Peerhive : Empowering SMEs with Real-World Asset Financing (RWA)

[GENERAL] Name and surname of main applicant

Michael Chia Yin (CPO & Co Founder)

[GENERAL] Email address of main applicant

Michael.Chia@peerhive.app

Additional applicants

Vincent Yeo : CEO & Co-Founder

vincent.yeo@peerhive.app

Thiruvengadam Pillai :CTO & Co-Founder

thiruvengadam@peerhive.app

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

12

[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 dependencies

[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 rating: SDG

SDG 9: Industry, Innovation and Infrastructure

• Sub-Goal 9.3: Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets
• Sub-Goal 9.a: Facilitate sustainable and resilient infrastructure development in developing countries through enhanced financial, technological and technical support to African countries, least developed countries, landlocked developing countries and small island developing States

SDG 10: Reduced Inequalities

• Sub 10.b: Encourage official development assistance and financial flows, including foreign direct investment, to States where the need is greatest, in particular least developed countries, African countries, small island developing States and landlocked developing countries, in accordance with their national plans and programmes

Key performance indicators (KPIs) for monitoring progress towards the SDGs could include:

• 9.3.1 - Proportion of small-scale industries in total industry value added
• 9.3.2 - Proportion of small-scale industries with a loan or line of credit
• 10.b.1 - Total resource flows for development, by recipient and donor countries and type of flow (e.g. official development assistance, foreign direct investment and other flows)

[IMPACT] Please describe your proposed solution.

SUMMARY PROPOSAL:

Problem Statement:

Small Medium Enterprise (SMEs) often struggle with limited access to financing due to slow, centralized, and expensive processes. Additionally, crypto-holders lack secure platforms for investing in the real economy. These challenges hinder the growth and development of SMEs and limit investment opportunities for crypto-holders. There is a need for a disruptive solution that leverages blockchain technology and real-world assets to provide fast, affordable, and secure financing options for SMEs while empowering them with sustainable investment opportunities.

Response to the Problem:

At PeerHive, we revolutionize lending with blockchain and real-world assets. Our platform offers fast, secure financing for SMEs, empowering them with sustainable investments. We promote transparency, accessibility, and stable growth through stablecoin utilization. Bridging SMEs and crypto-holders for impactful real economy investments.

Approach and Reasons:

• We leverage the potential of the Cardano blockchain and real-world assets to revolutionize lending.
• By creating Peerhive, a transparent and secure lending ecosystem, we address the shortcomings of traditional financing.
• Our approach eliminates intermediaries, connects SMEs directly with lenders, and ensures fast, reliable, and affordable financing.

Engagement and Stakeholders:

• Our project engages the Catalyst and Cardano communities, SMEs, lenders, and crypto-holders.
• Stakeholders include SME owners seeking financing, lenders looking for reliable investment opportunities, and the broader Cardano ecosystem and multichain in the future.

Implementation:

• We will implement our project by developing a fully functional lending platform on the Cardano blockchain.
• The platform will connect SMEs and lenders, facilitating transparent and efficient financing processes.
• We will initially use Marlowe for our MVP smart contract development and later transition to PlutusTx for more advanced functionalities and flexibility.
• The primary smart contract for MVP is

1. "LendingNote" = getTotalLendersBalance and etc
2. "LoanProtocol = requestLoan, AccpectLoan and etc

• In PeerHive, the smart contracts are structured in a way that they operate separately. Each loan contract is connected to the master contract, which oversees the overall functioning of the lending ecosystem. Additionally, the individual loan contracts are connected to the lender, enabling direct interaction and communication between the lender and the specific loan contract. This decentralized structure allows for efficient and secure management of loans while maintaining direct connections between the involved parties.

Outputs:

• Our outputs include a user-friendly lending platform, a seamless interface for SMEs and lenders, and a robust infrastructure.
• We will establish partnerships with lenders and ensure compliance with regulations for a secure and trustworthy ecosystem.
• Cross-Chain interoperability to collaboration with other blockchain ecosystems such as interoperability can enable cross-chain asset transfers, expanding the range of collateralized assets available on the platform and attracting a broader user base.

Outcomes:

• SMEs will benefit from accessible and affordable financing, enabling business expansion, job creation, and economic stability.
• Crypto-holders will have impactful investment opportunities aligned with real-world businesses.
• Our work will drive economic growth, financial inclusion, and innovation within the Cardano ecosystem.

Project Status:

Development MVP Stage

Funding Ask Amount: 160,000 ADA

DETAILED PROPOSAL:

Summary Video:

https://youtu.be/_NrEFBjVGAc

Overview Solution Diagram:

Explanation below:

Step 1 Request Loan:

• SMEs request financing/loans through the PeerHive Protocol.

