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This document is a conﬁdential
overview (“Overview”) of the Simple Token Project. It is prepared by OpenST Ltd. “Foundation” in collaboration with The Simple Token Company. It may be amended or replaced at any time. There is no obligation to update the Overview or to provide the recipient with access to any additional information. Recipients are notiﬁed as follows: • No offer of securities: The Simple Token (as described in this Overview) is not intended to constitute securities in any jurisdiction. This Overview does not constitute a prospectus nor offer document of any sort and is not intended to constitute an offer or solicitation of securities or any other investment or other product in any jurisdiction. • No advice: This Simple Token Project Deck / Whitepaper does not constitute advice to purchase any Simple Tokens nor should it be relied upon in connection with, any contract or purchasing decision. • No representations: No representations or warranties have been made to the recipient or it advisers as to the accuracy or completeness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this Overview or any omission from this document or of any other written or oral information or opinions provided now or in the future to any interested party or their advisers. No representation or warranty is given as to the achievement or reasonableness of any plans, future projections or prospects and nothing in this document is or should be relied upon as a promise or representation as to the future. To the fullest extent, all liability for any loss or damage of whatsoever kind (whether foreseeable or not) which may arise from any person acting on any information and opinions contained in this Overview or any information which is made available in connection with any further enquiries, notwithstanding any negligence, default or lack of care, is disclaimed. • Risk warning: Potential purchasers should assess their own appetite for such risks independently and consult their advisors before making a decision to purchase any Tokens. • Translations: This Overview and related materials are issued in English. Any translation is for reference purposes only and is not certiﬁed by any person. If there is any inconsistency between a translation and the English version of this Overview, the English version prevails. Unless otherwise stated, all references to “$” and “dollars” in this Overview pertain to United States dollars. • This Overview has not been reviewed by any regulatory authority in any jurisdiction. • References in this Overview to speciﬁc companies and platforms are for illustrative purposes only. • Other than The Simple Token Company Limited (“Simple Token Company”) and the Foundation, the use of any company and/ or platform names and trademarks does not imply any afﬁliation with, or endorsement by, any of those parties. Disclaimer 2
1. Executive Summary 2. Market
& Customer Needs 3. The Simple Token Platform 4. Governance 5. Token Sale & Use of Proceeds 6. Project Roadmap 7. Appendix Contents 3
Any app can launch branded
tokens on open scalable side-chains, powered by Simple Token, a protocol for consumer-app tokenization and an ERC-20 utility token. 4 We are launching Simple Token to empower an ecosystem and to ﬁnance further development.
Executive Summary A protocol for
consumer-app tokenization powered by a blockchain and a utility token. • What. A suite of technologies that developers can easily integrate into their apps to design, launch, and manage their own branded tokens powered by Simple Token, a protocol and an ERC-20 utility token. • Why. Blockchain technologies hold tremendous promise for a new generation of consumer Internet services, but blockchain is currently too complex for most consumer apps, too daunting for consumer-facing developers, and not currently scalable to millions of end-user micro-transactions without public-private chain innovations. • Features. Token design; identity management; user-friendly wallets; support for in-app transactions such as incentives & rewards, P2P, B2C, API’s, B2B; rights management; public ledgers; administration tools for monitoring, fraud prevention, analytics and reporting; interoperability with other Ethereum-based technologies. • Solutions. We are exploring price stability smart-contract mechanisms and pay-as-you-go programs designed to make it easy for consumer marketplaces to use Simple Token. Preliminary work on these topics is presented in this deck. • Developers. We aim to foster an ecosystem that will take the lead and develop Simple Token protocols on behalf of the community. Developers will be encouraged to contribute to the Simple Token project and can earn Simple Tokens for their contributions. • Team. From the consumer-Internet technology team behind Pepo, Hem, Fab, and Social Median; the lead developer of Hyperledger Burrow (Monax); and the Blockchain technology team Enuma (prior work on EOS & OpenANX). • Roadmap. Developers will be able to implement the Simple Token protocol in November 2017. Consumer-facing deployments will begin in Q1 2018, followed by productization and on-boarding of selected Early-Adopter Companies, and then continued development to support thousands of Companies. • Token Sale #1: Total token supply: 800,000,000. 30% of token supply will be offered for$40M (hard cap). 20% of token supply reserved for future sales. 27% of tokens reserved for a Network Accelerator Program to seed promising projects built on Simple Token. 10% advisors, 10% team, 2.8% early backers (all on longterm vesting schedules). Pre- sale underway as of 5 September, 2017, $200K minimum for pre-sale, accredited purchasers only. 5
