Sector: Blockchain Awards
Empresa: Byppay Global SL
Byppay is a Blockchain-based service for invoice compensation and payment: a company’s customers pay directly to the company’s suppliers. It is a timely, secure, burden-free and lower-fee alternative to factoring that automates and provides all the documentation for proper accounting. We have Reverse Kelly Automated Market Makers (rkAMM) services as DeFi (Decentralised Finance) instruments for invoice risk management, guarantees and endorsements, and an instrumental token (Byto – Byppay Token) that are our patented and free to operate technology to underpin our competitive advantage. A success story: the Ministry of Economy of Romania pays more than 20 billion euros in invoices per year through a particular case of Byppay, invoice compensations called “netting”, which represents 3% of the Romanian GDP.
We have recently won the award from University College London (UCL) – Centre For Blockchain Technologies, on 13 February 2023 in London.
IDENTIFIED PROBLEM AND PROPOSED SOLUTION
- The problem
Companies have payment problems that are aggravated when they themselves are not paid when due. In Europe there are 1 million viable companies that banks do not lend to; and of the companies that they would lend to, half self-exclude because of the high costs and time it takes to contract banking products such as factoring or invoice discounting.
There is a Blockchain service for byppaying invoices: your customers pay directly to your suppliers. It is a cheap, secure, and agile alternative to bank factoring and invoice discounting that automates such payment agreements with their correct accounting documentation.
Since it is an agreement of invoice compensation and payments, blockchain technology is needed to upload such agreements as a smartcontract and automate payments, generate the relevant commercial and accounting documentation, and open the door to a world of financing with next generation liquidity pools managed automatically with the Kelly criterion that gives optimal performance to liquidity providers and with high resistance to hacking or attacks.
- Disruption of factoring: Invoice compensation with the method of direct payment to suppliers skipping payment steps is a more powerful debt-relief mechanism than factoring, faster, less expensive and without the need for third parties, by simple negotiation of those involved.
- Decentralised: Unlike usual liquidity pools or netting systems, there is no need to upload all invoices onchain and agreements are kept private between groups of 3 companies, with the maximum exponent of decentralisation.
- Distributes profits: Gives bonuses to customers and suppliers and saves costs for the applicant, as well as incentivises collateralisation and rewards liquidity providers thanks to the power of byppay and the Kelly criterion of optimisation.
- Proprietary technology: A patent applied for, a scientific publication to arXiv, entangled token technology and more work in progress with freedom to operate resulting from years of development in trading platforms that have found a catalyst with blockchain.
- Spanish technology: Conceived in Spain, developed in Spain, and awarded in UK by UCL – University College London. Soon it will also be awarded in Spain.
A success story: the Ministry of Economy of Romania pays more than 20 billion euros in invoices per year through a particular case of byppay, invoice compensations called “netting”, which represents 3% of the GDP of that country.
We are going to emulate this success with a reimplementation in Webapp at internet scale without legal barriers from any country since we do not have custody of crypto assets or fiat.
IMPACT ON SUSTAINABILITY
SMEs are less likely to obtain bank loans than large companies. The business financing gap in the EU is EUR 176.7 billion. The fact is that 4.3% of EU SMEs cannot access bank financing (we are talking about almost one million SMEs) [OECD 2019]. The largest financing gap (in absolute terms) is present in the largest countries, but not only (Italy, France, Germany, Greece, Spain, the UK and the Netherlands have a lack of financing above EUR 10bn). This makes the SME sector unstable: 1%, or 200,000 EU companies go bankrupt every year, creating social unrest as many of them were viable. And this shortage is aggravated in each crisis and when invoice payment deadlines are extended and when they exceed 90 days.
The fact is that the supply of banks does not cope with the size of the market, as 1 million viable EU companies are not financed by them or more than 50% of SMEs discarded factoring services despite being eligible.
And as a conclusion to the impact on sustainability, the adoption of such financing offered by byppay could have an impact on more than 2% of employment growth in the EU.
- Smartcontracts for Byppay agreements.
- Reverse Kelly Automated Market Makers (rkAMM) for liquidity pools.
- Entangled tokens EIP 4950 for the distribution and sale of Byppay Tokens (BYTO) and their use for the development of Byppay’s ecosystem.
- Subsystems: IPFS, fleek.co, Barterclubs (RES).
- Testnet: first Alastria (2020-2022) and Teranyina (Polkadot) (2023).
- Exploitation: Polygon (2023)