LODE Association + AGX
Project Paper
A Blockchain Enabled, Digital Silver-Money System October 2019
Reimagining Silver. Together. The LODE Association’s mission is to restore silver to the monetary system by introducing digital silver-money for everyone.
Digital Silver for Everyone
DISCLAIMER 1. No investment recommendations The published product-related information by the Lode Association Establishment (“Lode”) are exclusively for information and marketing purposes and Lode does not provide any kind of investment recommendations tailored to the personal circumstances of the client, especially not in the form of individual investment advice. Lode does not give any investment recommendations in particular. 2. Risks The lode token bond is a perpetual bond without a maturity date and a repayment is not intended and therefore the price of the lode token bond is only subject to the secondary market trading. The value of the lode token bonds may therefor fluctuate and is not guaranteed. Investors are notified that the price of the bonds may be volatile and that it may be difficult to sell the bonds. The lode token bond is not listed at any exchange or other secondary market venue at this time. Planed or past performance is no guarantee of future earnings. A detailed description of the additional other risks associated with the lode token bonds is contained in the securities prospectus, which is available on the lode website once the securities prospectus is approved. 3. Warranty and Liability Lode offers these services in a commercially reasonable way and hopes you can enjoy using them. Nonetheless, some of them are not part of our service offering. Except as expressly stated in these Terms of Use or the Additional Terms, neither Lode nor any of its affiliates or suppliers or distributors make any specific guarantees or warranties with respect to the Services. For example, we do not guarantee the Services ‘ content, the specific functionality of the Services, or the Services ‘ reliability, availability, or suitability for your purposes. We provide the Services in their current form. Lode and the Client shall be liable in accordance with the statutory provisions in the event of intent and gross negligence, including on the part of legal representatives and agents. The same applies to damage caused by harm to life, body or health, damage caused by lack of a guaranteed value, and in the case of defects that are fraudulently hidden. In the case of
material damage and financial loss caused by the client or lode, its legal representatives or agents by slight negligence, liability shall be limited to cases of infringement of a material contractual obligation, but limited to the predictable and typical damage at the time of conclusion of the contract. Essential contractual obligations are those whose fulfillment makes the proper execution of a contract possible in the first place and on whose observance the contracting parties may regularly rely. The Product Liability Act is not affected. Otherwise the liability of Lode and the Client is excluded. 4. Public offering jurisdictions The offer of the lode token bond is made exclusively in accordance with Liechtenstein and European supervisory law in Liechtenstein. This offering and its prospectus may not be distributed or transmitted, directly or indirectly, in the United States of America, Canada, Iran or Australia. In addition, only investors are permitted to invest who are neither (i) US citizens or (ii) holders of a permanent residence and work permit for the USA (Green Card), nor (iii) have a residence or registered office in the USA or its territories, nor (iv) are corporations or other assets organized in accordance with US law whose income is subject to US tax law and (v) are not listed on one of the sanction lists of the European Union or the USA. The same applies to citizens etc. of Canada, Iran and Australia. If foreign investors are used for investors with a foreign nationality, residence or habitual residence abroad or for other reasons, these investors must examine these regulations on their own responsibility. The token-based bonds referred to in this prospectus have not been and will not be registered under the United States Securities Law of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States unless they are registered or exempted under the Securities Act. The Issuer does not intend to offer, to sell or to deliver any securities, in particular not the token-based bonds which are the subject of this offering and the prospectus, outside the European Economic Area (EEA) or to otherwise register there or to apply for any kind of authorization. The placement of token-based bonds and the distribution of this offering or the prospectus or other information in connection with this public
offering of token-based bonds may be restricted by law. Any failure to comply may constitute a breach of the securities laws of the relevant jurisdictions. Persons wishing to accept the offer outside the EEA are therefore invited to inform themselves independently of the restrictions existing outside the EEA and any other legal or tax consequences and to comply with those rules. Investors can not rely on being able to invoke provisions to protect investors under a different legal system from that of the Principality of Liechtenstein. The Issuer has not authorized the publication, dispatch, distribution or dissemination of the offer document or other documents relating to the offer of securities by third parties outside the EEA. The Issuer is not responsible for the compatibility of the publication, dispatch, distribution or dissemination of the Securities prospectus outside the EEA with the legislation of jurisdictions other than the EEA. 5. Concluding Provisions Lode may reasonably adapt these Terms of Use or any additional terms for a particular Service to reflect, for example, changes in the legal framework or changes to our Services. You should therefore periodically review these Terms of Use. We will post notes on this page for modifications to these Terms of Use. We will post notices of changes to additional terms within that service. Changes will not be retroactive and will take effect no earlier than 14 days after they are posted. However, changes to a new feature for a Service or changes for legal reasons will be effective immediately. If you do not agree to the modified Terms of Use of a Service, you must discontinue the use of that Service. In the event of any conflict between these Terms of Use and any Additional Terms, the Additional Terms shall prevail on a case-by-case basis. These Terms of Use and any disputes arising out of or in connection with these Terms of Use shall be governed by Liechtenstein law to the exclusion of the UN Convention on Contracts for the International Sale of Goods. If you are a consumer, all disputes arising out of or in connection with these Terms of Use shall be settled in accordance with the applicable law in your jurisdiction. If you are not a consumer, the exclusive place of jurisdiction for all disputes arising out of or in connection with these Terms of Use shall be Liechtenstein.
