> For the complete documentation index, see [llms.txt](https://docs.mercatocapital.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.mercatocapital.xyz/mercato.md). # MERCATO ## MERCATO **MERCATO transforms verified purchase orders into financeable opportunities**, enabling investors to fund real commercial transactions between suppliers and SMEs across Latin America. Rather than issuing unsecured loans, MERCATO connects capital directly to verified economic activity originating from existing supplier–SME commercial relationships. The result is a programmable supply chain finance infrastructure where suppliers receive upfront payment, SMEs gain access to working capital, and investors deploy capital into real commercial transactions. *** ### What MERCATO Does MERCATO digitizes the commercial purchasing process before financing occurs. Suppliers manage their companies, product catalogs, pricing, availability, and commercial relationships directly within the platform. SMEs use these supplier relationships to create purchase orders representing real commercial demand. Eligible purchase orders then become financing opportunities that investors can fund using USDC on Stellar. Once an order is financed: * The supplier receives the purchase-order payment upfront. * The supplier fulfills the commercial order. * The SME completes repayment according to the financing terms. * Investors receive their principal and corresponding return. * Settlement and repayment activity is recorded through Stellar-based infrastructure. This allows MERCATO to finance the transaction itself rather than extending general-purpose unsecured credit to a business. *** ### The MERCATO Model MERCATO coordinates three core participants around a verified commercial transaction: **Suppliers** generate commercial opportunities by offering products and maintaining relationships with SMEs. **SMEs** purchase the products they need to operate and request financing when working capital is required. **Investors** provide the capital required to complete those purchases. The financing lifecycle follows a simple structure: 1. Suppliers manage products and commercial terms. 2. SMEs create purchase orders from verified supplier relationships. 3. Purchase orders become financing opportunities. 4. Investors allocate USDC to those opportunities. 5. Once the required capital is secured, the supplier receives payment. 6. The supplier fulfills the commercial order. 7. The SME repays according to the agreed financing terms. 8. Investors receive principal and their corresponding return. For larger financing opportunities, MERCATO is expanding the model to support capital participation from up to two investors, allowing a purchase order to be funded through either a single full investment or two proportional contributions. This transforms working capital financing into programmable commercial infrastructure. *** ## Powered by Stellar MERCATO uses Stellar as the settlement and capital coordination layer behind the financing lifecycle while abstracting blockchain complexity from businesses. ### Embedded Wallets MERCATO's wallet architecture is designed to allow SMEs, suppliers, and investors to interact with Stellar without requiring traditional crypto onboarding. The platform currently supports Stellar-compatible wallet infrastructure and Pollar embedded wallets, with **Privy planned as an additional embedded-wallet integration** to simplify account creation and wallet management. The objective is for users to interact with MERCATO through familiar authentication experiences while Stellar accounts and transactions operate underneath the application. ### Programmable Financing & Repayment MERCATO uses Stellar settlement infrastructure and escrow-based workflows to coordinate capital movement between investors, suppliers, and SMEs. Investor capital finances supplier payments, while repayment infrastructure coordinates the return of principal and financing returns to investors. For multi-investor opportunities, MERCATO is expanding this architecture so investor contributions and repayment entitlements can be tracked proportionally. ### Capital Efficiency with DeFindex MERCATO integrates **DeFindex yield vault infrastructure** to make capital more productive when it is not actively financing purchase orders. Investors can allocate idle capital to DeFindex vault strategies and withdraw capital when they decide to deploy it into financing opportunities. The target architecture also expands vault access to suppliers and SMEs. Supplier and SME access will be connected to role-specific reputation policies, while withdrawals remain available so reputation controls never trap user funds. This creates a broader capital layer where participants can manage their own liquidity while remaining connected to MERCATO's financing ecosystem. ### On-Chain Reputation MERCATO is developing a Soroban-based reputation layer for suppliers and SMEs. Supplier reputation reflects commercial fulfillment behavior, while SME reputation reflects repayment behavior. Reputation events can be derived from verifiable activity such as: * Successful or late deliveries * Repayment performance * Incomplete repayments * Resolved commercial incidents Rather than storing sensitive commercial information on-chain, the architecture is designed to store reputation state and cryptographic evidence references while detailed business information remains off-chain. Reputation can then become a reusable coordination mechanism for determining access to specific financial functionality, including reputation-gated DeFindex participation. ### Fiat Connectivity **MoneyGram Ramps is the planned fiat on/off-ramp integration** for MERCATO. The integration