Oracle to connect electronic invoices systems for #RealFi use cases

[GENERAL] Name and surname of main applicant

Ilan Melendez

[GENERAL] Email address of main applicant

ilan04@hotmail.com

Additional applicants

Roberto Intriago

Fernando Ontiveros

Alejandro Rodriguez

Douglas Montero

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

6

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

No

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.” .

No

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] If NO, please describe which outputs are not going to be open source. If YES, please write “Project will be fully open source.”

Project will be fully open source.

[METADATA] Category of proposal

RealFi

[METADATA] SDG rating

SDG goals:

End poverty in all its forms everywhere

Achieve gender equality and empower all women and girls

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Reduce inequality within and among countries

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

SDG subgoals:

Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries

Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all

Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors

Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services

By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value

Protect labour rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment

Increase Aid for Trade support for developing countries, in particular least developed countries, including through the Enhanced Integrated Framework for Trade-related Technical Assistance to Least Developed Countries

Key Performance Indicator (KPI):

Annual growth rate of real GDP per employed person

Annual growth rate of real GDP per capita

Proportion of adults (15 years and older) with an account at a bank or other financial institution or with a mobile-money-service provider

(a) Number of commercial bank branches per 100,000 adults and (b) number of automated teller machines (ATMs) per 100,000 adults

Unemployment rate, by sex, age and persons with disabilities

Average hourly earnings of employees, by sex, age, occupation and persons with disabilities

Proportion of informal employment in total employment, by sector and sex

Universal Human Rights Index (UHRI):

#proposertoolsdg

[IMPACT] Please describe your proposed solution.

Currently, invoice repositories are centralized, they belong to a single institution that controls and manages the documents. This situation raises security risks and concerns due to the existence of a single point of failure.

By decentralizing the platform and leveraging blockchain technology, we can significantly enhance invoice security and facilitate international trade. This transition will particularly benefit developing countries, granting them access to resources from investors worldwide.

We have established valuable connections with key stakeholders in invoice factoring, electronic invoices, stock exchange markets, and relevant ministries in the Americas region. This collaboration will serve as our proof of concept, effectively demonstrating the capabilities and advantages of blockchain technology.

To support our efforts, we are seeking funding through Catalyst to develop a prototype. This will enable us to elevate the conversation with stakeholders to a new level, showcasing the functionality and economic benefits of this technology. Our aim is to gain their buy-in, leading us towards full-scale production.

[IMPACT] How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?

Our proposal is a new proposition within Cardano ecosystem in #RealFi, never explored before. By converting invoice data into a standardized, decentralized format, it empowers developers and businesses worldwide to connect to Cardano platform transparently in untouched territories such as invoice-backed lending, conflict resolution, transparent auditing, and fraud mitigation. 

It will make a big impact in the Cardano ecosystem because it is a RealFi solution where we aim to reach the adoption to thousands of businesses and users worldwide and it has the potential to leverage Cardano existing solutions such as Atala PRISM, Marlowe, and stablecoins.

By leveraging this platform, we are entering a new era of asset tokenization, bringing untapped resources into the web3 environment. Latin America (Latam) holds tremendous growth potential in factoring activities, with the market projected to reach 4.6 trillion USD dollars by 2031, as per the Inter-American Development Bank, showcasing a remarkable annual growth rate of 9.4%.

While we recognize the global opportunity, our pilot initiative is focused on a specific country in Latam. This approach allows us to gather valuable insights, identify key growth indicators, and prepare for production within the Latin American region as a whole.

Why Latam? It's because the region boasts the largest growth potential in factoring, and a significant 80% of companies fall under the Micro, Small and Medium Enterprises (MSME) category. These MSMEs are the ones in dire need of increased access to financial alternatives to sustain their operations.

Through our platform, we are directly connecting small and medium companies with funding needs to a wide range of investors, effectively reaching the masses and addressing the funding requirements for their business operations.

The proposed blockchain component serves as the single source of truth, immutable and decentralized, forming the cornerstone for numerous applications. By connecting to this component, it enables innovation, openness, and facilitates access to funding opportunities for entrepreneurs.

[IMPACT] How do you intend to measure the success of your project?

