Supply Chain Finance Meets DeFi on the AMPLIFY B2B2C Ethereum-Built Infrastructure

Supply Chain Finance Meets DeFi on the AMPLIFY B2B2C Ethereum-Built Infrastructure

By Edward Moon | Analysis From Moon | 25 Dec 2020


The DeFi market is making a gradual comeback as Bitcoin glides smoothly past All-time highs (ATH), breaking the 2017 resistance levels. Well, crypto stakeholders and DeFi enthusiasts in particular are of the opinion that the ‘party just started’. As cool as it may sound, a deeper look in this emerging asset class further reveals what could be the future of finance in a few years.

The total value locked (TVL) in DeFi assets is currently over $16 billion and seems to be tracking Bitcoin’s bullish trajectory. Interestingly, this nascent market was barely at $1 billion in TVL when we began 2020, but skyrocketed at the debut of governance tokens this summer. It now seems that fundamentalists have managed to woo serious stakeholders into the burgeoning DeFi market.

Today, even small businesses can leverage the DeFi ecosystem to access contract credit or asset mortgage credit from B2B2C Ethereum built infrastructures like AMPLIFY. This project taps into the growing supply chain financial ecosystem by linking it with DeFi, hence scaling opportunities for small companies that are left out in traditional financing.

A Bridge Between Supply Chain Finance and DeFi

The supply chain finance market is currently estimated to be well over $275 billion in annual trading volumes despite limitations in the existing systems. AMPLIFY’s B2B2C infrastructure seeks to bridge the gap between traditional supply chain financing and the underlying potential in integration with digital assets. This DeFi ecosystem bases its fundamentals on an on-chain governance agreement, where stakeholders can enjoy the benefits of a decentralized supply chain finance market.

Small businesses have been historically sidelined when it comes to credit access in traditional finance, a trend that is now changing with the emergence of DeFi. AMPLIFY, being one of the projects in this niche, might as well be part of redefining an industry that has long been dominated by big players with ‘favorable’ credit metrics. With a decentralized supply chain finance market, all participants have a level playing field to supply or access credit.

The AMPLIFY model combines both a traditional financial market B2B platform and a blockchain-based financial B2C platform. This project plans to digitize all the assets within the supply chain finance system to increase market liquidity on a global scale. Through its on-chain governance protocol, AMPLIFY will establish a credit network that covers core enterprises and smaller units which include sub suppliers or non-core enterprises.

AMPLIFY’s Decentralized Supply Chain Financing Model

Having recently revealed its first MVP ‘Amplify 1.0’, this decentralized supply chain financing ecosystem is set to allow users to borrow and lend assets seamlessly. In fact, the process is as simple as selecting one’s preferred borrow or lend amount, after which an on-chain prompt from Metamask wallet will trigger the user to approve the transaction on-chain.

To sustain a decentralized architecture, AMPLIFY relies on its governance token ‘AMPT’ which is currently at its Initial Exchange Offering (IEO) stage on Emirex Exchange, under the Smart Fundraising Campaign (SFC) initiative. This token is built to act as a voting voice for the AMPLIFY community in future developments; they are also likely to benefit once its listed by prominent exchanges.

Like most DeFi tokens, AMPT will incentivize liquidity mining in the AMPLIFY on-chain DeFi platform. These tokens will be used to reward decentralized participation through distribution while supporting a potentially long-term supply chain finance market. AMPLIFY plans on releasing the AMPT tokens through a curved auction based on Ethereum smart contracts.

The Future of DeFi

Although some might be of a different opinion, DeFi has proved critics wrong in its short period of existence. This upcoming niche pivots on the shortcomings of today’s financial markets; it is touted for being decentralized, automated, reliable and financially attractive. Unsurprisingly, the early DeFi innovators like AMPLIFY have plans to further extend their market products and outreach.

According to the project’s roadmap, they plan on expanding past the lending-only scenario to other operations such as revenue aggregation, insurance and trading. In addition to this, AMPLIFY’s Governance Association will commence to structure varied agreements including on-chain supplier financial transactions, off-chain asset digitization, enterprise on-chain and off-chain asset credit.

Conclusion

Given the value proposition in DeFi, its integration with the supply chain finance market could be a big boost for both industries. The two market structures can basically work hand in hand to eliminate existing inefficiencies in the current setup. DeFi innovations like AMPLIFY are well on track to fulfil a world where the two markets are complementary; this on-chain financing DeFi project is a good insight on how traditional finance B2B markets can increase value by integrating with blockchain-built B2C ecosystems.


Edward Moon
Edward Moon

Crypto trader and analyst.


Analysis From Moon
Analysis From Moon

Analysis From Moon

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.