Blockchain Financing Smart Contract for Supply Chain
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Solution Overview
Problem
In the supply chain finance field, suppliers face challenges in accessing short-term accounts receivable, and financial institutions with idle funds and high credits struggle to effectively utilize these funds for financing.
Innovation Solution
A blockchain-based supply chain financial system is introduced, featuring a light node and a core node, where the core node determines a grant limit, repayment period, and loan interest rate based on account receivable information, and publishes a smart contract for financing management on the blockchain, allowing the light node to invoke and manage the financing operations.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If suppliers use traditional accounts receivable financing methods, then they can obtain financing, but the financing process is complex and time-consuming
Solution Approach 1:
The patent replaces traditional mechanical financing processes with blockchain technology. Smart contracts automatically execute financing operations based on predefined conditions, eliminating manual paperwork, multiple approval layers, and complex coordination between suppliers, core enterprises, and financial institutions. This substitution of mechanical processes with automated blockchain-based systems directly resolves the contradiction by simplifying the financing process while maintaining or improving efficiency.
Solution Approach 2:
The financing system enables suppliers to initiate and complete financing operations autonomously through the blockchain platform. The smart contracts automatically verify account receivable information, calculate financing amounts, and execute fund transfers without requiring extensive manual intervention from financial institutions or other parties. This self-service capability significantly reduces process complexity while maintaining high productivity.
2Adaptability or versatility
If financial institutions provide financing to suppliers, then suppliers receive working capital, but financial institutions cannot effectively utilize their idle funds
Solution Approach 1:
The blockchain-based financing platform creates a universal system that connects multiple financial institutions with idle funds to multiple suppliers needing financing. The platform enables any participating financial institution to provide financing to any eligible supplier through standardized smart contracts, making the fund utilization system highly flexible and adaptable. This multi-functional platform resolves the contradiction by enabling efficient matching between idle funds and financing needs across the entire supply chain ecosystem.
Solution Approach 2:
The system implements real-time feedback mechanisms where financing operations, fund flows, and repayment statuses are continuously tracked and recorded on the blockchain. This feedback enables financial institutions to monitor their idle fund utilization dynamically and adjust their financing strategies accordingly, maximizing the effectiveness of their capital while maintaining adaptability to changing market conditions.
3Reliability
If core enterprises provide repayment guarantees, then suppliers can access financing, but core enterprises cannot extend more help to suppliers
Solution Approach 1:
The patent segments the credit guarantee function from the core enterprise's direct financial exposure. By recording account receivable information and repayment obligations on the blockchain with smart contract enforcement, the system provides financing reliability through cryptographic guarantees rather than traditional corporate credit extensions. This segmentation allows core enterprises to maintain their primary repayment obligation while enabling financial institutions to provide additional financing support, thereby increasing overall support flexibility without compromising reliability.
Solution Approach 2:
The blockchain platform acts as an intermediary that formalizes and enforces the core enterprise's repayment commitment through smart contracts. This intermediary mechanism provides reliable guarantee execution while freeing core enterprises from direct involvement in financing operations. Consequently, core enterprises can maintain strong repayment guarantees while financial institutions and the platform provide additional flexible support to suppliers, resolving the contradiction between reliability and adaptability.
4Reliability
If blockchain technology is implemented for financing management, then data security and transparency are improved, but system complexity increases
Solution Approach 1:
The patent merges multiple functions (financing application, credit verification, contract execution, fund transfer, and repayment tracking) into a single integrated blockchain-based smart contract system. This consolidation eliminates the need for separate systems for each function, reducing overall system complexity despite the advanced technology used. The unified blockchain platform provides enhanced data security through its inherent cryptographic properties while presenting a simplified interface to users, effectively resolving the contradiction between improved reliability and increased complexity.
Data Source
AI summary
A computer-implemented supply chain method includes obtaining, by a core node of a blockchain, from a ledger of the blockchain, a financing transaction published by a light node of the blockchain, in which the financing transaction includes account receivable information; determining, by the core node, a grant limit of financing, a repayment period of the financing, and a loan interest rate of the financing based on the account receivable information; and publishing, by the core node, to the ledger, a financing management smart contract, in which the financing management smart contract specifies the determined grant limit of the financing, the determined repayment period of the financing, and the determined loan interest rate of the financing, and in which the financing management smart contract is invocable by the light node to complete a management operation of the financing.