B3. Fund the Order
Core Principle
Funds are secured, visible, and only released upon verified proof. Buyer capital is held as Locked EDSD—segregated by supplier and milestone—and transitions to Unlocked EDSD exclusively when the corresponding Escrow Milestone Token (EMT) is issued. No EMT, no funds.
Summary
Buyer pre-funds the initial milestone and pays the protocol fee upfront.
EDMA mints a 1:1 EDSD balance, designates it as Locked EDSD, and allocates it per supplier and milestone as defined in the Master Purchase Agreement (MPA).
Upon completion of production and successful inspection, EDMA mints a Pre-Ship EMT; buyer must then fund remaining milestones before shipment is authorized.
Each milestone (gate) unlocks its designated portion: EMT issuance → Locked EDSD becomes Unlocked EDSD → same-day payout.
Suppliers may assign funded-on-proof EDSD to whitelisted partners within EDMA; off-platform withdrawals are restricted until all scheduled milestones are complete.
If documentation is incorrect or funding is delayed, the affected stage is flagged, and funds remain locked until resolution.
Funding Workflow
Prefunding at Award: Buyer wires the first milestone amount (e.g., Pre-Ship 20%) plus buffer and pre-pays the 0.5% protocol fee (subject to caps). EDMA mints and locks EDSD, assigning it per the MPA. All parties have visibility; funds are immobile until proof is provided.
Production Completion → Pre-Ship EMT: Upon batch completion and inspection (e.g., SGS/COA), EDMA mints a Pre-Ship EMT as verifiable proof.
Subsequent Milestone Funding: Buyer funds remaining milestones post-Pre-Ship EMT. EDMA mints and locks additional EDSD, updating allocations. No shipping actions are permitted until all required funding is received.
Proof-Driven Release: At each gate, EDMA verifies contractually defined evidence (e.g., COA, PSI, BL, customs clearance, delivery confirmation, temperature logs). Upon passing, the corresponding EMT is minted, Locked EDSD is released as Unlocked EDSD, and payout occurs. Failure to meet proof requirements results in stage freeze and clear remediation guidance.
Rule: No EMT, no funds.
Supplier Permissions and Restrictions
In-Platform Assignments: Suppliers may allocate Locked EDSD to whitelisted partners (e.g., carriers, SGS, warehouses, OEMs) within EDMA. These assignments settle only if the linked milestone passes. Assignment fee: 1% (recorded in the fee ledger).
Off-Platform Withdrawals: Bank withdrawals are only enabled after full schedule completion, even if Unlocked EDSD is available. Cash-out fee: 0.5% upon redemption of Unlocked EDSD off-platform.
This model ensures that partners receive named, milestone-linked credits; buyer funds remain secured until verified; suppliers maintain operational liquidity without external financing.
Ensuring Buyer Funding for Subsequent Milestones
No requirement for letters of credit or performance bonds.
Production proof (Pre-Ship EMT) triggers a must-fund event for remaining milestones.
Until funding is received, EDMA withholds shipping instructions and documentation acceptance (e.g., BL).
Only upon full funding can milestones be released sequentially via EMTs.
Result: Suppliers see 100% Locked EDSD coverage before shipping; buyers retain control over fund release.
Buyer Controls
Optional review window (e.g., up to 4 hours) per milestone gate.
No action: auto-release at window expiry.
Block: stage is paused with explicit reason; supplier must correct and resubmit.
Treasury Management
Approximately 75% of Locked EDSD is invested in short-term treasury instruments (70–100 days); 25% retained as operational cash.
Yield is reported as Treasury interest in platform revenue.
Proof-of-Reserves and daily summaries provide auditor transparency and balance verification.
Fees and Burns
Protocol fee: 0.5% per paid stage, capped per tranche (≤$1M: $5k; $1–5M: $25k; >$5M: $50k).
Prepaid at award (buyer pays in EDM or USD).
50% of each stage’s fee is burned at milestone release (USD payments converted to EDM for burn).
Seller fees: 1% per funded-on-proof assignment; 0.5% on off-platform cash-out.
All fees and burns are transparently reconciled in the Fee Ledger.
Network fees are minimal and handled automatically; users do not require ETH to transact.
Edge Cases
Sub-lot splits: Each inherits the same rules; slices release individually upon passing proof.
Date amendments: Submissions rebalance Locked EDSD and update all parties; buffer covers minor shifts.
Cancellations: Pre-proof cancellations result in Locked EDSD refund or rollover per MPA.
Revocations: Proof revocation freezes dependent slices until resolved; previously released slices remain paid.
Participant Visibility
Buyer: Coverage by stage, upcoming funding requirements, and milestone payment timeline.
Supplier: Locked EDSD by stage, assignment status, milestone releases (Unlocked EDSD), and auto-redeem on completion.
Both: Receipts for all actions, public proof pages per milestone, and a comprehensive ledger detailing fees, burns, and treasury yield.
Agree once. Prefund smart. Pay only on proof. No EMT, no funds.
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