The primary goal and key indicator of success for our project will be to successfully complete a Proof-Of-Concept with the stock market exchange, effectively demonstrating the value, and potential of blockchain as a solution for this use case. Additional quantitative and qualitative KPI are below:

Quantitatively, we will track:

• Adoption rate - The number of dApps and businesses on Cardano utilizing our Oracle and repository. A growing adoption rate signifies that our solution is effectively addressing a need within the ecosystem.
• Volume of Invoices - The number of invoices processed and tokenized. This metric reflects the system's utilization and its capacity to handle large volumes.
• Smart Contract Interactions - The number of smart contracts interacting with the repository. An increase here would show that our solution is integral to the operation of financial and logistical dApps on Cardano.

Qualitatively, we will gather:

• User Feedback - Collect feedback from developers, businesses, and end users to gauge their satisfaction and to continually refine our solution based on their needs and experiences.
• Case Studies - Document successful use cases where our solution has enabled unique applications, financial transactions, or operational efficiencies.

[IMPACT] Please describe your plans to share the outputs and results of your project?

We will share all the details publicly to the Cardano community including:

• Resources needed
• Activities performed
• Documentation
• Lesson learned
• Feedback from stakeholders such as:
• GS1
• Bolsa Nacional de Valores

An official presentation with the results is a recorded webinar session where the stakeholders and the Cardano community can get together.

[CAPABILITY/ FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability?

We are confident in our ability to deliver this project with high levels of trust and accountability, supported by our existing capabilities and processes.

Knowledge and Expertise:

Our team consists of former IOHK employees, bringing a wealth of multidisciplinary expertise in Web3 technologies. We have the necessary knowledge and experience to navigate the complexities of blockchain implementation and ensure the success of this project.

Networking:

In selecting the country for this initiative, we have strategically aligned ourselves with decision-makers and sponsors who can support and facilitate its implementation. We have already established connections with two key players, GS1 and Bolsa Nacional de Valores, who are interested in participating in the proof-of-concept. These partnerships enhance our ability to drive the project forward effectively.

Proper Management of Funds:

To ensure the proper management of funds, we employ several steps and processes:

Detailed Budgeting:

We develop comprehensive budgets that cover all project expenses. This allows us to allocate funds appropriately, ensuring transparency and accountability in financial matters.

Financial Controls:

We maintain strict oversight of funds, with designated individuals responsible for managing financial transactions. We implement approval processes to ensure that expenditures align with project goals and adhere to budgetary guidelines.

Multi-Signature Wallets:

We prioritize the security of funds by utilizing multi-signature wallets. These wallets require multiple key holders to authorize fund transfers, minimizing the risk of unauthorized access and enhancing accountability.

Open Auditing:

We believe in the importance of transparency and accountability to the community and external stakeholders. Our financial processes are designed to be auditable, allowing for independent verification and scrutiny. This ensures that our fund management practices meet the highest standards.

By combining our knowledge and expertise, strategic networking, and robust financial management processes, we are confident in our ability to deliver this project with the utmost trust and accountability.

[CAPABILITY/ FEASIBILITY] What are the main goals for the project and how will you validate if your approach is feasible?

Pre-work:

The team already completed a discovery and innovation process, as result the team has identified the desirability of the solution with the stakeholders and the problem validation.

First stage of prototypes of the solution proposal has been tested succesful and now we are moving into fine-tunning the MVP proposal and building a proof-of-concept of the first milestone.

Proposed Objectives for the Project:

1) Objective: Increase Efficiency and Security in Invoice Trading

• Validate the implementation of a blockchain-based invoice repository as a more secure and efficient platform for invoice trading.
• Measure the reduction in transactional errors, processing time, and instances of fraud or manipulation compared to traditional systems.
• Assess the level of trust and confidence gained by invoice issuers and investors due to enhanced security measures.

2) Objective: Demonstrate the Value and Benefits to Stakeholders

• Showcase the advantages of the blockchain-based platform to key stakeholders, including invoice factoring companies, electronic invoice providers, stock exchange markets, and relevant ministries.
• Measure the level of engagement and buy-in from stakeholders to continue with the pilot program.
• Assess stakeholder satisfaction with the platform's functionality, security, and potential for economic growth.

