10 minute read
FINANCIAL MODEL
PAYMENTS & MONETIZATION
TRANSACTION MONITORING AML5 Transaction monitoring and KYC/AML services required by regulators is a complex and expensive undertaking. Adherence to AML5 regulated processes that will be required by everyone, from end users to commercial buyers of the LODE System. As such, the LODE System customers and users will be required to run through scanning with their transaction networks supporting industryleading forensics solutions that ensure token traceability and wallet risk scoring. This service will be integrated across other monetization inflow channels.
Advertisement
BULLETIN BOARD - FIAT TO AGX/AUX, CRYPTO TO AGX/AUX EXCHANGE Through the custom development of exchange trading pairs between AGX/AUX Coins and other digital and fiat assets, LODE can offer AGX/AUX Coin Holders with liquidity services and can offer investors the ability to trade against digital assets. In time, the development of further exchange services will continue to drive monetization opportunities. Users can also access services such as prepaid cards or ACH payment transfers to offramp from the exchange providing additional monetization opportunities for LODE.
MERCHANT NETWORKS INTEGRATION Through the development of payment network integrations, shopping cart plugins, ATM integration, and custom wallet integrations, LODE will look to provide an affordable, borderless merchant service offering available to all merchants. LODE provides this channel the ability to leverage the LODE Wallet as is or for larger clients, the ability to leverage the wallet APIs and development services team to provide ancillary wallet services on top of the platform.
CENTRAL BANKS –UNIVERSAL CURRENCY CROSS-PLATFORM LODE is currently working to develop relationships with central banks to offer AGX/ AUX Coins as internal exchange payments. It will also allow different agencies from different countries to utilize the AGX/AUX Coins to pay for international trade of goods and services by sending and receiving funds.
COMMERCIAL CLIENTS LODE can provide a solution by which customized smart contract scripts could be created alongside the development of user-friendly UX/UI that would enable users to enter custom logic into smart contracts aimed to facilitate complex transactions between manufacturers, the logistics industry, wholesalers, distributors, and retailers.
Customizable workflow and systems can be created that would enforce the fulfillment of a contract-based adherence to the terms of the contract. Funds stored in escrow can be released to respective parties after they have delivered their end of the process to move a good from manufacturer to retailer.
The integration of lending services, smart contract development services, insurance services, escrow/legal services and cross border remittance services would create efficiencies and simplify processes for the industry and create consistent and reliable revenue inflows.
LODEMARKETS –TRADE & COMMERCE LODEMarkets is the premier Trade and Commerce Marketplace to enable sales and purchases using AGX and AUX Coins. Unlike usual card payments, businesses that accept AGX and AUX Coins for payment of their products and services will pay almost $0 cash fees for the sales costs. LODE intends to extend the services for large trade organizations as a way to mitigate their losses in heavy foreign exchange fees and the cost of transactions. LODEMarkets enable merchants to pay for the products and services with new revenue streams from new sales to new customers.
TRADE NETWORKS –BARTER There are many reasons to connect Barter Exchanges, Networks of Exchanges, and Corporate Barter to the LODE Project, but the most compelling reasons are the benefits it provides to all participants. Barter, also known as Reciprocal Trade, provides liquidity, a massive array of product and service availability from hundreds of thousands of suppliers that can be purchased with AGX/ AUX Coins, new distribution channels for LODEMarkets merchants, and bottom-line cost savings and profit for all participants. Connecting the $85 Billion Reciprocal Trade Industry to the LODE Project also creates a network effect for LODE via interconnected marketplaces and merchant directories between exchanges worldwide, which enhances transaction velocity. INDUSTRIAL PRODUCERS –MINING Public and private silver and gold mining companies may deliver silver or gold into the LODE System for AGX/AUX Coins. This will enable producers to tokenize their metal. Once tokenized, the ability of this group to send the metal around the world for extremely low costs is possible. The companies will also be able to access goods and services offered in the LODEMarkets, convert the token values to prepaid credit cards, leveraging the LODE fiat relay. Regardless of their interaction with the product, LODE is able to monetize producers by offering them the ability to readily convert physical assets for digital assets. Producers will also have the ability to leverage other services such as the trading platform and the smart contract functionalities that can be used to speculate against asset prices and perform settlement transactions with their partners and employees.
Producers often hold the metal in inventory for various reasons. Through the tokenization of the physical assets themselves, producers will be able to hand off the handling risk to LODE while still maintaining the ability to hold their inventory to suit their needs.
AGX and AUX Coins can be used by the mining company to transact with enabled merchants. The coins can be used to transact on Barter Exchanges for goods and services, and/or they can be used to compensate employees or consultants in other countries or across any border.
LODE FOR SME’s & CORPORATIONS
Expanding the ecosystem to support ancillary products “bolt-on” offerings will allow companies the ability to customize the LODEPAY Application. By offering APIs and dynamic settings and workflow support, organizations will have the ability to customize the LODEPAY experience for their unique business process to service the needs of their customer communities and internal departments.
Part of the LODE for Enterprises initiative will include the targeting of B2C and B2B organizations looking to provide their customer communities with wallet technologies tailored for their organization.
Products on Roadmap include: Staining Services, Bleaching Services, Restaining Services, White-labeling of the LODEPay wallet, KYC/AML, Advertising, Maps & Notifications, Analytics, Merchant Processing, Loyalty Tokens, Event Ticketing, Post-Paid Credit Solutions and Premium Support Services. LODE AS A SERVICE (LAAS) REVENUE MODEL B2C and B2B organizations will be supported through the Merchant Service team. The intention of the LODEPAY Partner Ecosystem is to engage in joint or co-sell engagements between partners and the LODEPAY Merchant Service mid-market and enterprise teams.
