Delana, The Cardano Factoring Platform

[GENERAL] Name and surname of main applicant

Alejandro Rodriguez

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Not Incorporated)

[GENERAL] Co proposers and Additional applicants

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] Summarize your solution to the problem (200-character limit including spaces)

Platform to democratize the access to credit through the discounted sale of tokenized invoices of small companies. Trade for everyone, reduce risk, and boost growth in a trust-filled marketplace.

[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?

No

[GENERAL] Please provide here more information on the open source status of your project outputs

In line with Blockchain philosophy, we are committed to the principles of collaborative development and transparency. As such, all elements of the Delana project that directly interact with the Cardano network, including our smart contracts, will be open source. This reflects our commitment to give back to the Cardano community and contribute to its ongoing growth.

However, we must also consider the unique requirements and challenges of running a platform like Delana. With that in mind, there are certain elements of our project that won't be open-source for specific reasons:

• Backend Infrastructure: This involves our custom databases, servers, and data-processing systems that form the backbone of Delana. Open-sourcing these components could risk exposure of sensitive data, potentially compromising the security and privacy of our users.
• Business Algorithms & Logic: The services and core features of Delana are driven by our unique business models and proprietary algorithms. These provide us with a competitive edge, and making them open-source could offer our competitors an opportunity to mirror our business model, threatening the platform's potential for profitability and growth.

[METADATA] SDG rating

SDG goals

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

SDG subgoals

• 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 labor-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.
• Improve progressively, through 2030, global resource efficiency in consumption and production and endeavor to decouple economic growth from environmental degradation, in accordance with the 10‑Year Framework of Programmes on Sustainable Consumption and Production, with developed countries taking the lead.
• 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.

Key Performance Indicator (KPI):

• Level of national compliance with labour rights (freedom of association and collective bargaining) based on International Labour Organization (ILO) textual sources and national legislation, by sex and migrant status.
• Average hourly earnings of employees, by sex, age, occupation and persons with disabilities.
• Proportion of informal employment in total employment, by sector and sex.

[SOLUTION] Please describe your proposed solution.

Imagine being a small business in a developing country, where the financial landscape is challenging. Despite Micro, Small & Medium Enterprises (MSMEs) making up 99% of businesses, contributing significantly to employment and GDP, they receive less than 15% of the credit allocated to companies [1]. Traditional invoice factoring, a potential lifeline, is slow, inefficient, and costly, with extensive paperwork, high fees, and long payment cycles that stifle growth. It's also often inaccessible to startups and smaller enterprises without strong credit histories. Fraud is another concern, with activities like invoice duplication and falsification of documents increasing risks and costs. Lastly, the lack of transparency in pricing, terms, and conditions adds to the confusion and difficulty for MSMEs trying to manage their cash flow and financial obligations. It's a tough road that many businesses navigate daily [2].

Delana is a breath of fresh air in the invoice factoring industry, offering a decentralized platform built on the Cardano blockchain that directly addresses the challenges MSMEs face. It's a marketplace where MSMEs, customers, and investors meet, enabling companies to sell their invoices at a discount for immediate payment, thus boosting their working capital management. The platform simplifies the factoring process, reduces risks and enhances trust between parties. Delana’s ecosystem will have 3 main actors that will get different benefits from interacting with the platform:

• Benefits for MSMEs
• Increase your cash flow: Get your invoices financed quickly with low rates.
• Worldwide access to funds: No borders to get liquidity. Marketplace with global access around the world.
• Easy to use: Get funding almost real-time with their sales as collateral.
• Benefits for Investors
• Yield: Provide liquidity and get a high yield with low-risk in return
• Transparency: Transaction details are transparent and easily accessible to all parties involved.
• Minimize associated risks to payments and fraud
• Automation: Get your investment paid on time by automated transactions.
• Benefits for Companies Buying
• Reduce operational costs and implicit control on payments to providers/suppliers.
• Rewards in the form of token/discount for on-time payments.
• Payment automation.

