Produced by the Polkadot Ecological Research Institute, it must be a boutique (the article is very long, it is recommended to collect it first and then read it)
background
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therefore,background。
In recent years, affected by the global epidemic and economic fluctuations, small, medium and micro enterprises have been greatly impacted. However, small and medium-sized enterprises and private enterprises have always played a very important role in the national economy.
therefore,
In the current situation of declining demand and rising costs, as well as the obvious increase in market risks, the problem of financing difficulties for small and medium-sized enterprises has become increasingly prominentGenerally speaking, small and medium-sized enterprises can obtain financing through bank loan financing, inventory financing, and accounts receivable financing. Among them, accounts receivable financing is a distinctive financing method with flexible repayment methods and financing terms. Elasticity and other characteristics.If small and medium-sized enterprises can get the payment in time, the cash flow is guaranteed, and the financing difficulties may be easily solved. The root of these problems lies in credit, and blockchain technology can just solve the basic credit problems, so how should it be realized? This period"
Commerce in Polkadot
"We will start around supply chain finance.
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Principles of Supply Chain Finance
Before we discuss what kind of solutions blockchain technology can provide for supply chain finance, we need to first understand what is supply chain finance?。
With the process of globalization, everyone must be familiar with the supply chain. The supply chain refers to the network chain structure composed of upstream and downstream enterprises that deliver products or services to end users during the production and distribution process.
To put it simply, it is a system including raw material suppliers, suppliers, manufacturers, warehouses, transporters, distributors, retailers and end customers. It consists of four main parts: logistics, business flow, capital flow and information flow.
Through supply chain management, we can plan, coordinate, operate, control and optimize this, and ultimately make the supply chain more complete and create a better user experienceSupply chain finance is a product born in response to the optimization of capital flow in supply chain management.
Procter & Gamble's 2002 report pointed out that in the supply chain process, the process of physical flow of materials and products is often accompanied by a large number of information-based financial activities.
Supply chain finance affects a company's capital structure, risk level, cost structure, profitability and ultimate market value
, and as an important factor affecting shareholder value, supply chain financial management is crucial to enterprises.In 2005, Erik Hofmann pointed out that supply chain finance can be understood as a process in which two or more organizations in the supply chain, including external service providers, plan, execute and control the flow of financial resources between organizations to jointly create value. way.In a narrow sense, supply chain finance refers to “relying on core customers, taking the real trade background as the premise, using self-compensating trade financing methods, closing capital flows through receivable pledge registration, third-party supervision and other professional means or Control logistics and provide comprehensive financial products and services to upstream and downstream enterprises in the supply chain." Around the core enterprises in the supply chain, comprehensive financial services are provided to core enterprises and upstream and downstream related enterprises based on the transaction process.
There are currently three most common basic models of supply chain finance, which are
Accounts receivable financing model, inventory financing model and prepaid accounts financing model
. It solves the development bottleneck of financing difficulties that SMEs have suffered for a long time due to their own lack of collateral and opaque information.
As a method integrating logistics operation, business operation and financial management, supply chain finance closely links all parties in the trade, effectively embeds financial institutions into the supply chain network, and reasonably controls risks Under the premise of optimizing the efficiency of capital use.
Why do you need to use blockchain to solve the problem of supply chain finance?However, supply chain finance looks wonderful. It can convert accounts receivable, prepaid accounts or warehouse stocks in the hands of small and medium-sized enterprises into cash flow. It is a great tool to solve the financing difficulties of small and medium-sized enterprises. There are several reasons why it has not been widely used.。
1. There are many participating institutions and there are isolated islands of information.
Supply chain finance involves five roles: transaction party, platform party, logistics party, risk management party, and liquidity provider, including banking, logistics, commerce, insurance, agency, consulting and other related institutions. To complete a supply chain finance The project requires multi-party collaboration, but the data systems of each party are not unified, and the accuracy of the data is doubtful.
Information needs to be transmitted between agencies on the premise of ensuring credibility, which often requires repeated confirmation and supervision in the process, resulting in a lot of human cost and time waste, and the cost of trust is huge
2. It is difficult for financial institutions to have a clear understanding of the situation of the enterprise, so they dare not easily raise funds to the enterprise, and it is difficult to pass on the trust of the enterprise to the next-level enterprises.Financial institutions cannot obtain clear enough information about the company's situation, have doubts about the credibility of the company's information, and dare not easily raise funds to the company. In addition, the trust of financial institutions in an enterprise can only be directed at the enterprise itself, and cannot be passed on to secondary enterprises.
3. The usage scenarios of bills are effective, and the circulation is difficult.
Commercial bills, bank drafts and other bills are common tools for enterprise trade payment, which are difficult to transfer or split during actual use
, and because the trust of the core enterprise cannot be transferred, the bill can only be used in limited scenarios.