Traditional software implementation partners including ECommerce, CRM, ERP, and Cloud consultants will be targeted to participate in the partner program.
Offering LODEPAY through custom integrations to other business systems will open up the potential for existing professional services consultants to support the growth of the LODEPAY System with their existing clients. Targeting middleware integrators such as Jitterbit, Zapier, Mulesoft, and DellBoom, LODEPAY would support seamless integration opportunities between LODEPAY and
conventional business systems.
Branding Token Service Staining Service Bleaching Service Type of Revenue % charge to stain % charge to bleach
Restaining Service
White-labeled Wallet
KYC/AML
Advertising Maps and Notifications
Analytics Merchant Processing % of the volume
Monthly Recurring
One time
Monthly Recurring Monthly Recurring
Monthly Recurring Micro-transaction
Loyalty Token Offering
Event ticketing
Postpaid Solutions Premium Support Monthly Recurring
% of Revenue
Fees Vary by product Monthly Recurring Description Micro-fees apply when tokens are stained Micro-fees charged and paid when tokens are bleached
Micro-fees apply when staining requires bleaching prior to staining Cost depends on the number of users onboarded
Small one-time fee for every user onboarded Provide the ability to advertise in the application Leverage geolocation data with the ability to push notify uses based on location information API access to data endpoints Micro transaction - traditional merchant service model at low costs
Monthly recurring - fees locked in until renewal. As users grow, monthly fees increase Charged nominal fee to setup event - Per ticket fee - % of ticket revenue fee
Credit cards, lines of credit, etc.
Based on overall spend and the number of products purchased. Multi-tiered support offered
BENEFITS FOR INVESTORS
LODE is a multifaceted platform that consists of proprietary technology, payment platforms, media communications, and multi-jurisdictional corporate structures. All of this is represented by the LODE Token which is virtual equity and represents a stakeholder’s position in the entire global operations of the LODE1 Anstalt which is the parent holding company of all LODE operations in the Principality of Liechtenstein.
LODE’s goal for market penetration with its AGX/AUX Coins is focused on large “underbanked” markets such as Africa, South American, India, Pakistan, Bangladesh, and Indonesia. These countries alone represent over 3 Billion people with an average of over 43% being in the underbanked category. These people do have one common denominator that links them together, a smartphone, and the ability to utilize the LODEPAY Wallet to achieve their own financial freedom. LODE is currently in negotiations with several groups from these countries who have affiliate-networks of clients such as micro-savings and other financial products being offered to their user base. The scale of their operations and number of users is extremely large compared to North American and European operations of a similar nature. The four primary groups in negotiations have over 500M registered users. LODE is primarily a payments platform allowing the storing and transfer of value. Therefore, LODE uses evaluation metrics of the payments industry such as VISA and MasterCard to measure the LODE System value prediction for forward-looking projections. Conservative growth over 5 years shows, LODE reaching a 120M person user base. All values created in the system flow back to the parent LODE1 Anstalt. The LODE Token represents a stakeholding of virtual equity in that entity. In our opinion, this means the current value of LODE Tokens will increase by multiple amounts over the coming 5-year period using the aforementioned payment platform metrics of evaluation.
VALUATION SUMMARY & CONCLUSION
The LODE Project undertook an independent valuation from *Evans & Evans. The purpose of the independent valuation is to give the LODE Community an unbiased review of the LODE Offering. The results of the valuation are as follows.
ESTIMATED VALUES: IN USD Given the nature of the LODE System, the increase in the value of the LODE Token is not linear, it is exponential. It’s important to note that in the LODE System, LODE Tokens function as the virtual equity and AGX and AUX as the global medium of exchange. As more silver and gold is added, more AGX and AUX Coins are circulated, more trading occurs, and more merchants join the LODE System, the profit generated by LODE1 is expected to increase. Accordingly, there is the potential for the LODE Token to see significant price increases over its operating lifecycle. Based on the LODE’s operating model and the appreciation of existing non-asset backed cryptocurrencies, significant increases in value are achievable in the market. It is important for readers to note that the LODE Price Oracle acts as the pricing mechanism that provides users with realtime values for retail silver and gold. This key element of the LODE Project directly influences the value of LODE Tokens, along with AGX and AUX Coins. Over the long-term as the LODE System continues to operate and more transactions occur, the potential returns to LODE Token holders can increase as the value of retail precious metals fluctuates.
LODE TOKENS
High $21.58
Low $15.88 AGX COINS
High $1.50
Low $1.26 AUX COINS
High $0.11
Low $0.09 Over the past three years, the LODE Project has gone from concept to global operations with 70+ SPA members worldwide assisting in the development of this ambitious project. Currently, there are 6200+ active members in 125 countries, and over 582K oz of precious metals vaulted. As world economies rapidly shift, the LODE Project is poised to be the true challenger of fiat currencies and global payment systems currently in use.
Thank you for your interest in the LODE Project, further questions may be directed to: info@lode.one.
*Evans & Evans, Inc. is a leading Canadian boutique Investment Banking firm with offices and affiliates in Canada, the U.S., and Asia. They offer a range of independent and advocate services to their clients including valuation and fairness opinions, business due diligence, business planning, market and competitive research, capital formation assistance, and mergers and acquisitions advice. This is the fourth valuation provided by Evans & Evans throughout the LODE Project’s lifetime.
