Shaping the future of Trade Finance

In a normal business transaction a seller supplies goods to buyers who usually repay them after a certain period of time. The more reputed or larger the buyer the longer could be the time in which the seller is paid.

However, sellers need the money in a shorter period of time to fulfill their obligations.

Invoice financing facilities are methods where investors ( banks/ financial institutions) advance funds to the sellers against their issued invoices.

Every business has their own terms of payments from buyers and their suppliers. Usually there is a gap between when a business needs to pay its suppliers and when a business gets paid from the buyer. A business therefore needs money to bridge this gap. That is where invoice financing comes into play.

The following parties are usually involved in the traditional business model of invoice financing

1. Supplier - The customer who supplies the goods and is usually the one who needs money
2. Buyer- The party who purchases goods from the supplier and then has an obligation to pay the supplier money as per pre-defined terms
3. Banks/Financial Institutions - These give money to the supplier basis the invoice generated on buyer after doing their own credit assessments on the supplier and buyer
4. Insurance Companies- They are used by banks to further ensure that in case a buyer is not able to pay on time the insurer pays off the outstanding against the invoice.
5. Shipping Companies - They are used to confirm if the invoice has been shipped or not

Irrespective of the buyers and suppliers the financing of these invoices is controlled be CEFI institutions. The role that they play is getting investors on one side ( saving account holders) and having the ability to know details about the buyer OR take insurance on them. This leads to them being able to charge fees in a non-transparent manner hurting both suppliers and buyers. Using decentralisation we can get small investors to come and lend to suppliers. The details about the buyer and rating can be today be algorithmically determined using the publicly available data sets.

Thus we can eliminate/ reduce significantly the role of CEFI institutions leading to system being more efficient.

Yes projects native coin TRADE will be an ERC- 20 Token.

A key requirement for our solution is low transaction costs. If transactions costs are high then we won’t be able to compete against CeFI institutions on cost. The second requirement is that the transactions should be fast which would be a competitive advantage against CeFI ecosystem.

To enable this we need a layer-2 solution which does the operational heavy work and then is able to interact with the ethererum chain to update the contracts. Matic is our preferred solution for this.

Protocol will generate revenues by taking a small fraction of the borrowing cost. This would then be utilized to further strengthen the protocol, build reward mechanisms, enable more CeFI buyers on platform etc.

The team is a combination of people having deep experience in Trade Finance, Crypto and Fintech. You can check more details abour the team on our home page.

While the project will start with focus on trade finance eventually it would evolve into a full stack lending protocol for small businesses.

$TRADE is the native coin of Polytrade protocol. Holding a $TRADE enables:

1. a) Token holders
   • Governance: Allows validated holders to influence protocols decisions
   • Staking Rewards: Stake $TRADE to get rewarded
2. b) Borrowers: Receive reduced interest rates for staked and payment done via TRADE tokens
3. c) Buyers: Receive discounts on invoices for settlements done on Polytrade platform
4. d) Service Providers: Receive TRADE for participating in trade finance economy by performing key tasks of KYC, document validation, credit evaluation and more.