DXC White Paper v2.2 - Microsoft...DXC White Paper Version 2.2.1 pg. 2 Abstract Price volatility,...
Transcript of DXC White Paper v2.2 - Microsoft...DXC White Paper Version 2.2.1 pg. 2 Abstract Price volatility,...
DXC White Paper Version 2.2.1 pg. 2
Abstract Price volatility, usability and no asset-backing have prevented the mass adoption of cryptocurrency as a means of retail
payment. Digital Exchange Commerce and The Cash Back App (DXC/TCBA) operate an existing mobile payment and loyalty
platform that currently provides over 50,000 members with a free App and cash back when shopping at over 5,000 brick and
mortar retail locations in Australia. Our merchants range from small local businesses to the largest national brands. We
intend to expand our offering to the blockchain by converting our existing cash back offer into tokens.
DXC has produced the DXC Token as a cash-backed digital currency that is instantly convertible to fiat currency at no cost.
The DXC Token replaces the process of mining with shopping as the means of gaining tokens making it available to everyone.
The funds raised by this ICO will ensure that we achieve our three primary goals:
1. More great merchants. There is no cost for a merchant to use our platform apart from providing us with a
commission on introduced sales - which is a common practice globally. An expanded sales force will rapidly
increase the number of smaller brick and mortar merchant partners while our corporate division continues to
grow the number of major brand partners.
2. Marketing. The App will be extensively promoted via influencers on social media, through participating
merchants, on traditional media channels, and via strategic partners to their existing databases. Four
countries will be targeted in the Phase 1 release. These campaigns will ensure maximum consumer awareness.
3. Viral growth. Word of mouth is powerful. If you give people something good, something valuable, they will
talk about it. We live in the “Information Age” and share more content from more sources, with more people
more often and more quickly than ever before. The App capitalises on this by rewarding members with a
lifelong recurring income for sharing the App with others.
DXC/TCBA have developed a proven, scalable system and wallet that rewards users with cash that is theirs to spend as they
choose within our system or externally. If you are comfortable with these concepts, then you are at the right place. From
here on it’s all about employing the ICO funds to bring our product to the mass market and “Go Viral”.
Table of Contents
DXC White Paper Version 2.2.1 pg. 3
Table of Contents Important Notice 6
Executive Summary 7
Introduction 8
Stability of Cryptocurrencies 9
Ineffective Loyalty Programs 9
The DXC Advantage 9
Key Concepts 10
How It Works for Members 11
How It Works for Merchants 11
How It Works for Charities 12
How the Transaction Flows 12
The Cash Back App 13
The DXC Wallet 14
The DXC Treasury Account 15
How DXC Tokens Increases in Value 16
How Merchants Benefit 17
The Marketing Plan 18
Operating Platform 19
Platform Features 20
DXC Private Token Blockchain 20
DXC Consortium Token Blockchain 20
DXC To Public Blockchain Exchange 20
What Occurs in a Transaction? 21
Focus on Regulatory Compliance 22
KYC and AML 22
Real-World Payments 22
The Economic Model 23
The DXC Treasury 24
Allocation of DXC Tokens 24
The Advantages of Infinite Supply and Controlled Emissions 24
Comparing Bitcoin and DXC Tokens 26
Cryptocurrency, Fiat Money, and Digital Currency 27
Cash Held at Banks is Insured 28
DXC White Paper Version 2.2.1 pg. 4
Sustainable Merchant Commissions 28
DXC Economy Growth Potential 28
Designing the App for virality 29
Single Member Transaction Example 33
User Model Assumptions and Sensitivity Analysis 34
The Size of the Market 37
Customer Acquisition Cost 37
CAC/CP Ratio 37
How the Token Increases in Value: Example 38
Token Sale 39
Token Sale Purpose 40
Measured Capital Raising 41
DXC Token Allocation 42
DXC Token Sale 43
Expected Timeline 43
Lock Up Period 43
Use of Funds 44
Team and Advisory 45
Executive Team and Advisors 46
Technology Team 47
Brands and Partnerships 49
The Cash Back App 50
Available Brands on The Cash Back App 51
Charities Participating on The Cash Back App 52
Expansion 53
Overview 54
Merchant Acquisition 54
As a simple litmus test for the App 55
Key Risks 56
Roadmap 57
Competitive Analysis 58
Overview 59
Payment Processing 60
Rewards Programs 61
Disclaimers 62
DXC White Paper Version 2.2.1 pg. 5
Disclaimer 63
Caution Note on Forward-Looking Statements 64
References 67
Bibliography 68
Appendices 70
Tour of The Cash Back App 71
Token Definitions 76
DXC White Paper Version 2.2.1 pg. 6
Important Notice This White Paper is intended for general informational purposes only and does not constitute a prospectus, an offer
document, an offer of securities, a solicitation for investment, or any offer to sell any product, item or asset (whether digital
or otherwise) in any country. The information herein below may not be exhaustive and does not imply any elements of a
contractual relationship. There is no assurance as to the accuracy or completeness of such information and no
representation, warranty or undertaking is or purported to be provided as to the accuracy or completeness of such
information. All participants who participate in this project and Token sale are required to acknowledge that they have read
and understood this White Paper.
Digital Exchange Commerce Pty Ltd (DXC) is the promoter and the White Paper has been issued after consultation with The
Cash Back App Pty Ltd (TCBA) as a document that outlines the operations of the overall platform and that of the free
consumer-facing Application of TCBA which is referred to as the “App”. This White Paper outlines DXC’s plans for the DXC
Token and the joint DXC/TCBA marketing plan to disseminate the App within all countries of operation.
This White Paper (version 2.2.1) is a work in progress. It is a conceptual document describing the future development goals
of DXC/TCBA and may be amended or replaced from time to time. There are no obligations to update this White Paper or to
provide recipients with access to any information beyond what is provided in this White Paper neither has it been subject to
external audit or verification.
Nothing in this White Paper constitutes legal, financial, business, investment, or tax advice and you should consult your own
legal, financial, tax or other professional advisor(s) before engaging in any activity in connection herewith. Neither DXC or
TCBA, any of the project team members (the DXC team) who have worked on the network (as defined herein) or project to
develop the network in any way whatsoever, any distributor/vendor of DXC Token, nor any service provider shall be liable
for any kind of direct or indirect damage or loss whatsoever which you may suffer in connection with accessing this White
Paper, the App, the website of DXC or the website of TCBA. This White Paper is not a disclosure document, has not been
lodged with the Australian Securities & Investments Commission (the country where DXC is registered), is not a prospectus,
and is not a product disclosure document. This White Paper is not regulated by the Australian Corporations Act and does not
purport to contain all of the information that a prospectus would contain under the Act in order for participants to evaluate
in relation to an Offer. Neither the Australian Securities & Investments Commission nor any other regulatory body has
examined, approved or disapproved this White Paper, the Offer, the Token generation event or the DXC Token.
The information provided in this White Paper is not investment or product advice and does not take into account the
participants’ financial or taxation needs. Each participant should consider the risk factors that could affect DXC, TCBA, the
platform, and the Token Sale and seek professional advice before deciding to participate in the Token Sale.
DXC reserves the right to accept or reject each Application for the DXC Token. To make an informed decision about
participating in the DXC/TCBA Offer, each eligible Applicant acknowledges that:
• No person has been authorised to give any information concerning DXC, DXC Tokens, DXC Token generation
process, TCBA, or the App apart from as contained in this White Paper, and;
• If any such information has been given, it cannot be relied upon as having been authorised by Digital Exchange
Commerce, and;
• The Applicant has been given the opportunity to request, receive and review, all information considered by the
Application as deemed necessary or Appropriate to verify the accuracy or supplement to the information contained
in this White Paper.
This ICO is not available to residents of:
Algeria, Bangladesh, Bolivia, China, Morocco, Ecuador, Pakistan, Singapore, United States of America.
DXC White Paper Version 2.2.1 pg. 7
Executive Summary Most people have heard of Bitcoin, but have little understanding of what it is, what the underlying blockchain technology is,
or how it went in just a few years from being worth less than $0.01 to $20,000 before crashing down to around $3,000. They
know it has made a few people fabulously wealthy but hear little about the tragedy of the many thousands of people who
rushed in on the hype and collectively lost billions of dollars. Over 1,000 projects failed in 2018, and most of those that
survived have lost around 80% of their investment value (Biggs, 2018). While this opening statement does not inspire
confidence in cryptocurrency, it’s simply a statement of fact. We are not fans of stereotypical cryptocurrencies, but we do
believe in the power of blockchain technologies and the value of asset-backed digital currency as the future of mobile
payments.
Digital Exchange Commerce (DXC) is a mobile payments company and has a practical solution to the volatility of
cryptocurrencies. DXC has developed the DXC Token, a 100% cash backed digital currency. Users of our App earn DXC Tokens
when they shop at participating merchants. The DXC Token is cash backed because merchants pay us a commission on all
introduced sales. The App automatically pays 50% of the commission to the member as instant cash back and 50% to the
DXC Team which includes ICO participants. At the end of each day, any unspent cash is converted to DXC Tokens. The ledger
that maintains the cash and tokens is the DXC Capital Account which is published daily to the blockchain for transparency,
security, and continuous self-audit. All DXC Token holders are free to spend or convert their DXC Tokens to cash at no cost
24 hours a day, year-round, via the App without the need to sell the tokens on external exchanges. DXC Tokens can be
withdrawn from the economy and traded on external exchanges as ERC20 contracts. DXC Tokens that are redeemed for cash
during the year are burnt which keeps the system in balance.
Our free App has been downloaded by over 50,000 members and is accepted at over 5,000 locations in Australia. Developed
in partnership with The Cash Back App (TCBA), members receive cash and DXC Tokens when shopping at participating
merchants for everyday goods and services like groceries, petrol, fashion, meals, travel, electricity, telco, insurance and much
more. TCBA has partnered with small merchants up to the biggest brands - and they all have one thing in common: the need
for more customers. Merchants accept DXC Tokens as payment because it is instantly convertible to cash at no cost. The
merchants also benefit from transaction data, in-App marketing, and ZERO FEES* on credit and debit card transactions (*the
App either eliminates or substantially reduces third-party processing costs). Card fees alone cost US merchants over 88 billion
dollars last year, which ultimately gets passed onto consumers as higher prices.
The App has been designed to “Go Viral”. When a member shares the App with anyone who registers, they become part of
their “Shopping Community”, which is a basic five-level affiliate commission structure. Every time anyone in their shopping
community spends, they receive an affiliate commission. This is a powerful feature that is based on the viral coefficient of
design to rapidly spread the App among communities. The App also donates to each individual member’s selected charity
with every transaction, making it profitable to the member and beneficial to great causes.
As a digital currency for the retail market, DXC Tokens have an infinite emission that is in alignment with the continuous
nature of consumer spending. The emission is specifically capped for each country of operation and released equally each
day over a year. Each subsequent year a new emission repeats the process to continually reward members for shopping at
participating merchants.
This ICO will provide us with the marketing power to distribute The Cash Back App for free and en masse within the Phase 1
target markets; which include the United States of America, Canada, the United Kingdom and Australia. These countries have
been selected due to their high smartphone adoption, weekly shopping spend, and population. The capped emission for the
Phase 1 countries is 900 million DXC Tokens for each ten-year period. The DXC Token sale will comprise three rounds at 5%
each to a total of 15% (135,000,000 Tokens) to raise USD $108M across all Phase 1 countries. ICO investors will receive 15%
of the recurring DXC Token emission each year in perpetuity.
Our goal is to reach just 4 million users in the Phase 1 countries. We look forward to you joining us and being among the
early adopters who share the App to build your own Shopping Community and enjoy a passive recurring income while
contributing to an increase in the value of DXC Tokens every time you shop.
DXC White Paper Version 2.2.1 pg. 9
Stability of Cryptocurrencies Cash is being used less and less and has nearly disappeared in countries such as Sweden and China. At the same time, digital
payment systems like PayPal, Venmo, and others in the West; Alipay and WeChat in China; M-Pesa in Kenya; Paytm in India
offer attractive alternatives to services once provided by traditional commercial banks (Roubini, 2018). Based on this you
would think that cryptocurrencies should have attained significant adoption by now. However, this is not the case for a
number of reasons which include:
Price Fluctuation: One thing that the cryptocurrency space is well known for is the volatility in the market. The price of
Bitcoin and any other cryptocurrency can rise by 20% and just as easily fall by another 20% in the span of a few hours. For
cryptocurrencies to be as viable as cash they must possess the same value attributes; which means they must be a
dependable store of value, function as a medium of exchange, and represent a unit of account. Throughout history, any
currency that experiences significant price fluctuation fails this test and ceases to function as a dependable currency. This is
the history of cryptocurrency to date. A number of “Stable” coins have attempted to address wildly fluctuating values by
pegging tokens to the security of $1.00. The security typically comes from a third-party investor. These Stablecoins meet the
needs of big commerce for large transactions or to hedge against other tokens that are not asset-backed. Stablecoins have
little Application for everyday retail consumers.