Step 2 Collateral Securitization: 

• SMEs undergo Know-your-Business (KYB) verification with PeerHive.
• SMEs collateralize Real World Assets (RWAs) like Physical, Current, or Digital Assets.
• Credit rating analysis by a partner determines SME business scoring.
• Smart contracts create "Lending Note" contracts/NFTs with loan product details.

Step 3 Invest in Real world Economy:

• Approved SMEs list their loan requests.
• SMEs choose the interest rate for repayment.
• Lenders perform Know-your-Customer (KYC) before investing in RWAs.
• Transparent SME information helps lenders make informed investment decisions.

Step 4 Lender received contract/NFT :

• Lenders receive "Lending Note" as proof of investment.

Step 5 & 6 Received Loan & Repayment interest :

• When the Loan pool is fully funded, SMEs can claim the funds.
• SMEs repay the funds with the agreed interest rate.

Step 7 & 8 Received Yield from SME & Governance Votes :

• Lenders receive monthly interest payments via smart contracts (PeerHive doesn't hold funds).
• DAO allows Lender and Borrower to vote if the scenario below:
• Defaults Loan
• Stablecoin de-peg event
• Loan agreement are not being fulfilled
• The Debt Recovery Process for SME defaults: https://whitepaper.peerhive.app/protocol/debt-recovery-process

Step 9 Secondary Market:

• The secondary market offers lenders the opportunity to sell their "Lending Notes" for increased liquidity. When other users purchase these notes, they gain access to the associated interest rate.

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

PeerHive's solution has been listed as a Real World Asset (RWA) in the F10: Dapps, Products & Integrations campaign brief. Here's how our solution aligns with the requirements of Catalyst Fund 10:

DEFI & Physical Products

DeFi Lending Process:

PeerHive utilizes smart contracts to facilitate direct lending between borrowers and lenders, eliminating the need for intermediaries. Our solution falls under the Decentralized Finance (DeFi) category, promoting transparency and efficiency.

Collateralization of Real World Assets:

We collateralize physical assets such as land or invoice financing by converting them into contracts or non-fungible tokens (NFTs). This ensures the security and integrity of the lending process, enabling lenders to have tangible collateral.

Secondary Market Trading:

PeerHive provides or partners with other platforms for the trading of these contracts or NFTs in the secondary market. This feature enhances liquidity and allows investors to engage in the buying and selling of these Landing Note, promoting a dynamic ecosystem.

By offering a decentralized lending process, collateralization of real-world assets, and facilitating secondary market trading, PeerHive's solution directly aligns with the requirements stated in the Catalyst Fund 10 campaign brief, specifically under the Dapps, Products & Integrations section.

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

We intend to measure the success of our project through various key performance indicators (KPIs) and metrics, including:

1. Number of SMEs accessing financing through PeerHive
2. Amount of funds lent to SMEs
3. Growth in the user base and community engagement
4. Number of successful loan repayments
5. Median of Interest Rate per Loan Pool
6. Adoption and utilization of PeerHive within the Cardano ecosystem
7. Return on investment for lenders
8. Compliance with regulatory frameworks and standards

We will regularly track and analyze these metrics to assess the effectiveness and impact of our project. Transparent reporting and data sharing will enable the community to audit our progress and evaluate the success of PeerHive.

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

We have a comprehensive plan to share the outputs and results of our project with the community and relevant stakeholders. Here is an overview of our plans:

1. Documentation and Reports: We will prepare detailed documentation and reports that outline the progress, achievements, and outcomes of our project. These documents will be made available on our website and other relevant platforms.
2. Community Engagement: We will actively engage with the Cardano community through various channels, such as social media, forums, and community events. We will share updates, insights, and key milestones achieved during the project, fostering transparency and involvement
3. Collaborations and Partnerships: We will explore opportunities to collaborate with other projects and organizations within the Cardano ecosystem. Through partnerships, we can leverage our project outputs to create synergies and drive further development activities.

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

We have a strong capability to deliver our project with high levels of trust and accountability. Here are the key aspects that demonstrate our existing capabilities and why we are best suited for this project:

Experience and Expertise:

Our team comprises experienced professionals with a deep understanding of blockchain technology, lending practices, and financial regulations.

Compliance and Regulatory Framework:

We are committed to operating within the legal and regulatory frameworks of the jurisdictions we operate in. We will comply with relevant financial regulations and implement robust Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to ensure proper management of funds and maintain a high level of accountability.