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The Vision The LODE Association Tokenizes Idle Silver and Puts it to Work For You.
The LODE Association The LODE Association is a legally and economically independent establishment aimed at tokenizing investment-grade silver bullion into a two-token cryptocurrency system.
The LODE System The LODE Association tokenizes silver, one gram at a time.
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LODE & AGX Assets Explained - LODE Token - AGX Coin • The AGX Ecosystem • AGX - Nine Use Cases • Fees
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Governance Explained -
Governance Phases Key Players LODE Service Providers Alliance LODE Bullion Dealers Alliance LODE Vault Master Council
Tech Overview The LODE Tech Service Providers have identified the following 10 key components to support the LODE Project’s mission.
Financial Model LODE Tokens represent a contributor’s investment of silver bullion into the LODE Project. Token holders will receive variable interest payouts in the form of AGX Coins, with each minting of silversecured AGX Coins.
What’s Next for LODE The LODE Service Providers have identified the following roadmap for completing the LODE Project mission.
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Get Involved Join the LODE & AGX Community today.
Digital Silver is Here Now LODE Community Members possess a bold sense of identity, bound by a shared ethos and commitment to put the world’s oldest form of money Silver - back to work as digital silver.
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This document outlines the framework for a unique blockchain network comprised of a two-token, assetbacked, digital silver-money system that aims to create a new opportunity for wealth preservation. Whether you are a finance professional, silver enthusiast, crypto trader, merchant, miner, entrepreneur, or someone looking to safeguard your wealth, you are invited to consider the information presented in this document and learn about this blockchain system that brings the sound properties of investment-grade silver bullion to an exciting new form of assetbacked digital money.
Vision The LODE Association Tokenizes Idle Silver and Puts it to Work for You. The future of money needs to be a balance between the old and the new. The new provides freedom, speed, innovation and access to experiences. The old insures stability, wealth, legacy and trust. The advent of blockchain technology has inspired a new paradigm, one where it is possible to bridge both these old and new features to money through a resilient, inflation-resistant asset known as silver. With this in mind, the LODE Project was born to restore silver to the monetary system, by pioneering the world’s first Digital Silver-Money System powered by blockchain.
By issuing physical silver onto the blockchain, a valuable asset regains its rightful status as a vital unit of account. Silver establishes itself as a sound medium of exchange to settle trade and commerce for current and emerging economic systems.
THE FUTURE OF MONEY NEEDS TO BE A BALANCE BETWEEN THE OLD AND THE NEW Today, blockchain technology has made it possible to implement innovative business models like that of the LODE Project with its twotoken digital silver-money system. Together, the LODE Token and AGX Coin form part of a global, digital, and silver-backed system built on the foundation of blockchain technology. LODE Community Members will be able to send, spend, and build wealth using digital silver, enabling a more democratized global financial system. __
Project Plan Report / 2019
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What is the Mother-LODE?
The MOTHER-LODE is a principal vein or zone of veins of gold or silver ore. Ambitious Placer miners follow gold-bearing sands upstream to discover the source. This source is called the “mother” of the gold in the river, and so was dubbed the “mother lode”. The term is also used colloquially to refer to the origin of something valuable or in great abundance. This is how the LODE Project derived its name because of its close relation to silver and its vision to see mass adoption of silver-money.
The LODE Association The LODE Association is an independent establishment recognized under Liechtenstein law, aimed at tokenizing investment-grade silver bullion into a twotoken digital silver-money system. With no shareholders, the LODE Association is governed by a Board of Directors. It is made up of a global, decentralized group of sound money advocates that believe silver can serve as an affordable, verifiable, and secure store of value, and that when “tokenized� upon the blockchain, becomes a superior medium of exchange.
THE LODE ASSOCIATION IS CREATING A COLLABORATIVE ECOSYSTEM BUILT ON THE FOUNDATIONS OF THE LODE ETHOS Together with the LODE Service Providers, the LODE Association is creating a collaborative ecosystem built on the foundations of the LODE Ethos. An autonomous, secure, and disciplined ecosystem that returns a private, resilient, and autonomous unit of account to our economic system. __
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Modern Silver Money for Everyone
The LODE Association is made up of a global, decentralized group of sound money advocates
“What life have you if you have not life together? There is no life that is not in community.� - T.S. Eliot
“I believe cryptocurrencies have a place in the future as a safe-haven asset to get away from watching your currency collapse.� - Gerald Celente, publisher of the Trends Journal.
The LODE System The LODE Association Tokenizes Silver, One Gram at a Time. The LODE Association believes it possible to structure a two token system using blockchain. Each asset maintains a unique relationship to silver and each represents a special interest in the reserved silver bullion. LODE Token is the first asset and provides a revolutionary opportunity for investment-grade silver bullion owners to leverage their holdings. The silver is tokenized into LODE Tokens, which will represent a contributor’s stake in the LODE Ecosystem. The LODE Association issues a Digital Silver Bond to LODE Token Holders, which gives them a right to valuable and growing rewards in the form of AGX Micro-payouts.
AGX Coin is the second asset functions as digital silver. It will fuel transactions and leverage the LODE Ecosystem to expand adoption of silver as a unit of account. AGX Coins provide community members with a private and sound medium of exchange. It also represents a right of claim to the reserved silver bullion. The entire model is based upon the anchoring of reserved and vaulted silver bullion to the two digital assets, each underwriting the other. Both assets will be minted on Hyperledger, a permissioned blockchain network that will ensure the vaulted silver is properly accounted for and that all digital silver tokens remain compliant with regulatory frameworks.
