Gateway for crypto investors to fund real world fast-growing subscription businesses
Reverb Finance is all about providing new decentralized financing solutions to the subscription economy. We want to enable a gateway for crypto-native investors willing to invest in real-world assets, which have a subscription business model. In this case, crypto investors would be financing fast-growing subscription businesses, which are collateralizing their future monthly contracts in exchange for a lump sum amount. Such a financing model - called Revenue-Based Financing in TradFi - provides value to those subscription businesses by enabling them to invest in their growth without the pain of requiring dilutive external capital (e.g. VCs or Venture Debt). They simply get an annual upfront payment on Day 1, at a certain discount, by converting their future contracted monthly revenues. Thanks to blockchain technologies (see more technical info below), we have built the gateway to unlock funds sitting in crypto, by leveraging DeFi tools and potential, towards finally off-ramping those funds to unleash well-earned growth to founders in the real economy. Such a model offers obvious advantages on the investment/supply side, by generating constant yields, flexibility, and liquidity to a large array of investors (institutional and retail). On the demand side, Reverb Finance provides recurring businesses with a seamless experience to enter their financial information before obtaining tailored financing solutions and get paid instantly. On top of the financial gateway, Reverb Finance is willing to connect real-world businesses with Crypto-native communities having similar interests and risk profiles. Reverb’s vision entails a primary (described above) and a secondary marketplace where crypto investors can swap contracts instantly. Again, we believe that the power of web3 technologies will fuel a secure, automated, and liquid environment. Ultimately, by leveraging Reverb’s Web3-fueled tech, real-world businesses will be empowered by having more financing alternatives
How it's made
We used a mechanism of DeFi pools to fund RWA. Our main liquidity pool is designed to automatically rebalance itself to allocate uninvested funds into DeFi (through an Aave pool) and in that way constantly be generating yield for the investor. We keep a fraction of free liquidity in case investors want to withdraw their funds from the pool. The idea is to further develop a secondary market in order to be able to buy specific contracts from the pool. We’ve built our project on Polygon which enables us to perform fast and cheap transactions. Next to our liquidity pool we have a repayment pool which will collect the interest paid by the customers we fund. The principal will be directly repaid to the main pool. The repayment pool releases the interests on a recurring basis to the main pool in order to not incentivize investors to invest the day before a payment gets received. The idea would further be to implement a superfluid flow between the repayment pool and the main pool, releasing the interests constantly.