Market Problems, AMPLIFY Solutions
Now is the time to remind you why we have decided to launch our project and what problems of the market we are going to solve. Today’s post will be discussing exactly that. So, what do global markets look like today?
A huge portion of the supply chain cannot get credit. Financial institutions hardly grant credit down the value chain (2nd and 3rd level suppliers). Why? Traditional credit-grating mechanisms rely on the credit rating of the 1st level enterprises (also called core enterprises) - If and when non-core enterprises get credit, the costs associated with the grant are too high.
Another problem is that it is difficult to verify the authenticity of trading transactions. Supply chain finance is based on the credit rating of core enterprises. However, financial institutions must verify the authenticity of the whole trade flow, which is expensive, inefficient and unreliable.
As a result, the financing and risk costs are high. The capital liquidity is poor. Traditional financial institutions’ model is very centralized and limited to core enterprises. Non-core enterprises — especially SMEs —suffer therefore of inefficiency in credit granting, difficulties in clearing settlement, backward multi-party cooperation system and review system.
💡 What does AMPLIFY propose? A decentralized supply chain financial B2B2C infrastructure providing contract credit or asset mortgaged credit to companies that normally are left out of the traditional credit granting system. We will achieve this by bringing together the benefits of on-chain protocols (governance, liquidity, traceability) with off-chain stakeholders (legal & accounting firms, financial institutions, etc.) to ensure the value safety and legitimacy of the on-chain assets.
Now is the time to remind you why we have decided to launch our project and what problems of the market we are going to solve. Today’s post will be discussing exactly that. So, what do global markets look like today?
A huge portion of the supply chain cannot get credit. Financial institutions hardly grant credit down the value chain (2nd and 3rd level suppliers). Why? Traditional credit-grating mechanisms rely on the credit rating of the 1st level enterprises (also called core enterprises) - If and when non-core enterprises get credit, the costs associated with the grant are too high.
Another problem is that it is difficult to verify the authenticity of trading transactions. Supply chain finance is based on the credit rating of core enterprises. However, financial institutions must verify the authenticity of the whole trade flow, which is expensive, inefficient and unreliable.
As a result, the financing and risk costs are high. The capital liquidity is poor. Traditional financial institutions’ model is very centralized and limited to core enterprises. Non-core enterprises — especially SMEs —suffer therefore of inefficiency in credit granting, difficulties in clearing settlement, backward multi-party cooperation system and review system.
💡 What does AMPLIFY propose? A decentralized supply chain financial B2B2C infrastructure providing contract credit or asset mortgaged credit to companies that normally are left out of the traditional credit granting system. We will achieve this by bringing together the benefits of on-chain protocols (governance, liquidity, traceability) with off-chain stakeholders (legal & accounting firms, financial institutions, etc.) to ensure the value safety and legitimacy of the on-chain assets.