Mastering Supply Chain Finance with Deep Finance Tokens: A Step-by-Step Guide

May 15, 2024 . 6 Mins Read


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Small, medium, and micro-enterprises (SMMEs) often face financing challenges. While supply chain financing helps ease issues like limited financing options, complex funding processes, and high borrowing costs for SMMEs, centralized data management poses risks related to data authenticity. Moreover, the creditworthiness of core enterprises within the supply chain doesn't effectively reach SMMEs upstream and downstream. However, with the introduction of Deep Finance Tokens (DFTs), leveraging blockchain's decentralized and tamper-evident properties and the asset pass-through feature of SMMEs within the supply chain, the model enhances supply chain efficiency.

Additionally, it enables the credit of core enterprises to reach upstream and downstream SMMEs, addressing their financing challenges. This step-by-step guide aims to simplify the process of mastering supply chain finance using DFTs, offering a roadmap for businesses seeking to optimize their financial operations.

What are DFTs?

DFTs are blockchain based digital tokens designed to revolutionise supply chain finance. They offer a more flexible, transparent, and efficient approach to managing financial transactions within supply chains, especially benefiting the Tier 2 and Tier 3 vendors.

DFTs came into existence in supply chain finance to combat the long standing issues faced by participants in the supply chain ecosystem, such as:

  1. Working Capital Constraints
  2. Limited access for small vendors
  3. Dominance of traditional financing models.
  4. Lack of transparency
  5. Long settlement times.
  6. Opportunity for Liquidity democratization


As a first step, it's crucial to grasp the fundamentals of supply chain finance. This includes identifying the various stakeholders involved, such as suppliers, manufacturers, distributors, and retailers, and understanding the flow of capital throughout the supply chain. Understand working capital optimization i.e. providing liquidity to suppliers and buyers. Understand the role technology is playing in transforming supply chains.


Choosing the right DFT platform is necessary to successfully implement supply chain finance solutions. When evaluating DFT platforms, several critical factors must be considered. Scalability is needed to accommodate the diverse needs of supply chain participants and support the growing volume of transactions over time. Security features, including robust encryption protocols, are essential to safeguard sensitive financial data and reduce the risk of cyberattacks or unauthorised access. Transaction speed is another key consideration, as delays can disrupt supply chain operations and impact cash flow management. Regulatory compliance is also needed to ensure adherence to the laws and regulations that govern supply chain financing.

Timechain Labs offers a customised DFT solution for all your needs. With a solution based on layer-2 blockchain technology, be rest assured to never face any scalability issues. Layer-2 solution is significantly faster, reducing lead times, optimising supply chain at lightning speed.


Integrating Deep Finance Tokens into your supply chain operations requires careful planning and execution. Work closely with your DFT providers to seamlessly incorporate DFT transactions into existing systems and processes. Your DFT provider will integrate the solution with your pre-existing ERP infrastructure, which is the backbone of your supply chain operations. Next important step is training and education of supply chain personnel to understand DFTs. The various stakeholders should understand the purpose and benefits of DFTs and how to use them effectively.


Continuous monitoring and optimization are essential for maximising the benefits of supply chain finance with Deep Finance Tokens. Keeping track of KPIs such as cash flow, capital turnover and supplier payment cycles are necessary to fine-tune your supply chain strategy.

Apart from these traditional KPIs, Incorporating DFTs into your supply chain finance strategy can provide additional insights and opportunities for optimization.

For example, DFT transactions can offer real-time visibility into financial flows and transactions, enabling proactive decision-making and risk management. DFT platforms can also include analytics dashboards enabling you to identify trends, patterns and areas for improvement.


As you gain proficiency in using DFTs to streamline your operations, explore opportunities to scale your market. Blockchain solution from Timechain Labs runs on a layer-2 scalable network, supporting your goals all along the way.


Deep Finance Tokens are the go to solution for the challenges faced in supply chain finance. These tokens facilitate secure, transparent, and efficient transactions within the supply chain ecosystem. The advantages of DFTs include enhanced liquidity, reduced fraud risk, and increased trust among counterparties. Through tokenization of invoices and other financial instruments, DFTs offer suppliers access to early funding, thereby optimising working capital and liquidity management. Blockchain technology underlying DFTs will ensure immutable and transparent transaction records, mitigating the risk of fraud. Smart contracts help to build trust and accountability by automating payments, reducing the need of intermediaries.

Building resilience into global supply chains

The deep-tier supply chain financing solution empowers banks to expand their client offerings by providing supply chain financing options across various supplier tiers. Tokenization is the preferred approach, enabling liquidity to be unlocked from assets such as purchase orders and unpaid invoices.

The objective of deep-tier financing is to provide financial support to underserved suppliers at the lower end of the supply chain, leveraging blockchain technology. A multilevel penetration strategy allows anchors and their downstream suppliers to operate within a unified framework at reduced costs. The deep-tier financing solution lets customers benefit from blockchain technology throughout their entire lifecycle, regardless of their scale or financial capability.

Tokenization in the global market

The global tokenization market is projected to reach $5.6 billion by 2026, expanding at a CAGR of 19% during the forecast period. This growth is driven by the rising popularity of contactless payments and the increasing demand for cloud-based tokenization solutions and services. The need to comply with regulations, enhance customer experience, and maintain fraud prevention levels are also crucial factors fueling global market growth.

In 2021, North America held the largest share of the tokenization market, while the Asia Pacific region is expected to grow at the highest CAGR by 2026. Key players in the global tokenization market include Fiserv, Visa, Mastercard, American Express, CardConnect, Micro Focus, and Thales. Most of these companies are based in the United States, with Micro Focus and Thales headquartered in the United Kingdom and France, respectively.

Mastering supply chain finance with Deep Finance Tokens offers a transformative opportunity for businesses to streamline operations, optimise working capital, and enhance collaboration across the supply chain ecosystem. Timechain Labs stands with you in this transformation, visit our website to find out more!

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