SILVER-MONEY. A BRIDGE TO YOUR FINANCIAL FREEDOM.
Project Plan Report / 2019
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Silver-Money. Bridging your wealth with sound money. “The Lode Cryptographic Project has found a way to unshakably connect the strength, safety, and utility of the blockchain, with the four-thousand-year legacy of silver’s use around the world as Honest Money. At this point, call me very much impressed.” - David Morgan, founder of the Morgan Report
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Modern Silver Money for Everyone
LODE & AGX Assets Explained LODE Token The LODE Token is the foundation on which the LODE Ecosystem grows. Silver that otherwise would have been idle in a vault - is contributed into the system - vaulted, secured and digitized on the blockchain. The output is the LODE Token - a Digital Silver Bond that is issued to LODE Token Holders as a security for the vaulted silver contributed to the system.
How It Works 1. Contribute Idle Silver Participants contribute investment-grade silver bullion (or gold equivalent) to one of seven LODE Association vaults around the world. The silver will be assayed, certified 99.9% pure, and then reserved and insured by the LODE Association with oversight from the LODE Vault Service Provider. 2. LODE Token Issuance & World’s First Silver Bond The LODE Association generates a corresponding certificate – Digital Silver Bond – by way of a “smart contract” on the blockchain for the exact gram weight of each contribution, triggering a digital LODE Token issuance. The LODE Token functions as a perpetual bond in that LODE Token Holders have (1) a certificate for their contributed silver and (2) a claim to regularly scheduled – AGX Micro-payouts – in the form of AGX Coins. 3. LODE Tokens in your Personal Wallet After registering a LODE account and completing the required KYC process,
LODE Tokens will be delivered to the contributor’s private wallet, leaving a verifiable and immutable receipt upon a unique dual-asset blockchain. Subsequent phases of LODE Tokens will be issued in accordance with an algorithmic curve model, increasing the exchange rate per gram of silver contributed. 4. Minting AGX Coins Each one gram of silver bullion secured to the LODE vaults will enable the LODE Association to create and issue one AGX Coin. This second tokenized asset will be sold to speculators, investors and merchants with inflows allocated towards the purchase of additional silver bullion for the LODE vaults. 5. Silver to AGX Coin Cycle As long as AGX Coins are continuously purchased, the LODE Association can purchase more silver bullion for the vaults, regardless of the fiat price of the precious metal. New tranches of AGX Coins will be minted -- at a margin -- as additional silver enters the vaults, with the reserved silver bullion always exceeding the number of new AGX Coins outstanding. Project Plan Report / 2019
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LODE & AGX Assets Explained AGX Coin Sound. Secure. Digital Silver. While the LODE Token acts as the engine to the LODE System, the second tokenized asset – the AGX Coin – is the fuel. AGX Coins are borderless, private, secure and redeemable. They will be used by LODE Community Members as a sound unit of account, a stable store of value and a secure means of exchange. AGX Coins will be minted on an autonomous blockchain network, which will facilitate peer-to-peer transactions, with every transaction enabled by private encryption keys.
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Modern Silver Money for Everyone
THE LODE TOKEN ACTS AS THE ENGINE TO THE LODE SYSTEM... THE AGX COIN IS THE FUEL. Key Benefits • Allow purchase of goods and services on AGX Markets and from participating brick & mortar merchants • A means to speculate on the future price of silver • A right to claim silver bullion from the LODE Vaults • Used in a variety of ways including POS, tap and pay apps, ATM networks, prepaid debit cards, barter networks, and exchanges • Provide access to the AGX Ecosystem, which includes AGX Markets, AGXPay Wallet, AGX Media, and more • Transferable to fiat currency or other cryptos like Bitcoin, Ethereum and others (this feature to be made available at a future date)
AGX Micro-payouts Explained LODE Token Holders are eligible to receive AGX Micro-payouts 7 times a year, or every 52 days. These payouts will be equivalent to 5.25% of all newly minted AGX Coins and will be fully transactable upon receipt. Proceeds from the sale of newly minted AGX Coins will be used to purchase more bullion for the LODE Vaults which then will be minted as new AGX Coins. This will allow AGX Micro-payouts to grow with every sales cycle, benefiting eligible LODE Token Holders.
The AGX Ecosystem AGX Markets AGX Markets is an online platform connecting a global network of merchants who accept AGX Coins as payment. These merchants offer an array of unique products, services, and discounts. Also, merchants are welcome to offer their products and services on AGX Markets to expose their business to a worldwide customer base. AGXPay Wallet AGXPay Wallet will enable safe, low-cost digital silver transactions protected by blockchain technology. This digital wallet will allow LODE Community Members to buy, sell and store AGX Coins instantly. Sending and spending AGX Coins will be as easy as sending an SMS. AGX Media AGX Media will provide the AGX Community with exclusive and unbiased cryptocurrency, precious metals, blockchain and financial market news from top industry experts.
