Perpetual Contract Supply Chain Finance System
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Solution Overview
Problem
Conventional P2P invoice financing platforms are vulnerable to fraud, particularly duplication in the selling of invoices, and face inefficiencies in liquidation due to currency volatility in DeFi protocols.
Innovation Solution
A system and method for managing supply chain finance and retail finance that includes a processing subsystem configured to execute on a network, featuring a finance request receiving module, a financier seeking module, and a supply chain financing module that generates perpetual contracts to mitigate currency volatility and facilitate financing between buyers and financiers.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of time
If conventional P2P invoice financing platforms are used to provide short-term liquidity, then immediate funds can be accessed for invoices, but the platforms are vulnerable to fraud and duplication in selling of invoices
Solution Approach 1:
The patent introduces a blockchain-based intermediary system that acts as a trusted mediator between invoice sellers and buyers. The blockchain network verifies invoice authenticity and prevents duplication through its immutable ledger, eliminating fraud vulnerabilities while maintaining the speed of P2P financing. This intermediary layer resolves the contradiction by providing both immediate fund access and fraud protection.
Solution Approach 2:
The patent replaces conventional mechanical verification systems (manual invoice checking, trust-based agreements) with a cryptographic blockchain system. This substitution provides automated, tamper-proof verification of invoice authenticity, preventing fraud and duplication while enabling rapid fund disbursement. The blockchain mechanism substitutes human verification processes with automated cryptographic validation.
2Loss of time
If crypto assets are pledged as collateral in DeFi protocols to avail loans, then immediate liquidity can be obtained, but traders face liquidation risks due to currency volatility
Solution Approach 1:
The patent applies preliminary anti-action by pre-establishing perpetual futures contracts that hedge against currency volatility before liquidation events can occur. These contracts are set up in advance to counteract potential price movements, providing a protective mechanism that prevents liquidation risks associated with volatile crypto assets while maintaining immediate liquidity access.
Solution Approach 2:
The patent creates a composite financial structure combining collateralized loans with perpetual futures contracts. This composite approach layers two financial instruments together - the loan provides liquidity while the futures contract provides volatility protection. The combination resolves the contradiction by integrating both immediate fund access and liquidation risk mitigation into a single system.
3Reliability
If perpetual contracts are generated to mitigate currency volatility, then financing security is improved, but system complexity increases
Solution Approach 1:
The patent makes the blockchain system multi-functional by integrating invoice verification, loan disbursement, collateral management, and volatility hedging into a single universal platform. This universality reduces overall system complexity by consolidating multiple functions into one cohesive system rather than requiring separate systems for each function, while maintaining high financing security through the integrated perpetual contracts.
Data Source
AI summary
A system for managing supply chain finance is disclosed. A finance request receiving module 110 receives one or more invoices corresponding to one or more supplied goods or one or more provided services from a supplier, receives a request for process of raising funds from a buyer. A financier seeking module 120 identifies a financier for financing the funds to the buyer. A supply chain financing module 130 generates a perpetual contract between the buyer and the financier for financing the funds, enables the financier in financing the funds with one or more currencies to the buyer for paying the supplier for each of the one or more supplied goods or the one or more provided services, enable the buyer to repay the funds to the financier with interest using the one or more currencies based on the perpetual contract generated for managing the supply chain finance.