Global receivables and trade credit markets exceed $20 trillion, yet remain among the most inefficient financial systems in the world. Capital moves slowly, underwriting is fragmented, documentation is manual, and settlement cycles often stretch for months. Factoring companies, banks, and specialized lenders frequently operate with outdated infrastructure, restricting liquidity and limiting access to yield-bearing assets.
Meanwhile, crypto capital remains abundant, underutilized, and yield-starved. After the decline of unsustainable DeFi yield strategies, investors increasingly seek real, uncorrelated returns backed by productive economic activity. However, traditional receivables and credit assets have historically been inaccessible to on-chain participants due to the complexity of verification, performance monitoring, regulatory overhead, and the inability to enforce risk alignment between asset originators and investors.
This disconnect between a massive yield-producing real economy and an underutilized digital capital ecosystem defines the capital inefficiency gap.
Tokenization offers a path to transform receivables—healthcare reimbursements, SMB invoices, real-estate financing, and specialized factoring contracts—into programmable on-chain instruments with:
However, previous attempts at on-chain credit have faced challenges: complexity introduced by multi-layered tranching, direct exposure to borrowers, opaque underwriting, and insufficient real-time validation of underlying assets. These limitations prevented scalable institutional adoption.
Factor introduces a fundamentally different model.
Factor brings real-world credit on-chain using a risk-aligned underwriter-first-loss framework.
Instead of exposing investors to borrower defaults or structuring complex tranche systems, Factor requires approved underwriters to: