Web3 Startup Disrupts Tariff Wars

Tracking Tariffs with Blockchain: Watr's New Platform

In response to President Donald Trump’s recently implemented tariffs – proclaimed as “Liberation Day” – a web3 startup, Watr, proposes a system for automated tariff tracking on goods entering and exiting the United States. While ambitious, this claim is characteristic of the web3 space.

Watr’s platform is currently utilized by significant mining companies and automotive manufacturers for commodity validation, suggesting a foundation beyond mere speculation.

Leadership and Investment

The company is led by Maryam Ayati, formerly of Shell, BP, and JP Morgan, where she oversaw global origination and investment at Shell Trading. Her expertise lends credibility to Watr’s objectives.

Watr has secured funding from a syndicate of currently unnamed crypto VCs and commodity executives, reportedly totaling several million dollars, alongside commitments from major commodities firms.

Data Integration and Pre-Transaction Checks

Ayati explained that the platform will integrate machine-sourced data from satellites, sensors, and publicly available repositories to verify commodity origins. This includes tracking potential diversions during transport, such as transfers between ships at sea.

A key feature is the ability to pre-check commodities for applicable tariffs before a transaction is finalized.

Addressing Trade Discrepancies

Watr aims to address concerns raised by some governments regarding Western commodity traders misreporting destinations to avoid paying the correct tariffs. This practice allegedly allows traders to increase profits by circumventing proper commodity owner compensation.

The system will instantly verify tariff obligations, even before funds are exchanged, ensuring compliance.

Potential Impact on Global Trade

This innovation could potentially accelerate global trade, mitigating slowdowns caused by tariffs. Given the $20 trillion value of the global commodities industry, the potential impact is substantial.

Blockchain-Based Commodity Tracking

Watr’s platform employs blockchain technology, utilizing decentralized IDs for institutions and digital fingerprints for raw materials to track commodities.

The company’s objective is to modernize the core infrastructure of the global economy, focusing on trust, traceability, and liquidity rather than speculative tokenization.

From ESG to Sanctions and Tariffs

Initially launched in 2022 with a “nutrition label” approach to track commodity provenance based on ESG factors like CO₂ emissions, Watr is now shifting its focus to sanctions and tariffs.

The blockchain platform will verify commodity origins to help clients avoid inadvertent regulatory breaches before trades occur.

Migration to Avalanche Blockchain

Watr has recently migrated its operations to the Avalanche blockchain network. Developed by Ava Labs, Avalanche enables the creation of “sovereign chains” tailored to specific industry needs, such as the commodities sector.

Avalanche is already utilized by institutions like JP Morgan, Citibank, and FEMA.

Past Blockchain Initiatives in Commodities

Watr is not the first to explore blockchain solutions for the commodities trade. Previous attempts include “The Seam,” which partnered with IBM in 2017 to explore blockchain-based cotton trading, and the komgo initiative in 2018, backed by ING, Shell, and ABN AMRO, aimed at streamlining trade finance.

Notably, Ayati was also involved in the komgo initiative.

Challenges and Future Outlook

Many earlier blockchain projects in this space have not achieved widespread adoption.

Independent web3 VC Keld van Schreven, of KR1, emphasized the need for market validation of Watr’s plans. He stated that successful pre-trade tariff validation “onchain” at scale, particularly with backing from major players and experienced leadership, could represent a significant turning point for blockchain adoption in global trade.

Schreven also highlighted the importance of scalability, noting that the move to Avalanche demonstrates a proactive approach. Ultimately, success will depend on transaction volume and industry-wide adoption beyond initial pilot programs.