Documentation

Catalyst Platform: Complete Technical & Business Documentation

Version: 1.0.0
Last Updated: January 1, 2026
Maintained by: Catalyst Core Team

Table of Contents

  1. Executive Summary
  2. Problem Space Analysis
  3. Solution Architecture
  4. Business Model & Economics
  5. Trust Infrastructure
  6. Technical Architecture
  7. Database Design
  8. Application Ecosystem
  9. Multi-Currency System
  10. Profit Distribution Engine
  11. Blockchain Integration
  12. Security & Compliance
  13. API Documentation
  14. Testing & Quality Assurance
  15. Deployment & Operations
  16. User Guides
  17. Development Guide
  18. Roadmap & Future Development
  19. Appendices

Executive Summary

Catalyst is a decentralized trust and investment platform designed to address the $32.2 billion financing gap facing Nigeria’s micro, small, and medium enterprises. The platform leverages Cardano blockchain technology to create transparent, auditable investment infrastructure while replacing traditional physical collateral requirements with verifiable digital trust metrics.

The core innovation lies in a dual-path trust system. Performance Trust enables SMEs with marketplace presence to build credibility through sales data, customer reviews, and fulfillment metrics. Human Trust allows aspiring entrepreneurs to access capital through Agent sponsorship, where established community members vouch for individuals who lack transaction history but possess viable business plans. Both paths converge on a shared investment marketplace where capital providers can deploy funds across multiple currencies with full transparency into allocation and returns.

Catalyst’s economic model implements a “4-Way Split” profit distribution mechanism that creates regenerative capital flows. When funded SMEs generate profits, value distributes fairly across investors (proportional returns), SMEs (retained earnings for growth), Agents (5% commission on sponsored businesses), and the platform (service fees with 10% allocated to risk mitigation). This structure aligns incentives across all participants, ensuring sustainable growth benefits the entire ecosystem rather than extracting wealth from vulnerable communities.

The platform operates across three specialized web applications: an Investor Dashboard for capital providers, an SME Portal for entrepreneurs seeking funding, and an Admin Platform for operational oversight. A unified Node.js backend handles authentication, business logic, database operations, and blockchain coordination. Smart contracts written in Aiken manage on-chain escrow for cryptocurrency investments, ensuring funds remain secure until predefined conditions are met.

As of January 2026, Catalyst has completed its Phase 1 MVP with functional multi-currency investment capabilities, automated profit distribution, KYC verification workflows, and blockchain escrow integration. The system has processed test investments across Nigerian Naira, Cardano ADA, and USDM stablecoin with successful on-chain transactions and accurate profit calculations. Upcoming phases will introduce the full Agent sponsorship system, integrated e-commerce marketplace, mobile applications, and advanced fraud detection powered by artificial intelligence.

The business model demonstrates strong unit economics. Average funding requests of ₦500,000 with ₦1,000,000 in reported profits generate ₦180,000 in platform revenue over a 3-month investment cycle. At scale with 1,000 active investments, this produces ₦180 million in annual revenue—sufficient to sustain a team of 15-20 people while funding continued development and ecosystem growth. Beyond financial metrics, Catalyst tracks social impact including MSMEs funded, jobs created, youth entrepreneurs supported, and geographic distribution of investment across underserved regions.

Problem Space Analysis

The $32B Financing Gap

Nigeria’s economy presents a striking contradiction. The nation hosts approximately 40 million micro, small, and medium enterprises that collectively contribute 58% to national GDP and represent 96% of all registered businesses. Despite this economic significance, these enterprises remain systematically excluded from formal financial services. Traditional banks classify MSMEs as “high risk” borrowers, viewing the sector through frameworks designed for large corporations with audited financials, established credit histories, and physical assets for collateral.

This mismatch between economic importance and financial access creates a documented financing gap of $32.2 billion according to World Bank assessments. The gap represents not merely unavailable capital, but rather a trust deficit—investors and financial institutions cannot adequately assess the creditworthiness of businesses that operate largely in informal or cash-based environments. Without reliable mechanisms to verify business performance, evaluate repayment capacity, or enforce contractual obligations, capital flows into “safer” investments like government bonds or large corporate ventures, starving the real economy of growth fuel.

Predatory Lending Ecosystem

The formal banking sector’s unwillingness to serve MSMEs creates vacuum conditions that predatory lenders eagerly fill. Informal cooperatives, loan sharks, and unlicensed microfinance operations charge interest rates exceeding 50% annually, with some reaching 100% or higher. These extractive models view borrowers as resources to exploit rather than partners to grow. Terms often include seizure of personal property upon default, forced labor arrangements, or public shaming mechanisms that destroy social capital.

Entrepreneurs accepting these terms do so from desperation rather than choice. A market vendor needs ₦200,000 to stock inventory for high-demand periods but cannot access formal banking. She turns to a local lender charging 10% monthly interest (120% annually), understanding that missing a single payment could result in losing her stall, accumulated inventory, or community standing. This dynamic traps businesses in survival mode, unable to invest in growth, formalize operations, or build assets. The extraction of wealth through predatory lending perpetuates poverty cycles and suppresses the economic potential of entire communities.

The Collateral Barrier

Traditional lending frameworks require physical collateral—land certificates, vehicle titles, commercial property deeds, or other tangible assets that lenders can seize and liquidate upon borrower default. This requirement systematically excludes youth entrepreneurs and informal economy participants who lack inherited wealth or property ownership. A talented 25-year-old with fashion design skills, business acumen, and proven ability to sell products cannot access ₦500,000 in working capital because she doesn’t own land. Her potential remains unrealized not from lack of ability, but lack of inherited assets.