Our Platform

In the steps below, the numbers are shown as an example:

1. Purchase: Buyer orders $5000 worth goods from the seller.
2. Invoice: Seller delivers goods, issues $5000 invoice due in 90 days.
3. Tokenization: Seller uploads the invoice to Delana, discounts it to $4900 for immediate payment.
4. Approval: Buyer confirms the invoice on Delana.
5. Investment: Investors on Delana collectively fund the $4900.
6. Payment: Seller receives $4900 instantly, improving their cash flow.
7. Invoice Due: After 90 days, buyer pays the full $5000 to Delana.
8. Return: Investors receive their initial investment plus interest (~$5000 = $4900 + ~8% APY)

Components

Delana's platform is built on several core components:

• Decentralized Ledger: The foundation of the Delana platform, the decentralized ledger securely stores token ownership and transaction data, ensuring the immutability and transparency of all records.
• Tokenized Invoices: Delana utilizes tokenization to represent each invoice as a unique digital asset on the platform. These tokenized invoices contain essential information, such as the invoice amount, due date, seller and buyer details. Tokenization simplifies the trading of invoices, enabling seamless transactions and reducing the potential for disputes and frauds.
• Smart Contracts: The platform employs smart contracts to automate various aspects of the invoice factoring process, such as payments, collateral management, and dispute resolution.
• Historical Record: Delana maintains a comprehensive historical record that tracks the performance of every participant on the platform, including their transaction history, repayment rates, and risk profiles. This information is crucial for assessing the creditworthiness of borrowers and payers, as well as for determining appropriate discount rates for invoices.
• Delana Protocol: The Delana Protocol serves as the backbone of the platform, connecting suppliers of investment assets with demands of liquidity. By matching investors with suitable investment opportunities and facilitating the efficient flow of capital, the protocol ensures that MSMEs can access the funds they need to sustain and grow their businesses.

Smart Contract Development

For the development of our smart contracts, the majority of our focus will be on using Marlowe, using toolsets designed specifically for financial contracts on Cardano. Marlowe offers us a high-level, intuitive way of constructing contracts that ensure transparency, security, and efficiency, making it a perfect fit for our invoice financing platform.

However, while Marlowe is great for most of our needs, there may be specific features and exceptions in our design that necessitate the use of a more flexible and general-purpose language. For these, we'll be using Plutus. Our team has extensive experience and expertise with Plutus from working on IOG projects, so we're well equipped to handle any complexities that arise.

Marketplace

The Delana marketplace serves as a central hub for investors to access a wide range of tokenized invoice investment opportunities. It offers a user-friendly interface and provides detailed information about each opportunity, such as the Company Buyer's profile, payment record, feedback from other investors, transaction volume, suggested interest rate and invoice details. This wealth of information empowers investors to make well-informed decisions and maximize their returns while ensuring secure, traceable, and tamper-proof transactions through blockchain technology.

Catering to both institutional and individual investors, the Delana marketplace democratizes access to investment opportunities, fostering financial inclusion and allowing more people to benefit from the growing invoice factoring market. This feature contributes to the overall economic growth of the region and enhances investor confidence in the Delana ecosystem.

Payments

The platform will utilize a stablecoin available in Cardano (TBD; e.g. DJED or iUSD) for loans to MSMEs, return payments for investors, and fees. Payers will also use this stablecoin for their invoice payments. This approach ensures stability and mitigates the risks associated with ADA price volatility.

--While out of the scope of this proposal, in the long term Delana has plans to explore the introduction of its own utility token as a means of incentivizing positive behavior within the ecosystem's operations.--

Use Case Examples

1. A company categorized as a MSME in the manufacturing sector has a 60-day payment term with a large buyer. The MSME buyer has a solid payment history, but the MSME needs funds immediately to cover operational costs. The MSME tokenizes its invoice on Delana, enabling investors to purchase the invoice at a discounted rate. The investor gains an attractive return, while the MSME receives immediate funding.
2. A small retailer in Latin America has a stable relationship with its supplier but struggles to manage cash flow due to delayed payments from customers. The retailer tokenizes its accounts receivable on Delana, allowing the supplier to factor these invoices and receive immediate payment. The supplier gains liquidity, while the retailer secures essential goods for its operations.
3. An investor is seeking alternative investment opportunities with attractive returns and low risk. Through Delana's platform, the investor can access a diverse pool of tokenized accounts receivable with varying risk profiles and returns. The investor can diversify their portfolio and invest in multiple invoices, spreading the risk and maximizing returns.

