The Sivo DeFi model integrates three key parties: originators, capital sources, and borrowers. Originators—typically fintech companies or similar entities—identify borrowers and offer them credit in exchange for future sales. Capital sources, similar to suppliers on platforms like Compound, provide the necessary funding to purchase these receivables. Borrowers include individuals, such as gig workers, or businesses that exchange future sales for credit.
In this model, originators issue credit to borrowers, which can be funded either from their own balance sheet or by awaiting disbursement from capital pools. Once issued, these receivables are immediately purchased by capital pools associated with the originators' portfolios, facilitated by the network. This approach allows originators to focus on borrower acquisition and marketing, driving consumer purchases and accelerating loan repayment. Meanwhile, capital pools handle the funding, and the protocol manages loan servicing.
A significant advantage for originators is the ability to generate substantial returns, which provide them with the resources to partner with licensed lenders for the initial lending process if needed. This model enables originators to achieve returns comparable to or exceeding those of traditional lending while avoiding managing a full lending portfolio.
Traditionally, lenders must fund their lending portfolio from their own balance sheet, raise capital from debt funds, and, after years of effort, secure a forward flow model from banks to scale their portfolios. Sivo DeFi simplifies this process by providing immediate access to a forward flow model, allowing originators to focus on their core competencies while avoiding the labor-intensive and complex process of capital acquisition.
Originators could include a diverse range of the thousands of marketplaces and on-demand platforms operating globally. These vary from smaller, niche platforms serving specific industries or regions to large, well-known platforms like Amazon, Airbnb, and Uber, which connect gig workers and merchants with consumers. By exchanging future sales for credit, these originators can incentivize consumers to purchase from borrowers, thereby generating the necessary cash flow to repay the loans.
Repayments could be collected directly from the platform's payment flows, while underwriting could leverage the platform's data for more accurate risk assessments. This approach enables originators to earn substantial returns without needing to raise capital or manage a traditional lending program. Instead, they can use their existing infrastructure to drive revenue growth, attract new and repeat customers to borrowers, and accelerate loan repayment—while creating substantial origination for Sivo DeFi.