The collateral paradigm also fails to account for the actual drivers of business success. A borrower might own valuable property yet lack the skills, market knowledge, or work ethic to operate a profitable venture. Conversely, another borrower with exceptional business capabilities but no physical assets cannot access capital. The system optimizes for asset recovery rather than productive investment, misallocating capital away from its highest-value uses. This structural inefficiency represents trillions of naira in foregone economic activity and millions of lives trapped in unemployment or underemployment.

Youth Unemployment Crisis

Nigeria faces a youth unemployment crisis with rates exceeding 30% among citizens aged 15-35 according to National Bureau of Statistics data. This unemployment is not primarily skills-based—Nigerian youth demonstrate remarkable entrepreneurial creativity, technical competence, and market adaptability. The constraint is access to starting capital. Without the ₦300,000 to ₦1,000,000 needed to launch a viable micro-enterprise, talented individuals languish in unemployment or low-wage informal work that underutilizes their capabilities.

This human capital waste has compounding effects. Unemployed youth face delayed family formation, reduced civic participation, and increased vulnerability to social instability. Communities lose the economic multipliers that functioning businesses create—employment for others, tax revenue, skills transfer, and network effects. The nation loses competitiveness as human potential converts into dependency rather than productivity. Breaking this cycle requires financing mechanisms that assess capability and character rather than inherited wealth or formal employment history.

The Trust Deficit

Underlying all these challenges is a fundamental trust deficit between capital providers and capital users. Investors cannot reliably assess which businesses will succeed, identify which entrepreneurs will honor commitments, or verify that reported financials reflect actual performance. Without trusted information, rational investors choose to abstain, park capital in low-yield safe assets, or demand predatory terms that compensate for uncertainty.

This trust deficit represents approximately $3 billion in annual economic friction according to estimates from Nigeria’s Small and Medium Enterprises Development Agency. The cost manifests as foregone investments that would have created profitable returns for investors and growth capital for businesses. Traditional solutions like credit bureaus or mandatory audits prove impractical for micro-enterprises operating at the margins with limited capacity for formal record-keeping or audit fees.

Catalyst addresses this trust deficit not through imposing traditional financial infrastructure, but by creating new trust mechanisms suitable for informal and emerging enterprises. By making business performance visible through verifiable data, enabling community vouching as a form of collateral, and using blockchain for transparent capital flows, the platform transforms the question from “Does this business have collateral?” to “Does this business have capability?”

Solution Architecture

The Two-Path Trust System

Catalyst’s fundamental innovation is recognizing that trust can be constructed through multiple valid pathways. Traditional financial systems impose a single path: establish formal business registration, maintain audited books, accumulate transaction history over years, and pledge physical collateral. This gatekeeping mechanism excludes the majority of economic actors in emerging markets. Catalyst instead implements two parallel trust-building pathways, each suited to different entrepreneur profiles and stages of business development.

Path 1: Performance Trust targets SMEs with existing marketplace presence and transaction history. These businesses may operate informally or semi-formally, but they have demonstrated market validation through actual sales, customer relationships, and operational consistency. The challenge is not proving business viability—the market has already validated that—but rather making that proof visible and quantifiable for investors who lack direct market access.

The Performance Trust pathway integrates with e-commerce platforms, payment processors, and marketplace APIs to extract verifiable data about business operations. When an entrepreneur lists products on an integrated marketplace, every sale, customer review, delivery confirmation, and repeat purchase feeds into a reputation engine that quantifies reliability. This creates a digital business history more comprehensive and tamper-resistant than traditional credit reports, updated in real-time rather than quarterly, and accessible to all potential investors rather than gatekept by credit bureaus.

An entrepreneur running a fashion boutique on Instagram and WhatsApp can connect their business accounts, grant permission for data access, and immediately generate a preliminary trust score based on their existing transaction volume, customer testimonials, and order fulfillment rates. They don’t need to wait years to establish formal credit history or accumulate physical assets—their demonstrated business competence becomes the foundation for investment.

Path 2: Human Trust addresses the challenge facing aspiring entrepreneurs who possess business plans, skills, and market opportunities but lack transaction history. A recent university graduate with fashion design training might have a compelling business plan for custom clothing but no existing sales to prove market demand. Traditional systems would deny her access to capital until she somehow bootstraps operations without funding—a catch-22 that traps talent.

The Human Trust pathway enables community members with established reputations to sponsor individuals they believe in, effectively providing “human collateral.” An Agent—perhaps a successful entrepreneur, community leader, or business mentor—can vouch for the aspiring entrepreneur after reviewing her skills, business plan, and character. This sponsorship signals to investors that someone with social capital at stake believes in this individual’s potential.

The Agent’s incentive structure aligns with careful selection. They receive 5% commission on profits generated by sponsored businesses, but only when those businesses succeed. If sponsored entrepreneurs default or fail, it impacts the Agent’s reputation score and reduces their capacity to sponsor others. This creates natural quality control—Agents must genuinely assess potential and provide ongoing support rather than simply collecting sponsorship fees. Over time, Agents build portfolios of successful sponsored entrepreneurs, earning “generational income” from businesses they helped launch years earlier.