Community Engagement and Feedback:

We value the input and feedback of our community and stakeholders. We will establish effective communication channels to keep our community informed about project progress, milestones, and fund management. Regular updates and reports will be shared to maintain transparency and accountability.

Smart Contract Security:

We recognize the importance of secure smart contracts in managing funds. Our team will conduct rigorous annual smart contract audits by engaging reputable third-party auditors to ensure the security and reliability of our smart contracts. This includes regular security assessments and vulnerability testing to mitigate any potential risks.

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

The main goals for the project are to revolutionize lending by leveraging blockchain technology and real-world assets, provide fast and secure financing options for SMEs, empower sustainable investments, promote transparency and accessibility, and bridge the gap between SMEs and crypto-holders.

To validate the feasibility of our approach, we will undertake several steps:

1. Market Research: Conduct in-depth market research to understand the demand for blockchain-based lending solutions, identify potential competitors, and assess the viability of the target market.
2. Proof of Concept: Develop a proof of concept (PoC) to demonstrate the technical feasibility of our platform. This will involve building a prototype with core functionalities and conducting internal testing to evaluate its performance and usability.
3. User Validation: Engage with potential users, SMEs, and crypto-holders, to gather feedback on the concept, features, and user experience. This feedback will help us validate the market fit and make necessary adjustments to align with user needs and expectations.
4. Technical Infrastructure: Ensure that the necessary technical infrastructure, including blockchain integration, smart contract development, and security measures, is in place to support the envisioned lending ecosystem.
5. Financial Viability: Conduct a thorough financial analysis, considering revenue streams, operational costs, and potential risks, to validate the financial feasibility and sustainability of the project.
6. Regulatory Compliance: Assess the legal and regulatory landscape related to lending and blockchain technology in the target jurisdictions, such as Malaysia and Singapore, to ensure compliance and mitigate any potential legal risks.

[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.

Quarter 3 2023

Key Milestone 1 : MVP Development and Initial Testing

Start Date/End: 13 July 2023 - 30 September 2023

• List core functionality of MVP
• Product Design of the MVP
• Documentation (PRD) MVP
• Core functionality development:

1. Lender function

• Basic user interface implementation
• Initial testing and bug fixing

Quarter 4 2023

Key Milestone 2 : Smart Contract Integration and Initial Testing

Start Date/End: 1 October 2023 - 31 December 2023

• Hire a Full stack and Blockchain developer
• Core functionality development

1. Borrower UI function

• Integration with Cardano blockchain using Marlowe
• Initial testing and bug fixing

Quarter 1 2024

Key Milestone 3 : MVP Enhancement and Optimization

Start Date/End: 1 January 2024 - 31 March 2024

• Limited user testing of the MVP
• Gathering user feedback on functionality and user experience 

(To ensure a smooth user testing process, we will initially select the "Cardano Malaysia" community as our first user-tested group. This group will consist of 50-100 individuals who will actively participate in testing PeerHive's features and functionalities. Their valuable feedback will help us refine and enhance the platform before expanding to a larger user base.)

• Addressing identified issues and bugs
• MVP Enhancement and Optimization (2 months)
• Implementing enhancements based on user feedback
• Performance optimization and scalability improvements
• Additional testing and quality assurance

Quarter 2 2024

Key Milestone 4: Beta Release and User Feedback Gathering

Start Date/End: 1 April 2024 - 30 June 2024

• Beta Release (2 months)
• Opening the platform to a larger user base for beta testing and Gathering feedback from beta users for further improvements  

(To gather a diverse range of feedback, we will open up beta testing to all interested individuals who sign up on our website (https://peerhive.app/). This approach allows us to engage a wider user base and collect valuable insights from users with different backgrounds and perspectives. Their experiences and feedback will play a crucial role in refining and optimizing PeerHive before its full-scale release.)

• Monitoring user activity and collecting valuable data addressing technical issues and scalability challenges such as below:

Technical Issues:

• Smart Contract Security: We recognize the criticality of ensuring robust security measures for our smart contracts. Regular audits and code reviews will be conducted by reputable third-party auditors to identify and mitigate any vulnerabilities, ensuring the safety of funds and transactions.
• System Performance and Stability: As the user base grows, maintaining optimal system performance and stability becomes crucial. We will closely monitor the platform's response time, uptime, and overall performance metrics. Continuous load testing and infrastructure optimization will be carried out to address any performance bottlenecks and ensure a seamless user experience.

