TOKEN PAPER www.velix.id
Table of Contents PAGE 2 Introduction: Identity Token Model... 3 VXD: A Utility Token... Tokenomics... Token Transactions... Business-to-Business (B2B)... Business-to-Customer (B2C)... 5 Demand-Supply Model... 6 Supply of the tokens... 6 Demand for the tokens... 7 Price of the tokens... 8 Token Distribution... 9 Token Sale... 9 Fund Allocation... 11 Token Reward Programs... 12
Introduction: Identity Token Model VXD tokens are the native ecosystem tokens of Velix.ID, meant to facilitate the peer-topeer transactions of verified identities over the Velix.ID blockchain. The current processes of identity verification and sharing are too inefficient in terms of financial costs, time consumption, and privacy & security concerns involved. Utilization of blockchain technology, and an identity token model allows these processes to disrupted and reformed in a manner that is beneficial for both businesses and consumers. The reasons to have native Ecosystem tokens, instead of utilizing existing tokens, are: Arbitrage costs: Velix.ID Ecosystem will have high frequency transactions which are very low in value, for example, especially, at the PII Level 0, the cost of a transaction will be negligible (2 cents at ICO price), therefore, the high costs that are incurred in arbitrage fees in transactions of Bitcoins and Ethers will render the Ecosystem unviable. Conversion cost: If fiat is considered to make the identity transactions, then global currency conversion will leave the transactions unviable for the same reason as with using any external cryptocurrency. Fiat transactions are not suitable for small high frequency transactions. As stated in the above example, when an identity transaction of 2 cents is made globally, the conversion & arbitrage costs will be too high for this transaction to be viable. Other additional advantages of having native ecosystem tokens are: enable fast and automatic settlements within a smart contract easy to move digital assets/information among the Users of the blockchain as no exchanges will be involved in the process can be used across all jurisdictions are protected from the volatile nature of other tokens can be converted to other cryptocurrencies via an exchange. can be redeemed for goods/services on a marketplace designed especially for this purpose. VXD: A Utility Token VXD tokens are a type of utility tokens. Utility Tokens are tokens that allow the buyers of the tokens to be able to access product or services (whether immediately or in future). These tokens have an inherent value in themselves since they are backed by a business use-case. Startups that utilize blockchain technology sell a part of their total token supply initially in order to raise funds to be able to successfully develop their project, often with a discounted rate to incentivize increased participation. Utility tokens are not meant to be investments, however, as tokens that can be later utilized to avail the services of the platform once it has been developed at a later date. In spite of this, given that utility tokens are more likely to grow in value once the demand for their product increases, especially if their supply is fixed/restricted; a lot of investors do see an opportunity in it for increased capital. Such tokens also do not give any holdings or stake ownership in the startup for the investors, however these tokens are just tickets to buy the services provided by the blockchain startup. As per CoinDesk, Utility will be the defining word for tokens in 2018. There are three major guidelines that define if a token is, in fact, a utility token: 1. A Token that allows purchasing of a service(s): This is the threshold guideline for a token to be called a utility token, i.e., that it can be used to purchase a service(s) on its native platform. PAGE 3
2. A Self-Sustaining Ecosystem: An ecosystem that connects the buyers and sellers for that particular service, and allows wholesome transactions that utilize the native Ecosystem tokens. Any utility token needs to be backed by such a self-sustaining ecosystem. 3. Automated Payments with Smart Contract: One other vital feature of a platform with utility tokens is the enabling of automated payments with Smart Contracts. Tokenomics VXD tokens satisfy all of the above listed three conditions. TOKEN TRANSACTIONS The transaction of verified-identity takes place using Verification Stamps (VS) on the Velix.ID ecosystem, with 1 VS = 0.1 VXD = 10,000 VELs. One Verification Stamp is the cost of one identity verification transaction on the Velix.ID blockchain. The Verified-Identity Seeker pays for receiving the verified-identity to the Verified-Identity Provider, and a small amount of tokens from this transaction is paid to the Identity Holder as an incentive to participate in this transaction and provide his/her consent for the transaction. BUSINESS-TO-BUSINESS (B2B) The primary utility of the VXD tokens is to verify or share verified identities in a secure and efficient manner. On the Velix.ID ecosystem, if a business/organization has already verified the identity of a User, other businesses do not have to repeat the process again, as they can simply request the verified identity from the organization that has already verified the identity. Such a transaction can be made on the Velix.ID Ecosystem using VXD tokens as follows: 6 1 2 6 VERIFIED IDENTITY PROVIDER Flow of Info & VXD in an individual transaction on PII Level 1,2,3. 