Project Plan Report / 2019
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LODE & AGX Assets Explained AGX Coin Nine Use Cases 1. Individuals Individuals insure savings and protect purchasing-power by holding AGX Coins in their private digital wallet. Each AGX Coin is tethered to a verifiable one (1) gram weight of reserved silver bullion, backing each coin with over 30 inherent benefits silver provides. AGX Coins may be exchanged at any point, and from virtually anywhere, for the reserved silver in the vaults. 2. Merchants Small business owners, manufacturers, professionals, and retailers will gain access to a global customer base by offering products and services on AGX Markets, and by accepting AGX Coins as payment. AGX Markets provides business owners with low-cost, secure AGX-enabled transactions with low cash fees on sales. Also, merchants can connect with suppliers for business expenditures, access valuable rewards and incentives programs, and protect their business against depreciating fiat currency.
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Modern Silver Money for Everyone
3. Crypto Traders Cryptocurrency holders can trade or transact with digital silver. Fund managers of cryptocurrencies and blockchain assets can also position AGX Coins as a means to stabilize and diversify client portfolios, insulate profits, and hedge against volatility. Eventually, AGX Coins will be deposited with cryptocurrency operators to enable conversion into other cryptocurrencies like Bitcoin or into fiat positions. 4. Silver Investors The LODE System provides an opportunity to invest in a new digital silver asset class, which provides further diversification and lower administrative costs for trading, exchanging and transacting. AGX Coins provide better security and flexibility than silverbacked ETFs for instance, which require administration by various counterparties. Blockchain-enabled AGX Coins are controlled exclusively by their owners with encryption keys.
5. Bullion Investors Silver bullion investors may exchange their physical coins and bars for LODE Tokens and AGX Coins. The LODE Token provides an opportunity for silver enthusiasts to put idle silver assets to work. The LODE System will enable transactions between silver-money seekers and AGX retailers seeking sound silver settlements. All vaulted silver is reserved and insured on the blockchain. 6. Bullion Dealers Precious metals dealers and retailers can align with the LODE System and unlock a new customer base by enabling their stores and websites to accept AGX Coins for physical bullion products. Dealers can hold their AGX Coin balances and deploy them on future ‘street’ purchases (buybacks) or ‘call’ for silver bullion from the LODE Reserve at wholesale pricing. 7. Silver Miners Public and private silver mining companies may deliver silver into the LODE System and exchange their AGX Coins on AGX Markets. With AGX Coins, silver miners can protect their purchasing power from depreciating fiat currency, recover losses on idle inventory and reduce business expenditures with other AGX Merchants.
9. B2B Exchange Operators AGX Coins provide a superior trade and commerce settlement tool, giving AGX Merchants leverage across the AGX Ecosystem. Participating merchants may conduct reciprocal trading on AGX Markets by offering up idle inventories to source products and services used in business operations.
Fees As a promotional period for the first several months of the system, there will be no fees charged. After the promotional period has ended, a tiered transaction fee will be implemented on public blockchains. For blockchains that don’t support the transaction fee, a demurrage fee may be charged instead. • Tiered Transaction Fee: a progressively smaller percentage is taken from transactions until it caps out. • Demurrage: a small time-based fee paid daily or hourly, based on the number of coins held, and is not affected by transactions. These fee schedules will apply to networks that are capable of supporting this feature. Wallets and LODE services, such as utilizing Baton, will also provide transaction fees.
8. Industrial Uses Industrial users of silver may seek to buy, exchange, or earn AGX Coins as a means to further secure their hedging operations, or to secure future supplies of silver for industrial applications. Also, they can use AGX Coins to speculate upon the future price of silver.
Project Plan Report / 2019
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“I’d rather be my own bank — which is possible with cryptos — than use conventional commercial banks.” - Doug Casey, founder of Casey Research
Governance Explained Linking It All Together The governance of the LODE System will be set up in three phases to ensure the project’s mandate is met with the intention that LODE Community Members ultimately govern the entire system. The key parties highlighted in this section include the LODE Association, Interfix Corporation, LODE Service Providers Alliance and the LODE Community.
Governance Phases PHASE 1 Creators as Curators The network is currently managed by Interfix on behalf of the LODE Community, and the LODE Service Providers are developing and building the system architecture to ensure enterprise-level readiness for market release. This protocol maximizes efficiency and reduces the time required for upgrades. PHASE 2 Service Providers as Advisors Once the LODE Community and the Service Providers Alliance are running the ecosystem, the LODE Project will begin relying on the expertise of Service Providers and Community Ambassadors to make decisions for the community. While Interfix will continue to guide the project, decisions will be increasingly based on input from the LODE Community.
PHASE 3 Community-Based Governance The third phase of governance will pass control entirely to the LODE Community. With LODE Tokens being the governance token, LODE Token Holders wishing to participate in the governance of the LODE Community will be given voting and decision making rights. There will still be some controls and safeguards in place, but the central organization will have significantly less control or influence. By this point, it is expected that almost everything will be done by community vote. While Interfix might step up occasionally to prevent accidental disasters (like voting to set all fees to zero), for the most part, it will be hands off and participate just like other LODE Token Holders.
Project Plan Report / 2019
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Key Players The LODE Association The LODE Association is the compliant entity behind the entire LODE Project and will enable the creation of LODE Tokens and AGX Coins via the issuance of Digital Silver Bonds. The LODE Association is a legally and economically independent entity. Unlike a corporation, the LODE Association has no owners or shareholders. The LODE Association is governed by LODE Community Members and the LODE Project is enabled by the work done by Interfix and the LODE Service Providers.