Jason Goldberg Director & CEO
Simple Token. CEO Pepo Prior: Hem, Fab, Social Median Nishith Shah Director & COO Simple Token Prior: Hem, Fab, Social Median Benjamin Bollen Chief Technology Strategist, Simple Token Prior: Monax, Hyperledger Burrow, Maidsafe Sunil Khedar Founder & CTO Pepo Prior: Hem, Fab, Social Median Smith & Crown • Kenetic • KWM • Perkins Coie • Enuma • SparkChain • Duoh • Pepo Lionello Lunesu Engineering Lead, Simple Token Enuma Extended Team Antoine Cote Engineering Lead, Simple Token Enuma An Experienced Founding Team of Consumer Internet & Blockchain Leaders 6
1. Executive Summary 2. Market
& Customer Needs 3. The Simple Token Platform 4. Governance & Membership 5. Token Sale & Use of Proceeds 6. Project Roadmap 7. Appendix Contents 7
Ethereum Market Cap $ 28B
Bitcoin Market Cap $ 67B 0 10 20 30 40 50 60 70 USD$BILLIONS Billions Historical MarketCap Bitcoin & Ethereum • Market capitalization of the two major cryptocurrencies exceeded~$80B in August 2017, ~$100B for the top 10 crypto currencies. • Growth fueled by increase in B2B deep-tech protocols driven by crypto-companies, early-adopters, heated ICO market, and forward-thinking investors. All this growth driven by early crypto adopters Cryptocurrency Landscape For Those Following Crypto, Recent Gains Appear Enormous Source: coinmarketcap.com August 20178
• 100% y/y growth of
crypto wallets 2016 to 2017 to 16M wallets in August 2017. • But 16M active crypto wallets still pales in comparison to mass consumer services. • Still very early for crypto, reaching only the very early adopters. Estimated Number of Active Users August 2017, in Millions Cryptocurrency Landscape But in Reality, It’s Still Early Days: Less Than 0.5% of Internet Users Have A Crypto Wallet Crypto Wallets Twitter Users Instagram Users WeChat Payments Users WhatsApp Users Facebook Users Global Smartphone Users Globel Internet Users 16 310 700 800 1,300 2,000 2,700 3,300 Source: blockchain.info August 2017 & public reports from the named companies.9
11 Cryptocurrency Landscape Public Ethereum
Is Not Yet Capable of Supporting Consumer Micro-Transactions • A new app like Pepo would account for nearly 1% of the maximum number of daily Ethereum transactions. • One medium-sized app like Unsplash (330M monthly API calls) would overwhelm Ethereum entirely. • The median Ethereum transaction cost is $0.12 per transaction — not viable for consumer micro-transactions. Source: numerous public reports on public-chain Ethereum scalability challenges, such as: https://medium.com/@FEhrsam/scaling-ethereum-to-billions-of-users-f37d9f487db1
B L O C K
C H A I N D I G I T A L C U R R E N C Y S M A R T C O N T R A C T S S E C U R I T I E S R E C O R D K E E P I N G Rewards Incentives Vouchers Coupons E-Commerce Global Payments P2P Remittance Messaging Anti-Spam X-Border Micro- transactions Pay-for-Exact-Use Royalties Shared Economy API Equity Private Markets Debt Crowd-Funding Derivatives Trading Records Certiﬁcates (Birth, Wedding) Audit Trail Metadata Licenses Proof of Prior Art IP Voting Ownership Title Notary Identity Arbitration Wills Royalties Escrow Wagers Digital Rights 12 Cryptocurrency Landscape There Are Enormous Potential Uses for Blockchains. We Are Just Beginning to Scratch The Surface.
Content App • Reward and
incentivize content contributions, empower users, spread-the-wealth • Create economics behind up-votes, likes, thanks and “warm-up” transactions • Peer-to-peer micro-transactions • Bounties for answering questions or authoring in-demand content • Person-to-person messaging • Sidestep Facebook & Google for distribution by empowering users to monetize their social connections and contributions Photography App • Digital rights management • In-app purchases • API management, monetization and transparency • Create economics behind up-votes, likes, thanks • Peer-to-peer micro-transactions • Bounties for contributing in-demand content • Creating a public record of all uses of a photo DJ Mixes Music Sharing App • Digital rights management • Bounties for creating in-demand mixes and DJ sets • Peer-to-peer payments, purchasing music, up-votes, pay-per-play • Crowdsourcing and voting for best original mixes • In-app purchases • Removing advertisements within DJ sets • Creating a public record of all uses of a DJ set • Creating a decentralized user-to-artist network Travel App • Transparency on hotel and airline seat inventory • Transparency on reward seat availability • Removing intermediaries for booking local tours • Identify management, traveller proﬁles • Instant settlement • Interoperability of loyalty programs • Booking on behalf of someone else • Commissions payout according to smart contracts 13 Cryptocurrency Landscape Some Real-Life Consumer Use Cases for Tokenization & Blockchain Technology
Consumer Business An Ethereum Token
