ModulTrade has launched a blockchain-based global trade platform specifically aimed at micro, small and medium enterprises (MSMEs). It claims it represents a new marketplace to meet, commit and execute safe and secure trade anywhere in the world.
The ModulTrade platform addresses many of the barriers MSMEs face when working to complete a successful trade cycle. Currently, 56% of trade proposals made by MSMEs experience rejection. This compares to 7% of those submitted by bigger companies.
By tapping into blockchain technology, the ModulTrade team has created an “easy to navigate digital marketplace” to sell/buy products. The application of smart-contracts legally and efficiently replaces conventional financial trade instruments, such as letters of credit and bank guarantees. In effect, the blockchain technology provides users with:
- a secure platform
- a simple digital end to end trade process
- transactions executed in real time.
The ModulTrade team is also continually seeking to add new ways to expand opportunities for MSMEs, whether local or global. This explains why everything – from a user’s first experience creating an account and logging in to the benefits of trading in real-time with MTRc (see below) – has undergone rigorous design and testing to ensure relevance.
ModulTrade and crypto-token MTRc
A key element in the approach is ModulTrade’s crypto-token, MTRc. Architected on standard Ethereum, participants can use MRTc directly within the ModulTrade eco-system to streamline the trade cycle. In principle, any entrepreneur or business person, can place an offer to sell or buy a product on the ModulTrade platform.
Integration with logistics company DHL (ModulTrade indicates it will add further distribution companies) adds real time tracking. This ability, for the ModulTrade platform to signal across its platform, is a key element in the release of funds process after goods delivery.
Currently, the ModulTrade platform accepts ETH (Ethereum) in addition to MTRc as funds. There are plans to accept other ERC20 tokens, along with fiat currencies (USD, EU, £ etc.).
To enable would-be users to test the ModulTrade Platform, some MTRc has been released for free float in the system. Users may buy and sell MTRc at a nominal price of 1ETH = 700MTRc on the Etherdelta.com exchange. The ModulTrade platform will buy MTRc at a nominal rate for fiat from merchants.
How does ModulTrade work
The ModuleTrade platform operates along the following steps:
- an MSME registers and connects on ModulTrade’s Value Eco-system; this is where an MSME can shop to find desired goods/services; for example, a construction company in Italy can easily purchase the perfect colour, brand and quantity of paint at the best price from a smaller paint manufacturer in Poland, without having to worry about monetary exchange rates, reliability of delivery or even if the paint manufacturer will deliver the product as agreed
- once two participants have ‘met’ online, an agreement is made – via a smart-contract between the two parties
- MTRc tokens, or ETH, pay for the product and delivery; the buyer submits funds – with the agreed smart-contract locking these until product delivery completes
- an integrated logistic service (currently DHL) effects product delivery and tracking; as soon as the product arrives the funds release to the seller (this happens automatically and seamlessly within the system).
ModulTrade technology instruments
The ModulTrade technology uses the following instruments:
- for the blockchain: Ethereum (an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality); Solidity — the contract-oriented programming language of the Ethereum platform; Truffle — a tool for testing smart-contracts
- on the back-end: Node.JS — the lightweight and efficient back-end language using an event-driven, non-blocking I/O model; Express — a fast, unopinionated, minimalist web framework for Node.js
The ModulTrade bot of the ModulTrade prototype was developed from a model of Telegram. It performs and follows transaction steps in a Telegram chat window. The ModulTrade Value Eco-system will use this as an assistant for small transactions. Users will be able easily to check delivery and payments.
What does this mean
For an MSME the attraction of ModulTrade lies in risk plus complexity reduction as well as transparency and immediacy. It is a neat touch to exploit Telegram. The whole trade process is secure and streamlined.
If it performs as described the ModulTrade system has the intention to change the way the MSME businesses trade, via open networks across the globe. This will occur in ways wholly different from traditional, cumbersome and expensive trade finance (even those many conventional trade finance houses who are experimenting with blockchain-based solutions).
Assuming the platform functions as described the one ‘pebble in the trade shoe’ would appear to be the smart contract dimension. This remains a fraught area at the best of times. Whether MSMEs can cope is open to question. If ModulTrade can overcome this, as well as natural MSME inclinations to be conservative, then a broad future could open up after it becomes available in 2018/2019.