The Interfix Corporation is the LODE Association’s distribution partner. Operating transparently and in a disciplined manner, Interfix acts as the “linking element” that synchronizes the three elements within the system: the LODE Tokens, the vaulted bullion reserve, and the AGX Coin operations. With each sales cycle of LODE Tokens and AGX Coins, the reserved weight of silver bullion will grow beyond the number of LODE Tokens outstanding. This marginal difference will cover Interfix’s operational costs as well as the flow of rewards -- as AGX Micro-payouts -- to the LODE Token Holders. Interfix also works as the intermediary between the LODE Association and LODE Service Providers.
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Modern Silver Money for Everyone
The LODE Service Providers Alliance A decentralized network of LODE Service Providers will be responsible for pushing the LODE Project forward, enabling all products and services for LODE Community Members. KEY SERVICE PROVIDERS
A47Labs Inc. is a privately held, full service technology development consultancy firm focused on bringing emerging technology products to market. In collaboration with Interfix Corporation, A47Labs provides the LODE Community with the technical vision, strategy, and development as it relates to LODE and AGX Products. A47Labs’ primary goal is to ensure there is a successful product-market fit for all LODE & AGX Products.
BCF is a public blockchain development corporation, originally founded by the co-founders of Syscoin. It is currently in charge of developing the core protocol for the Syscoin platform. Implementing the experience they have acquired in the industry, BCF is spearheading core development, blockchain-based token creation, decentralized marketplaces, decentralized identity, DAPPs, and more.
A world class team of lawyers, tax experts and economists with a deep level of experience in asset and operational structuring for blockchain organizations and cryptocurrency products. Crypto Lawyers GmbH develop solutions that are tailored to the requirements of private and corporate clients in a variety of different jurisdictions in Europe (particularly Switzerland, Liechtenstein, Germany, U.K.) as well as the United States, Hong Kong and many others. They provide the LODE Community Association with sound legal advice in the areas of legal and operational token structure, jurisdictional operation and investor development.
BULLION DEALER ALLIANCE
Bullion Dealer Alliance (BDA) is the LODE Service Provider used for vaulting operations, and the organization that services the LODE Community to buy and/or deliver silver into the vaults. BDA is a fully-integrated precious metals dealer and secure storage provider specializing in the acquisition and secure storage of precious metals for individuals, companies, trusts and wealth management professionals on behalf of their clients. They offer global vaulting solutions in the Cayman Islands, Toronto, New York, Miami, London, Frankfurt, Zurich, Lichtenstein, Hong Kong, Singapore and Mexico City. They currently are looking to expand their vaulting operations in Latin America and the United Kingdom.
WB Financial Group is engaged as a LODE Financial Services and Auditor Service Provider. They ensure financial operations and governance remain compliant. WB Financial Group was formed in 2009 to provide professional financial services to a diverse client base. The key services that WB provides are Financial Advisory, Corporate Management, Captive Insurance, and Corporate Finance.
LODE SERVICE PROVIDERS WILL BE RESPONSIBLE FOR PUSHING THE LODE PROJECT FORWARD, ENABLING ALL PRODUCTS AND SERVICES FOR LODE COMMUNITY MEMBERS.
Project Plan Report / 2019
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As the project moves along the governance phases, more alliances will be formed to ensure the long-term success of the LODE Project, including: The LODE Bullion Dealers Alliance Rather than limiting the LODE Project to one bullion dealer service provider, the Bullion Dealers Alliance will be formed as the LODE & AGX Ecosystem grows. The LODE Project will work exclusively with a few of the world’s premier bullion dealers, which will accept AGX Coins as payment for the purchase of retail bullion products. Each bullion dealer will process the AGX Coin payment for each individual order, and then collect, ship, and track every order to completion. The Alliance will provide access to extensive and deep inventory of pure 99,99% investment-grade bullion from the most reputable refiners and government mints around the world. For bullion dealers, an API will be set in place -- the LODE Bullpen -- to gain access to a global network of buyers looking for retail bullion products.
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Modern Silver Money for Everyone
The LODE Vault Master Council The aim is to have a community-centric council that will provide oversight of the vaulting mechanism behind the LODE System. The LODE Vault Master Council will comprise of leading vaulting partners and other members of the Service Providers Alliance. The aim is to have a community-centric council that will provide oversight of all vaulting related activities.
Project Plan Report / 2019
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“LODE is building an ecosystem that will restore the use of silver as an easy, secure, and sovereign payment system. We’re excited to be helping put silver back to work as modern money powered by blockchain technology.” - Dan Wasyluk, CEO of Blockchain Foundry
Tech Overview The LODE System will be backed by distributed ledger technology that enables the creation and distribution of two tokenized assets that uniquely represent the interests of LODE Members. The architecture is built on the Hyperledger Fabric blockchain protocol and it is designed to provide the maximum level of transparency, accountability, security, and speed. Hyperledger Fabric will ensure the LODE Project remains legally compliant and can adapt easily to any regulatory changes.
Silver Vaults
Hyperledger Fabric System Native Tokens
Private Permissioned Network
Public Permissionless Networks
Exchanges
AGX Use Cases on Public Networks
Baton™ / Relay - Interoperability
More to come! Tron
Syscoin
Everything Else
Decentralized
Centralized
Regulated
Remittance
Crypto-Trading
More to come!