could help solve this! • Disrupt incumbents • Reduce value leakage to Facebook, Google, Apple WANTS • Engagement • Growth • Monetization NEEDS CAUTION! BUT AHA! Tokenization is Hard, and not Consumer App Plug-n-Play • Incentivize users • Reward value creation • Monetize micro-transactions • Decentralize • Link value realization to value creation • Interoperability to other services • High costs: >$500K to ICO (legal, tax, advisory) • High effort & complexity: not core com- petency • High risk: legal, regulatory, tax, security, fraud • High technology constraints: No existing consumer protocols, Ethereum is not ready for high volume, high transaction costs, challenging user experiences Consumer Apps Need A Bridge To Crypto 14
Simple Token Will Help Fuel
The App Phase of Blockchain 20-25,000 developers involved in Ethereum community c. 13,000 people involved in Hyperledger community c. 1,000 headcounts only for blockchain powered-IoT Technology Development 2014 2016 2017 2018 F I R S T D A P P s Simple Token Towards Web 3.0 Serenity Metropolis Frontier Olympic Homestead E X P E C T E D : 2 0 1 8 ETHEREUMDEVELOPMENT ROADMAP 1950’s 1990’s 2000’s Web 2.0 Social Media P2P Sharing Web 1.0 First Applications Internet 40 years of Core Infrastructure Building 97% 2 0 0 9 Telecom info carried on the internet 1% We envision a path to Web 3.0 consisting of both partially decentralized and fully decentralized apps. 15
1. Executive Summary 2. Market
& Customer Needs 3. The Simple Token Platform 4. Governance 5. Token Sale & Use of Proceeds 6. Project Roadmap 7. Appendix Contents 16
A robust technology suite that
consumer marketplaces can utilize to power their own branded tokens. The Simple Token Platform Stack Overview Simple Token • Branding • Staking • Exchange Rate • Token types and restrictions • Consumer Friendly • History • Buy Tokens • Cash Out & Exchange • Analytics • Alerts • Monitoring • Fraud Prevention • Security • Supply & Economy Management • Purchase more Simple Token • Across the Simple Token network • Across Ethereum services • Peer to Peer • B2C • Subscriptions • Optional Transaction Fees • Incentives & Rewards (e.g. tips, up-votes) • B2B & API • Unique User • KYC checks Token Design ModuleToken Design Module Identity Module Wallet Module Transaction Module (support for various types) Administration Module Interoperability ModuleInteroperability Module • Public Transaction History • Transaction Auditing Ledger Module S I M P L E T O K E N C O M P A N YF O U N D A T I O N • Digital Rights Management • Royalties • Commissions Rights Module
18 • Simple Token is
on the public Ethereum blockchain while the Member Companies are all within a highly scalable open Side-chain. • ST is a freely ﬂoated ERC-20 token, while the Member Companies’ branded tokens are not ﬂoated. • In Phase 1 all Member Company in-app transactions happen within their own communities. • Notably, the Simple Token solution enables companies to obtain Blockchain beneﬁts without requiring their entire business to be on a blockchain. • As Simple Token evolves and as Ethereum evolves and improves: • Interoperability across the Simple Token network with a common Simple Token wallet and interoperable services. • Interoperability with the broader Ethereum universe. • Successful Member Companies with proven market liquidity could spin out of the Simple Token Side-chain and ﬂoat their own token in ICO events. The Simple Token Network Network Evolution Phase I Future Evolution MC 1 MC 2 MC 3 ST MC 5 MC 4 MC 5 ST Ether. Ether. Ether. Ether. Ether. MC 1 MC 2 MC 3 MC 4
The Simple Token Platform How
It Works A Person or Entity Acquire Simple Tokens Buy Pay-For-Use pay as you go Earn via proof of contribution Founding Member Grants ST Owners Redeem Membership Simple Token Foundation Grants Membership Smart Contract Exchanges Stake ST and othercrypto-assets against branded token. Buy/Sell ST Member Community’s Users Permissioned-chain transactions: Earn, spend, branded tokens Buy more branded tokens Cash out / convert Side-chain transactions: Earn & spend branded tokens Requests rights to create Branded Tokens based on Simple Tokens Grants rights for Branded Tokens based on Simple Tokens Stake ST (and potentially other crypto-assets) against Branded Token) As a network of networks, the more Member Companies deploying Branded Tokens based on Simple Token and the more Member Company end-consumers buying Branded Tokens, the more demand pressure it creates on Simple Token.
The Simple Token Platform How
It Works: Drill Down Member company acquires Simple Tokens Buys (cash up front) Rents (pays over time) Earns from contributing to the project OR OR 1 Member Company converts Simple Token to their own Branded Token Creates their own branded token i.e. Applies a conversion rate of ST to their own Token (e.g. 100 ST to 10,000 BT) Stakes the required amount of ST (Locks it in a smart contract) Launches their own Token 2 Member Company supports desired transactions in their community. Open Side-Chain Transactions Peer to peer Up-votes B2C Subscriptions Unlocking features 3 Member Company supports cash-out by their users 4 Member Company Branded Token $ $ Convert Simple Token Exchange 20 Pay-For-Use Pay-as-you-go program As a network of networks, the more Member Companies deploying Branded Tokens based on Simple Token and the more Member Company end-consumers buying Branded Tokens, the more demand pressure it creates on Simple Token.