is designed to connect USDC settlement with local fiat access, allowing users to move between Stellar-based capital and familiar fiat experiences. The target architecture uses Stellar standards including **SEP-10** for wallet authentication and **SEP-24** for interactive deposit and withdrawal workflows. MoneyGram remains subject to partner onboarding, corridor availability, and production integration requirements before being enabled for users. *** ## Commercial Workflow ```mermaid flowchart LR A[Supplier Catalog] B[SME Purchase Order] C[Financing Opportunity] D[Investor Capital] E[Stellar Settlement] F[Supplier Payment] G[Order Fulfillment] H[SME Repayment] I[Investor Repayment] A --> B B --> C C --> D D --> E E --> F F --> G G --> H H --> I ``` Capital that has not yet been allocated to a financing opportunity can remain productive through DeFindex. ```mermaid flowchart LR A[User Capital] B[DeFindex Vault] C[Available Capital] D[Financing Opportunity] E[Commercial Transaction] A --> B B --> C C --> D D --> E ``` *** ## What This Creates MERCATO creates a financing network where: * Verified purchase orders become financeable opportunities. * Suppliers receive payment upfront instead of waiting through the SME's business cycle. * SMEs gain access to working capital tied directly to productive purchases. * Investors finance identifiable commercial activity rather than general-purpose unsecured credit. * Capital can remain productive through DeFindex when it is not financing transactions. * Commercial fulfillment and repayment activity can contribute to portable on-chain reputation. * Stellar coordinates settlement and recurring financial activity underneath the user experience. *** ## Why MERCATO Is Different Traditional lending begins with the question: **"Should we lend money to this business?"** MERCATO starts with a different question: **"Is there a verified commercial transaction worth financing?"** That distinction changes the structure of the financing model. Instead of creating financing independently from commercial activity, MERCATO first digitizes the relationship between suppliers, products, SMEs, and purchase orders. Capital is then deployed against that commercial activity. This creates a financing system built around real purchasing demand rather than unsecured access to capital. *** ## Network Effect MERCATO's distribution model is also embedded in the commercial network. A supplier does not represent only one potential user. Suppliers maintain relationships with multiple SMEs that repeatedly purchase products and may require working capital. SMEs interact with suppliers, investors finance their purchases, and successful transactions generate additional settlement and repayment activity. This creates a potential network effect: ``` Supplier ↓ SME Network ↓ Purchase Orders ↓ Financing Opportunities ↓ Investor Capital ↓ Recurring Commercial Activity ``` As the network expands, each new commercial relationship can generate additional financing opportunities and recurring Stellar transactions. *** ## Ecosystem Impact MERCATO is designed to bring recurring real-world commercial activity onto Stellar. Every financed purchase order can generate multiple interactions across the network: **capital allocation → supplier payment → commercial fulfillment → SME repayment → investor repayment** Additional infrastructure such as embedded wallets, DeFindex vaults, reputation, and fiat ramps reduces the distance between traditional business workflows and Stellar-based financial infrastructure. The objective is not simply to put financing transactions on-chain. It is to make Stellar the underlying coordination layer for a repeatable supply chain financing network. *** ## Current Status * Operational MVP on Stellar Testnet * 14+ businesses using MERCATO in Argentina * +22 additional businesses from Puerto Iguazú being onboarded through the MICE Argentina network * Two suppliers within BIMBO's broader supply chain using MERCATO in Costa Rica * Supplier product catalog and commercial management infrastructure operational * Supplier referral and SME onboarding infrastructure developed * Stellar Instaward completed * Participated in the Impacta Program and Código Alebrije Scale Hackathon * Preparing the financing infrastructure and Stellar integrations required for Mainnet deployment *** ## Road to Mainnet MERCATO's next development phase focuses on moving from validated Testnet infrastructure toward a production-ready financing network on Stellar Mainnet. The primary areas of development are: **Embedded wallet infrastructure** Integrate Privy and improve wallet abstraction across SMEs, suppliers, and investors. **Capital efficiency** Expand DeFindex integration so participants can manage capital and move liquidity between yield strategies and financing opportunities. **Multi-investor capital allocation** Allow larger purchase orders to receive proportional capital from up to two investors while maintaining transparent allocation and repayment accounting. **Reputation infrastructure** Deploy role-specific Soroban reputation for supplier fulfillment and SME repayment behavior. **Fiat connectivity** Integrate MoneyGram Ramps for supported fiat-to-USDC and USDC-to-fiat workflows. **Mainnet settlement** Deploy and validate the financing, repayment, monitoring, and transaction infrastructure required for production activity on Stellar. *** ## Core Value Proposition > **MERCATO transforms verified purchase orders into financeable opportunities, connecting investor capital directly with real commercial activity through Stellar.** --- # Agent Instructions This documentation is published with GitBook. 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