Trade & Commerce
Project Plan Report / 2019
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How the LODE System Works Investors Could be a 3rd-party crypto wallet
Personal Crypto Wallet
Invest Silver
Receive Lode Token Bonds
Interest on the bond is paid when new AGX are minted IN TE RF IX
IN TE RF IX
IN TE RF IX
The LODE Association
INTERFIX
Vaults (BDA) Redeem AGX for Silver
Mint AGX backed by new silver
AGX is sold to Interfix for distribution
Interfix Fiat Reserve
Redemption Fees
Verified AGX Holders
Managed Payment Rails
Managed ATM’s
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Modern Silver Money for Everyone
Managed AGX Visa/Mastercard
Purchase AGX Transaction Fees
Matters to Lode Token Holders (On Hyperledger)
Dealing with AGX
Directly managed and funded by InterďŹ x
Matter to both AGX & Lode (On Hyperledger)
Personal Wallet
(Could be on Hyperledger or other public blockchains)
Receive Silver
Customers
Send Silver
Transaction Fees
Bullion Dealers
Transaction Fees Transaction Fees
Transaction Fees
Buy Silver
Transaction Fees
Exchangeability Merchants
Regulated Exchanges
Transaction Fees
Banks
Regulated ATM’s
Regulated AGX Visa/Mastercard
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The LODE Tech Service Providers have identified the following 10 key components to support the LODE Project’s mission. 1. Community Member Frontend Applications A web application – LODE/AGX Members Portal – that allows community members to register their account, verify their information, and submit an order for LODE Tokens and AGX Coins. The members portal will include reporting functionality that identifies the current status of the LODE Ecosystem including system updates, news and communications, the prevailing LODE and AGX Coin exchange rates, terms and conditions, affiliate tracking, and the total silver bullion committed to the project in realtime. The mobile app will allow members to view balances while enabling peerto-peer transfers of AGX Coins and purchases with participating merchants. The front-end has been written in ReactJS and it communicates with a backend via REST calls, and is secured via industry standard JWT security tokens. Providing a localized interface, it allows members to work in their native language, currently available in English, French, and Spanish. It uses a third-party transactional email system to guarantee delivery of all communications.
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Modern Silver Money for Everyone
2. Vaulting/Audit Frontend The aim is to have an application that provides the functionality for LODE Service Providers (ie. vault partners, auditors, etc.) to report and reconcile on the deliveries and movements of physical silver. The auditing system will track vault declared silver balances. Once the LODE Vault Service Provider reports having possession of silver, it will be immutably recorded onto the Hyperledger. The third-party auditing service provider will double check that the vault declared balances and the blockchain-reported data is the same. The results from the third-party audit will then be recorded onto the blockchain. As the movement of silver is reported to the system via the REST API (cryptographically signed, and verified by the smart contract), it is then written to the coin contracts for either minting or burning of tokens. Auditing is currently being done manually by BDA.
3. System Backend This API will maintain the integrity of the LODE System by giving LODE Administrators and Service Providers various levels of permission to monitor, edit, confirm, and finalize the evolution of a member’s contribution to the LODE Project. The REST API provides a central system to register system health, metal movements that will be written on the blockchain for LODE Token and AGX Coin issuance, and provide member services. It acts as a clearinghouse for the member rewards while issuing commands to the smart contracts running on the blockchain. Members will be able to claim the rewards directly from the smart contract.
In this model, the issue price of LODE Tokens will increase as the token supply increases, discouraging excessive dilution of the LODE Tokens while protecting the value of the contributions in each tranche by making it more expensive for new tokens to be issued. Given that not all individuals will be able to access secondary markets, the possibility of new issuance remains intact.
GOING FORWARD, THE PRICE FOR NEW LODE TOKENS WILL STEADILY INCREASE AS THE SUPPLY INCREASES.
LODE Tokens were originally sold in a series of three phases, with a price of 3.7 grams in the final phase. The algorithmic price curve has been aligned with the final phase. As silver has already been contributed to the system, the algorithm begins after the adjustment phase. Going forward, the price for new LODE Tokens will steadily increase in price as the supply increases.
4. LODE Tokens Issuance & Bonded Curve The issuance of Lode Tokens is based on an algorithmic price curve. The LODE Project uses this price model for its token economics because it puts the focus on growing the adoption of LODE Tokens.
The sale price of new LODE Tokens is based on the number of tokens currently in circulation. It is designed as a step function, increasing in tranches of approximately 5 million grams of silver each. As the price is increasing with each tranche, the number of tokens sold in a tranche goes down.
The algorithmic curve model creates an instant market for LODE Token Holders without having to wait for tokens to be listed on major exchanges. The model essentially puts more power into the hands of LODE Token Holders and ensures that the entire system is built with a long-term view.
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For the first phase of the project, LODE Tokens will be accessible through the LODE Project’s digital wallet, known as the AGXPay Wallet. LODE Token Holders with a coin balance on the AGXPay Wallet are eligible to claim their AGX Micro-payouts. At later phases and as the system is further developed, other digital wallets such as Syscoin and Ethereum will be supported. 5. AGX Coins Issuance The AGX Coin will be issued by a smart contract on the blockchain as silver is added to the vault and then verified through the chain of custody and command. The AGX Coin contract will be based on blockchain standards providing security, functionality and speed. Additional AGX Coins are created and available for distribution upon the acquisition of more silver bullion for the LODE Vaults. As coins are purchased at retail exchange rates, the inflows are deployed at new weights of silver at wholesale exchange rates. The margin is always retained in grams of silver bullion and creates a larger reserve for the LODE Community. AGX Coins that are redeemed for reserved silver bullion by LODE Community Members are extinguished or burned.