Education and complexity: Cryptocurrencies and blockchain are at best an abstract concept that the average person finds
hard to grasp. The simple act of sending cryptocurrency from one person to another is often complicated. Plus, the average
person does not want to worry about losing their private keys along with their money.
Scalability: For mass adoption to occur, proper infrastructure is needed to adequately accommodate the increase in users.
Barriers to scalability include transaction costs, slow processing speeds, the energy cost associated with mining, and few
merchants globally accepting cryptocurrency as payment (Mycryptopedia, 2018).
Government: Cryptocurrencies that operate on the blockchain are based on anonymity, which makes it difficult for the IRS
to tax cryptocurrency trading profits. Richard Holden, an economics professor at the University of New South Wales, and
Anup Malani, a law professor at the University of Chicago, explain that anonymity is also the main fuel for the underground
economy (Holden & Malani, 2018).
Ineffective Loyalty Programs According to eMarketer, consumers like loyalty programs but complain about the hassle of accessing rewards. A February
2018 survey, from mobile coupon solution provider CodeBroker, found that 54% of US loyalty program members said it’s
frustrating when programs can’t be easily accessed on smartphones, and more than 50% agreed that without easily
accessible programs, rewards often go unused or expire because members aren’t aware, they’ve accrued. Of those polled,
37% prefer accessing loyalty program information, such as balance or redemption details, via a periodic text message. Some
28% rely on a mobile App (eMarketer.com, 2018).
Loyalty programs can help drive more frequent visits and heavier purchasing according to Deloitte. More than 72% of global
respondents agree that, all other factors being equal; they’ll buy from a retailer with a loyalty program over one without.
When it comes to the most-valued loyalty-program benefits, monetary incentives top the list in every region by a wide
margin; with cash back as slightly more popular than discounts in North America 49% versus 46% (Nielsen.com, 2016).
According to recent research, the most popular type of loyalty scheme is one that offers cash back. 72% of Millennials and
67% of Gen Z consumers had used a smartphone App to get cash back on at least one purchase in the month prior to the
survey. Even if the cash back amount for a purchase is small, respondents are happy to put extra work in to get it because
the amounts add up over time, with 47% of all respondents saying they’d download a cash back App (Carter, 2018).
The DXC Advantage DXC/TCBA provide users with instant cash back on purchases and DXC Tokens that appreciate in value. DXC Tokens can be
instantly converted back to cash at no cost within the App, and all cash reserves backing DXC Tokens are completely
transparent and verifiable on the blockchain. For merchants TCBA provides exceptional customer transaction data, zero
transaction costs on DXC Tokens and the complete elimination or substantial reduction of third party processing costs, a
mobile marketing channel via the App, the opportunity to attract new customers, a method to keep existing customers loyal
and the opportunity to create a passive recurring income by sharing the App with their customers. Together these
Applications provide a world-class solution that comprehensively addresses the current problems faced by loyalty programs
and retail-based cryptocurrencies. For consumers who already have to spend money, using the free App to get cash back
and DXC Tokens is a ‘no-brainer’ decision.
DXC White Paper Version 2.2.1 pg. 11
How It Works for Members Members use our free App to find participating local merchants and national brands offering cash back on everyday products
and services. The cash is instantly available to spend as they like. All unspent cash at the end of each day is converted into
DXC Tokens. Members select their favourite charity from the list within the App, and each time they shop the App makes a
separate donation to their nominated charity. Members who share the App with others create their own Shopping
Community (a five-level affiliate referral program) and earn a passive recurring income every time anyone shops.
How It Works for Merchants Merchants are continually looking to find new customers and ways to keep existing customers loyal. The App provides the
merchant with a smart and easy to use loyalty platform. There is no cost to the merchant to participate other than paying
an agreed commission on all introduced sales which is standard practice. The merchant business is listed on the App, and
they benefit from the strength of being part of a large retail community. Merchants receive transaction data on all sales,
providing them with valuable analytics that enables them to improve their business. All transactions with members using the
App’s wallet are at zero cost to the merchant. Credit and debit cards fees are also offset to either zero or substantially
reduced. Merchants accept DXC Tokens and can instantly convert it to cash at no cost. Merchants can also build their
Shopping Community by sharing the App with their customers.
Transaction Data
Participating Merchant
Shopping Community
New Customers
Zero Fees
Convert to DXC Token
Shop & Get Cash Back
Member
Charity Donation
Shopping Community
DXC White Paper Version 2.2.1 pg. 12
How It Works for Charities Charities depend on public donations. In tough economic times, these donations are significantly reduced as consumers
tighten their belts. There is no cost for a charity to be listed on the App. All members are required to select one of the
charities on the App to receive a donation from TCBA each time they shop. Charities can also build their Shopping Community
by sharing the App with their supporters.
How the Transaction Flows Each time a member spends money at a participating merchant, the App automatically debits the merchant for the agreed
commission. All funds are automatically dispersed into four beneficiary accounts. 35% is allocated to the member, 35% is
allocated to the DXC Team. The Member and DXC Team accounts are converted into DXC Tokens at the end of each day. 15%
is allocated to the Affiliate program for the Shopping Community and is disbursed equally over the five levels. 15% is allocated
to The Cash Back App which pays all government taxes (i.e. GST), donates to the members’ nominated charity, and retains
the balance to operate the platform.
Selected From App
Charity
Shopping Community
Participating Merchant
DXC Token TCBA
Member Shopping Community
DXC Team ICO
The Cash Back App
Convert to DXC Tokens
35% 35% 15% 15%
Commission
DXC White Paper Version 2.2.1 pg. 13
The Cash Back App The Cash Back App is known as “the free App that puts cash in your pocket” by consumers who use it to get cash back from
participating merchants. The App displays neighbourhood merchants, national brands, and service providers for Travel,
Finance, Insurance, Telco, Electricity etc. The DXC Wallet allows members to receive and spend their cash back and DXC
Tokens when shopping. All participating merchants pay us a commission on introduced sales which funds the entire program.
Cash back received by members when shopping is not taxable as it is a reward for shopping (i.e. a cash discount). The income
received by the DXC Team is taxable, as it is income received from members shopping. Income received from member’s
Shopping Community is likewise taxable.
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Cash Back
Merchants pay a marketing commission on all introduced
sales via the App which is converted into instant cash back
and then into DXC Token at the end of the day. Merchants
benefit from increased business, zero transaction fees, and
accurate customer data.
2
Sharing the App
When Shoppers or Merchants share the App with others,
they create their own “Shopping Community” and receive
an affiliate commission on the value of all spending within
their Shopping Community. The fixed amount of affiliate
commission is paid out equally over five levels of referral.
Charities
Every time a member uses the App and spends money, the
App makes a separate donation to the members’ nominated
charity. Members select charities from the available list
published within the App. The list of charities will be specific
to each country.
3
DXC White Paper Version 2.2.1 pg. 14
The DXC Wallet The DXC Wallet allows members to receive and spend cash back and tokens when shopping with The Cash Back App. DXC
operates the nodes in each country to facilitate payments, so there is no need for Proof of Stake or Proof of Work
(Frankenfield, 2018) or expensive mining (Fortney, 2019). DXC Tokens are created by Shopping instead of Mining.
The App’s Mobile Wallet shows the member how much cash they have available, or pending, and stores their tokenised
credit or debit card information. Cash on the wallet is a result of funds (cash) that the member has earned from shopping,
has transferred from an external bank account, or received from another mobile wallet in the economy. Members can pay
merchants with wallet cash at no cost and instant settlement, or with credit or debit cards at ZERO FEES to the merchant
(the App either eliminates or substantially reduces third party processing costs), pay friends, or transfer cash to and from
external bank accounts and store DXC Tokens. Post ICO, the revised wallet will feature functions for the use of the DXC Token
and will show members the price of DXC Tokens in all countries of operation and enable its purchase or sale.
Shopping Replaces Mining
Members receive instant cash back when shopping at
participating merchants. At the end of the day the cash (less
any spent by the member) is converted into DXC Tokens.
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DXC Token Economy
Each time a Member receives $1.00 cash back, $0.50 is also
paid to the ICO participants, and $0.50 is also paid to the DXC
Team. At the end of the day the cash is converted into DXC
Tokens. 50% of all tokens are issued to members as a
shopping rewards based on amount of cash back generated.
25% of the tokens are issued to ICO and Pre-ICO participants,
and 25% of the tokens are issued to the DXC Team.
2
3
DXC Token Capital Account
At the end of each day the DXC Token Capital account is
settled. It contains the total cash deposited and the DXC
Tokens issued. The DXC Token Capital account balance is
published to the blockchain.
DXC White Paper Version 2.2.1 pg. 15
The DXC Treasury Account Members who shop with The Cash Back App receive instant cash back from participating merchants. Members can instantly
access the cash and use it as they please. At the end of each day, the balance cash in the members’ wallet is converted to
DXC Tokens. After conversion DXC Token owners can “Cash Out” their DXC Tokens instantly for cash against the funds held
in the DXC Capital Account. DXC Tokens that have been cashed out are burned.
An infinite supply of DXC Tokens will be created for use in each country of operation to reflect the recurring nature of
shopping. The annual emission of DXC Tokens is predetermined and distributed equally over 12 months. Tokens that are
spent, i.e. redeemed for cash, are burned. The fixed number of tokens released each year against an increasing spend by
members causes the value of the DXC Token to increase.
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DXC Token Treasury
The amount of DXC Token issued in each country each year is
capped and remains constant. Each year the DXC Token
Treasury issues the same capped supply which is allocated to
all eligible members. DXC Token that have been cashed-out
are burned.
3
DXC Token Capital Account
As the DXC Token Economy grows, i.e. as more people shop
and get cash back, more money is held in the DXC Token
Capital Account. The capital is allocated to members
according to the number of DXC Tokens they own. Tokens
that have been withdrawn from the economy for use on
other exchanges can at any time be presented to DXC Token
and cashed-out.
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Cash Out
DXC Token can be cashed out at any time at zero cost via the
App for instant cash. DXC Token that is withdrawn from the
economy and sold on external exchanges will be subject to
exchanges fees. All DXC Token that is converted to cash is
burned.
DXC White Paper Version 2.2.1 pg. 16
How DXC Tokens Increases in Value There are three factors that contribute to the value of DXC Tokens: (1) Each shopping day adds more cash to the DXC Capital
account; (2) Each day a fixed amount of DXC Tokens are released; (3) DXC Tokens that have been cashed-out are burned.
As each member shops, DXC earns a commission that is automatically split 50/50 and distributed by the App to the Member
and to the DXC Team (which includes the ICO participants). All cash held in the DXC Capital Account is available for members
to review on the blockchain as a means of continuous independent audit. As DXC controls the nodes to eliminate the cost of
mining, there needs to be an independent verification that the value of cash held in the DXC Capital Account matches what
is published on the blockchain. The two account balances are reviewed by an independent auditor from a leading global
accountancy firm each week, and the results are published for all members to access. The DXC Capital account is an Escrow
or Trust account (Banton, 2019b) that cannot be accessed independently and the distribution of funds to token holders is
automated as a core function of the App.
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Blockchain Capital Audit
DXC Token is a digital token backed by the cash held in the
DXC Token Capital Account. The account is available for
members to review on the blockchain as a means of
continuous automated and independent audit.
2
Increasing DXC Token Value
The result of a fixed number of Tokens being issued against an
increasing amount of cash deposited in the DXC Token Capital
account each day indicates that DXC Token will continue to
increase in value each time members shop.
Infinite Supply & Controlled Emission
An infinite supply of DXC Token is created for use in each
country of operation to reflect the recurring nature of
shopping. The annual emission of DXC Token is
predetermined and distributed equally over 12 months.
Tokens that are spent, i.e. redeemed for cash, are burned.
3
DXC White Paper Version 2.2.1 pg. 17
How Merchants Benefit Many ICOs have produced tokens and cryptocurrencies as their product only to discover many millions of lost dollars later
that the market wasn’t interested in what they had to offer. DXC/TCBA are already operating the platform that serves a
robust market of both buyers and sellers. The ICO will fund the expansion of the existing network in Australia and to other
selected countries. DXC Tokens are a win-win for merchants and consumers.
