Liquidity Pools for Pre-Shipment Finance

Replace expensive, slow letters of credit with on-demand, peer-to-peer financing. Suppliers get paid immediately upon proof of shipment, while buyers extend their payment terms. This eliminates intermediary bank fees and reduces the cost of capital.

• Example: A manufacturer can access funds at 4-6% APR from a liquidity pool vs. 8-12% for a traditional bank loan.
• Impact: Direct improvement to EBITDA and cash conversion cycle.

Every transaction, document, and payment is immutably recorded on-chain, creating a single source of truth. This automates KYC/AML checks and provides regulators with real-time, permissioned access to audit trails.

• Key Benefit: Slash manual reconciliation efforts by over 70%, reducing operational overhead.
• Real-World Application: Proven in commodities trading, where platforms like komgo use blockchain to digitize and automate trade documents, cutting processing time from days to hours.

Smart contracts enforce payment upon verifiable, on-chain milestones (e.g., IoT sensor data confirming shipment loading). This removes the risk of double-financing and document fraud.

• How it Works: Funds are escrowed in the pool and released automatically only when pre-agreed conditions are met.
• Quantifiable Impact: Dramatically reduces defaults and disputes, protecting liquidity providers and enabling financing for a wider range of SMEs previously deemed too risky.

Corporations and institutional investors can act as liquidity providers, earning yield on capital that would otherwise sit idle. This creates a new, efficient asset class for treasury departments.

• ROI Potential: Providers can earn competitive, risk-adjusted yields (e.g., 5-8% APY) by funding real-world trade assets.
• Strategic Advantage: Transforms a cost center (treasury) into a profit center while strengthening the supply chain ecosystem.

Blockchain enables atomic settlement—the instantaneous transfer of payment upon digital proof of delivery. This eliminates the float period and accelerates the entire trade cycle.

• Before: Typical cross-border trade settlement takes 5-10 days.
• After: Settlement occurs in minutes, 24/7.
• Business Impact: Improves capital velocity, allowing companies to execute more transactions with the same working capital.

Institutional investors can now access a diversified portfolio of short-duration trade assets without the operational burden of direct lending. A single liquidity pool can be backed by hundreds of individual invoices or purchase orders across different geographies and buyers, mitigating concentration risk. This transforms a traditionally illiquid, high-touch asset class into a liquid, programmable financial instrument.

All transactions, from funding to repayment, are recorded on a permissioned ledger visible to all authorized parties (buyer, seller, funder, insurer). This eliminates disputes over payment status and triggers instant, atomic settlement upon fulfillment of smart contract conditions (e.g., proof of delivery). The result is a dramatic reduction in Days Sales Outstanding (DSO) and near-elimination of reconciliation costs.

Corporations with excess cash on their balance sheets can deploy it into vetted trade finance pools, earning a risk-adjusted yield superior to traditional money markets. The underlying assets are short-term, collateralized obligations from creditworthy buyers. This provides a new, efficient channel for treasury management, turning a cost center (idle cash) into a revenue-generating asset.

Our 90-day pilot focuses on a single, high-volume trade lane with a trusted supplier. We establish a private, permissioned liquidity pool with a capped capital allocation. You gain hands-on experience with:

• Onboarding digital KYC/AML for participants.
• Executing 5-10 real invoice financing transactions.
• Measuring KPIs: cost savings, time reduction, and process efficiency.
• Success Metric: Achieve a positive ROI within the pilot period to justify scaling.

No 'rip and replace' required. Our middleware uses standard APIs (like SAP S/4HANA, Oracle) to sync invoice data from your ERP to the blockchain pool. Your team works within familiar systems while the blockchain layer handles the financing logic and settlement.

• Implementation Path: Phase 1 connects your AP system. Phase 2 can extend to IoT sensors for in-transit goods financing.
• IT Overhead: Minimal. Focus is on integration, not infrastructure management.

Justify the pilot with hard numbers based on your current trade volume.

• Assumptions: $10M in annual pre-shipment invoices, 90-day payment terms.
• Pilot Savings: Financing cost reduction of 2% on a $2M pilot volume = $40,000 annualized savings.
• Efficiency Gains: Free up ~200 hours of AP/Finance staff time annually.
• Strategic Benefit: Strengthen supply chain resilience by ensuring key suppliers are paid promptly, avoiding production delays.