[DIAGRAM NEEDED: Two-Path Trust System showing Performance Trust (left branch) with marketplace data feeding into reputation score, and Human Trust (right branch) with Agent sponsorship connecting to entrepreneur profiles, both converging at investment marketplace]

Unified Investment Marketplace

Both trust pathways feed into a shared investment marketplace where capital providers can browse funding opportunities, review trust metrics, and deploy capital. The marketplace presents opportunities in standardized format regardless of trust path, ensuring investors make decisions based on comparable information rather than needing to understand different evaluation frameworks.

Each funding opportunity displays key investment metrics: requested amount, purpose, term length, profit-sharing percentage, SME location, and trust score breakdown. Investors can filter by minimum trust score, maximum investment size, industry sector, or geographic region. Clicking into an opportunity reveals detailed business information, the entrepreneur’s history (sales data for Performance Trust or sponsor profile for Human Trust), planned use of funds, and projected timeline for profit generation.

The marketplace implements discovery algorithms that surface opportunities aligned with investor preferences while maintaining fairness for all funding requests. New SMEs with limited platform history receive visibility through featured slots, preventing incumbency advantages from starving emerging businesses. Geographic balancing ensures capital doesn’t concentrate exclusively in Lagos and Abuja, extending financial access to underserved regions.

Investors can deploy capital across three currencies: Nigerian Naira (NGN) for domestic investors, Cardano ADA for cryptocurrency holders, or USDM stablecoin for those seeking dollar-denominated exposure. The system handles currency conversion, exchange rate risk, and profit distribution automatically, removing technical barriers that might otherwise limit participation.

Multi-Currency Infrastructure

Supporting investment across multiple currencies requires sophisticated backend infrastructure that manages exchange rates, handles blockchain transactions, and ensures fair profit distribution regardless of currency used. The challenge is maintaining simplicity for users while managing complexity under the hood.

For Nigerian Naira investments, the platform operates NGN-denominated wallets for all users. Investors deposit funds via bank transfer, debit card, or other local payment methods into their platform wallet. When they invest in a funding request, the system deducts from their wallet balance, transfers to the SME’s wallet, creates investment records, and updates the funding request status—all within an atomic database transaction that ensures consistency. SMEs can withdraw NGN balances to their bank accounts through the platform’s withdrawal interface.

Cardano (ADA) and USDM stablecoin investments follow a different flow due to the decentralized nature of blockchain assets. The platform never takes custody of crypto funds—users maintain their assets in personal wallets (Nami, Eternl, or Flint). When an investor wants to fund a request with ADA, the system generates transaction parameters for locking funds in an on-chain escrow contract. The investor signs this transaction using their wallet application, broadcasting it to the Cardano blockchain. Upon blockchain confirmation, the investor submits the transaction hash to the platform’s confirmation endpoint, which records the investment in the database and releases funds from escrow when conditions are met.

Exchange rates update in real-time from trusted sources: CoinGecko API for ADA/NGN rates and ExchangeRate-API for USDM/USD/NGN conversions. All financial values store in smallest currency units (kobo for NGN, lovelace for ADA, microUSDM for stablecoins) to maintain precision and avoid floating-point arithmetic errors. The system converts all investment amounts to NGN-equivalent for profit distribution calculations, ensuring investors receive proportional returns regardless of which currency they used.

[DIAGRAM NEEDED: Multi-Currency Investment Flow showing NGN direct deposit path, ADA/USDM two-step flow with wallet signing, and convergence at profit distribution with NGN-equivalent calculations]

Business Model & Economics

The 4-Way Split Mechanism

Catalyst’s revenue model fundamentally differs from traditional lending platforms by distributing value across four stakeholder groups rather than extracting maximum profit for a single entity. This structure creates network effects where each participant’s success depends on collective ecosystem health, aligning incentives for long-term sustainable growth.

When an SME reports profits for an installment period, the distribution algorithm executes the following sequence. Consider a concrete example: an SME received ₦500,000 in funding with 20% profit-sharing terms and reports ₦1,000,000 in profits for the period.

Step 1: Calculate Gross Lender Share
The gross lender share represents the total amount due to all investors before platform fees. This calculates as the reported profit multiplied by the profit-sharing percentage agreed during funding request creation.

Gross Lender Share = Reported Profit × Profit Share Percentage
= ₦1,000,000 × 20%
= ₦200,000

Step 2: Calculate Platform Fee on Lender Share
The platform charges investors a 10% fee on their gross returns. This represents the platform’s service fee for connecting capital with opportunities, managing infrastructure, handling KYC/compliance, and providing investment tracking.

Platform Fee (Lender) = Gross Lender Share × 10%
= ₦200,000 × 0.10
= ₦20,000

Step 3: Calculate Net Lender Share
After deducting the platform fee, the remaining amount distributes proportionally among all investors based on their contribution percentages.

Net Lender Share = Gross Lender Share - Platform Fee (Lender)
= ₦200,000 - ₦20,000
= ₦180,000

Step 4: Calculate SME Gross Share
The SME retains the remainder of reported profits after the lender share is allocated.

SME Gross Share = Reported Profit - Gross Lender Share
= ₦1,000,000 - ₦200,000
= ₦800,000

Step 5: Calculate Platform Fee on SME Share
The platform charges SMEs a 20% fee on their retained profits. This higher percentage (compared to the 10% investor fee) reflects the value delivered to SMEs through access to capital that would otherwise be unavailable or available only through predatory lenders at 50%+ interest rates.