For merchants to win the customer must benefit. For consumers, the App addresses two concerns. The first being the cost
of living by providing instant cash back on products and services purchased. The second is income security which can be
augmented by sharing the free App with others and earning affiliate income when they spend.
For merchants who are already facing stiff competition in a crowded brick and mortar marketplace which is further squeezed
by online sellers, the App offers significant benefits. The App presents an opportunity for thousands of merchants to be
found by consumers on a single mobile device that offers users cash back and DXC Tokens for buying products that they were
already going to purchase. In the same way that “Amazon” became the marketplace for online sellers, DXC/TCBA want to
become the marketplace for brick-and-mortar businesses, while also providing them with a strong online presence.
The bonus for both merchants and consumers is the additional value that DXC Token presents an appreciating cash-backed
asset.
2
New Customers
DXC Token/TCBA is like digital word of mouth when members
share the App with friends. The App also enables merchants
to market to new customers by gender, age bracket, and
location without revealing the customers individual identity
unless the customer decides to engage with the merchant.
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Customer Loyalty
U.S. companies lose $136.8 billion per year due to avoidable
consumer switching (Boeckelman, 2018). DXC Token/TCBA
provide merchants with customer data to help optimise
customer experience. Cash back as a donation to the
customers favourite charity with every purchase is also a
significant loyalty influence.
3
Lower Costs
DXC Token/TCBA have developed the payment platform to
absorb fees for credit and debit card transactions regardless
of the card being physically presented or tokenised to the
App’s wallet. Last year in the USA card fees cost merchants
USD $88 billion (Fulmer, 2017). Merchants can also save on
other services like electricity and marketing spend.
DXC White Paper Version 2.2.1 pg. 18
The Marketing Plan DXC/TCBA will pursue both organic and paid marketing channels. Organic growth will come from participating merchants
sharing the App with their customers and from average people as new members sharing the App with their family and friends.
Paid advertising will primarily target social media with the use of traditional media to a lesser extent.
At the core of both the organic and paid strategies, is the viral design of the App that enables members to easily share it with
friends, and then rewards them with a five-level affiliate commission structure. When any member (consumer, merchant,
club, or charity) shares the App they are building their own Shopping Community and receive a passive recurring income on
the value of all spending within their community. By design, the App uses the mathematical principles of Exponential Growth
over five referral levels to increase user adoption.
Research from the Cone Cause Evolution Study (Pavlovskaya, 2015) states that 85% of consumers have a more positive
impression of a product or company when it supports a charity they care about, and 80% of Americans are likely to switch
brands (equal in quality and price), to the one that supports a charity. The App enables each member to select the charity
that they want the App to donate to every time they shop. Charitable giving provides a compelling reason for consumers to
become members and use The Cash Back App.
2
Paid Growth
In the Australian market (as with other markets) we will use
Influencers on social media to reach 10 million consumers on
a consistent monthly basis during the launch. 90% of internet
consumers worldwide trust recommendations from people
they know, while 70% trust consumer opinions posted online
(Nielsen.com, 2009). ICO funds provide the marketing
horsepower.
3
Shopping Community Growth
Australian research shows that 37% of households are now
concerned about their ability to pay for their expenses, like
bills and household costs - up from 31% two years ago. This
is expected to increase to 40% by 2019 (Deloitte, 2017). This
means that 6.3 million households in Australia could benefit
financially by using the App and sharing it with others. By
design, the App promotes viral growth by rewarding those
who share.
1
Organic Growth
People are 4 times more likely to buy when referred by a
friend (Nielsen.com, 2009) and today those referrals are
being provided electronically. App referrals can come from a
member, merchant, club, or charity. Barriers to referral have
been removed as the App is free, it does not require the user
to buy or sell products, it pays cash, and donates to charity.
DXC White Paper Version 2.2.1 pg. 20
Platform Features The DXC/TCBA platform and internal ledger is a secure, stable, and well-tested system that enables cash and digital currency
to exist side by side in a loyalty-based payments platform. The operating platform seamlessly converts all unspent cash into
DXC Tokens for use within the DXC network. Tokens can be withdrawn from the DXC network for use on external blockchains
at which time they are converted into ERC-20 contracts and immediately written to the public blockchain.
All cash is held in government insured banks, and the DXC internal ledger writes to the blockchain at the end of each day to
confirm that the value of cash at bank balances with the number of tokens in circulation.
DXC Private Token Blockchain DXC will create and manage a private blockchain for DXC Tokens. A private blockchain is a blockchain where only one ‘bank’
organisation (DXC, in our case) can add (write) transactions to the blockchain. However, anyone who is given access to the
private blockchain network (all DXC users) are able to view the transactions on the blockchain. This allows DXC to ensure
that only validated token transactions are added, while allowing everyone to see what is going on in the blockchain. This also
allows DXC to be transparent to its members. DXC is the owner of the ledger and controls and records who owns the tokens.
This system is KYC and AML compliant and auditable.
DXC Consortium Token Blockchain As DXC will operate in several countries, the blockchain model will become a ‘consortium’ blockchain where each DXC
country is an Approved ‘bank’ for adding (writing) to the blockchain. DXC members will still be able to see the transactions.
Ultimately, DXC aims to include its members into the blockchain writing network so that DXC members can trade tokens
between themselves for international and local token exchanges. This exchange would then allow for DXC Token holders to
trade their tokens for foreign DXC Tokens (e.g. from other DXC countries) or to cash them in.
DXC To Public Blockchain Exchange DXC will have a ‘bridge’ (between the private blockchain to the public blockchain). This will enable the transfer of DXC Tokens
on the private DXC blockchain wallets to be transferred to public blockchain wallets. DXC Tokens can then be traded on
external public cryptocurrency exchanges. A DXC Token is generated using Ethereum ERC20 standard (for tokens) that is then
sent to the owner’s crypto wallet (separate from the DXC private wallet). A transaction is also performed on the public
blockchain ledger as evidence of the user’s ownership of this DXC Token.
Public Blockchain
Consortium Blockchain
Private Blockchain
• Many anonymous participants
• All participants can write/add
• All participants can view
• Consensus by proof of work
• Known participants and writers
• Only authorised can write
• Consensus only by writers
• All participants can view
• Known participants and writers
• Centralised writer
• Centralised consensus
• All participants can view
Public Blockchain
participant
miner
participant
minerminer
bank
miner
DXC Token Consortium consensus
viewer
authorised DXC Token
writer
participant
authorised DXC Token
writerparticipant
authorised DXC Token
writer
authorised DXC Token
writer
Central Writer (DXC
Token)
participant
participant
participant
participantparticipant
participant
participant
DXC White Paper Version 2.2.1 pg. 21
What Occurs in a Transaction? The DXC/TCBA processes are fully automated within the App. The steps involved in completing a transaction and the resulting
functions are shown in the diagram below.
Transaction Process and Events
1. The member makes a purchase and pays the merchant using either physical cash/card or the wallet on the App to
access either cash/card/DXC Token. The member scans their smartphone to the merchant terminal in the process.
2. The merchant processes the payment. The App debits the merchant’s nominated bank account for the agreed
commission less any card transaction fees. If a physical or digital credit or debit card has been used in the
transaction the App reduces the commission due, to offset the fees charged by the issuing bank. The net effect of
this is to reduce or fully offset the merchant fees to zero.
3. The net commission is credited to the DXC/TCBA Capital account and the Ledger is updated with credits posted to
all stakeholders. Members have instant access to the cash back received on the transaction that has just occurred.
Members can use the cash to pay for another transaction at a participating merchant, transfer funds to another
external bank account, or transfer funds to another members wallet.
4. At midnight each day the App automatically reconciles the Ledger and converts the remaining cash into DXC Tokens
and publishes the data to the blockchain. A set amount of DXC Tokens are issued each day.
5. 50% of the DXC Token for the day is allocated to members who shopped.
6. 50% of the DXC Tokens for the day is allocated to the Team and split 25% to the ICO investors and 25% to all other
DXC/TCBA stakeholders.
• The App makes a separate donation to the members nominated charity and updates the Merchant Portal instantly
with customer transaction details.
Merchant Portal
Transaction and
customer data.
App marketing
platform.
1. Member Pays merchant
with physical
cash/card
or wallet DXC
Token.
2. Merchant Zero Fees.
The App debits
merchant’s bank
account agreed
commission.
3. DXC Token/TCBA
Ledger Commission
auto allocation
to stakeholders.
Charity Payment
distributed to
the members
nominated
charity.
4. Blockchain End of day cash
reconciliation of
DXC /TCBA
Capital account
converted to
DXC Token.
5. Member Wallet
DXC Token
allocation to all
members who
shopped.
6. Founder Wallet
DXC Token
allocation to ICO
participants.
DXC White Paper Version 2.2.1 pg. 22
Focus on Regulatory Compliance DXC maintains a clear distinction from most cryptocurrencies and blockchain platforms, in that it is focused on regulatory-
compliance. A digital currency for mass use in the retail market cannot be created without the ability to identify the players
(including those who may attempt to undermine the basis of an existing sovereign economy). DXC Tokens are for consumers
and merchants that want a more efficient and rewarding method of conducting commerce. The inscription found on the 1oz
commemorative gold tokens reads “LIBERTAS AUTEM COMMERCIUM” meaning “FREEDOM OF EXCHANGE” which
represents our commitment to enabling smart and efficient digital commerce.
KYC and AML The DXC/TCBA operating system has been developed to meet Know Your Customer (KYC) and Anti-Money Laundering (AML)
obligations that are required of financial intermediaries. To date, the backend administration of KYC and AML for banks, in
general, is not working. The former Europol head Rob Wainright says, “The current processes used by financial institutions
to handle regulatory compliance are broken and highly ineffective in preventing money laundering” (Parvicini, 2018).
Institutions are pouring money into compliance systems that are failing to address the problem. We have seen firsthand in
our Australian operation how the KYC procedures of some leading banks still fail to address fraud issues. The blockchain will
significantly assist organisations to meet KYC and AML requirements with its ability to secure information and maintain an
enormous database. Shyft is an example of a new blockchain technology that provides the framework ensuring that senders
and receivers are able to verify and fulfil the terms of the interaction, for example, KYC/AML requirements, or other
requirements needed for that transaction to occur safely (Shyft.com).
Real-World Payments DXC designed DXC Token to facilitate payments easily at no cost, and to be as fast and convenient as paying with cash or
plastic. By necessity, DXC is required to be able to identify itself and our participating merchants and by design we require
the same transparency of our members. Every individual, business, or any other entity operating on the DXC platform has a
unique digital identity that can be verified. People, businesses, and projects have the option to transact among themselves
using DXC Tokens only when the other party has the required identity to ensure that the DXC network meets regulatory
compliance. Each of the country specific nodes on the DXC network also meets the same identification process prior to
completing a transaction as do independent auditors providing account verifications.
Each member’s digital identity on the network is secure and privacy is protected in the course of daily use however it is not
hidden from regulator’s scrutiny. The DXC network and DXC Tokens are not the place for bad or dark players and our KYC
and AML measures are in place to prevent, detect and investigate illicit activity such as money laundering, terrorism
financing, and human or drug trafficking.
DXC White Paper Version 2.2.1 pg. 24
The DXC Treasury There are an infinite amount of DXC Tokens that can be created, which reflects the ongoing nature of consumption for retail
products and services on a continuous basis. The emission of DXC Tokens is controlled and occurs in annual unchangeable
blocks that are unique to each country. The size of the block is determined at the inception of the token and the emission is
then released equally each day over the course of the year. At the end of each year, the next block is released which is
identical to the year before. All tokens that are cashed-in are burned. The parameters used in determining the initial block
size for each country include the purchasing power, cost of living, population, the economic cycle and the number of
projected users:
Purchasing Power Parity is an economic theory that compares different countries' currencies through a "basket of goods"
Approach (Hall, 2019).
Cost of living is the amount of money needed to sustain a certain standard of living by affording basic expenses such as
housing, food, taxes and health care. The cost of living is often used to compare how expensive it is to live in one city versus
another. The cost of living is tied to wages (Banton, 2019a).
Working-age population is the total population in an area that is considered able and likely to work based on the number of
people in a predetermined age range. The working-age population measure is used to give an estimate of the total number
of potential workers within an economy (Majaski, 2019).
Economic cycle is the time between expansion and recession and recovery back to expansion. When an economy grows for
a period it is in expansion, eventually this slows down, and the economy starts shrinking (which is called a recession). The
recession eventually ends, and the economy starts growing (which is called recovery) until it gets back up to where it was
before the recession. When it grows beyond that point, that is the next expansion (Kenton, 2019) (Colvin, 2018).