The Simple Token Platform How
It Works: Use Case of Consumers Holding Simple Token (purchased on their own) Simple Token Wallet User can send/receive and buy/sell ST User is also able to deposit and withdraw ﬁat 1 User connects her relevant member company accounts with her Simple Token Wallet account 2 BT is converted into ST in real time and ST is debited from user’s Simple Token Wallet Smart Contract on permissioned blockchain 4 User is logged in member company app and pays in BT 3 MC 1 MC 2 MC 3 Consumers who acquire Simple Token via a public Simple Token token sale or on a public exchange, would be able to use their Simple Tokens seamlessly across all Simple Token Member Companies’ platforms. 21 Smart Contract on Ethereum
22 Public Ethereum Blockchain The
Simple Token Platform Current Hypotheses Around Public & Open Side-chain Interactions for V1 Simple Token Protocol • Member companies' branded tokens live on a scalable open Side-chain. • Branded tokens are “mined” by staking ST and/or collateralized crypto-assets. • All branded token transactions live on the open Side-chain. Performant Ethereum Ledger TBD: Parity, Ethermint, Hyperledger Burrow The Simple Token Open Side-chain is validated by OpenST Foundation, Simple Token Company, and member companies. Anyone can send transactions to the Side-chain, and anyone can verify it. To ensure immutability of the Side-chain, the state root is regularly anchored in a Simple Token smart contract on public Ethereum. Freely Tradable ERC-20 Token Simple Token • Simple Token Protocol allows staking of crypto- assets on public Ethereum to mint Branded Token on Sidechain • Simple Token Protocol uses merkle proofs and signed receipts to ensure atomic and cryptographically secured transfer of usable value between Ethereum and the SImple Token Sidechain • Simple Token Protocol keeps all valuable crypto- assets on Ethereum, and they can be recovered in case of proven Byzantine behaviour on the Simple Token Sidechain Simple Token Open Side-chain Both chains track each other through respective lightclient smart contracts
23 The Simple Token Protocol
Transferring crypto-assets from one chain to another in a cryptographically auditable manner P U B L I C E T H E R E U M B L O C KC H A I N S I M P L E T O K E N O P E N S I D E C H A I N 1 4 Staking Smart Contract EscrowEscrow Move ST into escrow Receipt moves ST into staking contract Member Company 2 3 Minting Smart Contract EscrowEscrow Mint BT into escrow based on cryptographic proof MC signs receipt to release BT Member Company 4 1 Minting Smart Contract EscrowEscrow Receipt moves BT into minting contract Moves BT into escrow Member Company 3 2 Staking Smart Contract EscrowEscrow MC signs receipt to release ST Release stake into escrow based on cryptographic proof Member Company P R O C E S S # 1 Staking Simple Token (ST) to Mint Branded Token (BT) P R O C E S S # 2 Converting Branded Token (BT) back in Simple Token (ST)
For further details please consult
the Simple Token Technology White Paper. 24 • We deﬁne Simple Token Side-chain to be open because anyone can formulate a transaction and a transaction is valid or invalid in its own right. The Side-chain is validated not just by the Foundation and the Simple Token Company, but also by the member companies. • To ensure that no-one can attempt to rewrite the block history of the Simple Token Side-chain, the Foundation will submit the hash of the latest block height to a contract on public Ethereum. • Smart contracts for the member companies’ branded tokens and all their transactions will be executed on the open Side-chain. This makes privacy of the users, security, scalability, and performance important considerations when evaluating the right blockchain technology for Simple Token’s needs. • To protect the privacy of the users of the services of the member companies on inherently public networks, we will work closely with member companies to ensure that no personally identiﬁable information is stored on the Side-chain. We do this out of respect for our users, conviction for what is right, and to comply with data protection regulations. • For the initial test phase, we will also test on a private version of native Ethereum (Proof-of-Authority) to separate the core competency of Simple Token from the evaluation of and contributions to the most suited platform to execute Simple Token on. The Simple Token Platform Open Side-chain Technology Considerations
25 The Simple Token Platform
Potential Phase I Technology Implementation E T H E R E U M M A I N N E T O F F - C H A I N T O O L S P E R M I S S I O N E D E T H E R E U M (Proof of Authority) B I G D ATA Token Design Module Transactions Queuing Service Analytics Member Company Wallet Module Identity Module Admin Module K E Y S SIMPLE TOKEN OPEN SIDE-CHAIN
TARGET SIMPLE TOKEN EARLY-ADOPTER COMPANY
PROFILE • Consumer-facing marketplace business. • Desires to utilize a token to decentralize and/or democratize vs. powerful incumbents. • Desires to utilize a token not just as means to transfer value but more-so to empower users as stakeholders, associate value realization to value creation. • Able to contribute to the ongoing development of the Simple Token protocols and participate in evolution of the Foundation. The Simple Token Platform Simple Token Use Case #1: Pepo • The ﬁrst conﬁrmed Member Company for Simple Token is Pepo. • Pepo aims to democratize the market for local and travel expertise. • There are currently 200,000 Pepo app users. Pepo desires to deploy a token, Pepo Coin, to grow to 5M+ high-engaged users. • Pepo desires to utilize Simple Token to power its Pepo Coin, and incentivize and reward valued content creation, enable peer-to-peer transactions, and to build a user- ﬁrst alternative to large advertising-supported businesses like TripAdvisor & Yelp. • Working with Pepo enables Simple Token to develop its protocols in response to real- life customer needs rather than developing in a vacuum. • The following slides present mock-ups of how Simple Token could be used by Pepo. 26
27 The Simple Token Platform
Simple Token Use Case #1: Pepo Coin Token Design Assumes a grant of 12M ST at $.25/ST price, of which 2/3 utilized for Pepo user incentives. 8M ST 800M PC Directional Diagram Only. Note: No ﬁat currency is stored in the platform or in Simple Token or Member Company wallets. “Buy more” and “cash out” transactions involve the transfer of Simple Token for ﬁat currency through a 3rd party exchange. Stake 2M ST Simple Token Exchange Converts 100 Pepo Coin to 1 ST Initial PC Incentive Program 200M Incentives User Transactions Top-up Provide 1st 5M Pepo users avg. of $.40 PC for free to warm up. Peer to peer Buy more Up-vote Cashout • Thank good content • Enable content creators to earn PC • Pay to ask questions • Pay to message or call • Buy services • Join channel • Unlock premium content User to Pepo • Pay to feature content Advertisers • Pay to promote 1 2 3 Pepo’s Goals for Pepo Coin Economy Reward valuable user contributions Enable users to earn money Enable Pepo to earn money • transaction fees • ads
28 The Simple Token Platform
Use Case: Pepo Internal Admin Dashboard SIMPLE TOKENS STAKED Directional Design Mock Only. Note: No ﬁat currency is stored in the platform or in Simple Token or Member Company wallets. “Buy more” and “cash out” transactions involve the transfer of Simple Token for ﬁat currency through a 3rd party exchange.
