The goal of this article is to describe the Traxia project being built ontop of the Cardano blockchain in the simplest terms possible. This is not an all inclusive guide, and with my best efforts it is void of personal opinions. This is not investment advice or endorsement. Always do your own research.
Traxia is aiming to allow SMEs (small and medium-sized enterprises) the ability to increase their cash flow and liquidity by selling their invoices (accounts receivable) to investors before the invoices are completed. In simple terms, a company gets an order (invoice) but doesn’t want to wait to get paid, they can sell the invoice to investors and receive money immediately. Once the company fulfills its orders, then investors get reimbursed their investment plus a premium.
For example, a shoe manufacture with the name ShoesAreUs gets an order from Nike. They are to make 50,000 shoes and deliver within 6 months. The capital required to produce 50,000 shoes tightens the ropes on ShoesAreUs business. With a pay day of 6 months in the future, this makes it even more constraining, they need to pay for supplies, employees, electricity, etc. Traxia will allow ShoesAreUs to tokenise the future revenues from Nike and sell them to investors.
If an investor sees that ShoesAreUs has an impeccable record of producing shoes on time, and they know that Nike always pays out upon completion, then it is pretty safe to assume that the order will be fulfilled, and the tokens will be bought back at a premium.
Performing this operation on the blockchain has its advantages over other forms of invoice selling. The immutable ledger and smart contracts associated with the Traxia project create inherit trust between participants. The tokenized assets that represent the invoice cannot be falsified. They cannot be duplicated. They cannot be removed. Investors don’t have to trust the individual company, or even Traxia, to get payment for their investment. Everything is handled in smart contracts and happens automatically. This creates an incredible opportunity to blend the world of SMEs and individual investors, allowing everyone to profit, trust, and grow, without ever having to know to each other.