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6. The Blockchain The LODE System makes use of both public and private blockchain networks. For regulatory, booking and transparency purposes, a private permissioned Hyperledger Fabric network is used. For AGX Coin use, public decentralized networks are relied upon. Public networks, such as the Syscoin permissionless network, offer additional benefits over private permissioned networks including censorship resistance and decentralization. Through the use of a backend relay or Baton™ - AGX Coins will seamlessly transfer between private and public networks when needed. The system’s Hyperledger Fabric network uses a RAFT based ordering service, multi-node transaction endorsement policies and uses the Convector suite for cleanly designed Model/Controller based smart contracts (referred to as Chaincode on Hyperledger Fabric).
THE LODE SYSTEM MAKES USE OF BOTH PUBLIC AND PRIVATE BLOCKCHAIN NETWORKS. 7. Price Oracle Exchange Ticker A ticker is live on Lode.one providing the futures contract price for AGX Coins and LODE Tokens. It provides a stable reference to the retail value of grams of silver alongside a near real-time exchange rate (fiat and crypto pairings).
The data will be eventually published in accordance with the LODE Price Oracle, which will be verified by the smart contract on the blockchain. Each oracle will run independently and will query a list of sources for retail pricing of silver, fiat currencies, and cryptos. This pricing data is then amalgamated into a conversion table for AGX, all of which is then cryptographically signed against the current block number of the chosen blockchain main net. 8. AGXPay AGXPay is the payment solution within the LODE System. It enables the use of AGX Coins through the user application known as the AGXPay Wallet. The AGXPay solution relies on fast, trustless, off-chain transactions, which are secured with on-chain settlements through Syscoin. The system will use Syscoin for retail transactions because it has ZDAG, which supports instant transactions (finality), and debit card systems without custodial accounts. 9. Exchangeability At the time of publishing, there is no active effort to position the LODE Project assets on any exchanges. This does not preclude LODE Tokens and AGX Coins from being listed; however, this will not be pursued in the near term as a means of liquidity. In the future, the LODE Project may explore listing options for the LODE Tokens and AGX Coins, as the community demands.
Although exchanges are not a primary focus, exchangeability for the LODE Community is the goal, meaning that liquidity will come sooner by means of other internalized mechanisms such as: peer-to-peer trading, card programs and crypto-to-fiat off ramps. Internal to the LODE Ecosystem, tools such as the Price Oracle and algorithmic curve protocols may offer internal network supervised exchangeability. 10. ATMs As a longer-term strategy, the LODE Project will look to add new Service Providers to enable ATMs that support AGX Coins. These ATMs will work with blockchain standards using normal crypto wallets to allow for cash in and cash out at physical locations.
“I definitely think that savvy investors are going to be looking towards crypto as a safe place for their money.� - Joel Comm, Host of the Bad Crypto podcast
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What’s Next For LODE? The LODE Service Providers have identified the following roadmap for completing the LODE Project mission. • Enable LODE peer-to-peer transfers on Hyperledger Fabric • Activation of Global Merchant networks • Visa/Mastercard Rails integrated into the AGXPay Wallet • Automate AGX supply changes based on vault reported balances • Enable back-end Baton™ operation so users can transfer AGX Coins seamlessly across blockchain networks • Vault Master Council • Bullion Dealers Alliance and Bullpen API
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“Don’t look at cryptos unless they are backed by something real.” - Dennis Gartman, editor and publisher of The Gartman Letter
“Stablecoins will find a uniform way to transact across borders and technologies, all the while maintaining a fast and secure architecture, the impact of which will produce greatly amplified ramifications for digital assets globally� - Philippe Bekhazi, CEO - XBTO Group
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Project Roadmap 2019 - 2020
2019/20 LODE Project Roadmap
Infrastructure
Exchangeab
Harden Core System SYS Gas Station
Redemption of Silver
Back Office Transaction Fees as contracts
B2B Servic
Direct Sales for AGX & Lode Futures Delivery Market
Utility P2P Transfer on Hyperledger Reward Schedule / Automatic Payments
Multisig and Hardware Wallets for Hyperledger
DRIP Dividend Reinvestment Program
AGX Produ
Baton Wallet APIs Tax Liabilities & Rewards Reporting Internal Exchange / Bullitin Board
AGX Payroll
AGX Local Coin
Merchant Services Point of Sale Money Services License Vault Management Services Distribution Channels AGX Rails
Ecosystem Exp Bounties / Lode Improvement Process
Additional Instruments
Stained Tokens Merchant APIs
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Lode funded Development Grants
2020
astructure
Exchangeability Liquidity SYS Gas Station
Redemption of Silver Credit Cards / Debit Cards
Transaction Fees as contracts
B2B Services Futures Delivery Market
Utility P2P Transfer on Hyperledger
Bullion Fulfillment Market
Multisig and Hardware Wallets for Hyperledger
DRIP Dividend Reinvestment Program
AGX Products AGX Rewards Points
Wallet APIs
Internal Exchange / Bullitin Board
(agxrewards.com)
AGX Payroll
AGX Remit AGX Local Coin
hant Services
Money Services License
Distribution Channels
(agxremit.com)
AGX Loans
Ecosystem Expansion Bounties / Lode Improvement Process Open Source AGXRails Additional Instruments
Stained Tokens
Atomic Swaps
Lode funded Development Grants
* Subject to change. Project Plan Report / 2019
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Financial Model LODE Tokens represent a contributor’s investment of silver bullion into the LODE Project. Token holders will receive variable interest payouts in the form of AGX Coins, with each minting of silversecured AGX Coins. The issuance of LODE Tokens is based on an abundance model. As the project evolves, the number of grams required to purchase a LODE Token increases so as to reduce dilution without entirely preventing new tokens from being issued. At launch, three phases were introduced, using an exchange rate ranging from 1 gram to 3.7 grams of silver per one (1) LODE Token. As the LODE Project continues, the exchange rate will be based on an algorithmic formula and will create automatic tranches at ever-increasing prices. As the LODE Silver Reserve grows, new silver allows for the minting of new AGX Coins, to be utilized in daily trade and commerce. With each issuance of AGX Coins, 5.25% of newly minted assets are distributed to LODE Token Holders as AGX Micro-payouts as recognition for building the community.
