By harnessing the massive liquidity of the crypto ecosystem, Polytrade aims to address the invoice financing industry in the real world through blockchain technology, with the goal of helping solve cash flow problems that SMEs around the globe face. As part of our blockchain-based lending solution, Polytrade is integrating Chainlink Price Feeds for accurate stablecoin price data used by our smart contracts to calculate the value of real-world invoices by SMEs. Particularly, Chainlink Price Feeds are referenced to determine a user’s borrowing capacity and check the health of their loan.
As the most widely used and time-tested decentralized oracle network, Chainlink is the industry-standard in decentralized price feeds for DeFi protocols. Chainlink Price Feeds already help secure tens of billions of dollars in value thanks to their premium data quality and robust infrastructure, which has proven highly resilient during market volatility and network congestion. Through Chainlink, borrowers and lenders can feel more confident in the lending process reflecting real-time market conditions.
Polytrade — Saviour of Real World SMEs
According to the World Trade Organization, nearly 80% to 90% of world trade is facilitated by trade finance. Trade finance involves financial institutions providing short-term finance in the form of letters of credit or guarantees to facilitate the exchange of goods and services. However, 60% of trade finance requests by SMEs are still rejected. With an unmet demand of around $1.6 trillion, the gap is only widening. The World Economic Forum expects this gap to widen to $2.5 trillion by 2025, with developing markets in Asia and Africa bearing the brunt of the credit denials.
As a one-of-a-kind invoice financing platform backed by a decentralized infrastructure, Polytrade bridges the demand gap for SME trade financing by providing cryptocurrency holders access to real-world invoices. Polytrade is a transparent and secure blockchain platform that offers a new asset class for crypto holders to finance real-world invoices from world-class buyers like Walmart, IKEA, and more — all backed by credit insurance. On the flip side, SMEs in need of trade financing will be able to source instant liquidity by taking on a short-term loan provided by crypto holders. Ultimately, this creates a holistic infrastructure that benefits all members and democratizes access to trade financing, regardless of geographic location.
Because Polytrade’s lending platform will be run on-chain and facilitated through stablecoins, we needed an oracle network that provides accurate price feeds in a secure and reliable manner. Real-time stablecoin prices are crucial for decision-making and risk management, as any deviation in price could create currency conversion risk and impact the margin-thin business of trade financing.
Some of the specific optimizations that make Chainlink Price Feeds attractive for the Polytrade platform include:
- High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, leading to price data that’s aggregated from hundreds of exchanges, weighted by volume, and cleaned from outliers and suspicious volumes. Chainlink’s data aggregation model generates more precise global market prices that are resistant to API downtime, flash crash outliers, and data manipulation attacks like flash loans.
- High Update Frequency — Chainlink Price Feeds running natively on Polygon can perform frequent price updates at minimal costs and without dependencies on other blockchains, resulting in precise price data that consistently reflects current market conditions.
- Robust Infrastructure — Chainlink Price Feeds utilize decentralized networks of professional node operators run by leading blockchain DevOps teams and traditional enterprises with a strong track record of uptime during market volatility.
- Transparent Monitoring — Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify the historical and real-time performance of price feeds.
“Integrating Chainlink Price Feeds will provide Polytrade with real-time access to stablecoin price feeds sourced and aggregated across multiple exchanges, ultimately helping secure and protect our platform from bad actors hoping to manipulate price feeds and negatively impact businesses and investors using our platform.” — Arul Prakash, Chief Operating Officer at Polytrade Finance.
Polytrade is a blockchain-based decentralized protocol aiming to transform receivables financing connecting buyers, sellers, insurers, and investors for a seamless experience. It brings safe and insurance-backed real-world assets to the crypto world. Polytrade will provide real-world borrowers access to low interest and swift financing to free up critical working capital tapped from crypto lenders. While the project will start with a focus on trade finance, eventually, it would evolve into a full-stack lending protocol for small businesses.
Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers a universal gateway to all blockchains.
Shaping the future of Trade Finance 🚀
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