Sweetbridge

  • Cryptoasset Report
  • November 19, 2018

Sweetbridge is a collateral backed lending service, initially for crypto-assets and later supply chain assets, that aims to offer analytic resources and liquidity across global supply chains.

Overview

Sweetbridge is developing a blockchain-based lending service and liquidity provisioning platform. It proposes to, initially, use cryptocurrency as collateral for asset-backed loans. In subsequent stages, Sweetbridge’s borrowing mechanism plans to evolve to incorporate a far wider range of “real world” collateral. Collateralizing virtually every asset from the traditional economy—especially global supply chains— is Sweetbridge’s ultimate ambition. Developing the knowledge and the algorithms to incorporate every asset of global supply chains, from a factory to a ship and from inventory to accounts receivable, will potentially allow borrowing against as much as $50 trillion in locked-up capital whilst reducing costs across both supply chains and the economies they serve. Subsequent stages of the Sweetbridge project call for including both trade and billing settlement within the system, incorporating an accounting layer, and eventually adding resource optimization facilities. As envisioned, these additional layers will increase efficiency and reduce both risk within supply chains as well as capital costs as billing cycles are shortened.

Sweetbridge is led by a sizeable team with extensive experience in logistics and supply chain management. CEO Scott Nelson founded a large freight audit and payment firm; President Mac McGary has led several supply chain startups in addition to serving as Chief Revenue Officer for a leading supply chain and visibility company; Micha Roon, senior smart contracts developer, has trained corporate groups in the creation of Ethereum smart contracts in addition to having founded and served as CTO for data management and distributed systems startups; CFO David Henderson has served as European controller for supply chain logistics for a leading technology company.

The core of Sweetbridge’s vision is the lending function that allows owners to borrow against their own crypto assets locked into smart contracts within personal vaults. In the initial stages these assets will be exclusively cryptocurrencies. When borrowing against pledged assets, users set a “notice limit,” representing the level at which they would automatically be informed that they were approaching or had exceeded their borrowing capacity should the price of their underlying collateral decline. Should their collateral continue to decline, they would be notified by the smart contract of an approaching liquidation level, at which point their collateral would begin to be liquidated as to bring their borrowing ratios back into line.

Asset Details

The Sweetbridge liquidity system is built around two tokens. The first, Bridgecoin (BRC), is intended to be a stable coin, pegged to a fiat currency. Lending occurs in the form of Bridgecoin, allowing easy transfer within the network or conversion to fiat. The second, Sweetcoin (SWC) is a tradable ERC-20 token that will serve six functions on the platform: (1) The token will offset interest liability from using the vault— potentially up to 100% of interest fees— the exact discount a function of the global amount of SWC activated by token holders. (2) It will increase borrowing limits on pledged collateral. (3) It will lower fees when using Settlement Bus. (4) It will offset fees from converting BRC to fiat. (5) Lending and exchange during times of high demand will be prioritized by token holdings. (6) Like other crypto-assets, SWC can be used as collateral.

The total supply of Sweetcoin will be 100,000,000 tokens, of which 65 million will be available directly to the public through a series of crowd sale rounds extending over the life of the project. 44.7 million SWC will be sold at 10% below the market price over the project’s lifetime, in tiers, based upon milestones, including network expansion. This mechanism for later sale rounds to be carried out only if network growth is satisfactory is a thoughtful attempt to ensure the market is not swamped with tokens from an initial state. The proceeds of these last rounds will fund the establishment of additional Bridgecoin-fiat pairs, bolster Bridgecoin liquidity, and support project investment, marketing, and ecosystem development.

The balance of the token supply includes 10 million SWC tokens reserved for donations to non-profits promoting sustainable economic activity, and a further 5 million reserved for Sweetbridge alliance partners, all of which will be released on a graduated basis in proportion to the SWC network’s growth. Nine million tokens will be held by Sweetbridge as a reserve, with 11 million granted to the team and advisors, of which 4.7 million will be immediately liquid with the balance distributed over time. At the beginning of the first public sale tier, Sweetbridge employed a novel sale mechanism intended to jumpstart and reinforce the network’s liquidity provisioning aspect, whereby prospective token sale contributors initially used fiat to purchase Bridgecoin to be staked to reserve their place in the queue to purchase SWC, with increasing amounts of Bridgecoin required to purchase SWC as the rounds progress.