Letters of credit, without the letter. Or the bank.
The bank is the friction. Fluxo took it out. Smart contract escrow releases funds the moment the container arrives. Seconds, not days. Dollars, not thousands. The guarantee of an LC — without the institution that made it slow.
Fluxo Platform LLC · Florida, USA · Funds held in smart contract escrow
The letter of credit was designed in the 1700s. The underlying problem hasn't changed.
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.
A smart contract is a vending machine for $200,000 shipments. You put money in, the condition is met, the product releases. Nobody approves it. Nobody can decide not to pay after the container arrived. The code executes what both parties agreed to.
Letter of credit — the real cost
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.
Fluxo Contracts — the same protection
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.
Smart contract escrow. Four steps.
Both parties agree on terms. Code holds the money. Code releases it. No banker approves or denies. No delay. No $200 amendment fee.
Agree terms
Both parties set contract terms inside the Fluxo platform — product, value, route, payment milestones, inspection requirements. When both confirm, each signs with a cryptographic wallet signature. The signed contract is recorded permanently on a public ledger. Neither party can alter it unilaterally.
Buyer deposits funds into escrow
The buyer deposits the agreed amount into the smart contract — not into Fluxo's account, not into the seller's account. Into a contract that neither party controls. Fund by wire transfer or directly with USDT. Wire users never touch a digital wallet if they don't want to.
Milestone confirmed automatically
Each payment milestone has a defined trigger — vessel arrival at the destination port, a document review pass, an inspector sign-off, or any custom condition the parties define. When the trigger fires, the smart contract executes. No one at Fluxo approves or denies. The code runs the contract.
Seller paid instantly
When the milestone condition is confirmed, funds leave escrow in the same transaction. The seller receives USDT directly, or has it converted to a local bank account — Brazilian reais, US dollars, or other supported currencies. Settlement takes 4 seconds on-chain.
Every friction has a bond for it.
One mechanism. Dozens of applications. Attach to any contract, or post standalone. Every bond priced in code, enforced on-chain, released or forfeited automatically when the condition resolves.
Documents & compliance
Document delay
Bond forfeits if the B/L, commercial invoice, packing list, or any required document doesn't arrive by the deadline. The buyer's deposit is protected if the seller misses.
FDA Prior Notice delay
Required for all food imports to the US. Bond forfeits if Prior Notice isn't filed 2+ hours before vessel arrival.
Certificate of Origin delay
Required for preferential duty treatment and many customs regimes. Bond forfeits if the CO doesn't land before clearance.
Legalization / apostille
For jurisdictions requiring consular legalization. Bond forfeits if documents aren't properly legalized by the delivery deadline.
Shipping & quality
Loading delay
Bond forfeits if the vessel doesn't depart by the contracted ship date.
Quantity shortfall
If the B/L quantity is less than the contracted quantity, the bond deducts proportionally and releases the balance.
Temperature excursion
For reefer, pharma, and food. Bond forfeits if the container's temperature log shows a breach of the agreed range.
Quality mismatch
Bond forfeits if pre-shipment inspection or third-party lab test finds the goods don't match the contracted specification.
Payment & financial
Good-faith commitment
Buyer posts a bond to hold the deal. Forfeits to seller if buyer walks away without cause.
Milestone payment
Funds released in tranches as conditions clear. Bond backs the buyer's commitment to each tranche.
Warranty retention
Portion of payment held back until the warranty period ends. Bond releases if no warranty claim fires.
FX exposure
FX exposure locked at contract time. The counterparty benefiting from the rate move at settlement pays the delta out of their posted bond.
Counterparty behavior
Bid commitment
Bidders post a bond. The winning bidder's forfeits if they fail to sign the contract within the agreed window.
Forward purchase
Buyer commits to a forward quantity at a set price. Bond forfeits if the buyer doesn't execute.
Exclusivity commitment
Seller agrees not to sell to a named competitor or region for a defined window. Bond forfeits if exclusivity is breached.
Advance payment
Buyer prepays part of the contract. Bond guarantees the prepayment is recoverable if the seller fails to deliver.