Polytrade

INTRODUCING POLYTRADE -Shaping the future of Trade Finance with DeFi

Background:

Polytrade is a blockchain-based decentralized protocol aiming to transform receivables financing. It aims to connect buyers, sellers, insurers, and investors for a seamless receivables financing experience.

The global DeFi market worth is increasing in trillions with a large number of total value locked in it every day. Polytrade will harness the massive liquidity pool of the crypto world by tokenizing real-world invoices and bringing them on-chain into the DeFi space. Bringing DeFi in trade finance brings transparency to that industry. It can also reduce the costs to operate and the overall cycle time.

What is Receivable/ Invoice Finance?

Receivables financing is a form of loan that uses the account receivables (Invoices) to provide capital to businesses in need of liquidity, thus unlocking critical working capital.

A business may have multiple suppliers and may sell finished products to many buyers. Account Payable is the money that a business owes to its suppliers, while the Account Receivable is the amount it is supposed to receive from its customers.

There are two ways in which receivables financing is executed.

• Factoring: Instead of using invoices as collateral, businesses sell the entire trade receivables account to a third party in exchange for funds. In the case of factoring, all default risk transfers to the financing company from the borrower.

• Invoice Discounting: The account receivables are considered an asset and used as a guarantee for raising capital.

Connecting Crypto To The Real World

POLYTRADE works on DeFi, a borderless financing infrastructure that turns the ownership of real-world assets (“Receivables”) into digital tokens. It harnesses the massive liquidity pool in crypto space and addresses the gap in receivables financing by providing SMEs a new source of funding. POLYTRADE provides a safe investment opportunity for Crypto investors to sweat their crypto assets in real-world business use cases.

1. Borrowers/Sellers — get timely investment to run their business
2. Buyers- get streamlined credit facility
3. Crypto Investors — get interest payments with insured and safe investment in real-world assets.
4. Service providers — Participate in trade finance marketplace to perform key validation activities

How Does Polytrade Make Invoice Financing More Efficient through the DeFi Ecosystem?

Irrespective of the buyers and suppliers, the financing of invoices are currently controlled by CeFi institutions. These institutions engage with Borrowers on one side and investors on the other, with minimal transparency on costs incurred. The process is time-consuming and involves multiple teams leading to an extremely long duration(2–3 months) to decide on funding of an invoice. It leads to them being able to charge fees in a non-transparent manner hurting both suppliers and buyers. Decentralizing each element of the whole value chain and creating a marketplace for all intermediaries, makes them competitive and swift. We also reduce the entry barrier for the investors and the borrowers to invest and reap the benefits of this 5 trillion dollar industry. The details about the buyer and rating can be algorithmically determined today using the publicly available data sets and generate interest rates based on past performance and risk exposure. Enabling this platform via smart contracts also ensures payments to all key stakeholders be automated and immediate.

Key Benefits offered by Polytrade

For Borrowers:

• No minimum on invoice value – Unlike traditional financing options, the platform can finance even small-sized invoices

• Low cost & quick financing – The platform aims to speed the process & minimize the cost of finance by creating a competitive marketplace for validators and critical intermediaries.

For Investors:

• Easy Access to Trade Finance- Invest in a centuries-old asset class without getting into its aged redundant processes, fully smart contract enabled.

• Safe and insured investments – Investments are only deployed in insured & validated invoices

• Monetize Idle Credit Lines – Earn returns by directly investing in a large number of invoices from businesses spread across diverse industry sectors

• Secured Platform -An audited & secured blockchain-based platform offering best-in-class security to investors

The Importance of the $TRADE Token

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

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

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

Summary

Reducing the market challenges faced by users while trading will increase user participation.

Polytrade platform can solve all major problems faced by stakeholders in the receivables financing ecosystem. Every stakeholder gains by doing trade on the platform. With superior access to liquidity, intelligent automation, robust security, and greater transparency, the platform can scale rapidly and capture a large share of the receivables finance market.

Polytrade’s core team comprises highly skilled professionals experienced working with top Fortune 100 organizations and veterans well-versed in Trade Finance, Digital businesses, DeFi, cryptography, engineering, blockchain and other associated areas. Our team is the backbone of our platform who have worked day and night to make it perfect for our users.