• A simple wallet designed
to require no consumer-facing crypto keys to support Member Company in-app open Side-chain transactions. • Member Companies can easily rebrand, re-skin, re-design. Here we show the proposed “Pepo Coin” token wallet for Pepo. • The user could quickly view conversion of current Pepo Coin to her local currency, or change to another ﬁat or crypto real-time conversion. • The user can easily buy more Pepo Coin, or cash out. • The user has access to her complete transaction history. The Simple Token Platform Use Case: Pepo Wallet Module 29 Directional Design Mock Only. Note: No ﬁat currency is stored in the platform or in Simple Token or Member Company wallets. “Buy more” and “cash out” transactions involve the transfer of Simple Token for ﬁat currency through a 3rd party exchange.
• Simple Token plans to
develop easy-to-use modules to support a number of consumer marketplace use cases. • Here we show Pepo’s planned implementation of “Up-Votes.” • Pepo Users will be encouraged to spend their Pepo Coin to up-vote valuable content. • Users could up-vote with any amount of Pepo Coin. • The amount of Pepo Coin spent to up-vote drives the virality and visibility of a post. • Payouts from up votes are splits transparently amongst users. The Simple Token Platform Use Case: Pepo Transaction Modules 30 Directional Design Mock Only. Note: No ﬁat currency is stored in the platform or in Simple Token or Member Company wallets. “Buy more” and “cash out” transactions involve the transfer of Simple Token for ﬁat currency through a 3rd party exchange.
• Another use case for
Pepo Coin is for channel members to charge a speciﬁed amount of Pepo Coin to join their private channel. The Simple Token Platform Use Case: Pepo Transaction Modules 31 Directional Design Mock Only. Note: No ﬁat currency is stored in the platform or in Simple Token or Member Company wallets. “Buy more” and “cash out” transactions involve the transfer of Simple Token for ﬁat currency through a 3rd party exchange.
• Pepo members could also
create content (e.g. insider tips) that is hidden behind a Pepo Coin pay wall. • Pepo users shall be able to establish any price on a per post basis or for a collection of posts in a subscription model. The Simple Token Platform Use Case: Pepo Transaction Modules 32 Directional Design Mock Only. Note: No ﬁat currency is stored in the platform or in Simple Token or Member Company wallets. “Buy more” and “cash out” transactions involve the transfer of Simple Token for ﬁat currency through a 3rd party exchange.
• Another use case Pepo
has developed is for Pepo members to establish a price in Pepo Coin for other members to message them. The Simple Token Platform Use Case: Pepo Transaction Modules 33 Directional Design Mock Only. Note: No ﬁat currency is stored in the platform or in Simple Token or Member Company wallets. “Buy more” and “cash out” transactions involve the transfer of Simple Token for ﬁat currency through a 3rd party exchange.
• This example shows a
Pepo user charging a set amount of Pepo Coin to create a 3-day itinerary for gay travelers to Southern Spain. The Simple Token Platform Use Case: Pepo Transaction Modules 34 Directional Design Mock Only. Note: No ﬁat currency is stored in the platform or in Simple Token or Member Company wallets. “Buy more” and “cash out” transactions involve the transfer of Simple Token for ﬁat currency through a 3rd party exchange.
