Polytrade 2.0
Overview

To date, Polytrade has been known as an RWA Trade Finance Protocol, bringing trade finance on chain via its lending & tokenization technology and deep origination & underwriting expertise.

However, over the past year and a half, we've built out products that service more than a single RWA vertical or a single business model. Going forward, Polytrade will be reorganized into what we are calling Polytrade 2.0.

Polytrade 2.0 will consist of 3 distinct, but interrelated business lines

RWA Marketplace

Trade Finance

Institutional Technology

All 3 verticals remain underpinned by our core Marketplace, Tokenization, & ERC-6960 technology as well as our accumulated traditional finance plus DeFi knowledge base.

RWA Marketplace

The RWA Marketplace will become our core DeFi offering that aims to aggregate and consolidate on-chain RWAs by solving the key problems we have encountered in the ecosystem.

Discovery

Onboarding & Eligibility

Consideration

Cross-Chain Access

Ticket Sizes

Secondary Liquidity

Usability

Demand Aggregation

Discovery refers to making it easier for buyers to find RWAs across the growing universe at a single destination. Our definition of RWAs is intentionally broader than legacy financial assets to include assets like creator royalties, commodities, physical goods, apart from traditional assets like trade finance, structured credit, TBills, real estate, creator royalties etc.

Assets on the marketplace will include assets issued on-chain by third party protocols as well as off-chain asset originators, including Polytrade's trade finance.

Onboarding & Eligibility denotes one of the key pain points for asset buyers i.e. KYC and onboarding individually with each RWA protocol as well as the added complexity of geographic, ticket size, and accreditation restrictions associated with purchasing RWA assets. The Marketplace will make the process simple by filtering out where users can actively participate and reduce redundancy in onboarding.

Consideration refers to Consideration refers to giving tools and information to the users to meaningfully decide between different assets as well as meaningfully fulfill their intent with respect to such investments. This includes providing important attributes in a standardized taxonomy across RWAs including expectations of risk, reward, liquidity, ratings (where available), structure, eligibility, and mapping them to potential user intent (savings, treasury, long term, speculative etc.)

Currently we see the most RWAs concentrated in a few large chains. However, liquidity and buyer interest may lie fragmented across chains. Not every protocol has the capacity nor core focus to bring their assets to all chains. Cross-Chain Access means RWAs on the marketplace shall, in due time, be accessible across chains.

Ticket Sizes are a major barrier to entry for smaller investors to benefit from RWAs. With Polytrade’s technology (ERC-6960), RWA assets can be made more accessible via user led fractionalization. 

Usability refers to making RWA assets more interoperable - such as giving users to leverage or borrow on their RWA assets. A key part of this will be the use of ERC-6960 to allow protocols to freely build on a common standard for RWAs.

Last but not least, Secondary Liquidity is a major hurdle for asset holders. Without a place to transfer RWA tokens, we cannot build a thriving RWA ecosystem that has the basic components to enable asset management, efficient price discovery, and portfolio creation.

We believe solving these core components will lead to Demand Aggregation that will be critical to the maturity of the RWA ecosystem. Similar to how OpenSea and Blur created the market for Art NFTs, a single gateway for RWAs will create a real and thriving market for RWAs.

Trade Finance

As we focus on the marketplace, Polytrade will continue to be active as ever in trade finance. We will continue to grow the business in trade finance including managing lending books as well as originating and placing deals with other lending institutions.

Our trade finance originated ERC-6960s will continue to be active on the marketplace and we would invite users and protocols to build diversified portfolios taking advantage of our high quality assets.

We are incredibly encouraged with our progress in solving some of the hardest parts of bringing trade finance on chain - i.e. trustless oracles and custodians. We believe we have achieved, for the first time in both TradFi and DeFi, a bankruptcy-remote trade finance trustee & auditor model with our partners. This means tokenized trade finance assets would be serviced directly by a trustee without direct involvement from Polytrade and each datapoint from insurance coverage, third party risk rating (eg: Creditsafe, S&P) to yield and counterparty will be confirmed by an auditor and on-chained via a trusted oracle. We will look to operationalize this model in the months to come. For any lenders looking to use this structure, we invite inquiries.

Why We Stay Bullish on Trade Finance?

High Yield

Trade finance can fetch yields in the SoFR + 5-12% range depending on risk

Low Underlying Risk

Trade finance is a <1% NPA market globally

Insurance Protection

We continue to focus on high quality assets doubly protected with credit insurance

Liquid & Short Maturity

Underlying Invoice Receivables average 2-4 months in maturity, making the asset perfect for short and long term investment horizons

Un-democratized with multiple intermediaries

Banks own 60% of the trade finance market and the landscape is rife with multiple originator, quasi-lender intermediaries that add to timelines and cost of capital

Impact

SMEs are the backbone of any economy. Helping them access fairer and faster capital creates virtuous growth cycles

Apart from our on-chain activities, Polytrade will also continue to generate trade finance revenue from off-chain trade finance business including lending and origination. These fees will be reported and counted on our website and ultimately benefit our community.

Institutional Technology

Over the past year, we have seen a surge in institutional interest in our core technology including ERC-6960 for tokenization of any Real World Asset or Physical Asset as well as our Marketplace. Infact, the marketplace was built in close coordination with one of the largest global banks.

Polytrade is also part of the MasterCard StartPath Cohort as well as one of the first applications on the Mastercard MTN Network

Our last business line consists of working with large banks, institutions, and corporates to solve their challenges using Polytrade's suite of front facing and backend technology including ERC-6960, Marketplace, Lender Protocol, Onboarding & KYC Manager,  Lender Workflow Manager, and Lender Admin.

The revenue model for institutional adoption will range from platform fees to subscription, implementation, and servicing revenues.

Metrics

In the Polytrade 2.0 era, Polytrade's core headline metrics will be:

Total Transacted Volume / Gross Merchandise Value

  • Total Investments in Assets via Marketplace (Primary or Secondary)
  • Trade Finance Funded Asset Volumes not Invested Directly on Marketplace

Fees Generated

  • Trading Fees, Channel Partner Affiliate Revenue, Listing Fees for Marketplace
  • Interest, Discounting, Referral, and Processing Fees for Trade Finance
  • Platform Fees for Institutional Technology

Total Transacted Volume means the sum of all transactions that take place via the Polytrade platform including marketplace volumes, trade finance volumes, and institutional deployment volumes

Fees similarly refers to the total sum of fees or revenue generated by Polytrade across all business lines

You can see the live stats here.

Token

Polytrade is a on-chain decentralized protocol and as such our core commitment is to our community. As we generate value, we remain committed to making sure that value flows to our community.

Moreover, TRADE tokens will be a key part of the PolyTrade marketplace. TRADE will facilitate exchange and investments on the marketplace. Users that use TRADE to pay for fees and features shall benefit from major rebates as well as feature access. 

More to follow on this.

As we say at Polytrade, the best is yet to come!

About

Polytrade is a Real World Asset company backed by Alpha Wave, Matrix Partners, and Polygon with a mission to bring traditional and new age assets to the global on-chain ecosystem. The Polytrade team brings in deep financial and technological experience from SocGen, J.P. Morgan, Fantom, HSBC, PayU, Retreeb and Securrency.

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Proud Part of Mastercard StartPath Digital Assets Program