The partnership combines the power of the Tradeshift business commerce platform with the stability and security of the Dai Credit System to establish a supply chain liquidity marketplace for businesses, developers and investors.
Businesses can leverage trade receivables, purchases and other transactions and digital assets on the Tradeshift platform to create real-time and short-term financing models backed by anything from institutional finance to peer lending.
Developers can build investor applications to enable real-world B2B settlements that benefit from the efficiency, transparency, speed and security of the blockchain utilizing the Dai stablecoin.
Investors can benefit from a completely new range of low-friction, low-cost financial applications as a result of making real-world assets, such as invoices, available on the blockchain in a standardized “tokenized” and interoperable format.
The first implementation on the supply chain liquidity marketplace is currently in a pilot test for Tradeshift Cash, an instant invoice financing solution that gives micro, small and medium sized businesses (MSMEs) access to instant cash flow based on their outstanding receivables. Tradeshift Cash provides an alternative way to solve critical growth and stability challenges for MSMEs, who make up the vast majority of companies in most supply chains, and are hit the hardest by long payment terms.
“The trade receivables market has very tight margins, which leaves no room for a volatile digital currency as instrument for settlement,” said Tradeshift co-founder Gert Sylvest. “The Dai Credit System is a unique vision for a transparent and stable token that allows anyone to represent real-world currency settlements on the blockchain. It is a vision that we are very excited about.”
“Our partnership with Tradeshift proves the potential of the blockchain to level the economic playing field for businesses of all sizes around the globe,” said Rune Christensen, CEO of MakerDAO. “At the same time, we’re delivering new options for investors by creating an entirely new class of investment vehicles with vetted risk, based on real world assets.”
Held on the blockchain, Dai achieves stability via an open smart contract platform that allows anyone in the world to lock up their assets as collateral and issue Dai against them. Unlike other stablecoins there is no need to blindly trust a third party. When users want to retrieve their collateral, they simply return the Dai they issued plus a fee based on how long it was outstanding. True to the spirit of the blockchain, no one can alter these core mechanics of Dai, making it a safe and predictable form of money. Launched in 2017, Dai has successfully maintained a soft peg to the US dollar.