Why would Actors participate in the Traxia ecosystem? Cool technology is not enough to incentivize adoption. Game theory suggests individuals all seeking the best outcome for themselves can cooperate and create a better outcome for everyone. Traxia has outlined an ecosystem where each Actor can do just this. If you need in depth descriptions of the Actors, please refer to my other articles on this account.
Traxia is a Trade financing platform that helps a Seller increase liquidity and cash flow by tokenizing their invoices and selling them at a discount. For example, ShoesAreUs gets an invoice from Nike for $100,000 worth of sneakers. ShoesAreUs would be willing to sell this invoice to an Investor for $95,000 for the benefit of getting that money right now. $100,000 in 3 months or $95,000 today? The 5% loss is worth the cash flow to help pay for the production and maintain the companies’ liquidity.
But why would the Investor buy the invoice? For one. the Investor would not be willing to buy the invoice from the Seller alone. There needs to be a Buyer at the end of the line. In our example, this is Nike, the company who has hired ShoesAreUs. The Traxia ecosystem creates a smart contract around the invoice between ShoesAreUs and Nike, meaning that Nike is required to buy the invoice upon project completion for the face value, $100,000.
Because the Investor can trust Nike and Traxia through smart contracts and blockchain technology, his $95,000 investment is a safe bet that it will become $100,000 in 3 months (*investments are never absolute truths, there are only varying degrees of certainty, and this is up to the Investor to determine their risk/reward ratios).
Nike wants ShoesAreUs to succeed, after all, its their money on the line too. If ShoesAreUs were to run out of money mid-project, this could result in delay of delivery, cutting corners to save on costs, or an ask to renegotiate the terms of the deal. If Nike can facilitate a financing solution by letting ShoesAreUs use Traxia without any extra cost for them, they will.
To recap-
A Seller wants to sell an invoice at a loss to get cash immediately.
A Buyer wants to provide financing for the Seller to make sure the project gets completed as outlined.
An Investor wants a safe bet to increase his wealth.
It is important to understand why these Actors would use Traxia but there is much more to grasp the project. Note that there are three other Actors that help maintain the ecosystem, an Issuing Provider, Listing Provider, and a Loan Warehouse. These are all part of the internal operations at Traxia therefor are not part of the Game Theory discussion of this topic. Please check out my other articles for more information.