Projected Active Users is based on internal Australian member data which is extrapolated to Phase 1 target countries. The
percent of the population living under financial stress are considered. Other factors that indicate a particular part of the
population will respond well to using a free App that gives them cash back when shopping for essentials like groceries, petrol,
clothing, electricity etc.
Allocation of DXC Tokens DXC Tokens are issued equally each day over a year and split 50/50 between members shopping and the DXC Team which
includes ICO participants. For example, in the Australian economy 5 million DXC Tokens are issued each year at 13,698 per
day. These allocated tokens are split 50/50 daily with 6,849 tokens going to members who shopped and the other 6,849
going to the DXC Team. The members who shop receive a proportion of these tokens based on the value of their shopping.
The DXC Team receive their distribution according to the number of tokens they hold in the ICO.
The Advantages of Infinite Supply and Controlled Emissions Governments have the discretion to inflate or deflate the monetary supply at will which can have positive or negative
consequences. A blockchain based currency that publishes its emission policy can create certainty in the market. DXC
provides an infinite token supply in a controlled emission which supports its primary purpose to be used as a digital currency.
The following is a comparison of the emission strategy of Bitcoin compared to DXC Tokens:
Bitcoin - Finite Supply + Controlled Emission. Bitcoin was developed with a finite supply and a controlled emission using the
blockchain to ensure that the number of tokens are known at any given time. A maximum of 21 million tokens are released
in blocks every 10 minutes. This means that the inflation rate of Bitcoin decreases over time, it is deflationary. Speculation
and other factors have caused Bitcoin to experience rapid increases in value and sharp declines (i.e. Bitcoin can be overvalued
in the early years when inflation is high then decreasing exponentially over time). The Bitcoin model has overly rewarded
the early adopters with the majority of tokens mined in the first few years leaving too little for the potential late majority.
DXC Tokens - Infinite Supply + Controlled Emission. DXC offers an infinite supply and a controlled emission. The token was
created on the basis that the emission is tailored to its actual use proposition for retail spending by average consumers. DXC
is about providing stable digital cash in volumes that are compatible with the economy of each country in which they are
available. The core principle being that there is real cash available on demand with every DXC Token issued. All users, not
just the early adopters, are rewarded proportionally for using the platform.
Emission Rates. Most cryptocurrencies have an emission curve similar to Bitcoin with the majority of coins being issued in
the beginning stages of the cryptocurrency. This is the time when the least number of users are acquiring them and massively
over rewards the early adopters. Of the 21 million total Bitcoins to be mined, 17 million are already in the hands of the early
DXC White Paper Version 2.2.1 pg. 25
adopters. Bitcoin has not proven to be a digital currency but a store of subjective value. The following graphs show the
difference between the Bitcoin and DXC Token emission approaches.
Diffusion of Innovation
First, the diffusion of Innovation model below shows the number of overall users of a new product or service over time as
the blue line. Starting with a few users (the early innovators), are then followed by the early adopters, then the early majority,
the late majority and finally the laggards; who have no other choice but to use the product or service. The yellow line shows
the total number of users over time. When applied to the two models below, we see how users are rewarded unevenly in
Bitcoin but evenly with DXC Tokens.
The total Bitcoins issued over time, shown below in the blue line, demonstrates how early adopters are massively
overcompensated; receiving the majority of the fixed supply of tokens well before the majority of users have a chance to
engage the product. About 17 million of the total 21 million tokens were mined in the first few years. This uneven distribution
adds to the problem of massive price increases followed by massive price fall as small numbers of owners control the tokens.
DXC Tokens, below, have a flat constant emission rate that resets each year, rewarding members evenly and fairly based on
their shopping spend.
DXC White Paper Version 2.2.1 pg. 26
Comparing Bitcoin and DXC Tokens The following table presents a comparison between Bitcoin and DXC Tokens. Bitcoin attributes are taken from an article
published by William H. Harris Jr. the founder of Personal Capital Corporation, and previous CEO of PayPal Inc. Mr Harris is
openly critical of Bitcoin but is a supporter of Blockchain technology (Harris, 2018).
BITCOIN DXC Token
Means of Payment. Bitcoins are accepted almost nowhere,
and some cryptocurrencies nowhere at all. Even where
accepted, a currency whose value can swing 10 percent or
more in a single day is useless as a means of payment.
Means of Payment. DXC Tokens by virtue of their ability to
be instantly converted to cash can be accepted in Australia
at over 5,000 merchant locations and will soon be available
at hundreds of thousands of locations internationally. DXC
Tokens are not susceptible to radical value swings as it is
tied to the value of the actual cash that backs it. This value
is known at all times and published on the blockchain.
Store of Value. Extreme price volatility also makes bitcoin
undesirable as a store of value. And the storehouses — the
cryptocurrency trading exchanges — are far less reliable
and trustworthy than ordinary banks and brokers.
Store of Value. DXC Tokens are an effective store of value
as it is backed by fiat currency. The value of the currency is
likely to Appreciate as the amount of cash that it is backed
by increases with each transaction. All cash is deposited in
government-insured banks.
Thing in Itself. A bitcoin has no intrinsic value. It only has
value if people think other people will buy it for a higher
price — the Greater Fool Theory.
Thing in Itself. As per above DXC Tokens have a real cash
value and can be instantly converted to cash at no cost.
Criminal activity. Because transactions can be anonymous
— law enforcement cannot easily trace who buys and sells
— its use is dominated by illegal endeavours.
Criminal activity. Within the DXC platform, KYC & AML
measures are employed. All DXC Token holders both
members and merchants are known and identified. DXC
Tokens can be withdrawn from the economy and traded on
external exchanges as ERC20 contracts. The contract
entitles the owner to convert it to cash on presentation to
DXC but only after becoming a DXC member, which
requires full identification.
Hackers are getting into the act. It’s estimated that 90
percent of all remote hacking is now focused on bitcoin
theft by commandeering other people’s computers to mine
coins.
Hackers are getting into the act. DXC has replaced mining
with the simple act of shopping. DXC Tokens are rewarded
to individuals for shopping, meaning there is nothing to
hack.
Ordinary buyers are flouting the law. Tax law requires that
every sale of cryptocurrency be recorded as a capital gain
or loss and, of course, most bitcoin sellers fail to do so. The
IRS recently ordered one major exchange to produce
records of every significant transaction.
Ordinary buyers are flouting the law. Each time a member
shops the commission received by DXC is split 50/50 with
the member and the Founders. DXC Tokens received by the
shopper is a discount being given for shopping and is not
taxable. DXC Tokens received by the DXC Team are taxable.
As DXC Tokens appreciate in value, the difference between
the initial cash back value and value at which the DXC Token
is cashed-in represents a taxable gain to the member. All
DXC Token owners within the system are known and any
enquiry by the IRS, ATO, or other government body in any
country of operation receives full disclosure.
Bitcoin transactions are sometimes promoted as instant
and nearly free. They’re often relatively slow and
expensive. It takes about an hour for a bitcoin transaction
to be confirmed, and the bitcoin system is limited to five
transactions per second. MasterCard can process 38,000
per second. Transferring $100 from one person to another,
costs about $6 using a cryptocurrency exchange, and well
less than $1 using an electronic check.
While Bitcoin transactions are sometimes promoted as
instant and nearly free, DXC Token transactions within the
system are instant and free. DXC can process 125
transactions per second sequentially but the system
operates concurrently at speeds of 8 milliseconds (8 one-
thousandths of a second), which can be replicated on
multiple servers to exponentially increase processing
subject to load demand. Hence the payment system is
instant.
Bitcoin is absurdly wasteful of natural resources. Because it
is so compute-intensive, it takes as much electricity to
create a single bitcoin — a process called “mining” — as it
does to power an average American household for two
years. If bitcoin were used for a large portion of the world’s
commerce (which won’t happen), it would consume a very
large portion of the world’s electricity, diverting scarce
power from useful purposes.
Bitcoin is absurdly wasteful of natural resources. DXC
operates the Nodes in each country. The system consumes
no more energy that any moderate cloud-based computing
operation. DXC Token mining is the activity of shopping, the
only energy expended is by members walking in out of
participating brick-and-mortar stores, which burns calories
and not valuable resources.
DXC White Paper Version 2.2.1 pg. 27
Cryptocurrency, Fiat Money, and Digital Currency To understand the role of Digital Currency and the DXC economic model, it’s helpful to have a definition of cryptocurrency
and fiat money, the following is sourced from Investopedia:
Cryptocurrency. A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is
difficult to counterfeit because of this security feature. Many cryptocurrencies are decentralized systems based on
blockchain technology, which is a distributed ledger enforced by a disparate network of computers. A defining feature of a
cryptocurrency, and arguably its biggest allure, is its organic nature; it is not issued by any central authority, rendering it
theoretically immune to government interference or manipulation (Frankenfield, 2019).However, they are not accepted legal
tender in most countries.
Fiat Money. Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver.
The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing
government, rather than the worth of a commodity backing it. Most modern paper currencies are fiat currencies. The word
"fiat" comes from the Latin and is often translated as the decree "it shall be" or "let it be done" (Chen, 2019).
Cryptocurrency Market Share. To keep things in perspective, the market capitalisation of all cryptocurrencies is around $100
billion dollars (Bitcoin accounts for about 50% of the total) which is about 0.15% of the value of the world’s stock markets.
The personal wealth of Bill Gates ($90B) eclipses the value of Bitcoin and Jeff Bezos ($112B) is worth more than all
cryptocurrencies combined. Cryptocurrency is an early stage emerging market. The diagram below depicts the value of
cryptocurrency compared to World’s money. The total value of the DXC Capital account with 4 million members at the end
of year one is projected at $400M which would represent about 1/1,000 of the cryptocurrency market.
Comparing the two systems. There are over 2,500 recognised cryptocurrencies in existence (Bright, 2018), many of these
have already failed and many more, will soon fail in our opinion. Of these less than 50 are classified as Stablecoins which are
backed by an asset. Approximately 30 are backed by gold (Sameeh, 2018) and no more than 50 are backed by cash, which is
usually pegged to the US dollar (blockchain.com, 2019). This means that the majority (97% +) of the cryptocurrencies are not
asset-backed. But likewise, there are no countries in the world today that back their currencies with gold, as was once the
case. Today, fiat currencies are backed by the faith in the country, its central bank, and the declaration that they are legal
tender. To own either a Stablecoin or a Fiat Dollar, you need to have purchasing power (i.e. you can’t buy gold without
putting up cash or some form of leveraged security and the same goes for a Stablecoin).
Digital Currency. The DXC wallet provides a seamless exchange of DXC Tokens to cash and cash to DXC Token. Wallet
exchanges occur in real time with live DXC Token conversion rates shown in App. DXC Token is a true digital currency that
provides absolute security and certainty for members that every DXC Token is backed by actual cash. A major limitation of
cryptocurrencies today is the fact that ten years down the road, not enough people own them to make a significant impact
on their use and as far as retailers are concerned, cryptocurrencies are not worth the time involved to set up the processes
for accepting them and they are not being requested by consumers. DXC /TCBA is here to facilitate that change.
400
DXC White Paper Version 2.2.1 pg. 28
Cash Held at Banks is Insured DXC holds all cash in Escrow-Trust accounts at banks in each country of operation In Australia, the Government
guarantees deposits up to $250,000 in Authorised Deposit-taking Institutions (ADIs) such as your bank, building society or
credit union. This means that this money is guaranteed if anything happens to the ADI (ASIC, 2018). In the US, the standard
deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. Deposits held in
different ownership categories are separately insured, up to at least $250,000, even if held at the same bank (Morah, 2019).
Various deposit guarantee schemes operate in each of the Phase 1 countries.
Sustainable Merchant Commissions Merchants whose business, products, or services that are listed on the App join to increase their business profitability.
Through the App, they become part of a larger network where shopping members are actively rewarded and seek out
merchants that provide them with cash back.
For the cash back system to be sustainable it must represent value to the merchant over the long term. DXC/TCBA
deliberately keeps the commission charged per transaction as low as possible with most merchants paying between 5% and
10%. Many of our competitors charge fees as high as 30%, 40% and 50% of the sale price. For most merchants, this is not
sustainable, and competitors ultimately lose businesses as they cannot sustain such high costs.
DXC Economy Growth Potential Our goal is to secure a minimum of 4 million users by 2020 across the four Phase 1 countries. This is based on organic growth
starting with the merchants listed on the App sharing it with their customers by offering them cash back and grows as the
customers share the App with their friends.