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Retail Model AGX Coins are sold on a retail model to customers who wish to purchase digital silver. By selling AGX with a small markup, the resulting revenue can be used to purchase more silver, which can be tokenized into more AGX Coins and sold, continuing the cycle. This is a standard retail sales cycle, selling a physically-backed digital product. As such, AGX sales and the creation of new AGX Coins should be able to continue almost indefinitely, provided customers continue to demand the product. To assess potential Contributor ROI please use the QR code to access the LODE Profit Calculator.
A Silver-backed cryptocurrency is a “fantastic idea.” - Phil Streible, senior market strategist for RJO Futures
“Precious metals-backed cryptocurrency projects allow investors to build financial wellness.” - Morgan Steckler, co-founder and chief strategy officer at iTrust Capital
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Get Involved Join the LODE & AGX Community today. Welcome to LODE & AGX, a global community spread across over 100 countries and bound by the belief that money should be sound, secure and stable. Individuals interested in joining can do so in two ways: by contributing investment-grade silver bullion to the system in exchange for a LODE Token, or by purchasing AGX Coins. Start putting your idle silver to work in these easy steps: • Get started by creating an account either on LODE.one or AGXPay.com and become a community member • From the members portal, you can choose to (1) buy/deliver silver in exchange for LODE Tokens and/or (2) purchase AGX Coins directly • LODE Tokens are delivered to your digital wallet as a receipt for the vaulted silver and the contributed silver is digitally recorded on the blockchain as AGX Coins • LODE Token Holders receive rewards (AGX Micro-payouts) 7 times a year from newly minted AGX Coins • Purchase AGX coins directly on the members portal and receive AGX Coins in your digital wallet. Send and spend AGX Coins as seamlessly as sending an SMS.
Build Wealth on Autopilot You have the option of setting up a subscription to grow your AGX Coin holdings on a regular basis. It is an efficient way to steadily grow your investment-grade silver stack. Set the budget that works for you and receive AGX Coins in your wallet every month. You are free to change your monthly contributions whenever you want to best fit your budget. LODE Affiliate Program The LODE Project provides an Affiliate Program for Community Members wanting to become more involved in the project. You have the power to become a Community Affiliate to receive a predetermined payment of tokens for your efforts using a performance-based model.
A GLOBAL COMMUNITY BOUND BY THE BELIEF THAT MONEY SHOULD BE SOUND, SECURE AND STABLE. 40
Modern Silver Money for Everyone
LODE Ambassador Program If you have an established online and social presence and are attracted by what you have learned, consider becoming a LODE Ambassador. You must have a high level of professionalism and be considered a leader in your respective field. Also, you must possess the skills for establishing and growing relationships that promote and otherwise benefit the LODE Community. Join the likes of the silver-guru himself David Morgan and others. AGX Markets Merchant If you are a business owner, become a listed merchant on AGX Markets and share your goods and services with the community. Accept AGX Coins as payment and open up your business to a global network of buyers eager to fuel the economy with silver-money.
“The LODE Project is challenging the status quo and restoring silver to its grandeur. The idea of restoring silver to the monetary system using the power of blockchain bridges both the old and the new world - it is a project that has certainly captured my attention.� - Daniela Cambone, Editor-in-Chief of Kitco News
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Digital Silver is Here Now LODE Community Members possess a bold sense of identity, bound by a shared ethos and commitment to put the world’s oldest form of money - Silver - back to work as digital silver. The LODE Community is creating the future of money right before your very eyes. The LODE Digital Silver-Money System provides security against systemic risk and gives users the freedom to experience what the world has to offer. The LODE Community understands the need to merge these two elements together to form a sound medium of exchange. The LODE Community invites you to get involved and join this growing global ecosystem of LODE Token Holders, AGX Coin Users, affiliates, ambassadors, merchants, retailers, bullion dealers, miners, and investors.
JOIN THE LODE DIGITAL SILVER-MONEY REVOLUTION TODAY!
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Digital Silver for Everyone
LODE Association TreuUnternehmen Reg. Zweistäpfle 6 LI-9496 Balzers Principality of Liechtenstein
Learn more at lode.one, agxpay.com and agxmarkets.com