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The PayPledge platform works with a Bittensor subnet designed to integrate credit scoring, trade transaction underwriting, and payment processing to facilitate the financing of trade transactions.
Bittensor Subnet Architecture
Roles
The PayPledge platform relies on Underwriters (as Miners) and Validators to facilitate secure trade finance transactions. Underwriters, serving as Miners on the Bittensor subnet, provide Trade Tokens as collateral, perform credit underwriting by evaluating Underwriting requests, and submit Credit Underwriting Offers with premiums and collateral to secure PayPledges. They earn Underwriting Premiums and TAO token emissions (41% of Bittensor subnet emissions), distributed based on PayPledge validator assessments of premium competitiveness, collateral coverage, and Offer frequency. Validators ensure quality by scoring Underwriter performance, influencing TAO token distribution.
Componenets
| Component | Description |
|---|---|
| PayPledge Application | User interface for Buyers/Sellers to initiate paypledges & request credit underwriting. |
| Validator | Manages credit underwriting request distribution, miner evaluation, and offer selection. |
| Miners | Process requests (CURs), provides collateral by funding liquidity pool, and submit Credit Underwriting Offers (CUOs). |
| Subtensor | The underlying blockchain for the Bittensor network. |
| Bridge Service | Facilitates collateral movement between the public network and the private network by minting Trade Tokens (ERC-3643) with a 20x leverage factor. |
| Private Network Contracts | Smart contracts like CreditManager, CollateralManager, and TradeTokenBridge. |
| Public Network Liquidity Pool | manages the deposit and withdrawal of ET Coins: provides collateral for underwriting. |
PayPledge uses a custom Bittensor subnet for decentralized credit underwriting. A buyer initiates a credit underwriting request via the PayPledge application. If no preferred underwriter exists, the request is forwaded to configured validator in the subnet. The validator broadcasts the request to all active miners. Each miner:
- funds the liquidity pool with ETCoins and TradeTokens (with 20x leverage and applicable dollar value) are minted via a bridge service
- conducts independent risk assessment.
Miners submit underwriting offers to the Credit Manager contract on a private EVM chain. The validator then selects the optimal offer based on premium and collateral coverage, finalizing it on-chain. Collateral is locked through the Credit Manager contract into the PayPledge smart contract.