Based on launching the App in the Phase 1 countries, DXC Tokens will be accepted at potentially 28,000 small merchants
(local SME businesses) and thousands of national brand partners by virtue of their ability to be instantly converted to cash;
making DXC Token available at hundreds of thousands of locations. Using the Organic Growth model, which is based only on
small merchants initially sharing the App to their customers, we project 4 million members as active users of the App by
2020. If each member used the App each week to get cash back on groceries, petrol, alcohol, and a few other discretionary
purchases (like a cup of coffee or a meal out), this could equate to a USD$150 per week spend. At an average commission of
5% to DXC/TCBA and 4 million members acquired steadily over a year and with 80% of all members cashing out each week
the DXC Capital account at the end of the year would reach about USD $400 million in cash; giving the remaining DXC Tokens
in circulation a value of $7.54 each. Using the same metrics at 1 million users across the Phase 1 countries (we have 50,000
in Australia now), the cash at bank would be $100,000,000 and the DXC Tokens in circulation would be worth $1.89 each.
The DXC model is highly predictive and DXC Tokens will always be backed by actual cash at bank, redeemable on demand
and clearly visible to all on the blockchain. In contrast to this (excluding Stablecoins), how accurate are other cryptocurrency
price predictions? Some have predicted that Bitcoin will break the $1 million mark, including John McAfee (McAfee
Associates), CNBC’s Jim Cramer and Bobby Lee (CEO BTCC Exchange). Others are sticking to more modest, but still relevantly
high price predictions, including ex-JP Morgan chief U.S. equity strategist and current managing partner at Fundstrat, Tom
Lee, who predicted a price of $25,000 by the end of 2018 and $125,000 by 2022. Robert Sluymer, also from Fundstrat, put
Bitcoin at not much higher than $7,000. Llew Claasen, executive director at Bitcoin Foundation, said Bitcoin will hit $40,000
during 2018. On the other side of the scale, you have partial to full market collapse predictions. Boutique investment bank
GP Bullhound predicts a 90 percent market crash within the year, while Harvard professor and ex-IMF chief Kenneth Rogoff
predicted that Bitcoin will shrink to $100. Roy Sebag, CEO of GoldMoney Inc., said Bitcoin will be worth $0 in the future
(Pauw, 2018).
DXC White Paper Version 2.2.1 pg. 29
Designing the App for virality A “Viral Loop” in marketing refers to a campaign that is used to promote a company or product. It takes its name from a
virus, that infects a person and cause them to infect another person. The DXC/TCBA viral loop represents the number of
members sharing the App with others and generating more members. DXC/TCBA rewards members (with recurring income)
for sharing the App. Incentivising one member to recommend the app to their friends and so on (by word of mouth) costs
nothing and is one of the most effective ways to organically grow from zero to thousands or even millions of users in a very
short time. The formula for the Viral Coefficient is VC = N x P1 x P2.
VC = viral coefficient is the result of the equation and indicates how the loop will grow.
N = the average number of customers who are invited by each active user who invites people.
P1 = the proportion of invited users who tend to actually sign up and become active customers.
P2 = the proportion of active users who tend to invite other people.
If VC is greater than 1 viral growth occurs. If VC is less than 1, the message needs to be constantly re-marketed. If VC is 0,
there is no growth. The table below illustrates a merchant that shares the App with 100 customers. 33% of the customers
like getting cash back and become Active Users and are now part of the Merchants Shopping Community on Level 1. Of the
Active Users, 66% decide to share the App with their friends. They share the App with 5 friends. 33% of the friends like getting
cash back and become Active Users and are now part of the Merchants Shopping Community on Level 2. This process can
repeat itself up to a maximum of 5 times within the Merchant’s Shopping Community.
Applying the Viral Coefficient formula to this example we see that the viral coefficient is working.
In this example, the Merchants reward is the $2,306 annual Affiliate Commission that is received from his or her Shopping
Community on the value of members spending $150 per week on products and services that they were already going to buy.
For the above example, we projected that 33% of people who receive the free App become active users. We based this
percentage on research by consultancy group Core Data, which indicates that one in three Australians (33%) are suffering
from financial stress (Elkind, 2018) and would benefit from cash back. If one-third of people like using the App and want to
share it with their family and friends, then we have projected that two-thirds of them will press the share tab in the App.
Members share because they want their friends to benefit and because of the financial reward. We projected that the
average member would share the App with 5 people based on research from Esteban Kolsky, that states if a customer is not
satisfied, 13% of them will tell to 15 or even more people that they are unhappy, and likewise 72% will share a positive
experience with 6 or more people (Kolsky, 2015).
To quantify exactly how much virality exists we measure the “k-factor”. Looking at the viral co-efficient the k-factor is the
part of the formula that tells us how many new members have joined as a result of the viral activity of a single member in
the period. The formula to determine the k factor is k = i x c.
i = number of invites sent by each customer.
c = percent of conversions of each invite.
Merchant Who Share Exposures Active Users Users who Share Affiliate Affiliate 33% 66% Commission Week Commission Year
Level 1 Customer 100 100 33 22 7.43$ 386.10$ Level 2 Friend 5 109 36 24 8.09$ 420.46$ Level 3 Friend 5 119 39 26 8.81$ 457.88$ Level 4 Friend 5 129 43 28 9.59$ 498.64$ Level 5 Friend 5 141 46 31 10.44$ 543.01$ Total 597 197 130 44.35$ 2,306.10$ Member Spend $150Commission 5% 7.50$ Affiliate Commission 15% 1.13$ Affiliate Commission per level 0.23$
VC N P1 P2Merchant Number Invited % become active % active who share Viral coefficient
100 33% 66% 21.78
i c kNumber Invited % become active k Factor
100 33% 33
DXC White Paper Version 2.2.1 pg. 30
The k factor for the merchant in the example above can be illustrated in the funnel diagram below.
The Merchant has a k factor of 33 in this example.
There are several ways that DXC/TCBA is able to increase the viral coefficient (k-factor) which include:
1. An easy sharing mechanism
All of us have a tendency to skip a task if it involves too much effort. The same holds true for a member who is thinking of
inviting their friends. The easier the sharing mechanism is, the greater the number of invites (i) that members will send.
DXC/TCBA use the following features in the App to increase the average number of invites members are sending:
• The referral program is easy to find.
• There are multiple ways for sending an invite which are easy to use.
• The App explains the benefits of building a Shopping Community.
• The invite to friends explains the benefits of using the App.
2. Incentives for sharing
For a referral program to be successful the reward needs to be valuable.
DXC/TCBA uses the following features in the App to increase the average number of share invitations that members are
sending:
• Sharing builds a five-level affiliate income known as the Shopping Community that pays the owner a recurring
passive income on the value of all member spending each day.
• Various daily, weekly, monthly, and national cash prizes will be offered as additional bonuses to incentivising
sharing the App.
• The new member nurturing sequence invites members who have received cash back to share the App after they
are familiar with it.
• The more people they share the App with, the greater the social good is achieved because each member’s selected
charity receives a donation as a percentage of every dollar spent.
• TCBA operates the Ambassadors Club which provides further incentives for members who want to seriously get
involved in building their Shopping Community.
3. The Shopping Community
Sharing builds a simple five-level affiliate matrix known as the Shopping Community that pays the owner a recurring passive
income on the value of all member spending each day. There is a fixed amount of commission that is paid out in relation to
every sale for referrals. As the affiliate commission is paid out over multipole levels some have incorrectly thought it could
be a pyramid scheme which it is not. Pyramid schemes are illegal and rely on people recruiting others with a promise of
payments or services for enrolling others into the scheme for a payment, but no actual product or service is provided.
Amazon derives 40% of its income from its Affiliate Program (Mehan, 2013).
Merchant invites 100 customers
by offering them cash back on
their purchase.
33% of the customers say yes
to free cash
i (100)
c (33%)
k
33
33 customers on Level 1 of the
Merchants Shopping Community
DXC White Paper Version 2.2.1 pg. 31
4. Additional incentives for members to share the App
All members who share the App benefit from building their Shopping Community.
TCBA further incentivises members to get excited about sharing the App with the
“Ambassadors Club”. Members who become Ambassadors receive additional in App
marketing tools to assist them in building a substantial income by sharing the free
App. Additional benefits include bonus travel rewards and the Ambassadors Car
Program. These additional offers are transparent and open to everyone.
Ambassadors will typically share the App with everyone because; it’s free, gives the
recipient cash back, and supports their selected charity. So, it’s not hard to share with
others. Ambassadors work with members to help them get cash back on all possible
spending on things they are already buying. The Ambassador’s goal is to help their
members get cash back on a minimum of $500 spending each week.
The example below is for an Ambassador who shares the App with 200 people, with 33% success rate and 66% of the active
members sharing the App with 10 friends. A minimum weekly spend of $500 per week is used in the example. Based on
these inputs the Ambassador would earn $104,905 annual recurring income.
4. Charity or larger organisation sharing 1,000 times
Charities or Clubs can also share the App with their supporters to keep them loyal and reward their support. The example
below is for a Club that shares the App with 1,000 supporters, with 33% success rate and 66% of the active members sharing
the App with 5 friends. A minimum weekly spend of $150 per week is used in the example. Based on these inputs the Club
would earn $23,060 annual recurring income.
The following example is for an organisation who shares the App with 1,000 members.
5. Frictionless onboarding
Virality is not just about getting more users sending an increasing number of invites to their friends. It also involves what
happens when a friend receives the invite - and that keeps the loop going.
Sharing the App with others should achieve three things:
• An understanding how to get cash back on purchases.
• The action of using the App to get cash back.
• The action of sharing the App with their friends as soon as possible.
Ambassador Who Share Exposures Active Users Users who Share Affiliate Affiliate
33% 66% Commission Week Commission Year
Level 1 Everyone 200 200 66 44 49.50$ 2,574.00$ Level 2 Friend 10 436 144 95 107.81$ 5,606.17$ Level 3 Friend 10 949 313 207 234.81$ 12,210.24$ Level 4 Friend 10 2066 682 450 511.42$ 26,593.91$ Level 5 Friend 10 4501 1485 980 1,113.88$ 57,921.53$ Total 8151 2690 1775 2,017.42$ 104,905.86$
Member Spend $500
Commission 5% 25.00$
Affiliate Commission 15% 3.75$
Affiliate Commission per level 0.75$
Club Who Share Exposures Active Users Users who Share Affiliate Affiliate 33% 66% Commission Week Commission Year
Level 1 Supporters 1000 1000 330 218 74.25$ 3,861.00$ Level 2 Friend 5 1089 359 237 80.86$ 4,204.63$ Level 3 Friend 5 1186 391 258 88.05$ 4,578.84$ Level 4 Friend 5 1291 426 281 95.89$ 4,986.36$ Level 5 Friend 5 1406 464 306 104.43$ 5,430.14$ Total 5973 1971 1301 443.48$ 23,060.97$ Member Spend $150
Commission 5% 7.50$
Affiliate Commission 15% 1.13$
Affiliate Commission per level 0.23$
DXC White Paper Version 2.2.1 pg. 32
The DXC/TCBA App enables the member to share the App with friends via any of the social channels or chat Apps on their
smartphone. Explainer videos relay how easy it is to get cash back and to share the App. These are reinforced by prizes and
competitions to further stimulate engagement.
6. Optimize the viral time cycle
The viral cycle time refers to the first time that a member accesses the App, makes a purchase and gets cash back, then sends
an invite to their friends and the new invitee becomes a member. The shorter this cycle can be made, the greater the chances
of conversions on the App’s referral marketing program.
DXC/TCBA have employed the following strategies to ensure that the viral cycle time remains short:
• Sharing the App is easy across all channels on the members smartphone
• Bonus cash incentives, prizes, and competitions reward sharing
• The understanding that early adopters are likely to build the larger Shopping Communities
• Push Notifications with easy to opt-in links
• Time Sensitive Airdrops via leading sites to distribute DXC Tokens to existing new members as a marketing strategy
to reward them for downloading the App, spending at any participating merchant
Customer uses
the App
Customer
shares the App
Invitee becomes
an active member
DXC White Paper Version 2.2.1 pg. 33
Single Member Transaction Example The member spends $200 at a participating merchant where the merchant is paying DXC Token/TCBA 5% commission on the
value of all introduced sales. A commission of $10 is generated from the transaction. The $10 is automatically dispersed by
the App, preventing any unauthorised intervention as follows:
1. TCBA 15% = $1.50
2. Shopping Community 15% = $1.50
3. DXC Token 70% = $7.00
$1.50 Funds received by TCBA are automatically dispersed as follows:
1. TCBA to the member’s nominated charity 10% = $0.15
2. TCBA to the Government Taxes i.e. GST 10% = $0.15
3. TCBA retained for operations 80% = $1.20
$1.50 Funds received by the Shopping Community are automatically dispersed as follows:
1. Shopping Community to Level 1 member 20% = $0.30
2. Shopping Community to Level 2 member 20% = $0.30
3. Shopping Community to Level 3 member 20% = $0.30
4. Shopping Community to Level 4 member 20% = $0.30
5. Shopping Community to Level 5 member 20% = $0.30
Note:
a) The Shopping Community depicted above comprises the person who referred the App to the shopping
member, and the other four levels above the referrer.