Scalability Challenges:

• On-Chain Transaction Volume: As PeerHive's lending ecosystem expands, an increasing number of loan transactions will occur on the Cardano blockchain. Scalability solutions, such as layer-two protocols or sharding techniques, will be explored to accommodate higher transaction volumes, prevent network congestion, and maintain efficiency.
• User Growth and Platform Adoption: To support a growing user base, we will focus on horizontal scalability by implementing scalable architecture, utilizing cloud infrastructure, and leveraging caching and data replication techniques. This will allow us to handle increased user activity without compromising performance.

Please note that the following plan outlines the development stages specifically for the MVP and Beta of PeerHive. Additionally, PeerHive is actively working towards incorporation and alignment with regulatory frameworks in Singapore. For more details on our roadmap, please visit our website.

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

Quarter 3 2023:

Key Milestone 1: MVP Development and Initial Testing

1. Deliverables: Core functionality of MVP, Product Design of the MVP, Documentation (PRD) MVP, Lender function, Basic user interface implementation
2. Outputs: Fully functional MVP with lending features, user-friendly interface
3. Intended Outcomes: A well-designed and functional MVP that demonstrates PeerHive's lending capabilities
4. Progress Tracking: Measure completion of core MVP features, documentation, and user interface development against the planned timeline

Quarter 4 2023:

Key Milestone 2: Smart Contract Integration and Initial Testing

1. Deliverables: Integration with Cardano blockchain using Marlowe, Borrower UI function
2. Outputs: Smart contract functionality for lending, borrower-specific user interface
3. Intended Outcomes: Successful integration of PeerHive with the Cardano blockchain, enabling secure and transparent lending transactions
4. Progress Tracking: Measure completion of smart contract integration, Marlowe implementation, and borrower UI development, along with initial testing and bug fixing

Quarter 1 2024:

Key Milestone 3: MVP Enhancement and Optimization

1. Deliverables: Enhanced MVP based on user feedback, Performance optimization and scalability improvements
2. Outputs: Refined user experience, improved system performance
3. Intended Outcomes: Addressing identified issues, implementing user-suggested enhancements, ensuring a smooth and efficient lending process
4. Progress Tracking: Measure user feedback and incorporate improvements into the MVP, conduct performance testing, and monitor system stability

Quarter 2 2024:

Key Milestone 4: Beta Release and User Feedback Gathering

• Deliverables: Beta version of the platform, User feedback collection and analysis
• Outputs: Open beta testing environment, valuable insights from beta users
• Intended Outcomes: Gather user feedback for further platform refinement, identify areas for improvement, and ensure a user-centric lending ecosystem
• Progress Tracking: Measure the number of participants in beta testing, collect user feedback, and analyze feedback to inform further enhancements

Project Progress Tracking:

• Completion of deliverables and milestones within the specified timeline
• User engagement metrics, such as the number of users signing up, participating in testing, and providing feedback
• Bug reports and their resolution status
• User satisfaction surveys and feedback analysis
• Performance metrics, including platform response time, uptime, and transaction speed

Measurement Methods:

• User analytics tools to track user activity, engagement, and behavior
• Bug tracking systems to monitor reported issues and their resolution
• Surveys and feedback forms to gather qualitative feedback from users
• Performance monitoring tools to measure system response time and uptime

Regular reporting and updates will be provided to the Catalyst community, sharing project progress, key metrics, and outcomes achieved

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

We would like to request a funding of 160,000 ADA to support our 12-month project. Please find below the detailed breakdown of the required amount:

(Kindly note that all currency values mentioned here have been converted from Ringgit Malaysia (RM) to ADA at the rate of 0.29 USD.)

Here is some marketing and Business Development fund:

Moreover, here some Case Scenario we predict:

(Kindly note that this growth pertains to the overall company and not just the development phase.)

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

The cost of the project represents excellent value for money for the Cardano ecosystem due to the following reasons:

1. Justified Costs: The project costs have been determined based on careful market research, analysis, and industry standards. We have considered factors such as the average wage in our country and typical freelance rates in the relevant industry. This ensures that the costs are reasonable and proportionate, providing value for the resources invested.
2. Long-Term Benefits: The project's value extends beyond the initial investment. By building a robust lending platform and fostering economic growth, we create long-term benefits for the Cardano ecosystem. The project contributes to financial inclusion, supports SMEs, and provides investment opportunities for crypto-holders, enhancing the overall ecosystem's value proposition.
3. Potential Return on Investment: The project's success has the potential to generate substantial returns for stakeholders within the Cardano ecosystem. The value created through increased lending activities, user adoption, and ecosystem expansion will outweigh the initial investment. This aligns with the principle of generating sustainable and meaningful returns for participants.

[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