Smart Invoice Announcement Post

Title: Introducing Smart Invoice
Subtitle: A new way to get paid for services, built by Raid Guild

Here at Raid Guild, clients pay us to slay their web3 product demons. This sounds like a simple transaction – do work, get paid – but is complicated by the fact that our projects ("raids", in our vernacular) take time to complete and our services are far from standardized commodities, creating what we call the invoice dilemma: how do we ensure that we are paid for the work we do while simultaneously ensuring that our clients receive the expected value they're paying for?

Raid Guild could ensure we're paid by charging the clients before we start, but then the client would be taking a risk that by paying before seeing any work. Or clients could ensure they get what they expect by paying us only after the raid is over, but then Raid Guild would essentially be working on spec.

• Invoice lemma #1: how does the service provider ensure that they are paid for the work they do?
• Invoice lemma #2: how does the client ensure that they are receiving the expected value they are paying for?

We started tackling these problems for ourselves by doing what we do best: building. We quickly realized that others could benefit from the same tools, so we set out to make it work for freelancers and DAOs everywhere. We received grants from Aragon (more on this later) and STAKEhaus to build out our solution for DAOs and to deploy it on the xDAI network.

After much work toiling in the mines of web3, Smart Invoice was born!

Traditional Invoices

Before we get into the juicy stuff about what Smart Invoice is and does, we need to spend some time talking about traditional invoices. If you're anxious to get to the fun part, feel free to skip to the next section. But fully appreciating what makes Smart Invoice exciting requires some background, so we encourage you to read the whole thing.

Traditional invoices work like this: a service provider completes some agreed-upon work, and then bills the client by sending them an invoice. The invoice includes the amount to be paid for each element of work delivered (and sometimes expenses), instructions for how it should be paid (e.g. a mailing address, bank account routing number, etc.), and a time period after which the payment is due.

This period (called "net D", where D is the number of days) is part of the initial agreement between the client and service provider, and typically follows industry standard periods. These periods are long – invoices often come with net 10, net 30, or sometimes even net 90 payment terms!

In the traditional world, there are some legitimate reasons for the long payment terms. First and foremost, clients need time to evaluate the quality of the work that's been delivered before agreeing to pay (invoice lemma #2). Second, many clients – especially larger organizations – have long approval processes. Third, in the traditional world payments can take multiple days to clear. There are probably other legitimate reasons, too.

However, these long periods create a number of problems. First, and most obviously, service providers often have to wait a very long time to get paid. This means that service providers have to trust that the client has the money to pay them (invoice lemma #1). Conversely, if a client agrees to make an upfront payment (even if partial), the long processing time can greatly delay the start of the project.

These delays also have knock-on effects that impact the entire economy. Since many service providers are also clients in other capacities, if they have to wait 60 days to receive payment, they may not have enough money to pay their own service providers until even later. These delays and liquidity crunches cascade, gumming up the works and creating the need for epicycle-like solutions such as cash flow financing, which is highly susceptible to fraud.

There's another problem with traditional invoices. In web3, a sizable and growing portion of much economic activity is being commissioned and performed by DAOs and other on-chain organizations. How are these organizations supposed to send – or pay! – a traditional invoice?

Smart Invoice

Smart Invoice flips traditional invoices on their head. Instead of billing the client after the work is done, a service provider sends the client a Smart Invoice before they start work. Instead of waiting 30+ days to be 100% sure that they'll get paid for their good work, service providers can see that clients have deposited funds into Smart Invoice's escrow before beginning work.

Smart Invoice has benefits for clients, too. Happy service providers do better work. As with traditional invoices, clients release payment to service providers as milestones are reached; but with Smart Invoice, payment, once released, is virtually instantaneous. And if there is ever a dispute over the quality of deliverables, clients can lock the funds in escrow and trigger
Smart Invoice's built-in arbitration mechanism.

Here's what freelancers, DAOs, and other service providers get with Smart Invoice:

• Guarantee that quality work will be paid for
• Break up projects into multiple milestones and get paid after each one
• Get paid fast (no waiting for mail or wire transfers)
• Less admin to deal with (the app keeps track of everything)

Here's what clients get:

• Guarantee that payment will only be spent if the service provider delivers
• Deposit funds to cover the next milestone payment only (don't have to lock up the entire budget at once)
• Ability to tip the service provider, if desired

An example Smart Invoice with 4 milestones, in progress

Check it out!

Smart Invoice is ready for you try right now! You can find it at smartinvoice.eth or smartinvoice.xyz, and it works both on xDAI (real money!) and Rinkeby (test money).

For a detailed overview of how to use Smart Invoice, check out our documentation and instructions [here].

We'd love for you to test it out and and let us know what you think over in the Raid Guild discord's product testing/feedback channel (aka the #🍷-wine-cellar).

Smart Invoice is unaudited, so please treat this as beta software.

Where do we go from here?

We're excited to have people and DAOs start using Smart Invoice. We'll keep a close eye on how they're using it; almost certainly we'll learn something new that we didn't anticipate.

That said, we do have a few ideas for future improvements:

• Better in-app tools to support the arbitration process
• Explore private data sharing/storage between client and provider (and resolver as needed)
• More arbitration providers (Kleros Court, Aragon Protocol, etc)
• Streaming payments, such as via Superfluid
• DeFi deposits so escrowed funds can earn interest
• Support for multiple networks (rollups, etc.)
• Some ability to change total invoice and/or milestone amounts

Appendix: That Aragon Thing

Astute readers will notice that even though we received a grant from Aragon, Smart Invoice does not integrate any Aragon components. This was not for lack of trying! Our original goal, as outlined in our grant proposal to Aragon's Conviction Funding round, was to integrate Aragon Court as a second arbitration provider alongside LexDAO.

Unfortunately, after we finished an initial implementation and were starting to test, Aragon's support for their Court product waned and we weren't able do the testing necessary to finish our work. Soon after, when Aragon announced Court's (still-ongoing) transition to Aragon Protocol, we understood why. We look forward to integrating Aragon Protocol into Smart Invoice once it is live.

to do

• links to app itself
• link to FAQ/docs
• select screenshot(s)
• invite to test on rinkeby and leave feedback in #wine-cellar
• explain Aragon Court thing