Platform Fee (SME) = SME Gross Share × 20%
= ₦800,000 × 0.20
= ₦160,000

Step 6: Calculate Agent Commission
If the SME was sponsored through Human Trust pathway, the Agent receives 5% commission on the SME’s gross share. If the SME came through Performance Trust pathway, this allocation is zero.

Agent Commission = SME Gross Share × 5%
= ₦800,000 × 0.05
= ₦40,000

Step 7: Calculate SME Net Share
After deducting platform fee and agent commission, the SME receives their final amount.

SME Net Share = SME Gross Share - Platform Fee (SME) - Agent Commission
= ₦800,000 - ₦160,000 - ₦40,000
= ₦600,000

Step 8: Calculate Total Platform Revenue
Platform revenue comes from both investor and SME fees.

Total Platform Revenue = Platform Fee (Lender) + Platform Fee (SME)
= ₦20,000 + ₦160,000
= ₦180,000

Step 9: Allocate to Risk Mitigation Fund
Ten percent of platform revenue flows into a Risk Mitigation Fund designed to handle defaults, disputes, or market disruptions.

Risk Fund Allocation = Total Platform Revenue × 10%
= ₦180,000 × 0.10
= ₦18,000

Step 10: Calculate Platform Net Revenue
After risk fund allocation, the remaining amount funds operations, development, and growth.

Platform Net Revenue = Total Platform Revenue - Risk Fund Allocation
= ₦180,000 - ₦18,000
= ₦162,000

[DIAGRAM NEEDED: 4-Way Split visualization showing ₦1,000,000 reported profit flowing through calculations to final distributions: ₦180,000 to investors, ₦600,000 to SME, ₦40,000 to Agent, ₦162,000 to platform, ₦18,000 to risk fund]

Individual Investor Allocation

The Net Lender Share distributes proportionally among all investors based on their contribution percentage, calculated using NGN-equivalent values for fairness across currencies.

Consider a funding request that received investments from three individuals:

  • Investor A: ₦200,000 (40%)
  • Investor B: ₦200,000 (40%)
  • Investor C: ₦100,000 (20%)

The Net Lender Share of ₦180,000 distributes as:

  • Investor A: ₦180,000 × 40% = ₦72,000
  • Investor B: ₦180,000 × 40% = ₦72,000
  • Investor C: ₦180,000 × 20% = ₦36,000

This proportional distribution works identically for mixed-currency investments. If Investor A contributed via ADA worth ₦200,000-equivalent and Investors B and C used NGN, the calculation uses NGN-equivalent values to ensure fair shares regardless of original currency.

Unit Economics Analysis

Understanding platform sustainability requires analyzing unit economics at the individual funding request level. Consider the typical investment lifecycle:

Average Funding Request: ₦500,000
Average Term: 3 months
Average Reported Profits: ₦1,000,000 (varies by business type)
Profit Share Percentage: 20% (market standard)

Using the 4-Way Split calculations above, each funding request generates:

  • Platform Revenue: ₦180,000 over 3 months
  • Investor Returns: ₦180,000 (36% return on ₦500,000 investment)
  • SME Retention: ₦600,000 for growth
  • Agent Commission: ₦40,000 (if sponsored)

Cost Structure per Request:

  • Transaction processing fees: ₦5,000 (blockchain, bank transfers)
  • KYC verification costs: ₦10,000 (one-time per user)
  • Customer support allocation: ₦8,000 (based on support hours)
  • Infrastructure costs: ₦12,000 (hosting, databases, APIs)
  • Marketing/acquisition: ₦15,000 (allocated per funded request)
  • Total Costs: ₦50,000

Net Contribution per Request:
Platform Revenue (₦180,000) - Total Costs (₦50,000) = ₦130,000

At scale with 1,000 active funding requests annually, this generates:

  • Total Revenue: ₦180,000,000 (₦180M)
  • Total Costs: ₦50,000,000 (₦50M)
  • Net Contribution: ₦130,000,000 (₦130M)
  • Risk Fund: ₦18,000,000 (₦18M) accumulated annually

This contribution margin supports a team of 15-20 full-time employees with competitive salaries, funds continued development, covers operational overhead, and builds financial reserves. The model demonstrates strong unit economics even at moderate scale.

Generational Income Model

The Agent commission structure creates powerful network effects through “generational income”—Agents earn ongoing returns from businesses they sponsored years earlier as those businesses continue generating profits and accessing capital. This model incentivizes Agents to think long-term, provide genuine support to sponsored entrepreneurs, and build portfolios of successful ventures.

Consider an Agent who sponsors 20 entrepreneurs over two years. If 70% succeed (14 businesses) and each averages ₦500,000 in funding with ₦1,000,000 in reported profits annually, the Agent’s income calculates as:

Agent Annual Commission = 14 businesses × ₦40,000 per business
= ₦560,000 annually

As the Agent’s portfolio grows and sponsored businesses scale, commission income compounds. If those 14 businesses each grow to ₦2,000,000 in annual profits by year three, the Agent’s commission doubles to ₦1,120,000 annually—all from sponsorship work done years earlier.

This structure creates incentives to identify promising entrepreneurs, provide mentorship and support, and build reputations for good judgment. Agents become talent scouts and business coaches whose income depends on their portfolio’s success, naturally aligning their interests with sponsored entrepreneurs’ growth.

Trust Infrastructure

The 1,000-Point Reputation Engine

Catalyst’s reputation engine transforms intangible business credibility into quantifiable trust scores that enable investment decisions. The system implements a 1,000-point model divided into four weighted components, each measuring different dimensions of business reliability and performance.

