Fluxo replaces letters of credit with smart contract escrow. Buyer funds are held securely and released automatically when delivery conditions are confirmed. Settlement in seconds, not five business days.
International trade requires two parties in different countries to trust each other with significant money. The traditional solution — the letter of credit — is a bank guarantee that the buyer will pay if certain conditions are met.
It works. But it costs 0.5 to 2 percent of transaction value in bank fees. It takes three to five business days to issue and another three to five to settle. It rejects on first presentation 70 percent of the time due to document discrepancies. Each amendment costs $200 to $500 and another week. Small and medium-sized businesses — importers doing $500,000 to $10 million a year in cross-border trade — often cannot access letters of credit at all. Their bank considers the transactions too small to justify the compliance overhead.
The result: smaller importers and exporters either transact on pure trust (full payment upfront, or open account with no protection) or they pay disproportionately for instruments designed for transactions ten times their size.
Issuance fee: $500–$1,500. Amendment fee: $200–$500 each. Advising fee: $300–$600. Settlement: 3–5 business days. Rejection on first presentation: 70% of transactions. Annual cost on a 6-container trade lane: $13,000–$19,000 in fees alone.
Platform fee: 0.15% of transaction value, capped. Amendment: $0, two minutes. Settlement: 4 seconds after milestone confirmation. Rejection rate: near zero — conditions are defined and verified in advance. Same 6-container trade lane: $922.50 per year in platform fees.
A smart contract is a self-executing agreement written in code. When both parties agree to terms and the buyer deposits funds, the contract holds the money and releases it automatically when the agreed conditions are confirmed. No bank needed. No discretion. No delay.
Both parties set the contract terms inside the Fluxo platform — product, value, route, payment milestones, short shipment tolerance, inspection requirements. The AI advisor explains the implications of each term for their specific role. When both parties confirm, they each sign with a cryptographic wallet signature. The signed contract is recorded permanently on a public ledger. Neither party can alter it unilaterally.
The buyer deposits the agreed amount into a smart contract — not into Fluxo's account, not into the seller's account. Into a contract that neither party controls. Buyers can fund by wire transfer (USD or local currency) or directly with USDT, a US dollar stablecoin. Wire transfer users connect via a licensed currency partner who handles the conversion. They never touch a digital wallet if they don't want to.
Each payment milestone has a defined trigger — a GPS geofence at the destination port, a document review pass, an inspector sign-off at origin or destination, or any custom condition the parties define. When the trigger fires, the smart contract executes automatically. No one at Fluxo approves or denies the release. The code runs the contract.
When the milestone condition is confirmed, funds leave escrow in the same transaction. The seller can receive USDT directly, or have it converted and settled to a local bank account in their currency — Brazilian reais, US dollars, or other supported currencies. Settlement takes 4 seconds on-chain. Local currency deposit takes under 10 minutes via licensed currency partners. Banks settle on the next business day. Fluxo settles now.
Every document uploaded to the platform — packing list, bill of lading, commercial invoice, certificate of origin — is processed by AI to check for compliance issues before submission. Each document also receives a SHA-256 fingerprint written permanently to a public ledger at the moment of upload. Change one character in the document after upload and the fingerprint changes completely. Post-upload document tampering is not just against the rules — it is mathematically detectable.
If a condition fails, funds freeze automatically and both parties have 48 hours to resolve directly at no cost. If that fails, a neutral reviewer examines the photographic and documentary evidence and issues a binding determination. Fluxo is never the judge on large commercial claims — the platform routes significant disputes to ICC or LCIA arbitration. The platform earns revenue from dispute resolution fees, which means it is economically aligned with resolving disputes fairly and quickly, not prolonging them.
Harbor Co, a Miami importer, ships 97,000 braided rawhide chews from Pacífico Pet Supply in Santos, Brazil. $102,500 per container. FOB Santos. 6-container annual arrangement.
| Cost or delay item | Letter of Credit | Fluxo |
|---|---|---|
| Issuance / platform fee | $500 – $1,500 | $153.75 (0.15%) |
| Amendment (loading date change) | $200 – $500 + 5 days | $0 · 2 minutes |
| Advising / notification fee | $300 – $600 | Included |
| Document discrepancy rejection rate | ~70% on first presentation | Near zero — AI review before submission |
| Settlement after delivery confirmed | 3 – 5 business days | 4 seconds |
| Settlement on a Friday at 4:57pm | Monday at earliest | 4:57pm Friday |
| Working capital freed (Thread B) | Full value locked until settlement | Buyer deposits nothing — seller posts performance bond |
| Total — one $102,500 shipment | $2,300 – $3,400 | $153.75 |
| Annual cost — 6 containers | $13,000 – $19,000 | $922.50 |
Figures shown are illustrative based on current market conditions. Platform fees and yield rates are subject to change. Yield is not guaranteed.
Fluxo serves two distinct trade relationships — first-time counterparties who need full escrow protection, and established relationships where a lighter-touch performance bond makes more commercial sense.
Buyer deposits the full contract value into escrow before the shipment loads. Funds are held by the smart contract until delivery is confirmed. Neither party controls the money during transit. This is LC-grade protection at a fraction of LC cost. Appropriate for any new trading relationship where neither party has established trust.
Seller posts a performance bond (typically 5–10% of contract value) instead of the buyer making a full deposit. The bond is locked at signing and returns to the seller automatically at delivery confirmation. If the seller fails to perform, the buyer claims against the bond. The buyer's working capital is never committed. Appropriate for parties who have traded successfully before and want contractual protection without capital lockup.
Any importer paying a foreign supplier faces the same problem: pay upfront and trust the supplier delivers, or ask the supplier to ship on open account and trust the buyer pays. Fluxo eliminates both risks. The buyer's money is secure until delivery. The seller is guaranteed payment the moment delivery is confirmed. Both parties can trade with confidence from the first transaction.
Most banks will not issue letters of credit for transactions under $500,000 or for importers without a multi-year banking relationship. Fluxo has no minimum transaction size and no banking relationship requirement. Any buyer and seller who can agree on terms can use the platform. The infrastructure that was previously available only to large corporations is now accessible to any business doing international trade.
Fluxo is building a complete trade finance operating layer. Two products are live today. Two more are coming.
Any two parties in any two countries who want to trade with payment protection can use Fluxo. The infrastructure runs on a public blockchain — it has no geographic limit. The platform's first corridors reflect where the team has direct operating experience and where traditional trade finance is most inaccessible to small and medium-sized businesses.
Wire transfer on-ramp and local currency settlement are available via licensed currency partners regulated in each operating corridor. Neither party needs to interact with digital wallets or stablecoin infrastructure directly — fund by wire, receive in your local currency.
The stablecoin settlement layer also positions Fluxo to support emerging government-backed digital currencies as they come online. A US dollar digital currency issued or backed by the US government would slot directly into Fluxo's settlement infrastructure — the platform is built to be currency-agnostic at the settlement layer.
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