The characteristics of blockchain, such as decentralization and resistance to tampering, can effectively solve problems in credit transmission. Credit itself is based on the concept of a traditional centralized production relationship.
Amplify will use its years of experience in the supply chain finance and blockchain industries to establish on-chain governance mechanisms. It will be initially composed of various professionals with experience in major accounting, legal institutions, and financial institutions, yet open to any party that earns the trust of the network participants in their abilities to perform these and other specialized functions. This “Governance” would be the body that helps to whitelist entities through background checks and other risk management techniques to perform specialized functions within the ecosystem (e.g. tokenizing invoices).
Once core entities have passed the whitelisting process, they may participate on the on-chain borrowing. The financial threshold for financing would be lower than for standard SCF, which would allow currently underserved participants to obtain credit as well.
The members of Amplify’s on-chain governance council will conduct background checks on companies that wish to obtain credit through Amplify. Once they have passed the initial KYC process, these new enterprises must create new digital identities on Amplify that will facilitate any future financing.
In order to solve the problem of insufficient liquidity, we plan to digitize all assets currently generated by the SCF system. The natural transit-and-settlement model of blockchain technology and the current mature DeFi market, together with the Amplify protocol’s incentives, can help Amplify’s users improve their trading efficiency.