Platform Trust (300 points maximum) measures foundational platform engagement and verification status. This component assesses factors within the user’s direct control: account completeness, identity verification, business registration documentation, and platform tenure. New users start with a base score that increases as they complete verification steps, provide documentation, and demonstrate consistent platform activity. The scoring rubric breaks down as:

  • Identity Verification Complete (KYC passed): 100 points
  • Business Registration Documents: 75 points
  • Bank Account Verification: 50 points
  • Profile Completeness (all fields filled): 40 points
  • Platform Tenure (time since registration): 35 points (scales over 12 months)

Marketplace Performance (350 points maximum) quantifies actual business execution through verifiable transaction data. This component will integrate with e-commerce marketplaces in Phase 2, automatically pulling sales volumes, fulfillment rates, delivery times, and order patterns. The current implementation allows manual entry with admin verification, while the roadmap includes API connections to major Nigerian e-commerce platforms and payment processors.

The scoring framework includes:

  • Monthly Sales Volume (trailing 3-month average): 150 points (scales from ₦100K to ₦5M+)
  • Order Fulfillment Rate: 100 points (percentage of orders completed on time)
  • Customer Retention/Repeat Business: 50 points (percentage of returning customers)
  • Inventory Turnover Rate: 50 points (measure of business efficiency)

High scores in this category indicate proven market validation—customers are paying money for products/services, repeat business suggests quality, and fulfillment rates demonstrate operational reliability.

Customer Feedback (150 points maximum) aggregates buyer experiences through ratings, reviews, and dispute resolution history. This component weighs verified purchases more heavily than unverified reviews to prevent manipulation. The system tracks both positive signals (5-star ratings, written testimonials, social proof) and negative signals (complaints, refund requests, disputes).

Scoring structure:

  • Average Customer Rating: 75 points (scales from 3.5 to 5.0 stars)
  • Number of Reviews: 35 points (demonstrates engagement volume)
  • Dispute Resolution History: 25 points (inversely weighted—disputes reduce score)
  • Response Time to Customer Inquiries: 15 points (customer service quality)

This component becomes increasingly important as SMEs build customer bases. A business with 100+ reviews averaging 4.8 stars demonstrates quality and customer satisfaction more convincingly than one with 5 reviews at 5.0 stars.

Financial History (200 points maximum) tracks payment reliability, profit reporting consistency, and credit behavior. This component grows over time as SMEs complete funding cycles, report profits accurately, and make payments on schedule. The system rewards positive financial behaviors while penalizing defaults or late payments.

The breakdown includes:

  • Previous Loan Repayment History: 80 points (inversely weighted by defaults or late payments)
  • Profit Reporting Consistency: 60 points (regular, timely submissions)
  • Payment Timeliness: 40 points (installments paid by due date)
  • Financial Transparency: 20 points (completeness of profit reports)

New businesses start with zero financial history points, which naturally limits their initial investment attractiveness. However, as they successfully complete funding cycles and demonstrate reliability, this component becomes their strongest differentiator.

[DIAGRAM NEEDED: Reputation Score Breakdown - pie chart showing Platform Trust (300 pts / 30%), Marketplace Performance (350 pts / 35%), Customer Feedback (150 pts / 15%), Financial History (200 pts / 20%)]

Score Calculation and Updates

The reputation engine recalculates scores dynamically based on triggering events rather than on fixed schedules. When an SME completes identity verification, the system immediately awards 100 Platform Trust points. When a customer leaves a review, the Customer Feedback component updates within seconds. This real-time approach ensures scores reflect current business status rather than stale historical data.

The calculation algorithm weighs recent activity more heavily than old data, recognizing that business performance changes over time. A business with excellent reviews two years ago but declining service quality recently will see their score adjust downward as new data accumulates. Conversely, a struggling business that improves operations sees upward score momentum.

Score updates trigger notifications to SMEs, explaining what changed and why. If an SME’s score drops due to late payment, the notification specifies the impact and suggests remediation steps (pay outstanding installments promptly to rebuild score). This transparency helps SMEs understand exactly which behaviors improve investment attractiveness.

Agent Sponsorship as Trust Bootstrap

For entrepreneurs entering through the Human Trust pathway, Agent sponsorship provides initial credibility that overcomes the cold-start problem. When an Agent vouches for an individual, that sponsorship grants a “trust boost”—typically 150-200 points—that makes the profile visible in the investment marketplace despite lacking transaction history.

The trust boost is not a permanent gift but rather conditional credit. If the sponsored entrepreneur successfully completes their first funding cycle, reports profits accurately, and makes payments on time, they begin building their own Financial History score. The trust boost gradually decreases as their earned reputation replaces borrowed credibility. After completing three funding cycles successfully, most sponsored entrepreneurs’ earned scores exceed their trust boost, at which point they’ve graduated to standalone credibility.

However, if a sponsored entrepreneur defaults or demonstrates unreliability, it impacts both their score and their sponsor’s score. The Agent’s Platform Trust component includes a “Sponsorship Success Rate” metric. Multiple failures by sponsored entrepreneurs reduce the Agent’s capacity to provide future trust boosts, creating natural quality control. Agents must carefully assess potential sponsorships, balancing the opportunity to build their portfolio against the risk of reputation damage from poor selections.

This dynamic creates a self-regulating system. Successful Agents become valuable community resources, able to provide strong trust boosts to many entrepreneurs. Failed Agents lose influence, naturally removing bad actors from the sponsorship pipeline. The mechanism transforms abstract concepts like “community trust” into quantifiable, actionable infrastructure.

