LilyPad

Inspiration

99.9% of all businesses in the US qualify as small businesses—employing 47.3% of the nation’s private workforce—but they’ve been one of the hardest-hit sectors during the COVID-19 pandemic. Compared to January 2020, 34% of small businesses have permanently closed. San Francisco is one of the most affected metro areas, with a 48% closure rate for small businesses.

But while mom-and-pop type businesses might not always be in the spotlight, small businesses collectively are powerful and an integral part of the economy. A 2019 SBA report found that small businesses account for 44% of the US economic activity. Proposals like the CARES Act and other billion-dollar-plus proposals have been aimed at helping small businesses get back on their feet; yet, the situation hasn’t dramatically improved.

We want to provide small businesses with more opportunities to access funding, investments, and support. So, we have turned to cryptocurrency and smart contracts: the emerging secure and decentralized financial service.

What it does

Meet LilyPad, a fintech platform using crypto to bring funding opportunities to small businesses. With blockchain and smart contracts, we’re a launchpad for small businesses to enter the DeFi world.

Most importantly, by using Near’s re-invented blockchain technology, we provide a simple solution for community investors and small businesses to navigate the cryptocurrency world with smart contracts.

Our aim is to provide small businesses with opportunities to receive community-based funding from small investors like your neighbors, friends, and local fans through easy access to cryptocurrency and using the Web 3.0 world. And, of course, we value transparency throughout the entire process.

What we learned

It was our team’s first time interacting hands-on with any form of cryptocurrency - let alone using Near’s CLI and API to handle blockchain transactions. We also explored integrating different technologies, like MongoDB APIs, TS/JS, and Rust. We especially learned more about the security and transparency requirements for cryptocurrencies and blockchain systems. We learned immensely, especially thanks to Near’s team.

How we built our project

Businesses create smart contracts with investors, a self-executing program that automates the actions required in an agreement or contract. We build our smart contracts on LilyPad’s fungible tokens, FrogCoins. Businesses will essentially exchange equity of their company for FrogCoins, which are then purchased by investors as “shares” . These investors can then exchange their FrogCoins in order to liquidate the equity they had in each company.

In order to provide these FrogCoins, we used a custom implementation of a decentralized fungible token and minted a large pool for further use. We centered our project around using Near Social. We then set a static exchange rate between Near tokens and FrogCoins and allowed for investors to exchange their vested stake in each company back to near tokens.

In order to create this system, we created a dedicated Flask-based backend that is responsible for communicating with Near using the Near CLI. Our backend also uses MongoDB in order to keep a persistent copy of the information.

We also created an HTML, CSS, and JavaScript powered front-end for our users to easily interact with our platform. Our goal was to make a user-friendly interface for both sets of our users: small businesses and community investors. Our demo focuses mainly on the community investor end by providing an interactive browsing experience, where users can learn about businesses’ stories and support their favorite small businesses.

Challenges

We challenged ourselves in learning about blockchain, cryptocurrency, and working with Near CLI and their APIs. These concepts were entirely new for our team, so it was a rewarding experience to finally approach a topic we had all been previously interested in.

We also explored many avenues for implementing our platform—though, not all of them came into fruition.

What’s next for LilyPad

We want to scale and expand our platform to handle different forms of cryptocurrencies, with various smart contracts. We also want to improve transparency and build educational resources for both small businesses and community investors to learn more about cryptocurrency, Web 3.0, blockchain, etc., to encourage more users to join the DeFi world.

In terms of services, we hope to fully flesh out the small-business facing side of our platform. We also look forward to improving our location-based filtering of small-businesses. We believe that this could enable community investors to better identify businesses they care about and want to support.