5 VERIFIED IDENTITY SEEKER 1 Request Info about User 2 Requests authorization 3 Authorizes the request 5 3 6 Forwards the request Providers verified identity of the User 6 Pays VXD USER At the initial launch price of $1 for VXD token or 100000 VELs, for PII Levels 1 and 2, each transaction is charged at 10,000 VELs; 000 of these go to Velix.ID and to the PoET Pool, 2000 go to the Attestation Provider, 1500 go to the Identity Holder, and the remaining 2500 to the request processor node. As and when the price of VXD token changes, the rewards will be proportionally aligned. See the table below, for example: PAGE
Tokenomics Distribution of Tokens in an individual transaction on PII Level I, II Attestation Identity Velix.ID+PoET Pool (VELs) Provider (VELs) Holder (VELs) Request Processor Node (VELs) VXD Price (USD) Transaction Cost (VELs) $1 10000 000 2000 1500 2500 $2 5000 2000 1000 750 1250 $3 3750 1500 750 562.5 937.5 $ 2500 1000 500 375 625 For PII Level 3, the overall transaction cost increases by 1.5 (15000 VELs at launch price ), and the rest of the costs increase in the same proportion as well. Distribution of Tokens in an individual transaction on PII Level III Attestation Identity Velix.ID+PoET Pool (VELs) Provider (VELs) Holder (VELs) Request Processor Node (VELs) VXD Price (USD) Transaction Cost (VELs) $1 15000 6000 3000 3750 5625 $2 11250 500 2250 1125 2812.5 $3 5625 2250 1125 83.75 106.25 $ 3750 1500 750 562.5 937.5 BUSINESS-TO-CUSTOMER (B2C) For basic PII information (Levels 0 in the Velix.ID Ecosystem), such as, name, phone number, email address, residential address, etc., the User themselves can be the identity provider, with verification being conducted by Velix.ID. In such cases of transaction of identity, the flow of information & VXD tokens will be as follows: Request Info about User 2 Requests authorization 3 Authorizes the request Providers verified identity of the User 1 3 5 1 Flow of Info & VXD in an individual transaction on PII Level 0 2 1 5 Pays VXD 5 VERIFIED IDENTITY SEEKER USER These transactions are charged at 2000 VELs at the launch price out of which the User gets 50% and Velix.ID gets the rest 50% as operational cost. These will vary proportionally with the change in price of VXD token as follows: PAGE 5
Tokenomics Demand-Supply Model Distribution of Tokens in an individual transaction on PII Level 0 VXD Price (USD) Transaction Cost (VELs) Velix.ID User $1 2000 1000 1000 $2 000 2000 2000 $3 5000 2500 2500 $ 6000 3000 3000 SUPPLY OF THE TOKENS 1. The total supply of the VXD tokens is capped at 100 million tokens and the launch price of VXD tokens is USD $1. 2. The partners at Velix.ID buy/are offered Verification Stamps, the equivalent value of which in number of tokens is locked into the smart contract, and cannot be dumped by the partner. These tokens are released only when the verification stamps are utilized to verify identities on the Velix.ID ecosystem. For a model case, suppose a partner has been offered 1000 Verification Stamps (i.e. 100 VXD tokens), then the 100 VXD tokens are locked into the smart contract, and when the partner utilizes 1 Verification Stamp, the equivalent value of VXD tokens (i.e. 0.1 VXD or 10000 VELs) is released from the smart contracts. This ensures that the supply of the tokens is restricted primarily to its utility. A sample supply model for the VLX tokens can be drawn as follows: P S $1 O 50 Million 100 Million Q Supply Curve In the above diagram, S is the Supply Curve for the tokens, Q is the Quantity Supplied, P is the Price at which the quantity is supplied. The Supply increases starting the token sale at a launch price of $1, until it exhausts at the total maximum permissible quantity of 100 million tokens, after which, irrespective of the price, the total number of VXD in circulation remains 100 million, hence the Supply Curve becomes a vertical line. PAGE 6