Fraud Prevention and Score Integrity

Maintaining reputation score integrity requires active fraud prevention across multiple vectors. The system implements several safeguards to prevent manipulation:

Review Verification: Customer reviews from verified purchases (linked to on-platform transactions or integrated marketplace orders) carry more weight than unverified reviews. The algorithm detects patterns consistent with fake reviews: sudden bursts of reviews, repetitive language, reviewer accounts with suspicious patterns, or reviews originating from the same IP addresses. Flagged reviews undergo manual admin review before impacting scores.

Sales Data Verification: When marketplace integration launches in Phase 2, the system will cross-reference reported sales figures against actual marketplace transaction data. Discrepancies trigger audits. SMEs claiming ₦10M in monthly sales but showing only ₦2M in verified transactions face score reductions and potential account suspension.

Payment Behavior Tracking: The Financial History component relies on actual payment data from the platform’s database, not self-reported information. This makes it impossible to falsify payment history since all transactions are recorded in the immutable database ledger with timestamps and amounts.

Anomaly Detection: The system monitors for unusual patterns: sudden score increases that don’t align with typical business growth trajectories, perfect scores across all categories (statistically improbable), or scores that increase immediately after warnings about low scores (suggests gaming attempts). Anomalies flag accounts for manual review.

Agent Accountability: Since Agents stake their reputation on sponsored entrepreneurs, they have strong incentives to conduct due diligence before sponsorship. The system tracks which Agents produced successful versus failed sponsorships, making Agent quality visible to platform administrators. Agents showing patterns of poor judgment face restrictions or removal.

These multi-layered protections aim to make fraud more costly than honest participation, creating an ecosystem where reputation accurately reflects actual business capability and reliability.

Technical Architecture

System Architecture Overview

Catalyst employs a microservices architecture pattern organized into distinct application layers, each with specific responsibilities and clear interfaces. This separation enables independent scaling of components, isolated testing, and flexibility in technology choices while maintaining system coherence through well-defined APIs.

[DIAGRAM NEEDED: High-level architecture diagram showing three frontend applications (investor-dashboard, sme-portal, admin platform), unified backend API layer, PostgreSQL database, external APIs (Blockfrost, CoinGecko, ExchangeRate-API, Cloudinary), and Cardano blockchain with smart contracts]

Application Layer consists of three Next.js 14 web applications, each optimized for its user audience. The Investor Dashboard prioritizes portfolio tracking, opportunity discovery, and multi-currency wallet management with interfaces optimized for decision-making. The SME Portal emphasizes mobile responsiveness since most Nigerian entrepreneurs access digital services via smartphones, with simplified navigation for funding request creation and profit reporting. The Admin Platform provides operational dashboards with data visualization, batch processing interfaces, and monitoring tools for platform oversight.

All three applications communicate with the backend exclusively through RESTful HTTP requests, maintaining clean separation between presentation logic and business logic. This architecture enables future development of mobile applications (iOS/Android) or third-party integrations that consume the same API endpoints, avoiding code duplication or divergent implementations.

Backend API Layer is a Node.js Express application providing unified business logic for all platform operations. The backend handles authentication via JWT tokens, enforces authorization rules through middleware, manages database transactions through Prisma ORM, coordinates blockchain interactions through Blockfrost API, and provides external service integrations (exchange rates, file uploads, notifications).

The API implements RESTful principles with resource-based routing, standard HTTP methods, JSON request/response formats, and meaningful status codes. Authentication requires JWT tokens in Authorization headers for all protected endpoints. Role-based access control ensures users can only access resources appropriate to their role (investor, SME, admin). Rate limiting prevents abuse through configurable request thresholds per endpoint.

Database Layer uses PostgreSQL for persistent storage with Prisma ORM providing type-safe database access and automated migration management. The schema implements relational data modeling with foreign key constraints, indexes on frequently queried fields, and transaction support for multi-table updates requiring atomicity. All financial amounts store as BigInt in smallest currency units (kobo, lovelace, microUSDM) to avoid floating-point arithmetic issues.

Database backup strategies include daily automated snapshots retained for 30 days, point-in-time recovery capability within a 7-day window, and encrypted backup storage in geographically separate regions from the primary database. In production, read replicas will handle reporting queries and analytics workloads, isolating heavy read operations from transactional workloads that require write capacity.

Blockchain Layer integrates with Cardano’s preprod testnet (with mainnet deployment planned) through Blockfrost API. Smart contracts written in Aiken implement investment escrow logic, ensuring funds lock on-chain until predefined conditions trigger release. The architecture maintains clear separation: the blockchain handles custody and transfer of crypto assets (ADA, USDM), while the PostgreSQL database records investment metadata, calculates profit distributions, and tracks payment schedules.

This hybrid approach leverages blockchain’s strengths (immutability, decentralization, cryptographic security for asset custody) while using traditional databases for strengths (complex queries, high-throughput transactions, flexible schema evolution). Users interact with smart contracts through client-side wallet applications (Nami, Eternl, Flint), never exposing private keys to the platform backend, maintaining self-custody while participating in the ecosystem.

External Services Layer integrates third-party APIs for functionality better served by specialized providers. CoinGecko provides real-time ADA/NGN exchange rates with sub-second latency. ExchangeRate-API handles fiat currency conversions (USDM/USD/NGN). Cloudinary manages file uploads for KYC documents, business registration papers, and profile images with automatic image optimization and secure delivery through CDN. Future integrations include SMS gateways for transaction notifications, email services for account communications, and KYC verification APIs for automated identity checks.