$7.00 Funds received by DXC are automatically dispersed to the Capital Account as follows:
1. DXC Token to Member for shopping 50% = $3.50
2. DXC Token to Team (ICO Investors, DXC Token Staff, Advisors etc) 50% = $3.50
Note:
a) All cash at the end of each day that has not been spent is converted to DXC Token
b) All DXC Token conversion transactions are published to the blockchain
c) The blockchain ledger will always be in balance with the actual cash at bank each day
d) All funds are held in Escrow/Trust accounts (the balance is verified by a registered independent auditor)
$3.50
Shopping Community
Receives
Commission
Member Spends $200 at a
participating
merchant.
Merchant Commission Pays DXC /TCBA
5% commission $200
DXC Token Capital
Account Receives
Commission
The Cash Back App
Receives
Commission
$7.00 $1.50
$10.00
Converted to
DXC Token
DXC Token Team
Published on
Blockchain
Charity $0.15
Taxes / GST $0.15 TCBA retains $1.20
Level 1. $0.30
Level 2. $0.30
Level 3. $0.30
Level 4. $0.30
Level 5. $0.30
$3.50
$1.50
DXC White Paper Version 2.2.1 pg. 34
User Model Assumptions and Sensitivity Analysis The user model assumes the following:
1. Weekly spend per member USD $150* or USD $300*
2. The average commission paid by merchants to DXC/TCBA of 5% or 10%
3. The cash out rate at which TCBA members cash out, 80% or 20%
4. Market size (members spending each day) in each country at 4,000,000 members up or down by 25% increments
* The weekly spend could comprise groceries, petrol, alcohol, fashion, meals, travel, telecommunications, electricity etc.
The Sensitivity Analysis shows the effect of a change in any of the above key metrics that drive revenue in the model. The
metrics are based on our estimates and our experience to date in the Australian market with 50,000 registered users of the
App.
The tables on the following pages show the variables impact on the DXC Token price at years 1, 5, and 10 years.
DXC White Paper Version 2.2.1 pg. 35
Global Sensitivity Analysis Merchant Commission 5% Member Cash out rate 80%Sensitivity Active Members Weekly Spend Token Price Yr 1 Token Price Yr 5 Token Price Yr 10(+) 75% 7,000,000 150$ 13.20$ 26.01$ 31.37$ (+) 50% 6,000,000 150$ 11.31$ 22.30$ 26.89$ (+) 25% 5,000,000 150$ 9.43$ 18.58$ 22.41$ TARGET 4,000,000 150$ 7.54$ 14.86$ 17.93$ (-) 25% 3,000,000 150$ 5.66$ 11.15$ 13.45$ (-) 50% 2,000,000 150$ 3.77$ 7.43$ 8.96$ (-) 75% 1,000,000 150$ 1.89$ 3.72$ 4.48$
Global Sensitivity Analysis Merchant Commission 10% Member Cash out rate 80%Sensitivity Active Members Weekly Spend Token Price Yr 1 Token Price Yr 5 Token Price Yr 10(+) 75% 7,000,000 150$ 26.40$ 52.03$ 62.74$ (+) 50% 6,000,000 150$ 22.63$ 44.59$ 53.78$ (+) 25% 5,000,000 150$ 18.86$ 37.16$ 44.82$ TARGET 4,000,000 150$ 15.09$ 29.73$ 35.85$ (-) 25% 3,000,000 150$ 11.31$ 22.30$ 26.89$ (-) 50% 2,000,000 150$ 7.54$ 14.86$ 17.93$ (-) 75% 1,000,000 150$ 3.77$ 7.43$ 8.96$
Global Sensitivity Analysis Merchant Commission 5% Member Cash out rate 20%Sensitivity Active Members Weekly Spend Token Price Yr 1 Token Price Yr 5 Token Price Yr 10(+) 75% 7,000,000 150$ 10.63$ 25.51$ 29.83$ (+) 50% 6,000,000 150$ 9.11$ 21.87$ 25.57$ (+) 25% 5,000,000 150$ 7.59$ 18.22$ 21.31$ TARGET 4,000,000 150$ 6.07$ 14.58$ 17.05$ (-) 25% 3,000,000 150$ 4.55$ 10.93$ 12.79$ (-) 50% 2,000,000 150$ 3.04$ 7.29$ 8.52$ (-) 75% 1,000,000 150$ 1.52$ 3.64$ 4.26$
Global Sensitivity Analysis Merchant Commission 10% Member Cash out rate 20%Sensitivity Active Members Weekly Spend Token Price Yr 1 Token Price Yr 5 Token Price Yr 10(+) 75% 7,000,000 150$ 21.25$ 51.03$ 59.67$ (+) 50% 6,000,000 150$ 18.22$ 43.74$ 51.14$ (+) 25% 5,000,000 150$ 15.18$ 36.45$ 42.62$ TARGET 4,000,000 150$ 12.14$ 29.16$ 34.10$ (-) 25% 3,000,000 150$ 9.11$ 21.87$ 25.57$ (-) 50% 2,000,000 150$ 6.07$ 14.58$ 17.05$ (-) 75% 1,000,000 150$ 3.04$ 7.29$ 8.52$
DXC White Paper Version 2.2.1 pg. 36
Global Sensitivity Analysis Merchant Commission 5% Member Cash out rate 80%Sensitivity Active Members Weekly Spend Token Price Yr 1 Token Price Yr 5 Token Price Yr 10(+) 75% 7,000,000 300$ 26.40$ 52.03$ 62.74$ (+) 50% 6,000,000 300$ 22.63$ 44.59$ 53.78$ (+) 25% 5,000,000 300$ 18.86$ 37.16$ 44.82$ TARGET 4,000,000 300$ 15.09$ 29.73$ 35.85$ (-) 25% 3,000,000 300$ 11.31$ 22.30$ 26.89$ (-) 50% 2,000,000 300$ 7.54$ 14.86$ 17.93$ (-) 75% 1,000,000 300$ 3.77$ 7.43$ 8.96$
Global Sensitivity Analysis Merchant Commission 10% Member Cash out rate 80%Sensitivity Active Members Weekly Spend Token Price Yr 1 Token Price Yr 5 Token Price Yr 10(+) 75% 7,000,000 300$ 52.80$ 104.05$ 125.49$ (+) 50% 6,000,000 300$ 45.26$ 89.19$ 107.56$ (+) 25% 5,000,000 300$ 37.72$ 74.32$ 89.63$ TARGET 4,000,000 300$ 30.17$ 59.46$ 71.71$ (-) 25% 3,000,000 300$ 22.63$ 44.59$ 53.78$ (-) 50% 2,000,000 300$ 15.09$ 29.73$ 35.85$ (-) 75% 1,000,000 300$ 7.54$ 14.86$ 17.93$
Global Sensitivity Analysis Merchant Commission 5% Member Cash out rate 20%Sensitivity Active Members Weekly Spend Token Price Yr 1 Token Price Yr 5 Token Price Yr 10(+) 75% 7,000,000 300$ 21.25$ 51.03$ 59.67$ (+) 50% 6,000,000 300$ 18.22$ 43.74$ 51.14$ (+) 25% 5,000,000 300$ 15.18$ 36.45$ 42.62$ TARGET 4,000,000 300$ 12.14$ 29.16$ 34.10$ (-) 25% 3,000,000 300$ 9.11$ 21.87$ 25.57$ (-) 50% 2,000,000 300$ 6.07$ 14.58$ 17.05$ (-) 75% 1,000,000 300$ 3.04$ 7.29$ 8.52$
Global Sensitivity Analysis Merchant Commission 10% Member Cash out rate 20%Sensitivity Active Members Weekly Spend Token Price Yr 1 Token Price Yr 5 Token Price Yr 10(+) 75% 7,000,000 300$ 42.50$ 102.06$ 119.34$ (+) 50% 6,000,000 300$ 36.43$ 87.48$ 102.29$ (+) 25% 5,000,000 300$ 30.36$ 72.90$ 85.24$ TARGET 4,000,000 300$ 24.29$ 58.32$ 68.19$ (-) 25% 3,000,000 300$ 18.22$ 43.74$ 51.14$ (-) 50% 2,000,000 300$ 12.14$ 29.16$ 34.10$ (-) 75% 1,000,000 300$ 6.07$ 14.58$ 17.05$
DXC White Paper Version 2.2.1 pg. 37
The Size of the Market The Phase 1 countries are all affluent and have a collective population of 457,362,525 people. They were selected because
of their population, smartphone adoption, and average consumer spend. Our target is a minimum of 4,176,043 members
which represents about a 1% market penetration. We have based our assumptions only on organic growth which comes
from merchants sharing the app with their customers and then the customers sharing with their friends. In addition to
organic growth, $40,000,000 will be invested in marketing to ensure maximum exposure on social and traditional media
channels. DXC/TCBA believes that it will exceed the minimum active member target.
Key assumptions per country
Customer Acquisition Cost The Customer Acquisition Cost (CAC) is calculated by dividing all costs spent on acquiring more customers (marketing
expenses), by the number of customers acquired in the period the money was spent. DXC/TCBA has projected that it will
spend $40,000,000 to acquire 4,000,000 members, which is a CAC of $10.00 per member.
CAC/CP Ratio The ratio of CAC to Customer Profit (CP) is another important metric. The CP for a TCBA active member using the App is
projected at ($150 spend /week X 52 weeks = $7,800 x 5% Commission X 15% TCBA Revenue = $58.50 X 35% EBITDA =
$20.47). DXC/TCBA is spending $10 to acquire a member, with a CP of $20.47 per year, at an initial ratio of 2.05.
Country Population Merchants Active Users Spend Year Commission DXC Commission Tokens Issued United States 328,694,000 20,302 3,001,209 23,409,428,502$ 1,170,471,425$ 819,329,998$ 650,000,000 United Kingdom 66,040,229 4,079 602,994 4,703,353,329$ 235,167,666$ 164,617,367$ 130,000,000 Canada 37,371,800 2,308 341,231 2,661,601,612$ 133,080,081$ 93,156,056$ 70,000,000 Australia 25,256,500 1,560 230,610 1,798,755,776$ 89,937,789$ 62,956,452$ 50,000,000 Total 457,362,529 28,250 4,176,043 32,573,139,218$ 1,628,656,961$ 1,140,059,873$ 900,000,000
DXC White Paper Version 2.2.1 pg. 38
How the Token Increases in Value: Example The following table is a simplified example of how the DXC Token increases in value with every transaction by accumulating
more and more cash in the DXC Capital Account. The example starts at day one with 100 members shopping and grows
rapidly each day for 5 days before slowing to a moderate steady growth. The average spend per day is $200 at a 5%
commission with 70% distribution to DXC.
• The daily commission received by DXC from members shopping is shown in the ‘New Cash’ column.
• The ‘Interim Cash Balance’ is the new cash received that day plus the closing cash balance of the previous day
shown in column ‘Cash Balance’.
• The ‘Token Issue’ for the example is set at 1,000 tokens per day.
• The ‘Token Balance’ is the new tokens issued that day plus the closing token balance of the previous day shown in
column ‘Tokens in Circulation’.
• The ‘Interim Token Balance’ is the ‘Interim Cash Balance’ divided by the Token Balance.
• ‘Tokens Out’ is the number of tokens being cashed out each day. In this example we have set it at 50% of the new
Tokens Issued each day.
• ‘Token Out Value’ represents the number of Tokens cashed out at the Interim Token Price.
• The ‘Cash Balance’ is the Interim Cash Balance less the Token Out Value.
• ‘Tokens in Circulation’ is the Token Balance less the Tokens Out.
• ‘Token Price’ is the Cash Balance divided by the number of Tokens in Circulation.
To illustrate the viability of the platform we have assumed that on day 7, 100% of all Token holders’ cash out which does not
adversely affect the Token price which goes from $7.00 the day before to $13.30 the next day as members continue to shop
and earn cash back. At all times the Token is 100% backed by cash.