DEMAND FOR THE TOKENS The demand for the VXD tokens is expected to rise for the following reasons: 1. VXD tokens are utility based. The utility of the token is to improve on the existing methods of managing and verifying identities, and due to the shortcomings of the existing methods, more businesses and organizations will sign up for Velix.ID to access an increasing number of services in a more time & cost efficient manner. 2. It will always be more cost-efficient to verify identities through the Velix.ID ecosystem than through fiat or other contemporary methods of identity verification. Velix.ID will be a preferred substitute over the existing methods. 3. VXD tokens are always in circulation, with reward mechanisms for both VerifiedIdentity Providers and the Verified-Identity holders. Apart from its primary utility, the VXD tokens can also be exchanged for other cryptocurrency or other products or goods on a marketplace especially designed for this purpose. This ensures active circulation and demand for VXD tokens, even for the people who may not want to utilize the tokens for the purpose of identity verification. A sample demand model for the VLD tokens can be drawn as follows: P Dt7 Dt6 Dt5 Dt Dt3 Dt2 $1 O Dt1 Q 50 Million 100 Million Demand Curve In the above diagram, Dn is the Demand Curve at any given time tn, Q is the quantity demanded, and P is the price at which the particular quantity is demanded. tn represents the time stamp, with tn-1 time having occurred before tn. As defined above, the Demand is expected to rise, with Dt(n)>Dt(n-1) holding true for all values of n. PAGE 7
PRICE OF THE TOKENS If we put together the demand and supply curves in a supply-demand curve and study their interaction to determine the equilibrium price at various time stamps, this is how it will look like: P S Et7 Pe7 Et6 Pe6 Et5 Dt7 Pe5 Dt6 Et Pe Dt5 Et3 Pe3 Dt Et2 Pe2 Pe1 Dt3 Et1 Dt2 $1 O Dt1 Qe1 Qe1 Qe1 Qe1 Qe1 Q Qe6 = Qe7 50 Million 100 Million Supply - Demand Curve In the above diagram, S is the Supply Curve for the tokens, Dt(n) is the Demand Curve at time stamp tn,et(n) is the equilibrium point at which both the quantity demanded and supplied are equal for that particular time stamp tn, Qe(n) is the Quantity demanded/supplied at equilibrium En, and Pe(n) is the price at which the particular quantity is demanded/supplied for the equilibrium En. The equilibrium price can be seen to be increasing from Pe1 to Pe7 with time, as the equilibrium is shifting along the supply curve and across the demand curves. Since, after hitting Q = 100 million, the Supply Curve remains a vertical straight line, the equilibrium will keep on shifting up with a positive shift of the demand curve, leading to an increased equilibrium price of the token. PAGE 8
Token Distribution The total supply of VXD tokens is 100 Million. Out of these 100 Million, 50 Million (or 50% of the total supply) will be sold during the token sale (any unsold token from the reserved amount will be burnt). From the rest of the 50 Million token, 16 Million (16% of the total supply) have been reserved for founders, team, and advisors, Million (% of the total token supply) are allocated for the bounty program and community incentivization. The rest of the 50 Million tokens have been reserved for future utilization (15 million reserved for a future crowdsale after 18 months, and the rest 15 million retained to bring onboard future business partners and incentivising Velix.ID Users) 35 % TOKEN SALE 30 % 30 % BUSINESS PARTNERS 35 % 15 % FUTURE CROWDSALE Token Distribution % COMMUNITY & BOUNTY 16 % TEAM 15 % 16 % % TABLE 1- TOKEN SALE INFORMATION DIGEST Token Sale PAGE 9 VXD Token Type Utility Token VXD Token is meant to be used to verify and share verified identities p2p. It not a security token and not meant to be used as a currency. VXD Tokens Allocated for the Token Sale 35 Million 35% of the total token supply) are being offered through the initial token sale or the ICO. Launch price of the VXD token $1.00 USD However, during various phases of the token sale, the VXD token is being offered at a discounted price to encourage early participation.
Token Sale PAGE 10 soft cap for the token sale 2.5 Million USD If the target is not reached, all the investments raised will be returned to the respective buyers in whole. Hard cap for the token sale 23.8 Million USD If the hard cap amount is raise, that indicates that the product can be developed in whole as promised, i.e. business development, technical development, operations & marketing can be conducted without financial restraints. Token Sale Dates 17 April, 2018 May 15, 2018 These include private, pre-sale, and crowdsale. See Table 2 for detailed information. Unsold Tokens Burned Any tokens allocated to the token sale that remain unsold will be burnt in order to keep the price of the VXD token up. VXD Token Compatibility ERC-20 VXD is a ERC-20 compatible token on the Ethereum blockchain. VXD Allocation Instant Tokens will be instantly sent to the investor s ERC-20 wallet through the smart contract. VXD Availability Locked till the end of Crowdsale The tokens allotted to the investors in their Ethereum Wallet will be locked in the Smart Contract till the end of the Crowdsale. As soon as the crowdsale ends, the tokens will be released from the Smart Contract immediately.