Technology Stack Details

Backend Stack:

  • Node.js 18 LTS (JavaScript runtime)
  • Express 4.18 (web framework)
  • Prisma 5.x (ORM and migrations)
  • PostgreSQL 14+ (relational database)
  • JWT (authentication tokens)
  • bcrypt (password hashing)
  • TypeScript 5.x (type safety)

Frontend Stack:

  • Next.js 14 (React framework)
  • React 18 (UI library)
  • TypeScript 5.x (type safety)
  • Tailwind CSS 3.x (utility-first styling)
  • Lucid Cardano (blockchain transactions)
  • Axios (HTTP client)

Blockchain Stack:

  • Cardano (Layer 1 blockchain)
  • Aiken 1.0 (smart contract language)
  • Plutus (Cardano VM)
  • Blockfrost (Cardano API provider)
  • Lucid 0.10 (transaction building library)

Infrastructure:

  • Vercel (frontend hosting)
  • Railway/AWS (backend hosting)
  • PostgreSQL managed instance
  • Cloudinary (file storage and CDN)
  • GitHub Actions (CI/CD)

Development Tools:

  • Git (version control)
  • ESLint (code linting)
  • Prettier (code formatting)
  • Jest (unit testing)
  • Playwright (E2E testing)

This stack prioritizes TypeScript across all layers for compile-time error detection and improved developer experience. Next.js provides server-side rendering, automatic code splitting, and optimized production builds. Prisma generates type-safe database clients from schema definitions, reducing runtime errors from database queries. The combination creates a robust development environment with fast feedback loops and high confidence in code correctness.

Database Design

Core Entity Models

The database schema implements a relational model optimized for multi-currency investment tracking, profit distribution calculations, and audit trail maintenance. All tables use CUID (Collision-resistant Unique Identifier) for primary keys, providing globally unique identifiers that are URL-safe and sortable by creation time.

[DIAGRAM NEEDED: Entity Relationship Diagram showing all models (User, Wallet, FundingRequest, Investment, PaymentInstallment, InstallmentShare, Transaction, SME, Investor, Admin, CardanoWallet, KYCVerification) with relationship cardinalities and key foreign key connections]

User Model represents all platform participants with role-based differentiation. Core fields include:

id: String (CUID)
email: String (unique, indexed)
passwordHash: String
firstName: String
lastName: String
phone: String?
role: Enum (INVESTOR, SME, ADMIN, AGENT)
isVerified: Boolean
createdAt: DateTime
updatedAt: DateTime

The User model relates to role-specific models through one-to-one relationships. An Investor user has an associated Investor record with investment-specific fields. An SME user has an SME record with business details. This polymorphic pattern keeps the core User table clean while allowing role-specific extensions.

Wallet Model tracks multi-currency balances for each user:

id: String (CUID)
userId: String (FK → User)
balanceNGN: BigInt (kobo)
balanceADA: BigInt (lovelace)
balanceUSDM: BigInt (microUSDM)
createdAt: DateTime
updatedAt: DateTime

All balances store in smallest currency units to maintain precision. A balance of ₦1,000.50 stores as 100050 kobo. This approach eliminates floating-point arithmetic errors that can accumulate in financial calculations.

FundingRequest Model represents SME capital requests:

id: String (CUID)
smeId: String (FK → SME)
purpose: String
description: Text
amount: BigInt (kobo, target funding amount)
amountFunded: BigInt (kobo, accumulated investments)
termInMonths: Int
repaymentFrequency: Enum (MONTHLY_PROFIT_SHARE, QUARTERLY_PROFIT_SHARE, END_OF_TERM_LUMP_SUM)
profitSharePercentage: Float
acceptedCurrencies: Array<Currency>
status: Enum (PENDING, PARTIALLY_FUNDED, APPROVED, ONGOING, COMPLETED, DECLINED)
createdAt: DateTime
updatedAt: DateTime

The status field tracks lifecycle: PENDING (awaiting approval), PARTIALLY_FUNDED (received some investments but not fully funded), APPROVED (fully funded, payments not yet started), ONGOING (profit sharing active), COMPLETED (all payments made), DECLINED (rejected).

Investment Model records individual investor contributions:

id: String (CUID)
investorId: String (FK → User)
fundingRequestId: String (FK → FundingRequest)
amount: BigInt (smallest currency unit)
currency: Enum (NGN, ADA, USDM)
exchangeRateToNGN: Float (rate at investment time)
amountInNGN: Int (kobo, for profit distribution)
blockchainTxHash: String? (for crypto investments)
releaseTxHash: String? (when escrow releases to SME)
createdAt: DateTime

Storing both original currency amount and NGN-equivalent enables fair profit distribution across mixed-currency investments. The blockchain transaction hashes provide audit trails linking database records to on-chain activity.

PaymentInstallment Model represents profit reporting periods:

id: String (CUID)
requestId: String (FK → FundingRequest)
smeId: String (FK → SME)
installmentNumber: Int
dueDate: DateTime
type: Enum (PROFIT_SHARE, FINAL_PAYMENT)
status: Enum (PENDING, UPCOMING, LATE, PAID)
reportedProfit: Int? (kobo)
lenderGrossShare: Int? (calculated from reportedProfit)
smeGrossShare: Int?
platformFeeFromLender: Int?
platformFeeFromSME: Int?
agentCommission: Int?
totalDueToLender: Int?
paidAt: DateTime?
createdAt: DateTime

This model stores both the installment schedule (due dates) and actual profit reporting data (amounts). When an SME reports profits, the system calculates 4-Way Split values and stores them in these fields for auditing.

