# KulaDAO & Hyperlocal Commodity Pricing

**Published by:** [KulaDAO](https://paragraph.com/@kuladao/)
**Published on:** 2023-06-02
**URL:** https://paragraph.com/@kuladao/kuladao-hyperlocal-commodity-pricing

## Content

The Law of One Price states that identical goods should sell for the same price when there are no transportation costs or differential taxes in the two markets. However, many factors prevent commodity prices from being the same everywhere. The costs of moving goods from one place to another require resources, which can vary depending on the distance, mode of transportation, and infrastructure. Regional and national agreements regarding cross border trade protocols also affect commodity prices where tariff and nontariff barriers inflate or regulate commodity value to the global market. Local regulations or geopolitical risks might increase the cost of producing commodities. Taxation or subsidy that can artificially increase or decrease the price of a commodity. There can also be quality differences in a single type of commodity. Even though we consider a commodity homogeneous, it does not hold universal truth. Because finding real-time, accurate commodity prices for every location on Earth is challenging, KulaDAO will we have resorted to providing a general understanding of global commodity prices. Organizations such as World Bank, International Monetary Fund (IMF), and the United Nations Food and Agriculture Organization (FAO) often publish reports and datasets related to global commodity prices. Major commodity exchanges, such as the Chicago Mercantile Exchange (CME), the London Metal Exchange (LME), or the Intercontinental Exchange (ICE), provide market data on various commodities. While these exchanges might not cover every commodity in every location, they can give a general idea of the global pricing trend.However, there are times when understanding hyperlocal commodity prices becomes essential.For example, it will provide accurate cost estimation for construction, agriculture, and manufacturing industries. Accurate market analysis improves business decision-making. Consumer awareness of fair trade practices encourages positive competition. It can enhance the quality of the product while reducing costs.KulaDAO provides confirmed hyperlocal commodity prices via blockchain technology through the double-DAO structure.Because The KulaDAO token’s value is the sum of the RegionalDAO profits divided by the total KulaDAO tokens in circulation, gathering such confirmed commodity prices is one of the core functionalities of KulaDAO. Each RegionalDAO, within the KulaDAO structure, represents a DAO (decentralized autonomous organization) that owns the mining right fully or partially. Through an agreement with local communities within each region, KulaDAO receives a profit distribution. Because each RegionalDAO has a specific commodity mined within that region, the RegionalDAO’s profit is a function of the particular commodity price per region. Each regional price turns out to be hyperlocal. KulaDAO has MOUs with multiple organizations across many geographical areas. The nature of a global presence puts KulaDAO in the unique place of gathering many hyperlocal commodity prices. Many of these commodities are not listed on exchanges. For example, one of the first RegionalDAOs involves limestone production. Limestone has multiple prices when sold to various buyers due to the local demand and supply. Since each RegionalDAO records all records on the blockchain due to the nature of a DAO, KulaDAO starts building a collection of hyperlocal commodity prices on the blockchain.Over time, KulaDAO will gather a commodity price index across geographical areas.Instead of relying on an average of reported prices when available, consumers can access near real-time hyperlocal commodity prices wherever KulaDAO has a RegionalDAO. Perhaps one day, KulaDAO’s decentralized database will complement the existing price indexes exchanges offer. Consumers and DAO members will benefit significantly along KulaDAO’s growth journey. For further information please see here. -The KulaDAO Team

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