocation should be done. Arbitration is meant as a last resort for resolving disputes. The escrow contract can be cancelled and assets refunded if both parties un-sign.
The fish market offers automatic tax collection as an option. The tax is calculated automatically and added to the sale price, like sales tax. The payment is automatically split and the tax is sent directly to the tax collection address, which could be the government’s revenue account, or a DAO governed by the fishermen themselves. The tax collector can look up a transaction receipt in the blockchain, see the amount of fish sold, and verify the correct amount of tax was paid. Tax collectors would be able to see transactions even if tax was not included, allowing them to collect tax by their current methods.
An example transaction might look like this: A fisherman wants to sell some fish. He creates an escrow contract, specifying the amount, price, as well as other parameters. In signing, the legal title for the amount of fish to be sold is put into escrow. The offer is automatically listed in the market. A buyer sees the offer and signs it, putting payment into escrow. When the fish reach the buyer, the buyer inspects the fish and then finalizes escrow, which releases the payment to the seller and legal title to himself.
Fishare prevents ‘double selling’ of catch shares and fish, without a central title agency, in the same way that Bitcoin prevents double spending of money without a bank. Fishermen can collectively only acquire as many catch shares and fish deeds as was created when the software was deployed. A fisherman can only verifiably sell as much fish as he has title for. This same rule holds true all the way down the supply chain. Processors and retailers can only sell as much Fishare fish than they obtained from their suppliers.
Those in the middle of the fish supply chain, like processors, wholesalers, and retailers, benefit from receiving fish deeds from their suppliers, which they can offer their own customers. At the end of the supply chain, consumers might have less interest in receiving legal title to the fish they are going to eat. However, consumers can benefit from detailed digital receipts, containing verifiable claims about the fish, such as ‘certified sustainable’, where and when it was caught, and the complete chain of custody along its journey from bait to plate.
Fishare offers enhanced transparency, liquidity, interoperability, autonomy, and accountability. The Ethereum blockchain supports many useful tools, including digital signatures, digital payments, automated escrow, peer-to-peer markets, and self sovereign identity. Benefits extend across the entire fish economy, from regulators to consumers, from fishers to fish. Fishare is a proof of concept to inspire research into how we can create more sustainable, and valuable, fisheries.
Visit Fishare.net to claim your share!
Future research and development
Abstract away cryptographic keys and special wallets so that more user friendly forms of identity can be used.
Support use of other Ethereum tokens as payment methods. Stablecoins like DAI would be useful for escrow.
Hash legal prose into the code as an interface for current legal frameworks. For example, if a seller never delivers the fish to the buyer, the buyer has a legal contract written in english to show a judge. Protocols like Mattereum might be useful here.
Use cryptography like zero knowledge proofs to obfuscate sensitive data. Perhaps allow ‘view only’ access for some circumstances, like giving regulators access to audit transactions.
Enable market support for different products, like whole and filleted fish.
Risk pools where members can combine quota to cover catches as needed. Some data has shown lower bycatch ratios, lower harvest rates of rebuilding species, and higher target species harvest rates.[source]
Integrated peer-to-peer messaging.
Allow for seamless transitions between successive fishing seasons (Fishare is a solution for a single fishing season). A new Ethereum contract could be deployed every year with legacy catch share ownership, or the same contract could include upgradeability for specific parameters.