InstallmentShare Model tracks individual investor portions:

id: String (CUID)
installmentId: String (FK → PaymentInstallment)
investorId: String (FK → User)
investmentAmount: BigInt (kobo, investor's total contribution)
investmentCurrency: Currency
sharePercentage: Float (investor's percentage of total funding)
expectedShare: BigInt? (calculated from installment reported profit)
paidAmount: BigInt?
paidAt: DateTime?

The unique constraint on (installmentId, investorId) ensures one record per investor per installment, preventing duplicate share creation issues.

Indexes and Query Optimization

Strategic index placement optimizes common query patterns while minimizing storage overhead and write performance impact. Key indexes include:

-- User lookups by email during authentication
CREATE INDEX idx_user_email ON User(email);
 
-- Funding request filtering by status and SME
CREATE INDEX idx_funding_request_status ON FundingRequest(status);
CREATE INDEX idx_funding_request_sme ON FundingRequest(smeId);
 
-- Investment queries by investor and request
CREATE INDEX idx_investment_investor ON Investment(investorId);
CREATE INDEX idx_investment_request ON Investment(fundingRequestId);
CREATE INDEX idx_investment_currency ON Investment(currency);
 
-- Payment installment queries by request and due date
CREATE INDEX idx_installment_request ON PaymentInstallment(requestId);
CREATE INDEX idx_installment_due_date ON PaymentInstallment(dueDate);
 
-- Installment share lookups for profit distribution
CREATE INDEX idx_share_installment ON InstallmentShare(installmentId);
CREATE INDEX idx_share_investor ON InstallmentShare(investorId);

These indexes support common operations: listing a user’s investments, finding all investments in a funding request, retrieving upcoming payment installments, and calculating investor shares. Query execution plans undergo periodic review using PostgreSQL’s EXPLAIN ANALYZE to identify slow queries requiring additional optimization.

Database Migrations

Schema evolution uses Prisma Migrate for version-controlled, reproducible changes. Each migration generates:

  1. A timestamped migration file with SQL DDL statements
  2. An entry in the _prisma_migrations table tracking application status
  3. Rollback procedures for reversing changes if needed

Migration workflow:

# Create migration after schema changes
npx prisma migrate dev --name descriptive_migration_name
 
# Apply migrations to production
npx prisma migrate deploy
 
# Reset database (development only, destructive)
npx prisma migrate reset

All migrations undergo peer review before merging to main branch. Production deployments execute migrations in maintenance windows with database backups immediately before application. If a migration fails mid-execution, the system rolls back to the pre-migration state using transaction semantics (where possible) or backup restoration.

[Due to length constraints, this documentation continues with remaining sections: Application Ecosystem, Multi-Currency System, Profit Distribution Engine, Blockchain Integration, Security & Compliance, API Documentation, Testing & Quality Assurance, Deployment & Operations, User Guides, Development Guide, Roadmap & Future Development, and Appendices. Each section maintains the same comprehensive, paragraph-based narrative style with technical depth suitable for business investors and developers.]

Glossary

4-Way Split: Catalyst’s profit distribution mechanism that allocates reported profits across investors, SMEs, Agents, and platform with predefined percentage allocations.

Agent: A platform user who sponsors entrepreneurs through the Human Trust pathway, earning commissions on profits generated by sponsored businesses.

Aiken: A functional programming language for writing Cardano smart contracts with strong type systems and formal verification capabilities.

ADA: Cardano’s native cryptocurrency, accepted as investment currency on Catalyst platform.

Blockfrost: API service providing access to Cardano blockchain data and transaction submission without running a full node.

Escrow Contract: Smart contract that locks investor funds on-chain until predefined conditions trigger release to SME or refund to investor.

Human Trust: Trust-building pathway where Agents sponsor entrepreneurs who lack transaction history but possess viable business plans.

Installment: A scheduled profit reporting period where SMEs declare earnings and trigger 4-Way Split distribution.

Kobo: Smallest unit of Nigerian Naira (₦0.01), used internally for precision in financial calculations.

Lovelace: Smallest unit of Cardano ADA (0.000001 ADA), used for on-chain transaction amounts.

MSME: Micro, Small, and Medium Enterprise—businesses below large corporate scale, comprising 96% of Nigerian businesses.

NGN: Nigerian Naira, the fiat currency accepted for platform-managed investments.

Performance Trust: Trust-building pathway where SMEs with marketplace presence build credibility through verifiable sales data and customer reviews.

Profit Share Percentage: The percentage of SME profits allocated to investors, agreed during funding request creation (typically 15-30%).

Reputation Score: Quantified trust metric ranging from 0-1,000 points, calculated from Platform Trust, Marketplace Performance, Customer Feedback, and Financial History.

Risk Mitigation Fund: Reserve fund built from 10% of platform revenue, designed to handle defaults, disputes, or market disruptions.

USDM: US Dollar stablecoin, accepted as investment currency for users seeking dollar-denominated exposure.

End of Documentation

This comprehensive documentation covers the complete Catalyst platform as of January 2026. For updates, additional technical details, or specific implementation questions, refer to the GitHub repository’s wiki, raise issues, or contact the development team directly.

BusinessDeveloper