In today’s trading industry, banks do everything you need for you but at an expensive cost.
From opening an account to moving money between accounts, even for something as simple as buying online, banks charge you fees for everything which adds up over time.
While some may argue that charging fees for services are justified, individuals are still let down every day but the inefficiency of these institutions that are using outdated systems and practices not fit for the modern era.
One of these inefficiencies can be seen in international trade for micro-small-medium sized businesses (MSMEs).
First, the idea of an international trade is far beyond the capabilities of many MSMEs. Even if they want to trade internationally, they don’t know where and how to start which represents a gap in the market.
For these MSMEs to even enter international trade, they would have to go through some sort of trade financing to ensure that trades go smoothly without breaking the bank.
Unfortunately, 56% percent of trade financing proposals from MSMEs are rejected compared to the stark contrast in multinational corporations where only 7% of proposals are rejected.
Proposals are often rejected because MSMEs don’t have the resources to overcome the high entry costs of trade financing. The complexity of these trades is also too much for small businesses where deals are rather simple and straightforward.
The main problem, however, comes from the inherent lack of trust in these trades.
Simply put, will the buyer pay the seller for the goods received or vice versa?
This problem is currently solved with risk-reducing steps like a letter of credits or bank guarantees but these solutions are not effective for MSMEs because they are expensive and the customer experience during the process is not always going to be a pleasant one.
ModulTrade was developed as the solution to this problem.
ModulTrade is a blockchain startup in the trade finance sector with an aim to allow small businesses all over the world to involve themselves in international trades efficiently, securely, and easily.
The ModulTrade platform which is based on a smart contract ecosystem will provide MSMEs with a complete range of financial services as well minimizing transactions and supporting international trade with current and emerging markets.
With the ModulTrade ecosystem, millions of MSMEs across the world will be connected to negotiate, agree, and execute trades that benefit parties involved fairly.
Businesses will only be matched with trusted suppliers that have their reputation verified. All funds involved in trades will also be transparent while trades recorded in ledgers are 100% verified as goods are tracked to the point of delivery.
As a result, ModulTrade helps to build trust and complete transparency in trades while helping MSMEs to widen their reach further than local markets hence increasing profits and growth.
The ModulTrade platform aims to standardize global trade by implementing the blockchain technology.
As mentioned earlier, the blockchain technology allows ModulTrade to connect over 400 million MSMEs with each other to not only negotiate trade agreements efficiently but also to get help with trade-related issues easily.
The blockchain is used in the platform in two unique ways:
- A smart contract platform that replaces traditional financial instruments like credits letters or bank guarantees as well as removing intermediaries like banks and lawyers
- Introducing the MTRc token, an Ethereum ERC20-based token or cryptocurrency which enables seamless trade on the platform thanks to a global currency. The MTRc token will be accessible to all businesses as well as allowing MSMEs to use the token in negotiating and executing trades
With the MTRc token, ModulTrade hopes to become one of the few pioneers who want to improve the trade finance industry by connecting millions of MSMEs as well as enterprises in an efficient, trustful, and easy way.
Since smart contracts work directly between two parties, fees involved in transactions are reduced significantly which allows ModulTrade to not only mimic traditional banking systems but to also introduce an all-time low transaction fee of only 1%.
To simplify the process of using the ModulTrade platform, the team has developed a step-by-step process implemented in all transactions that makes it extremely easy to use, even for a non-tech individual.
A typical transaction on the platform goes like this:
- The seller creates a trade proposal in the platform
- The trade proposal is sent to the ModulTrade marketplace where it is filtered and refined so that only relevant buyers see the proposal
- A buyer checks the proposal as well as the products and agrees to buy; the money is then deposited by the buyer
- After the trade is agreed, the goods are tracked until they are delivered at which the funds will be released to the seller
This efficient process eliminates fraud by ensuring that every step in the trade is monitored and the purchase agreement is confirmed via smart contracts. For ModulTrade users, they do not have to worry about the complexities of Ethereum or the blockchain as everything is done by the platform.
This will also help with global trades for MSMEs as businesses do not have to rely on technical skills or large financial resources for them to trade across borders. Instead, they can use a platform where literally the goal is to help MSMEs trade efficiently.
ModulTrade will hold a token sale for the MTRc token.
Token name: MTRc
Token base: Ethereum (ERC-20 compliant)
Token supply: 100,000,000 (10,000,000 on sale during the pre-sale – 30,000,000 on sale during the public token sale)
Token sale duration: November 2017
Token sale target: 15,000 ETH
Token exchange rate: 1 ETH = 700 MTRc