The current scope of the PoC is mainly focused in the backend which includes:

• Log in of the different roles (buyer, seller and investor) using their public address.
• Seller uses invoices imported previously manually by the Admin of the PoC.
• Each invoice has its own smart contract with, for the moment, just basic info as seller, buyer and amount.
• Buyer can confirm that invoice. Therefore the state of the invoice changes from "Not confirmed" to "Confirmed".
• Investor can see the invoices available where capital can be added.

Access our public PoC through our website: https://www.delana.io/

[IMPACT] Please define the positive impact your project will have on the wider Cardano community.

Delana will become the first Factoring solution built on the Cardano Blockchain allowing MSMEs to access credit and allowing their businesses to grow fast while investors from all over the world will get low-risk yield in return. This will mean a massive adoption of Cardano Blockchain in a real world use case with a real world mission: financial inclusion.

We want to become a worldwide platform expecting thousands of businesses to use Delana and dozens of thousands of investors to take advantage of the APY offered by the platform.

We'll also encourage developers to build solutions for real-world business applications on Cardano, strengthening the Cardano reputation, the ecosystem and encouraging innovation. In the long run, this project's success could position Cardano as a leading choice for FinTech solutions, enhancing its global reputation.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Our team brings a unique blend of industry experience and technical acumen as we have a proven track record. Our core team has worked in IOG for the last 2 years, in Fintech and Blockchain for over a decade. We have strong financial management skills, underscored by experience with previous startups. We've managed budgets effectively, ensuring optimal use of resources.

We ensure proper management of funds through:

1. Detailed Budgeting: We allocate funds comprehensively to cover all project expenses.
2. Financial Controls with Multi-Sign Wallets: We ensure strict oversight and security by using multi-signature wallets and implementing approval processes for fund transfers.
3. Regular Reporting: We provide transparent financial reports to keep stakeholders informed about project finances.
4. Open Auditing: Our financial processes are auditable by the community and external stakeholders, promoting accountability and independent verification.

[Project Milestones] What are the key milestones you need to achieve in order to complete your project successfully?

MILESTONE 1

Evolution of the PoC - Front end: Invoice registration & login modules

Tasks:

1. Improve front end and evolve UI/UX design: Design and implement a user-friendly interface.
2. Enhance the PoC login system, including password hashing and encryption.
3. Evolve the invoice registration to allow the sellers to input invoice customizable details.
4. Implement role-based access control (RBAC) to restrict user access to specific features and functionalities.

Success criteria: Each role may have access to its specific features through the login portal.

Delivery date: End month #1

MILESTONE 2

Fraud risk detection and secure marketplace

Tasks:

1. Implement validation and verification checks on invoice data to ensure accuracy and prevent fraudulent entries.
2. Add non-confidential information about the invoices in smart contracts deployed in the decentralized ledger.
3. Integrate appropriate APIs for listing invoices in the marketplace, while storing the complete invoice information in a traditional database for enhanced security and confidentiality.
4. Implement search and filtering options for invoices based on specific criteria (e.g., amount, due date, MSME name).

Success criteria: All components of the platform have been successfully developed and passed internal testing.

Delivery date: Month #3

MILESTONE 3

Payments automation & Historical data

Tasks:

1. Integrate Decentralized Ledger for transaction data securely.
2. Implement smart contracts to automate the invoice factoring process and enforce terms and conditions agreed upon by the parties involved.
3. Implement mechanisms for associating tokenized invoices with relevant metadata, such as invoice details, due dates, and payment information.
4. Integrate token management functionalities, allowing users to view, transfer, and redeem tokens associated with invoice ownership.
5. Optimize the UI to provide a seamless and intuitive experience for all user roles.
6. Develop a system for tracking historical records of buyers and sellers, including transaction history, payment records, and dispute resolutions.
7. Implement a user interface to access and view transaction details and historical data.
8. Continuously improve the user interface (UI) and user experience (UX) based on user feedback and usability testing.

