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Crypto Biz 101: Utilizing DeFi Liquidity as Business Cash Flow

Decentralized Finance- A new source of Liquidity

The concept of Decentralized Finance (DeFi) made possible by cryptocurrency technology has come a long way in the past couple of years. Envisioned as an alternative to traditional financial services, the DeFi ecosystem has already established its capabilities by offering a range of blockchain financial products and services that are akin to their traditional counterparts. As an added benefit, these DeFi solutions are borderless, and anyone from anywhere can benefit from it, at a fraction of the cost.

So far, the majority of DeFi users have been crypto savvy individuals. It is mainly due to the extensive use of crypto assets and the infrastructure that needs some basic understanding of the technology to interact with the available solutions. Further, most of these DeFi solutions currently available do not interface with traditional finance, which also limits their uses in meeting the day-to-day demands of individuals and businesses.

Nonetheless, the DeFi ecosystem has built enough credibility and is plush with liquidity, ready to be capitalized to meet the real-world needs. Few projects have recognized the opportunity and the advantages it can offer to individuals and businesses.

At ShuttleOne, we identified the potential of DeFi in revolutionizing trade for businesses of all sizes. As a result, we created the Plug and Play DeFi solution that enables small and medium businesses across ASEAN to indirectly leverage crypto assets to meet their financing and payment needs. Created to provide financial inclusions where 90% of the economy contributors (SMEs) do not receive the support from traditional financial industry as they should, our Plug and Play DeFi solution is easy to use, secure and maintains end-to-end compliance.

Plug-and-Play DeFi - Connect DeFi Liquidity to Business Cashflow

The ShuttleOne Plug-and-Play DeFi is a combination of multiple modules that cater to financial liquidity, payment and automation needs of organisations. As the name suggests, Plug-and-Play DeFi is a ready-to-use solution that enables global remittance, automated due diligence and creditworthiness rating, loan approval and liquidity access, all in a decentralized fashion over blockchain.

The Plug-and-Play DeFi solution is designed to offer a seamless experience to ShuttleOne’s partner businesses. The smart solution is structured in such a way that users don’t even realize the role of blockchain technology and digital assets in making quick and easy trade financing possible. Meanwhile, by tapping into virtually limitless liquidity offered by the universal DeFi ecosystem, ShuttleOne also offers the community an additional avenue to earn returns through efficient deployment of their crypto assets.

Few benefits offered by ShuttleOne Plug-and-Play DeFi includes:

  • Rapid global fiat remittance and settlement directly to bank accounts over a stablecoin powered ShuttleSwap network
  • Quick cross-border, B2B trade financing in less than 3-days
  • Catering up 13 different industry verticals across 60 supported countries
  • Proven track record with successful deliveries amid dire pandemic-driven circumstances

ShuttleOne Plug-and-Play DeFi Secured Critical Supplies for Covid-stricken Malaysia

Let us give you an example of how ShuttleOne’s trade financing solution helps businesses operate even in the direst of circumstances.

During the peak of Covid pandemic, a Malaysian company involved in securing medical supplies for use within the country was faced with a credit crunch, due to increased competition and the vendor’s demand for a significant upfront payment for supplies. As both developed and developing countries bid for limited supplies, medical equipment suppliers based out of China and Vietnam required buyers to deposit a significant percentage of the shipment value in advance. In this case, the concerned supplier demanded 70% of the cost upfront deposited into the bank account instead of the standard practice of shipping the goods against bank guarantees like Letter of Credit that allows payment settlement within 30-60 days.

The deviation from established trade practice handicapped the business as banks were wary of financing the deal. The transaction was construed as abnormal activity and the request for financing was denied by the banks due to higher risk involved in making a huge upfront payment. However, thanks to ShuttleOne’s Plug-and-Play DeFi, the deal went through smoothly as the buyer was able to secure the necessary loans to make the upfront payment.

Leveraging the DeFi liquidity, ShuttleOne enabled the buyer to secure a loan from the crypto community, following a quick verification of their creditworthiness. The entire process of securing the loan approval was concluded in 10 minutes, followed by disbursal within three days. The quick response ensured that the vendor received the necessary payment on time, enabling the Malaysian buyer to secure the shipment for use within their homeland.

Simple, Easy and No Limits Trade Financing

The DeFi based trade financing system built by ShuttleOne’s Plug-and-Play DeFi solution is simple and straightforward. Once a financing request is received, the system created a credit scoring verifies all essential documents and determines the creditworthiness of the borrower. Unlike the practices implemented by traditional financial institutions, the DeFi based trading financing solution is available to businesses and loans of all sizes, as long as the borrower meets the requirements.

Once the borrower passes the due diligence, the system taps into the DeFi liquidity pool fuelled by crypto holders on the ShuttleOne platform to issue loans. The loans issued in the form of stablecoins will be sent to the partner bank, which will use it as collateral to release the equivalent amount, paid directly to the seller. Even though the loan is issued by ShuttleOne in stablecoins, the intended recipient will receive it in fiat currency.

Meanwhile, the borrower having received the goods and services contracted from the seller will have to repay the loan to the ShuttleOne DeFi platform along with the applicable interest. For their contributions, the ShuttleOne community contributing to the liquidity pool will receive their investments back along with additional rewards.

ShuttleOne continues to develop innovative solutions to maximize the utilization of crypto assets to meet real world requirements. The chain agnostic Metachain with its multi-chain capabilities further enhances the ecosystem by supporting a variety of crypto assets across multiple protocols from a single place. It also provides a unified interface for developers to create cross-chain applications using a variety of ready tools. As long as the protocol is supported by Metachain, users can seamlessly execute cross chain transactions by paying necessary transaction fees using the project’s native $SZO token.

Explore ShuttleOne’s B2B Plug N Play Defi product and how it can benefit your business here.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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