Example Token Value Increase
Day Total New Interim Tokens Token Interim Tokens Out Token Cash Tokens in Token Members Cash Cash Balance Issued Balance Token Price 50% Out Value Balance Circulation Price
1 100 700$ 700$ 1000 1000 0.70$ 700$ 1,000 0.70$ 2 200 1,400$ 2,100$ 1000 2,000 1.05$ 500 525$ 1,575$ 1,500 1.05$ 3 400 2,800$ 4,375$ 1000 2,500 1.75$ 500 875$ 3,500$ 2,000 1.75$ 4 800 5,600$ 9,100$ 1000 3,000 3.03$ 500 1,517$ 7,583$ 2,500 3.03$ 5 1600 11,200$ 18,783$ 1000 3,500 5.37$ 500 2,683$ 16,100$ 3,000 5.37$ 6 1700 11,900$ 28,000$ 1000 4,000 7.00$ 500 3,500$ 24,500$ 3,500 7.00$ 7 1800 12,600$ 37,100$ 1000 4,500 8.24$ 4,500 37,100$ -$ - -$ 8 1900 13,300$ 13,300$ 1000 1,000 13.30$ 500 6,650$ 6,650$ 500 13.30$ 9 2000 14,000$ 20,650$ 1000 1,500 13.77$ 500 6,883$ 13,767$ 1,000 13.77$
10 2100 14,700$ 28,467$ 1000 2,000 14.23$ 500 7,117$ 21,350$ 1,500 14.23$
Member Spend per day 200.00$ Commission 5% 10.00$ DXC 70% 7.00$
DXC White Paper Version 2.2.1 pg. 40
Token Sale Purpose This ICO will provide us with the marketing power to distribute The Cash Back App for free and en masse within the Phase 1
target markets; which include the United States of America, Canada, the United Kingdom, and Australia. These countries
have been selected due to their high smartphone adoption, weekly shopping spend, and population.
The capped emission for the Phase 1 countries is 900 million DXC Tokens over each ten-year period. The DXC Token sale will
comprise three rounds at 5% each to a total of 15% (135,000,000 Tokens) to raise USD $117M across all countries of
operation. ICO investors will receive 15% of the recurring DXC Token emission each year in perpetuity.
650,000,000
130,000,000
70,000,000
50,000,000
- 100,000,000 200,000,000 300,000,000 400,000,000 500,000,000 600,000,000 700,000,000
United States
United Kingdom
Canada
Australia
DXC Token Emission by Country
DXC White Paper Version 2.2.1 pg. 41
Measured Capital Raising
The DXC capital raise is different to other ICOs in that the DXC Token is asset backed, it is not based on a hopeful future use
as many other cryptocurrencies have been which were not sustainable and failed within the first year or less of operation.
DXC has a demonstrable means of income and the absolute ability to return value to all participants.
The DXC Token is a real Digital Currency backed by real cash which gives it actual value from day one. As with real businesses
there are true costs to acquire customers and build the income base which are clearly demonstrated in the White Paper.
DXC/TCBA is building a viable international company based on sound economic principles. In order to achieve our mission
and to remain well funded during the growth phase, the ICO represents a substantial capital raise that reflects a real-world
commercial application.
The chart below compares the DXC ICO to that of the top ten largest ICOs, all of which have all lost approximately 80% of
their value because they were either not asset based, or had failed to prove there was a market for their product prior to
the ICO (Kharif, 2018).
The DXC ICO is measured in its approach and based on establishing a physical presence in each major city of operation across
the United States, Canada, the United Kingdom, and Australia. Overall a total of 680 staff across 72 offices supported by a
marketing spend of USD $40,000,000 will be deployed to ensure that a solid user base of 4,000,000 active members are
secured by 2020.
DXC Use of Funds
Country USA UK Canada Australia Head Office Total
Offices 50 10 6 5 1 72 Staff 451 100 62 48 19 680 Wages 20,162,726$ 4,914,045$ 3,249,665$ 2,675,780$ 3,153,600$ 34,155,815$
Operations 4,456,926$ 965,472$ 584,383$ 474,264$ 750,000$ 7,231,046$
Marketing 28,631,315$ 5,752,519$ 3,255,319$ 2,200,000$ 250,000$ 40,089,153$
Merchant Acquisition 10,829,265$ 2,203,752$ 1,262,285$ 866,578$ 3,000,000$ 18,161,879$
Commission 4,387,500$ 877,500$ 472,500$ 337,500$ -$ 6,075,000$
Sub Total 68,467,732$ 14,713,288$ 8,824,151$ 6,554,122$ 7,153,600$ 105,712,894$
Reserve 19,282,267$ 2,836,711$ 625,848$ 195,877$ 7,153,600-$ 15,787,103$
Total 87,749,999$ 17,549,999$ 9,449,999$ 6,749,999$ -$ 121,499,997$
DXC White Paper Version 2.2.1 pg. 42
DXC Token Allocation The composition of DXC Token for issue are as follows:
Token
DXC Token
Private Blockchain
DXC Token Wallet
Public Blockchain
Ethereum ERC 20
Token Issuer
Digital Exchange Commerce Pty Ltd
Total Annual Supply Phase 1 Countries
90,000,000 DXC Tokens (100%)
Pre – ICO
9,000,000 DXC Tokens (10%)
ICO 30% Discount
4,500,000 DXC Tokens (5%)
ICO 20% Discount
4,500,000 DXC Tokens (5%)
ICO 10% Discount
4,500,000 DXC Tokens (5%)
DXC Team & Reserve
16,200,000 DXC Tokens (18%)
The Cash Back App Pty Ltd
4,500,000 DXC Tokens (5%)
Bounty
1,800,000 DXC Tokens (2%)
DXC White Paper Version 2.2.1 pg. 43
DXC Token Sale The composition of DXC Tokens for sale are as follows:
Ten-year block issue Phase 1 Countries
900,000,000 DXC Tokens (100%)
Total Annual Supply Phase 1 Countries
90,000,000 DXC Tokens (100%)
Total Tokens for Sale (Pre-ICO & ICO)
225,000,000 DXC Tokens (100%)
ICO 30% Discount Price $0.70 USD
45,000,000 DXC Tokens (5%)
ICO 20% Discount Price $0.80 USD
45,000,000 DXC Tokens (5%)
ICO 10% Discount Price $0.90 USD
45,000,000 DXC Tokens (5%)
Currencies Accepted
All currencies of Phase 1 Countries
Total Capital Raise (ICO)
$108,000,000 USD
Expected Timeline The timeline is not fixed and is provided as an indicative reference. DXC may vary the timeline at its absolute discretion.
ICO Public Sale
1 July 2019
ICO 30% Discount Price $0.70 USD
1 July 2019 – 31 August 2019 (8 weeks)
ICO 20% Discount Price $0.80 USD
1 September – 31 October 2019 (8 weeks)
ICO 10% Discount Price $0.90 USD
1 November – 31 December 2019 (8 weeks)
Token Generation and Issue Date
31 January 2020
Lock Up Period The token issue date is the date when DXC launches the token in The Cash Back App. At that time the following Token
recipients will be locked up for 12 months, all Pre-ICO tokens, ICO tokens, all DXC Team tokens, all TCBA tokens, and all
Bounty tokens will be locked up for 12 months, from the token issue date. ERC20 contracts, as required, will be issuable
when the lock up period is complete.
DXC White Paper Version 2.2.1 pg. 44
Use of Funds DXC intends to raise a total of USD $121,500,000 under the Pre-ICO and ICO. The funds will be allocated as follows to the
Phase 1 countries:
Country USD Funds Raised
Marketing
34%
Wages
29%
Operations
6%
Merchant Acquisition 16%
Commissions
5%
Reserve
10%
USA
$87,750,000
$ 28,631,315
$20,162,726
$4,456,926
$10,829,265
$4,387,500
$19,282,267
United
Kingdom
$17,550,000
$5,752,519
$4,914,045
$965,472
$2,203,752
$877,500
$2,836,711
Canada
$9,450,000
$3,255,319
$3,249,665
$584,383
$1,262,285
$472,500
$625,848
Australia
$6,750,000
$2,200,000
$2,675,780
$474,264
$866,578
$337,500
$195,877
Head
Office
NIL
$250,000
$3,153,600
$750,000
$3,000,000
NIL
-$7,153,600
TOTAL
$121,500,000
$40,089,153
$34,155,815
$7,231,046
$18,161,879
$6,075,000
$15,787,105
DXC White Paper Version 2.2.1 pg. 46
Executive Team and Advisors
David Hennessy: Chief Technology Officer
David holds two Masters degrees, one in Information Technology (Cloud Computing and Software Design &
Development) and the other in Information Systems Security. He has over 15 years’ IT experience in Government and
the Private sector. David oversees the e-commerce, mobile wallet, and social capabilities of the DXC Token and TCBA
Applications. He leads a seasoned team of software engineers.
Peter Scott: Chief Financial Officer
Peter has over 30 years accounting and tax consulting experience for ASX-listed, private company, and government
organisations. He has worked on numerous mergers and acquisitions and represented clients within the Media &
Entertainment industry including Film/TV production companies, producers, musicians, actors and artists.
Matthew Inglis: DXC Token Operations Manager
Matthew is responsible for the day to day business operations of DXC Token. He is tasked with liaising between DXC
Token and TCBA and ensuring the administration functions between the two companies align with the Joint Venture.
Matthew is currently completing Bachelor of Business at the University of the Sunshine Coast.
Bruce Inglis: CEO & Founder
Bruce is a seasoned entrepreneur and has developed businesses across the Retail, Franchise, and Real Estate markets.
He has been a long-term investor in technology-based enterprises. He is the Founder of The Cash Back App and his vision
for the DXC Token and TCBA is to unite 10 million App users worldwide by the end of 2020 via downloads and social
sharing.
Dr Ross McKenzie: Chief Risk and Compliance Officer
Ross has an outstanding record of accomplishment in financial services having led teams of over 1,000 employees. His
leadership experience extends to the National Australia Bank, Westpac Banking Corporation, ANZ Bank, CBA Bank, AXA,
HSBC, Macquarie Bank and Samsung, and dealings with statutory and regulatory authorities in Australia and globally.
Tim Dixon: International Partnerships
Tim has 25 years of commercial & business experience in Franchising in Australia and internationally working with
numerous well-known brands. Tim is a highly creative communicator and faciliatory and is the founder of Music Oz which
provides a forum for Independent and Unsigned Artists in Australia.
David Scopelliti: Chief Marketing Officer
David has over 30 years’ experience in radio, TV, social, and digital advertising. His companies clients include Harvey
Norman, HSBC, Credit Union Australia (CUA), Sony Pictures Entertainment USA, Universal Studios USA, WIN Network,
Surf Life Saving Australia, Croc Media, and Recrue Media USA.
DXC White Paper Version 2.2.1 pg. 47
Technology Team
Saroj Maurya: Senior Blockchain Engineer
Saroj has over 7 years’ experience in the field of Blockchain and Cryptocurrency development and in iOS, PHP, Node JS,
Angular JS, SQL, MongoDB, App Architecture and Design.
Michael Shareef: Digital Strategist
Michael is a highly experienced digital strategist who has worked with the development of Facebook algorithms and has
a strong background across high level digital strategy and delivery.
Tom Raine: Senior Front End Web Developer
Tom is an experienced software developer at design and marketing agencies in Australia such as Starts at 60, LoopLabs,
Nodding Dog and YomStar. Tom is skilled in AngularJS 1 and 2/4/5, React, Vue, NodeJS, jQuery, HTML5, SASS, Bootstrap
and Ionic.
Chiranjeevi Singh: Lead Financial Data Engineer
Chiranjeevi has over 8 years expertise in Big Data, Data Warehousing and ETL Technologies within the banking and
financial services industry, including JP Morgan.
Martin Knott: Lead Solutions Architect
Martin has a Bachelor of Engineering (Computer Systems) and Commerce at the University of Queensland. He is an
experienced developer within the technology divisions at National Australia Bank, Royal Bank of Scotland and Macquarie
Bank.
Gagandeep Singh: Senior Project Manager
Gagandeep has over 12 years expertise in management, delivery and consultation for projects that include custom
software, enterprise mobile Applications, blockchain development, AI and machine learning and advanced website
Development.
Darryn Flood: Senior APIs and Transaction Systems Developer
With over 18 years in developing technology systems Darryn is the Senior Developer in charge of APIs and transaction
systems. Darryn is experienced in highly C#, ASP.NET, MS SQL, jQuery, CSS, HTML as well as in continuous delivery and
agile planning
Steve Taylor: Lead Systems Developer
Steve oversees systems and development with over 25 years developing and pioneering technology systems. Steve is
highly skilled in C#, Java, ASP.NET, JBoss Fuse, MS SQL, jQuery, CSS / SASS and HTML as well as in complex DevOps
processes.