3) Objective: Initial feasibility test for International Trade and Access to Resources

• Validate the tokenization feasibility of invoices and enable global trading, thereby increasing access to resources for small countries.
• Identify potential market target and potential strategy of international investors and the volume of cross-border transactions facilitated through the platform.
• Assess the impact on the country's economy in terms of increased liquidity and investment opportunities.

[CAPABILITY/ FEASIBILITY] Please provide a detailed breakdown of your project’s milestones and each of the main tasks or activities to reach the milestone plus the expected timeline for the delivery.

Milestones, Tasks, Timeline, and Success Criteria for Project Implementation:

Milestone 1: Requirement Analysis and Planning

Tasks:

• Conduct an in-depth analysis of the existing invoice trading process and identify pain points. (Completed)
• Based on solution proposal define the specific requirements from stakeholders for the blockchain-based invoice repository platform.
• Develop a comprehensive project plan and timeline.

Timeline: 1 month

Success Criteria: Completed requirement analysis report, finalized project plan, and timeline.

Projected Cost: 21,450 ADA

Milestone 2: Prototype Development

Tasks:

• Design and develop a functional back-end /API prototype of the blockchain-based invoice repository platform.
• Implement tokenization and smart contract automation features.
• Integrate connectivity with stablecoin.

Timeline: 4 months

Success Criteria: Fully functional prototype with tokenization and connectivity features.

Projected Cost: 107,100 ADA

Milestone 3: Proof-Of-Concept

Tasks:

• Engage with the stock market exchange and other stakeholders to initiate the proof-of-concept demo.
• Onboard a select group of invoice issuers and investors onto the platform.
• Conduct user testing, gather feedback, and address any identified issues.

Timeline: 2 months

Success Criteria: Proof-Of-Concept session with active participation from stakeholders and positive user feedback.

Projected Cost: 10,725 ADA

Milestone 4: Evaluation and Refinement

Tasks:

• Evaluate the outcomes of the pilot program and assess the achievement of project objectives.
• Incorporate user feedback and define iterative refine sprints.
• Address any technical or operational challenges identified during the pilot program.

Timeline: 3 months

Success Criteria: Evaluation report, refined platform addressing user feedback, and resolved challenges.

Projected Cost: 10,725 ADA

Project Management Approach:

• The project will follow an agile project management approach, allowing for flexibility and iterative development.
• A project manager will oversee the project's execution, ensuring adherence to timelines, managing resources, and mitigating risks.
• Regular team meetings will be held to monitor progress, address challenges, and foster effective collaboration.
• Stakeholder engagement will be prioritized through frequent communication and feedback sessions.
• Documentation and reporting will be maintained throughout the project to track milestones, progress, and outcomes.

[CAPABILITY/ FEASIBILITY] Please describe the deliverables, outputs and intended outcomes of each milestone.

Milestone 1: Requirement Analysis and Planning

• Requirement analysis report: A comprehensive document outlining the findings from the analysis of the existing invoice trading process, including identified pain points and specific requirements for the blockchain-based invoice repository platform.
• Project plan and timeline: A detailed project plan specifying the tasks, timelines, and dependencies for the successful implementation of the project.

Milestone 2: Prototype Development

• Functional back-end/API prototype: A working prototype of the blockchain-based invoice repository platform, demonstrating features such as tokenization, smart contract automation, and connectivity with stablecoin.

Milestone 3: Proof-of-Concept

• Proof-of-concept demo: A session showcasing the functionality and value proposition of the blockchain-based invoice repository platform.
• Onboarded invoice issuers and investors: A selected group of participants using the platform during the proof-of-concept phase.

Milestone 4: Evaluation and Refinement

• Evaluation report: A comprehensive report assessing the outcomes of the Proof-Of-Concept and the achievement of project objectives.
• Refined platform: An improved version of the platform based on user feedback and defined iterative refinement sprints.

The progress of the project will be measured by the completion and quality of the deliverables for each milestone, stakeholder feedback, user engagement, and adherence to the project plan and timeline.

