Decentralized trade finance using blockchain and lightning network

Abstract

A decentralized trade finance system is urgently needed, as smart contracts and blockchain can make the entire process fast, secure, and efficient while also allowing ordinary people to participate in the global economy. Decentralization will increase trust and transparency, as well as allow smaller businesses to participate in the industry, resulting in more jobs and a boost to the economy. We have also taken a decentralized approach to solving this massive problem with our project. We propose a decentralized trade finance model that is owned by the general public, such as you and me. On the one hand, a community of people like you and me give liquidity to the platform's liquidity pool via a lighting network, while on the other hand, importers and exporters can create profiles and engage in trade finance via the decentralized network. The exporter will use the platform validator to validate their invoice and then apply for trade finance.If everything goes well, the exporter will get monies from the liquidity pool, and the platform will be compensated by the importer after the trade is completed.Everyone involved in the process will receive trade tokens when each successful deal is completed, incentivizing the participants' good behavior.

Blockchain of things (BoT) innovation for smart tourism

“…Another key function of blockchain technology is the ability to provide decentralized consensus and trust among participants on the network (Swan, 2015). Blockchain can also be used to create decentralized identity systems, enabling individuals to have greater control over their personal data and privacy (Chen, Lee, et al, 2022; Harvey et al, 2019). In the financial sector, blockchain can be used to facilitate cross‐border payments and remittances, reducing costs and transaction times (Lamport, 2019).…”

A Review of the Lightning Network’s Evolution: Unraveling Its Present State and the Emergence of Disruptive Digital Business Models

“…For example, some authors have focused on the LN's development, potential non-monetary uses, along with legal challenges that may impact LN adoption [13]. Other authors discuss recent advancements and applications of the LN in various domains such as international remittances, energy trading, decentralized trade finance, micropayments, consumer IoT devices, food safety management and securities settlement [14][15][16][17][18][19][20][21]. However, it is not clear from the available literature the added value brought forward by the LN as well as the various challenges underpinning the adoption of the LN by merchants and the business sector.…”

“…In the realm of decentralized trade finance, Ref. [16] present a model leveraging the LN, enabling importers and exporters to engage in trade finance via a decentralized network. Additionally, Ref.…”

“…The LN and its characteristics provide an interesting fit in this use case scenario. In [16], the authors propose a decentralized trade finance system that leverages smart contracts and blockchain technology to improve efficiency, security and accessibility. This system increases trust and transparency, enabling smaller businesses to participate in the global economy and contribute to economic growth.…”