Beginning this year, due to the research and development and large-scale production of vaccines, the global new coronavirus epidemic has been contained to a certain extent. In the post-epidemic era, economic development has become the main focus of all countries in the world. At the same time, due to inflation expectations, global trade has gradually begun to pick up. , Many companies are beginning to pay attention to the international trade market.
After the new coronavirus epidemic, many small and medium-sized enterprises around the world have encountered difficulties such as the capital and rising labor costs. They are struggling in 2020-2021 , and the pressure to survive has soared. On the one hand, companies have a large amount of accounts receivable, and on the other hand, they need a part of cash flow for turnover in the short term. How to obtain short-term loans and seize the opportunity in this wave of recovery.
When it comes to borrowing, most people may think of bank borrowing, but for traditional banks, they actually prefer to provide lending services to some large companies. Although part of the reason is due to the good credit of large enterprises, the behavior of traditional banks will put a large number of small and medium-sized enterprises in trouble, which also restricts economic development and affects competition in many industries. With regard to financing, every country in the world has cases of bankruptcy due to breakage of the corporate capital chain due to various reasons.
The origin of financing difficulty of small and medium sized enterprises
The problems of difficulty and high financing for small and medium-sized enterprises have always existed. For bank credit and financing for small, medium and micro enterprises, there is a natural contradiction between the two, which is difficult to reconcile for a long time. Some people may think that banking institutions provide deposit and loan services, so why not borrow from banks to solve business operation problems? In fact, two aspects are mainly involved here:
The first aspect is the risk control of banks, which means that in most cases, banks play the role of sending umbrellas on sunny days and collecting them on rainy days in economic activities. When companies do not need to borrow, banks will provide companies with loan. When companies encounter funding difficulties in a short period of time, banks often refuse to lend due to risk.
In most cases, companies need loans for a short time but sadly loaning process is slow . Therefore, the bank’s business process is obviously difficult to meet the needs of the company.
Blockchain technology has given people hope for new finance. What role will the financial industry play in helping SMEs solve financing problems? In fact, Ploytrade has been exploring in this regard, and proposed the use of decentralized DEFI liquidity incentives to build a new framework to solve corporate financing problems.
How does Ploytrade help SMEs in financing?
Ploytrade mainly provides a simplified financing solution that brings together sellers, buyers, investors, insurance companies and other parties on a platform to tokenize real-world acceptance invoices and provide a series of token incentives Mechanism to provide enterprises with fast financing services . So, that they can solve their financing problems.
Ploytrade mainly involves two aspects. The first is the credit status of each role, and the second is the flow of tokens and funds and incentives. This is also the core and key point of the operation of polytrade.
First of all, on the ploytrade platform, all participants need to perform strict KYC real-name authentication in order to determine the main identity of the participants, so as to ensure that the use of funds is normal.
Secondly, investors will be funding in a liquidity pool in this way similar to our liquidity in the form of mining, and investors can get ploytrade token TRADE rewards to motivate more users to participate in liquidity mining.
In this way, the liquidity pool can provide enterprises with convenient financing and provide them with special lending services. For example, buyers obtain acceptance invoices by using accounts receivable for pledge lending, and then pay the sellers, and the sellers send the goods Sell to *home, get **, and then exchange into corresponding funds in the ploytrade contract, and get a certain TRADE token reward.
Here we can learn:
1. The target groups of token incentives are mainly sellers and investors. Through the DEFI liquidity pool, investors can put stablecoins into the liquidity pool, and the amount of stablecoins invested by investors into the liquidity pool is directly Determines the number and amount of invoices generated by the contract, which also ensures that funds will not be overused .
2. The invoice obtained by the seller can be exchanged at any time, and the seller can accept the acceptance function of the invoice by matching offline trade, and the buyer's accounts receivable will be audited by polytrade and be subject to a certain amount of quota , which can solve their short- and medium-term capital use problems and prevent the buyer’s capital chain from breaking. Since the accounts receivable here need to be reviewed by a professional team, the lender’s repayment background check is still required. The following service team conducts investigation and review so as to prevent the occurrence of bad debts.
3. Since this intermediate smart contract is the key process for processing invoices, and everything in the contract is open and transparent, the invoice will naturally be recognized by the market. At the same time, due to token incentives, sellers also have the confidence to accept such invoices.
In this model, Ploytrade has formed an intermediary agency similar to a bank, which scientifically and transparently manages the use and flow of funds through smart contracts, brings together buyers and sellers to conduct money transactions on the platform and ultimately helps companies .
At present, in the field of blockchain financing, Ploytrade is a combination of on-chain and off-chain. It obtains the corresponding user group by serving corporate customers. The operating model is similar to the Internet finance of previous years, but for Internet finance it is said that due to the opaque use of funds and the credit problems of borrowers and incentive problems, the Internet finance sector has experienced bankruptcies in recent years.Ploytrade uses smart contracts to manage the use of funds, Ploytrade truly solves the needs of the borrower and help the small companies.