Token Sale The bonus slabs for the Velix.ID token sale are as follows: Amount Invested Bonus Tokens 0.1 ETH 0% 0.1 ETH 0.5 ETH 5% 0.5 ETH 1 ETH 10% 1 ETH 5 ETH 20% 5 ETH 10 ETH 30% Other than the standard bonuses offered on the investments, there re also two special bonuses that will exist: PowerUp: During the first 2 hours of the token sale, there will be an added bonus of 5% VXD tokens on all purchases made within this timeframe, for all Users on the Velix.ID platform. The PowerUp bonus will also be available for the first 2 hours of a new User signing up on the Velix.ID token sale platform. PowerHour: Velix.ID will announce 2 power hours per week for the entire period of the token sale. There will be an added bonus of 5% VXD tokens for these periods that will each last 60 minutes. The exact time at which these power hours start will be decided by voting through the community members, and will be announced 2 hours in advance before the Power Hour starts. PAGE 11
Fund Allocation The entire amount raised through the ICO will solely be dedicated to the development of the Velix.ID platform. The fund allocation, if the suggested minimum cap is reached, will be as follows: 5% 20 % 20 % OPERATIONAL COST 5 % RESEARCH 5 % PRODUCT DEVELOPMENT 25 % Funds Allocation 5% 25 % PARTNERSHIP & MARKETING 5 % LEGAL 5 % 5% of the raised funds will be dedicated towards the development of the product, mainly implementing and improving the technology behind the platform and other development in the Ecosystem as may be required. 25% of the raised funds will be dedicated to new business partners acquisition and the promotion of the platform. 20% will be allotted for the cost of operations & expansions, 5% to the research & development (R&D) process, and the remaining 5% will be spent on ensuring legal compliances with the regulatory authorities. PAGE 12
Token Reward Programs During the initial development stage of the project, there are multiple token reward programs to incentivize the community to contribute to the growth of the overall product. These reward programs are sub-categorized as follows: Early Participation Reward Program (Nodes Hosting) VXD tokens themselves cannot be mined, but there is a transaction-based reward program for nodes that successfully host the Velix.ID Blockchain nodes. This reward will be made on the basis of the proof of elapsed time (PoET) consensus protocol as developed by Intel. The Proof of elapsed time requires much less electricity consumption as compared to the proof of work and proof of stake consensus protocols, thus democratizing this process to allow even individual contributors to be able to successfully host the nodes. The uptime to host the node will be rewarded from the Velix.ID PoET pool; with each minute spent being reward with VXD (native Velix.ID tokens). There will be added incentives for the early participants in this program, as well, with each Request Processor node getting additional 0.01 VXD tokens from the available 15% pool of tokens held during the ICO; the reward for each minute of successful hosting will also be doubled for the early participants in the program. The early participation program will cease to end when a sufficient number of nodes have been hosted. BOUNTY PROGRAM 750,000 VXD tokens or 0.75% of the entire token supply has been reserved for the Velix.ID bounty program to incentivize the Cryptocurrency enthusiasts to participation in the promotion of the Velix.ID ICO. These VXD tokens will be distributed among the bounty program participants using the stakes system. Bounty participants will be split into bounty pools based on their method of contribution, with each pool having its own distribution of Velix.ID tokens (VXD). Participants will get stakes during the campaign and at the end of the campaign, with each member's amount of bounty VXD tokens getting calculated and distributed on the basis on the work done by them. In the bounty program, the tokens have been sub-allocated from the 0.75% pool as follows: 8% 8.5 % 8 % Facebook 10 % Twitter 10 % 5% 3 % VK 3% 10 % Telegram 10.5 % Reddit Bounty Distribution 15 % 15 % Signature & Avatar Campaign 10 % 15 % Translation & Ann Thread Moderation 15 % Blog & Media 5 % Bugs & Glitches 8.5 % Publications PAGE 13 10.5 % 15 % 15 %
Token Reward Programs Community Incentivization 3,250,000 VXD tokens (3.25% of the total token supply) have been reserved for the purpose of incentivizing community members to participate in the development of the Velix.ID project and the promotion of the ICO. These rewards include the people who help with community moderation (online & offline), outreach program (representing Velix.ID at conferences/meetups/workshops/etc.), online or offline marketing, social media marketing, and any other community participation as may be deemed useful to the development of Velix.ID project. FOR MORE DETAILS, SEE: Website: https://velix.id White Paper: https://www.velix.id/assets/velix.id%20white%20paper.pdf Presentation: https://www.velix.id/assets/velix.id%20ppt.pdf Blog : https://blog.velix.id/ Press Kit : http://press.velix.id/ Announcement Thread: https://bitcointalk.org/index.php?topic=272172.0 Bounty Thread: https://bitcointalk.org/index.php?topic=2799783 Social Channels: Facebook : https://www.facebook.com/vxdid/ Twitter : https://twitter.com/velixid Telegram : https://t.me/velixid Or, Contact us at: info@velix.id PAGE 1