[RESOURCES & VALUE FOR MONEY] Please provide a detailed budget breakdown of the proposed work and resources.

Budget Breakdown:

Milestone 1: Requirement Analysis and Planning

• Cost: 21,450 ADA
• Conduct an in-depth analysis of the existing invoice trading process and identify pain points. (Completed)
• Based on solution proposal define the specific requirements from stakeholders for the blockchain-based invoice repository platform: 15,015 ADA
• Develop a comprehensive project plan and timeline: 6,435 ADA

Milestone 2: Prototype Development

• Cost: 107,100 ADA
• Design and develop a functional back-end /API prototype of the blockchain-based invoice repository platform: 64,200 ADA
• Implement tokenization and smart contract automation features: 32,175 ADA
• Integrate connectivity with stablecoin: 10,725 ADA

Milestone 3: Proof-Of-Concept

• Cost: 10,725 ADA
• Proof-of-concept demo: A session showcasing the functionality and value proposition of the blockchain-based invoice repository platform: 10,725 ADA
• Onboarded invoice issuers and investors: A selected group of participants using the platform during the proof-of-concept phase.

Milestone 4: Evaluation and Refinement

• Cost: 10,725 ADA
• Evaluation report: A comprehensive report assessing the outcomes of the Proof-Of-Concept and the achievement of project objectives: 4, 290 ADA
• Refined platform: An improvement list of features and requirements of the platform based on user feedback and defined iterative refinement sprints: 6, 435 ADA

Total Project Cost: 150,000 ADA

[RESOURCES & VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The cost of the project not only represents value for money within the Cardano ecosystem, but it also presents a unique and groundbreaking initiative with significant potential for impact.

This project stands as the pioneering invoice and commercial document asset tokenization initiative within the Cardano environment. As one of the early initiatives globally to address this challenge, it positions Cardano as a secure environment for tokenizing financial assets and enables tangible impact on a broad scale in the short term.

By closing the funding gaps for Small and Medium Enterprises (SMEs), this initiative has the potential to capture approximately 90% of companies in Latin America. This represents a substantial opportunity for adoption and showcases the project's potential to bring about transformative change for businesses in the region.

The value for money proposition is strengthened by the project's innovative nature, being at the forefront of its field, and its ability to tap into a significant market. It sets a precedent for future initiatives and positions Cardano as a leader in financial asset tokenization.

Overall, the cost of the project is justified by its pioneering nature, potential for high adoption rates among SMEs, and the opportunity to position Cardano as a secure and impactful environment for financial asset tokenization.

Competitive Rates: The costs have been determined by considering typical freelance rates in the Latam industry and the prevailing market rates for similar projects. By ensuring that the costs are in line with industry standards, the project represents fair and competitive pricing.

Value of Deliverables: The project deliverables are designed to provide significant value to the Cardano ecosystem. The development of a blockchain-based invoice repository platform has the potential to revolutionize the invoice trading process, enhance security, and increase access to funding for small and medium-sized enterprises (SMEs). The benefits of increased efficiency, transparency, and accessibility can generate substantial value for stakeholders within the ecosystem.

Long-Term Impact: While the initial costs may be considered an investment, the long-term impact and potential returns on investment are significant. By leveraging the capabilities of the Cardano ecosystem, the project aims to unlock new opportunities for asset tokenization and expand the reach of financial assets in Latin America. This can lead to economic growth, job creation, and increased adoption of Cardano technology, ultimately creating a sustainable and thriving ecosystem.

Catalyst Funding: The project's alignment with Catalyst, a funding initiative by the Cardano community, further supports its value for money. The proposal has undergone a rigorous review process, ensuring that it meets the criteria and requirements set by the community. This validates the project's potential to deliver meaningful outcomes and represents a collective endorsement of its value within the Cardano ecosystem.

By considering competitive rates, focusing on delivering valuable outcomes, emphasizing long-term impact, and aligning with community-driven funding initiatives, the project demonstrates a commitment to providing value for money within the Cardano ecosystem.

[IMPORTANT NOTE] The Applicant agreed to Fund10 rules and also that data in the Submission Form and other data provided by the project team during the course of the project will be publicly available.

I Accept