35 0.20 0.18 0.16 0.14
0.12 0.10 0.08 0.06 0.04 0.02 0.00 1 Unadjusted BT price, based on value of collateralized cryptoassets (USD) Adjusted BT price (USD) 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 4 USD • One concern of consumer-facing companies considering tokenization is exposing their users to wild price ﬂuctuations as currently experienced with crypto currencies. • Negative ﬂuctuations could hamper users’ faith in the economy and create challenging user experiences (i.e. if a user earns $100 worth of a token for selling a real-world service only to have that drop to $20). • Positive appreciation could drive consumers to cash out and / or hoard the currency. • To mitigate this, Simple Token is exploring providing price stabilization-as-a-service of Branded Tokens to Member Companies. To achieve this, rather than staking Simple Tokens against Branded Tokens, a basket of non-correlated and less volatile assets would be staked against the Member Company’s Branded Tokens. The roadmap also includes this service being provided in a decentralized fashion by other holders of Simple Token • Any appreciation in the basket of crypto-assets would be captured as proﬁt (sell off excess crypto-assets), while depreciation would need to be addressed by loading more crypto-assets into the collateral address. The Simple Token Platform Price Stabilization In this example, the project selects a maximum of 10% price appreciation and minimum of 10% price depreciation, creating a band between $1.1 and $.09 within which the BT ﬁat price is allowed to ﬂuctuate When the effective price drops below 10%, the company must put new cryptoassets into the collateral address—or the smart contract makes a capital call on a designated reserve address. When the effective price drops below 10%, the company must put new crypto-assets into the collateral address—or the smart contract makes a capital call on a designated reserve address. When the effective price rises above 10%, the company has the option of selling their excess collateral, because they aren’t needed to guarantee the price. At the end of a designated cycle, the company has the option of adjusting the base price. STABILIZING THE PRICE OF BRANDED TOKEN
36 The Simple Token Platform
Price Stabilization Collateral Mechanics The collateral address backs the ﬂat value of Branded Tokens The reserve address provides provable reserves for price protection Funds can be withdrawn from the collateral address when it goes above allowable ranges The collateral address makes a capital call on the reserve address if it fall below allowable ranges. BRANDED TOKEN COLLATERAL ADDRESS RESERVE ADDRESS BT BTC ETH USD OTHER ASSETS BT BT BT BT BTC ETH USD OTHER ASSETS 0.20 0.18 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00 1 Unadjusted BT price, based on value of collateralized cryptoassets (USD) Adjusted BT price (USD) 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 4 USD STABILIZING THE PRICE OF BRANDED TOKEN ETH
37 • Early on, companies
will be able to attain Simple Tokens by: • Buying them outright from the issuers or others. • Earning them through valued contributions to the Simple Token mission. Bounties will be established for desired projects and offers and submissions will be evaluated by the Foundation. • Receiving grants for speciﬁc projects. • Scaling to hundreds and thousands of Member Companies via Pay-Go Programs . • We are exploring various methods for enabling Simple Token Participating Companies to pay monthly subscriptions for the amount of tokens being utilized in their networks rather than incurring large upfront fees, similar to the popular AWS pay-for-use programs. • Such programs could be combined with price stability services and other value added services. • In the future other 3rd party companies could also offer such products to Simple Token Participating Companies. The Simple Token Platform Scaling to 10,000+ Companies
38 The Simple Token Platform
Summary of Customer Beneﬁts Your Own Consumer App ICO Simple Token User Experience Technical Implementation Legal, Regulatory Risk Transaction Scalability Network Effects & Interoperability Price Stability Developer Ecosystem Costs Complex Complex Complex Low TBD Unknown High Upfront Fees Simple Simple Simple High Supported by Simple Token Ready from From Day 1 Scales With You TBD High
1. Executive Summary 2. Market
& Customer Needs 3. The Simple Token Platform 4. Governance 5. Token Sale & Use of Proceeds 6. Project Roadmap 7. Appendix Contents 39
40 • The Foundation's purpose
is to promote the real world application of the OpenST protocols and its implementations, collectively referred to as “the OpenST Platform” or “the Platform.” It will have its own robust governance model. • The Foundation also aims to initially develop the OpenST Platform and advocate governance and transparency for the Platform. • ST Token holders, Developers, and Member Companies will be empowered to determine the direction of functionality and improvement to the Platform and associated ecosystem. • The Foundation shall be separate from any for-proﬁt ventures, including the separate for proﬁt Simple Token Company. The Foundation shall have an independent Board of Directors of 5 members, with oversight over token supply, token distribution, and allocation of Foundation resources. • The Foundation shall own the IP for the Platform which enables Simple Tokens to be staked against deploying Branded Tokens on side-chains and associated API’s which enable Simple Token-based applications and services. • The Foundation shall provide the Platform on an “open source” basis for anyone with a license to study, change, distribute, to anyone, for any purpose. However, the Foundation reserves the right to approve Memberships to the Platform which are required in order to stake ST against Branded Tokens on the Platform. • It is initially conceived that The Foundation shall conduct the following activities: • Manage the ST token supply. • Manage the Platform development and intellectual property. • Allocate Foundation resources. • Evaluate and approve memberships. • Evaluate and approve ST token grants under the ST Network Accelerator Program. • Approve the deployment of branded tokens based on Simple Tokens. • The Foundation may take on other activities in the future. The OpenST Foundation Governance
41 • OpenST Platform, is