Success criteria: Marketplace is fully functional. All features successfully pass performance tests. Any identified issues, bugs, or vulnerabilities are addressed through debugging and refinement processes, ensuring a stable and reliable marketplace experience.

Delivery date: Month #5

MILESTONE 4

Delana platform launch

Tasks:

1. Launch the initial version of the platform.
2. Roll out marketing campaigns to onboard early users to the platform.
3. Collect their feedback, and identify areas for future enhancements.

Success criteria: Successful launch with positive user feedback, early users onboarded, and actionable feedback collected for future enhancements.

Delivery date: Month #6

[RESOURCES] Who is in the project team and what are their roles?

Delana's team is composed of former IOG employees and highly experienced and qualified professionals with diverse backgrounds in fintech, blockchain, and financial markets. The team members have held leadership roles in companies such as IDB, Cardano, NYSE, and Visa, and are dedicated to solving the unique challenges faced by MSMEs in Latin America's financial landscape.

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Name: Ilan Melendez

Link: here

Email: ilan@delana.io

Bio: Former IOGer. As a guy who's spent years immersed in blockchain (Cardano, LACChain, Government Blockchain Association), Ilan has a knack for juggling web3 tech and strategy. Known as the 'go-to negotiator', he's got an impressive track record of resolving conflicts and building trust.

Responsibilities: He's the one who's going to make sure the Delana project keeps ticking along nicely, while also acting as our main point of contact with our customers.

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Name: Fernando Ontiveros

Link: here

Email: fernando@delana.io

Bio: Former IOGer. Fernando has been in the game for over 25 years, designing software architecture for a whole host of different projects. He's got a great head for strategy, too, honed through his previous gig as a co-founder and CTO.

Responsibilities: Fernando is going to be our go-to tech guru, overseeing the technical aspects of Delana and making sure it meshes well with the Cardano ecosystem.

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Name: Alejandro Rodriguez

Link: here

Email: alejandro@delana.io

Bio: Former IOGer. Alejandro is a bit of a wizard when it comes to business development, with a strong background in finance and a history of working with various fintech startups. He's the kind of guy who can talk to anyone, which is key when you're building partnerships.

Responsibilities: He'll be the one steering the marketing ship, creating compelling stories to engage our audience and boost the Delana brand.

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Name: Roberto Intriago

Link: here

Email: rob@delana.io

Bio: Former IOGer. Roberto knows the blockchain like the back of his hand. He’s also got a great eye for design and understands the importance of a good user experience. With his deep understanding of Cardano and its vision, he's uniquely positioned to help us tap into the potential of Web 3 tools.

Responsibilities: Roberto will be focused on refining the technical side of Delana, while also making sure our UX/UI is as user-friendly as possible.

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Name: Douglas Montero

Link: here

Email: douglas@delana.io

Bio: Having made his mark in the financial trenches of the NYSE and NASDAQ, Douglas is a seasoned pro when it comes to finance. With a proven ability to lead teams and communicate effectively, he's been turning strategies into successes for years.

Responsibilities: He'll be the guy who guides us on all things financial, making sure we're making smart moves with our investments.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources.

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

The budget for our Delana project is based on an average hour rate of ₳ 73 which is aligned with industry standards for resources based in LATAM region. This cost includes project management, architecture, UI/UX design, feature development, testing, and platform launch, all performed by our highly experienced team.

Each ADA spent on Delana is an investment in the Cardano ecosystem, aiming to strengthen it by enabling MSMEs in developing countries to access funding, attracting new users and showcasing Cardano's utility. Thus, we believe the project represents excellent value for money.

Justification of the cost:

1. PM, Architecture & UI/UX Design: Our experienced team ensures maximum value per ADA spent, producing a user-friendly and efficient platform.
2. Core Features Development: Building secure and efficient systems on Cardano requires skilled blockchain engineers, thus justifying the cost.
3. Testing and QA: To launch a high-quality, bug-free platform, rigorous testing is necessary, warranting its allocation in the budget.
4. Launch & User Feedback: The marketing and support team will ensure effective platform launch and collection of crucial user feedback.

[IMPORTANT NOTE] The Applicant agrees to Fund 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