4. Frequent financial fraud in the supply chain.The low degree of enterprise informatization is easy to be maliciously used by people to create fake transactions and design financial scams.。
As an emerging network technology, blockchain can bring a brand-new solution that can resolve various problems faced by supply chain finance one by one.
Utilizing the non-tamperable and traceable features of the blockchain, participating institutions can share transaction data and trade conditions in real time, greatly reducing the process of data confirmation and verification.
The entire process greatly reduces the cost of trust, and improves the operating efficiency of the entire process, so that all parties involved in supply chain finance can enjoy the effect of cost reduction and efficiency increase of the system
In this process, certain informatization capabilities are given to each enterprise, such as using the Internet of Things combined with blockchain technology to track the flow of goods in real time and confirm the rights in a timely manner.At the same time, because the product is based on the blockchain, trust can be passed on to subsequent secondary or even tertiary enterprises, which greatly expands the usage scenarios of bills and improves the circulation rate. Bills can also be split and used flexibly to solve the capital problems of various enterprises to the greatest extent.
Blockchain technology improves the pre-lending risk control methods of supply chain financial products, strengthens technology empowerment and supervision during lending, and enhances dynamic risk prevention and control after lending, which solves the problem of financing difficulties for small and medium-sized enterprises
, There are endless cases of supply chain finance at home and abroad. Any company with a supply chain can try such a solution. The market involved will be a trillion-level market and will become a regular product in the future.
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Supply Chain Finance in the Polkadot EcosystemEarlier we talked about the changes brought by the blockchain to supply chain finance. The main scenarios are alliance chains and multi-party collaboration cases, but the situation of the public chain is slightly different, and the public chain is more decentralized.。
Now, let's go back to the Polkadot ecosystem to see what actual products have brought more practical applications to the development of supply chain finance. Along this line of thought, we see a shadow——Centrifuge's Tinlake.
First of all, we need to clarify what Centrifuge does. According to the more official definition,
Centrifuge is the tokenization of real-world assets/debts (Assets), such as invoices, home mortgages, or delivered goods, and place them on the blockchain (mainly in the form of NFT)
Centrifuge enables users to obtain loans by mortgaging these Assets, thus opening up a new way of financing (Fiancing).。
And Tinlake is an open, smart contract-based Assets market that brings together Asset promoters and investors who want to take advantage of the potential of DeFi. ", but this "gathering place" is on the blockchain, and it is more open and transparent.
The following figure briefly depicts the operation process of the Tinlake pool. Enterprises or "asset initiators" can bring liquidity to real-world financial assets/debts such as invoices and collateral through DeFi, but there is no need for an intermediate role of a bank to provide liquidity. Participate in the entire assessment process.
They achieve more decentralized supply chain finance by marking their financial assets/debts as NFTs and using these NFTs as collateral in Tinlake pools to provide financing for assets/debts (Financing)
Of course, here we only briefly describe the process, and the actual operation is much more complicated. Interested readers can refer to the information for in-depth understanding.Through the above methods, so far, the Tinlake website has included 13 pools. The founders of the pools include Branch, a micro-lending company with more than 4 million users, Fortunafi, a revenue-based financing with a valuation of 2 billion US dollars, and Inventory, which has been established for 9 years. Management specialist Databased.FI, as well as some other leading fintech companies.。
The public chain solution eliminates intermediaries, enables small and medium-sized enterprises to finance at a lower cost, and minimizes the cost of investors and asset promoters
postscript
Take ConsolFreight, a cargo company in Tinlake, as an example. The original shipping invoice payment cycle is usually 30-45 days, but now it can be shortened to one day, which has brought real cost reduction and efficiency increase for enterprise supply chain finance.
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postscript
Under the epidemic, many companies are facing practical problems such as insufficient funding sources and financing difficulties. Although government departments at all levels have also introduced a series of policies to rescue small and medium-sized enterprises, government intervention cannot solve the problem of market development. .
Therefore, supply chain finance with the characteristics of high frequency, small amount, fragmentation, and digitization has become a breakthrough point.With the increasing popularity of blockchain technology, the dual-chain model of supply chain finance + blockchain has brought new changes to enterprises. In the "14th Five-Year Plan Outline", blockchain is listed as one of the seven key industries of the digital economy during the "14th Five-Year Plan".The People's Bank of China, China Banking and Insurance Regulatory Commission and other departments have also issued documents requiring supply chain finance to improve efficiency and use financial technology to help improve the overall financial service level of the industrial chain supply chain.
And Polkadot Ecology is also bringing public chain technology to the supply chain finance industry, providing solutions and technological innovation services for enterprises, and eliminating the tediousness and costs brought by intermediary agencies, and further improving the effect of supply chain finance for industrial empowerment , the real rich man.
*The information provided by the Polkadot Ecological Research Institute does not represent any investment hints. The published articles only represent personal opinions and are for reference only. Since there are no policies and regulations related to digital assets in China, users in mainland China are requested to pay close attention to the development of Crypto.
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