the open-source implementation of the OpenST protocol. Any developer can utilize the OpenST Platform to build a software suite of modules, dashboards and applications that enables Member Companies to easily integrate with the sidechain and allow their end-consumers to carry out different types of transactions using branded tokens on the sidechain. • For example, while OpenST publishes the speciﬁcations and implements the REST APIs for value transfers between two addresses, developers can provide admin dashboards with transaction modules where Member Companies can easily conﬁgure the types of value transfer transactions that Pepo’s users can perform, like Up Votes etc. • Developers can then further offer value added services build on top of the OpenST Platform, for example, end- consumer’s transaction history, analytics, pay-per-go, price stabilization mechanisms, price oracles etc. • In future, we envision the protocol to develop in a way that allows the end-consumers to use Simple Tokens for transactions across various Member Companies in a seamless manner. Developers can build wallet services for end- consumers using such protocol methods. • OpenST will also work towards advancing the requirements beneﬁcial to the OpenST Platform, particularly related to scalability and privacy. This includes work that contributes to (application-speciﬁc) sidechain and payment channel technology. The OpenST Foundation An Open Platform for Development
42 Any Token Holder Input
on features and development of the Simple Token protocols. Utilize Simple Tokens within any Simple Token-powered app. Purchase a Membership Level in the Simple Token Platform. Members of the Platform All the rights as Token Holders, plus can apply for and be granted the rights to create Branded Tokens based on staked Simple Tokens and deploy Branded Tokens within their apps. Members will pay regular membership fees based on the size and/or transaction volumes of their networks. Member Companies will also be required to maintain a small staked balance in order to guarantee good behavior within their economy. Contributing Member All the rights as normal Members plus can also suggest topics for discussion and vote regarding the future direction of the platform. Network Accelerator Companies (Early Adopter program) All the rights as Contributing Members, plus Network Accelerator Companies may receive seed token grants. Uses of Simple Tokens ST Tokens can be used to input on the Simple Token protocols, purchase types of memberships, and to deploy Branded Tokens powered by Simple Tokens.
43 • After the Token
Sale 27% of Simple Tokens shall be reserved in the Network Accelerator Program. • Early on, one of the primary uses of the Network Accelerator Program shall be to provide Simple Tokens as grants to Early Adopter Companies to help them kickstart their Simple Token implementations and growth of their networks. Early Adopter Companies will help deﬁne requirements for the protocol, software, and related services, and shall help contribute to the Simple Token open-source protocol. • Up to 30% of each Network Accelerator grant may be provided to the project team of the Early Adopter Company, under a long-term vesting schedule, to further incentivize the team to create value utilizing Simple Token. • The Foundation shall review and approve Network Accelerator grant requests and determine the terms and conditions of grants. • In addition to Pepo who is helping deﬁne and develop the Simple Token platform, we are currently evaluating several interested Network Accelerator Companies. Network Accelerator Program
44 • The relationship between
The Simple Token Company and the Foundation is on a as-mutually-beneﬁcial basis only and non-exclusive. The two companies are distinct and all services that may be provided would be on an at arms- length basis. • The Foundation may contract with the Company to develop technology on behalf of the Foundation. Any and all technology developed by the company for The Platform shall be provided as open-sourced technology with IP owned and managed by the Foundation. • Any value-added-services or unique user experiences or presentation layers developed by The Company, at its own expense, that extend the value of the Platform may be retained as proprietary IP by the Company. The Company shall be entitled to earn proﬁts from such activities. • The Company may provide deployment services and technology to help onboard Member Companies onto the Platform and to help Member Companies manage their usage of the Platform. The Company shall be entitled to earn proﬁts from such activities. • The Company may provide additional value added services to Member Companies beyond those contemplated herein. The Company shall be entitled to earn proﬁts from such activities. • The Company, (and speciﬁcally not the Foundation), may engage in risk-taking activities such as KYC checks (for cash-in and cash-out by end-consumers), price stabilization, insurance policies, and ﬁnancing programs to enable further adoption of Simple Token by Member Companies. The Company shall be entitled to earn proﬁts from such activities. • The Foundation may provide ﬁnancial resources to the Company (as it may to other companies and organizations) to compensate for its efforts in marketing, sales, business development, technology, and other areas that further the mission of the Foundation, development of the Platform, and growth of the ecosystem. The Simple Token Company
1. Executive Summary 2. Market
& Customer Needs 3. The Simple Token Platform 4. Governance 5. Token Sale & Use of Proceeds 6. Project Roadmap 7. Appendix Contents 45
46 800,000,000 ST Tokens generated
for development of the Simple Token project. • A ﬁnite amount of Simple Tokens created (no inﬂation). • Token Sale #1 conducted to fund the development of the protocol, prototypes and proof-of-concepts, marketing, strategic partnership developments, operations, legal, security and administrative expenses. $30M target raise. $40M absolute hard cap. 30% represents the hard cap. • Future Token Sales envisioned once milestones achieved, to fund ongoing development of the protocol. • Network Accelerator Program to be used for seeding promising projects built on Simple Token, and supporting overall ecosystem development. • Core Team, Early Backers & Advisors’ tokens subject to long term vesting schedules. Token Sale #1 Future Token Sales 20.00% Accelerator Program 27.20% Token Sale #1 30.00% Founders 10.00% Advisors 10%Investors 2.8% Early Backers
47 • $30M target sale.
