This is not investment advice or endorsement of Traxia. All quotes not annotated come directly from Traxia’s whitepaper.
There are 6 different actors within the Traxia ecosystem. Each has a specific role and together will show the potential of this company. We will go through them one by one.
Actor One – The Seller:
This is where the ecosystem begins. A Seller is a company that has been hired to complete a project and wishes to increase its cash flow by selling the current project’s invoice. Traxia suspects that most of the Sellers will be SMEs (small and medium sized enterprises) but they don’t dismiss the possibility of larger corporations wanting to use the ecosystem.
Actor Two- The Buyer:
The Buyer is the company which created the purchase order from the Seller, ie. They hired the Seller to make a product. This is often a large corporation with better credit ratings than the Seller. The Buyer adds value and trust to the contract because of their credit rating.
If Seller has +1 trust, and Buyer has +5 trust, now the contract has +6 trust.
Actor Three – The Investor:
The investor is a ‘person or organization that puts money into financial products, assets, etc. with the expectation of achieving a profit.’ Once the contract is created between the Seller and the Buyer, the invoice is tokenized and able to be purchased by third party Investors. These Investors have no part in the production of the contract. They simply lend their money with hopes of a return on investment.
Actor Four – The Issuing Provider:
The Issuing Provider holds a key aspect of the ecosystem in that they are the ‘technology provider that setups and maintains the Traxia platform’. The goal is to make it quick and easy for the other Actors to participate in the ecosystem, without having to be technologically minded. For example, the Issuing Provider is in control of uploading and validating business and trade details, KYC compliance, AML checks, contract volume, contract duration, etc. The whitepaper states that they will be ‘combining commonly used web technologies with a modern blockchain infrastructure running on the backend in a manner that is transparent to the Buyer, Sell, and Investor’.
Creating a system that is easy to use for Sellers, Buyers, and Investors is crucial to the success of this project. All other Actors must do is sign transactions with their private keys. The Issuing Provider is responsible for all of the ‘technological integration’.
Actor Five – The Listing Provider:
This is the marketplace that ‘matches investors of securities with listed and unlisted securities’.
Side note around securities laws: ‘Although there is increased scrutiny of regulators regarding cryptocurrencies and increased targeting of fraudulent ICO business practices, there is in no jurisdiction that has a dedicated set of rules and laws in place to categorize a digital asset and/or blockchain token. Also considering that accounts receivables are in fact categorized as current assets under international bookkeeping standards, it seems unlikely to see a new set of rules approaching that will transform accounts receivables into a security, as traditional factoring services have been in operation for many years. In some markets, like the US, UK and Brazil, factoring is unregulated, giving commercial factors an advantage over their bank counterparts in the traditional factoring field.’
Actor Six – The Loan Warehouse:
The Loan Warehouse is crucial for the Traxia project to get up and running during the initial phase. The Warehouse is responsible for purchasing invoices from Sellers, if they don’t immediately find an Investor. Traxia believes that without a Loan Warehouse, this could become a bottle neck. Sellers want to sell, but Investors don’t want to Invest. The goal is to slowly move away from the Warehouse as the project gains exposure and adoption.