Stellar Community Fund

By Clear

Clear - Liquidity for payments

SCF #26

$45.0K

Legacy v5.0 Activation Award

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Asmart contract solution connecting payment companies to instant liquidity from individual guarantors for their daily operations.

Products & Services

Utilizing the power of Soroban, Clear aims to become the first community-based liquidity pool for payment institutions that want to streamline their operations and reduce settlement times.

Blockchain based, real-time payments are closer to becoming a reality, however, while payments on Stellar take only a few seconds to complete, the onramping and offramping of money through cards is still slowing down the process for financial institutions. While local government initiatives like ACH (US), SEPA (EU) and others make cheap and instant acquiring a reality, card payments are still very much the norm. Unfortunately, card payments are settled in no less than 24 hours after receiving the payment confirmation, at best, unless you are willing to pay predatory fees in order to get the money right away. These costs are then passed down to the client in international transfers and other operations, making it a very unfair situation for the senders, and the recipients will have to wait various days for the final amount to arrive unless they are willing to pay the high prices of instant (pre-funded) transfers.

By signing up to Clear, payment companies will no longer have this issue, as they’ll be able to access short-term liquidity provided by individuals through our Webapp. Finally, financial institutions can enjoy instant settlements of card payments for a non-predatory price, while being able to offer cheap and instant transfers for their customers.

Clear solves this by offering payment companies: Instant Deep Liquidity, Simple Pricing, Flexible repayments, and a tech-free integration through a dashboard or a simple API integration. Payment companies will be able to apply to this liquidity but will have to undergo a rigorous KYB process beforehand, in order to ensure that the companies are legit and able to operate before accessing funds. This is done in order to maximize the security of the deposits of end-users.

On the other side, liquidity will be provided by individuals looking to obtain interest payments. By adding funds to the liquidity pool, they will be given daily payouts, based on the EoD amount that has been used up by the previously approved Payment Institutions. Liquidity, as well as rewards in the form of loan interest payments, will be paid out in USDC and will bear a flat daily interest of the total amount loaned out, and will be distributed according to the % share of the liquidity pool that each individual has.

In order to make this a reality we will have to create the following: Smart contract system - This will self execute the payments based on the amount used by the payment institutions, the time they’ve taken to repay and the interests offered in exchange for the daily upfront liquidity.

And; 3-sided Webapp - Where customers can login using “Wallet-connect” to deposit USDC for the liquidity pool and view their transaction history as well as the interests earned, Payment Companies can request liquidity and manage their account and an admin dashboard.

In order to protect individuals who are giving out loans, our dashboard will display publicly the amount that each PI has asked for (while remaining anonymous), as well as their repayment history. Based on this and for customer simplicity, we will add a public credit score (Clear score). If a Payment institution pays late, their score will decrease until the point where they won’t be allowed to access the liquidity pool. If they fail to pay, they will be automatically expelled. In order to make sure that Payment institutions don’t cheat the system by taking out a large loan and not pay it back, there will be a progressive system in place, where they will only be able to access a small amount at first, and progressively build up to larger amounts as they prove their ability to pay back, much like the current credit system.

Clear’s aim is to improve access to liquidity which nowadays is trapped and badly managed by a few Financial institutions. This will also allow individuals, with small amounts of funds, to access a market which is completely inaccessible for them right now. Join Clear’s mission to make the short term loan market efficient, and that all individuals, not just a handful, can benefit from it.