$40M hard cap. A maximum of 30% of token supply available for sale in Token Sale #1. • 50% of Token Sale #1 may take place via private pre-sales beginning 5 September, 2017. Minimum buy-in for the pre-sale shall be $200,000 USD. Accredited purchasers only. Participants in the pre-sale shall receive 20% bonus tokens, which shall be dilutive against the Foundation’s reserves for the Network Accelerator Program and future token sales. • Future token sales will be considered on an as-needs basis in due course. Token Sale #1 Mechanics
48 • The purpose of
the ﬁrst Simple Token sale is to empower an ecosystem and to help ﬁnance further development of the Simple Token protocol. • We plan that the vast majority of proceeds from token sale #1 shall go towards protocol and associated software development. • Other expenses shall include security, legal, and regulatory matters to maintain the integrity of the Simple Token network. Token Sale #1 Use of Proceeds Sales & Mktg 10% Legal 10% Security 10% Accounting 5% Overhead 10% Admin 5% Technology 50%
1. Executive Summary 2. Market
& Customer Needs 3. The Simple Token Platform 4. Governance 5. Token Sale & Use of Proceeds 6. Project Roadmap 7. Appendix Contents 49
50 Project Roadmap Q3 2016
Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 C O N C E P T D E V E L O P M E N T DESIGN PROTOTYPES PEPO LAUNCH GENERAL PROTOCOL AVAILABILITY TOKEN DESIGN 10 FOUNDING MEMBERS ICO #1 TOKEN SALE #1 PROTOCOL ARCHITECTURE TOKEN SALE #2 TBD Widespread deployments Utility of protocol established (any token holder can deploy branded tokens on side- chains)
Contents 1. Executive Summary 2.
Market & Customer Needs 3. The Simple Token Platform 4. Governance & Membership 5. Token Sale & Use of Proceeds 6. Project Roadmap 7. Appendix 51
“We began exploring tokenizing the
consumer marketplace Pepo in 2016. Beyond the enormous costs and regulatory cautions involved with launching a blockchain-based token, we quickly discovered a huge gap between the promise of blockchain technologies and the ability to currently deploy tokens within consumer apps. An entire set of B2C-friendly protocols needs to be developed in order to bridge the gap between crypto and consumer. Rather than wait for others to develop it, Simple Token is building that bridge. Our team has worked on many high proﬁle and high scaling projects. Simple Token is far and away the most technologically challenging and greatest impact project we’ve ever taken on. ” Jason Goldberg Director, Simple Token Project Background THE TOKEN TO POWER YOUR BUSINESS 53
“We’ve been building large scale
Internet technologies for more than a decade, reaching tens of millions of consumers. When it comes to blockchain, there’s so much potential for a new wave of disruptive applications that enable consumers to realize economic value. Much as Stripe has built enabling technology for any internet company to easily accept payments, Simple Token is developing enabling technology for any internet company to simply and safely tokenize.” Project Background Nishith Shah Director, Simple Token THE TOKEN TO POWER YOUR BUSINESS 54
“As the lead developer for
Hyperledger Burrow, I last worked at Monax to enable enterprise-grade applications on a permissioned blockchain node following the Ethereum smart contract code speciﬁcation. I am delighted to work with the team at Simple Token as it presents a unique opportunity to work on a protocol that has the potential to propel Ethereum and Blockchain technologies to mainstream apps and mass- consumer adoption.” Project Background Ben Bollen Chief Technology Strategist, Simple Token THE TOKEN TO POWER YOUR BUSINESS 55
“Our team prides itself on
consumerizing technology. A great recent example is our work with AWS SES. We were the ﬁrst company to create a robust and highly scalable way for any company to harness the power of AWS SES without writing any code of their own. Simple Token presents a similar and exciting challenge: To enable any Internet company to easily and safely deploy blockchain technology and tokens to their end-users. Pepo is excited to be the ﬁrst customer of Simple Token and to contribute to its development.” Project Background THE TOKEN TO POWER YOUR BUSINESS Sunil Khedar Founder & CTO, Pepo 56
“We’ve been implementing Blockchain technologies
for some of the most exciting projects in the industry, including programming the smart contracts for two of the largest ICO’s, and working on KYC solutions, payment platforms, security auditing, and wallets. Rarely have we seen a project with as big of a vision and possible impact on the Blockchain community as Simple Token. We’re thrilled to be part of the Simple Token founding team.” Project Background Lionello Lunesu Engineering Lead, Simple Token Founder, Enuma THE TOKEN TO POWER YOUR BUSINESS Antoine Cote Engineering Lead, Simple Token Founder, Enuma 57
“The ﬁrst wave of blockchain
has unleashed tremendous value, largely driven by organizations creating protocols for deep crypto technology. The next wave of exponential growth will be driven by organizations like Simple Token that enable real-world use cases that put tokens into the hands of tens of millions of consumers.” THE TOKEN TO POWER YOUR BUSINESS Project Background Jehan Chu Advisor, Simple Token Managing Director, Kenetic 58