DXC White Paper Version 2.2.1 pg. 48
Varun Kumar: Senior iOS Developer
Varun has over 5years of experience in iOS development with expertise in Objective C/Swift, React, native mobile
Application design and advanced design patterns.
Satvir Singh: Senior Android Developer
Satvir has over 5 years expertise in Android, Kotlin, Java, UI/UX design, Advanced Design Patterns (MVC, MVVM, MVP)
and Material Design Animations.
Ramandeep Kaur: Senior Product Quality Engineer
Over 9 years’ experience in software development and managing product quality for major firms, including JP Morgan.
Ramandeep’s experience includes Java and JavaScript technologies, systems analysis, quality planning, testing design and
integration.
DXC White Paper Version 2.2.1 pg. 50
The Cash Back App
Exclusive Partner The Cash Back App is the exclusive partner of Digital Exchange Commerce and will be fully integrated to the DXC platform to
use and manage DXC Tokens for member purchases.
Shop. Save. Simple. “Did you shop yesterday? Will you shop today? And what about tomorrow and the next day? Everybody shops. It’s a fact of
life. So why not shop where you can get cash back or discounts on the necessities and niceties of life?”
The Cash Back App is the winner of the Austral-Asian App Design awards for Best Mobile Shopping Application, it features a
fully operational mobile wallet, has been downloaded by over 50,000 consumers and is accepted at over 5,000 locations in
Australia.
The App does not require members to shop differently, buy special products, amass points or undertake complicated
redemption processes, it just gives members instant cash back every time they shop at participating merchants that include
small retailers and national brands.
Following the ICO, DXC/TCBA will convert all unspent cash that each member receives form shopping, at the end of each
day, into DXC Tokens which have the added benefit of appreciating in value each time any member shops. The DXC Token
can be instantly converted to cash with no fees within the App.
The Free App That Puts Cash In Your Pocket
Download the app today!
DXC White Paper Version 2.2.1 pg. 51
Available Brands on The Cash Back App DXC/TCBA offer a comprehensive and rapidly expanding number of leading brands where members can receive cash back.
Based on our experience in the Australian market we expect our country managers will have the same success in onboarding
brands in each country of operation. Some of our Australian brands include:
DXC White Paper Version 2.2.1 pg. 52
Charities Participating on The Cash Back App Australia alone has over 50,000 registered Charities, and many struggle financially to provide much needed community
services. Many consumers feel overwhelmed by the volume of requests for donations from so many worthwhile
organisations. DXC/TCBA enables consumers to keep their cash back and at the same time know that every time they spend
at a participating merchant a donation will be made automatically by the App to their favourite charity.
Charities Struggling to Survive with almost one in five UK (cafonline.org, 2017) charities fear their organisation is struggling
to survive, according to research by international not-for-profit-organisation Charities Aid Foundation (CAF) in what is being
seen as a wake-up call for Australian charities. TCBA welcomes Charities to Apply to be listed on the App so consumers can
select them as beneficiaries of their shopping. In the Australian market TCBA projects that its user base could generate in
excess of $10 million per year in shopping donations. Charities and Not for Profits can also share the App with their members
and supporters to build their own Shopping Communities and benefit from the Affiliate income.
90% of Millennials (22 to 37 year-olds) are likely to consider switching brands to be associated with a good cause, and 88%
will become more loyal (Gross, 2015). The App empowers all members by enabling them to choose a charity from the list
within the App. Then every time they shop the App makes a separate donation to their selected charity. The member gets
to keep their cash back and the charity benefits.
Current charities listed in the App for Australia include:
QIMR Berghofer Medical Research
Givit Goods for Good Causes
Habitat for Humanity
Rainforest Trust Australia
Leukaemia Foundation
Mates on a Mission
Childfund Australia
Scripture Union Qld
Menzies School of Health Research
Surf Lifesaving Australia
Shake It Up Foundation
Royal Institute for Deaf and Blind Children
Opportunity International
Daniel Morcombe Foundation
Assistance Dogs Australia
DXC White Paper Version 2.2.1 pg. 54
Overview The DXC/TCBA Application is a proven highly scalable platform. The model can be replicated in other countries as TCBA offers
a solution for members to save (and earn cash back) on everyday shopping while assisting participating merchants.
Our strategy is to expand to 4 countries by 2020. Following the Token Sale, we intend to immediately expand the number of
small merchants on the App in Australia. Country leaders will then be Appointed with a major focus on National Brand and
Charity partner acquisition and the roll out of the small merchant program.
The Phase 1 countries include United States of America, Canada, the United Kingdom, and Australia. These countries have
been selected due to their high smartphone adoption, weekly shopping spend, and population.
Merchant Acquisition Over the last few years of beta testing, TCBA has investigated several options for merchant acquisition and is confident that
it has developed the optimum path. TCBA provides merchants with location specific hardware that interacts with the
consumers mobile phone or physical card to process transactions. All hardware, training, and support is provided to the
merchant at no cost. Merchants are secured either by direct contact from a dedicated in field sales force or online via the
App or website. To date, TCBA is available at over 5,000 locations in Australia. Funding from the ICO will be allocated to
significantly increase the number of participating merchants. There are three types of merchants that are best suited to the
program, these include:
1. Large national brands
2. Small to medium retail businesses
3. Service providers
All merchants provide DXC/TCBA with a marketing fee as cash payment or an upfront discount. The value of the marketing
fee typically ranges between 5% to 10% of the value of each transaction. The DXC/TCBA platform is designed to operate on
a low margin high volume model. This approach enables our merchants to maintain a sustainable cash flow while offering
their customers cash back. It is also in direct contrast to many other cash back or loyalty programs that seek to exact much
higher fees ranging from 20% to as much as 75%.
High-income countries according to the World Bank, 2018
DXC White Paper Version 2.2.1 pg. 55
Our model is designed primarily for brick and mortar stores which still represent 90% of all retail transactions today
(Ahadmotlaghi & Pawar, 2012). DXC/TCBA have a strong value proposition for merchants that includes:
1. Customer transaction data
2. Zero costs on accepting DXC Token payments
3. Zero costs on credit and debit card payments
4. In-App mobile marketing channel
5. Opportunity to attract new customers
6. Effective, smart and easy to use loyalty program
7. The opportunity to create a passive recurring income by sharing the App with their customers.
Member payments using physical credit or debit cards, or cards tokenised to the member’s mobile wallet are subject to the
issuing and receiving banks settlement periods and transaction fees. These fees are deducted from the commission the
merchant pays DXC/TCBA on introduced sales. The net commission is converted to instant cash back and paid to the
members’ wallet. DXC/TCBA’s Zero fees on credit and debit card payments represent a substantial saving to merchants. This
feature alone is sufficient to persuade many merchants to join the program. These days, cash as a means of payment is
diminishing rapidly (Steele, 2015) and any means of reducing card transaction costs is a direct saving to a merchant.
As a simple litmus test for the App Q. If you were shopping and a merchant asked “would you like some cash back with your purchase” what would you say?
If you answer “yes” then we look forward to you becoming one of the 4,000,000 active users by 2020.
P.S. Make sure you share the App with your family and friends before someone else does!
If you answer “no” then we’d ask, “what is your favourite charity, would you like to help them when you shop”?
If your answer was “yes” then “thanks for supporting such a great cause”.
P.S. Make sure you share the App with your family and friends so they can be supporters too!
If you answer “no” then “we respect your choice, have a great day”
(You either have too much money, or no friends).
DXC White Paper Version 2.2.1 pg. 56
Key Risks Through The Cash Back App, there is an already operating and fully-functional system, that includes backend services, and
mobile apps for members, merchants. The mobile apps are available for download from the Apple App Store and Google
Play Store.
We have an existing in-house team of skilled developers and designers actively developing and improving the DXC/TCBA
platform and systems. We are developing the blockchain and integration technologies concurrently to the core TCBA
platforms.
Risk in DXC (or TCBA) failing is less pronounced (than the risk for blockchain-based projects, e.g.) due to the already operating
and fully-functional system of The Cash Back App in the marketplace along with the security of the tokens being fully
supported with cash in our capital account.
Additionally, we are well positioned to expand into the overseas markets of choice with key personnel identified. Our
operations are being fine-tuned in preparation for this exciting phase of our growth in line with our business plan.
There are always risk outside of the control of our company and its management and director team, however. The following
have been identified:
• Dependence on Key Personnel: Key personnel are always crucial to an aggressive roll out. The inability to recruit
the right staff could affect our implementation program and in turn the value of DCX tokens
• Political Risk: Regulators / Governments worldwide may change the way DXC Tokens operates and in doing so
may affect the value of DXC Tokens. Token sales are a new business practice and have received some negative
press which have resulted in action from countries such as the USA
• Brand Reputation and Risk: The key to our success will be the building of our brand. Strong market credibility and
recognition will attract users and merchants alike. If we are unsuccessful in this endeavour the acceptance of DXC
Tokens will be reduced, resulting in a loss in value of the token
• Operational Risk: The value of DXC Token is dependent on the growth of The Cash Back App (membership and
transactions per day). Operations of The Cash Back App could be affected by many factors including transaction,
personnel, business, technology and security matters
DXC White Paper Version 2.2.1 pg. 57
Roadmap The DXC/TCBA platform has been developed over the past six years. By some standards this has been a slow process however we are confident that the system and its Application have evolved
sufficiently to take what is an exciting instant cash back offer and ZERO FEE payment platform to the market. During the development period, we have won the Australasian App design Awards for
best App and secured over 50,000 members with the App accepted at over 5,000 merchant locations in Australia. The platform is well-tested, working, highly scalable and ready for international
deployment.
2013 The Cash Back App
incorporated &
prototype developed
2013 Idea evolves
while building
apps for SME’s
2013 Family and friends invest
$500,000
2014 Beta trials with National
Brand some success and bug
fixes
2014 Seed investment $2,000,000
2016 Mobile Wallet and
Merchant Dashboard
development
2017 Seed investment $600,000.
2015 Beta trials: 22,000+ members,
$1,000,000 sales. Winner App Design Award
2017 TCBA Franchise Established for merchant
acquisition
2018 Ambassador and Licensee
programs established. Learning
Management System
deployed.
2018 Payment processing
moved to National
Australia Bank
Card Aggregator Status
2019 Q2
Launch ICO
$124,500,000 for
International Launch
2019 Q4
Established merchant
suppliers in Phase 1
Countries
2020 Q4
Phase 1 Countries
4,000,000 active
members
DXC White Paper Version 2.2.1 pg. 59
Overview
As The Cash Back App and DXC Apply proven technologies and concepts in a novel way, we do not have direct competitors. However, there are a range of companies and services that share our space in Australia on certain aspects of our solution. Apps and services for reward programs, payment processing providers, and digital marketing solutions each have some degree of overlap with what we do:
• Reward programs such as Amex Membership Rewards program, Flybuys and Velocity and Online Affiliate reward networks such as Liven, Shopback and CashRewards deliver a similar common concept of rewarding the customer for using their service (by points or cash back, e.g.).
• Rewards platforms are also hindered by a lack of value for consumers because it is unclear on ‘how much a point is actually worth’ – and their true value is often quite small (especially compared to the value of the dollar spent to earn them). These platforms often give little value for merchants, too, because they do not have the capacity to bring customers to merchants. The Cash Back App brings cash as the loyalty reward and puts merchants at the forefront of the member’s view – pulling new customers to new merchants and bringing existing customers back again.
• Loyalty services, which include ‘loyalty collector’ services such as Locify, Rewardle or Hey You, deliver the typical ‘points for loyalty’ service. They share the same core offer as standalone loyalty Apps, such as McDonald’s, Subway and Starbucks. However, while the points are conveniently collected in the one App/service, the loyalty reward given is points that are difficult to value. Member uptake is therefore limited. It has been demonstrated that the best means of loyalty reward is cash – and this is at the core of what The Cash Back App offers.
• Finally, in the area of payment processing, we have a unique position in that we do not compete with others but instead use and leverage them to our advantage. Payment platforms, such as Physical Card Payment at Point of Sale (Visa and Mastercard), Tokenized Wallets (Alipay, WeChat Pay), in-device wallets (Google Pay and Apple Pay) and other Payment Apps such as Afterpay and Zip Pay are used (or can be used) within our system.
Our unique system is centred on giving ‘instant cash back’ as the reward (as opposed to points) and this cash can be accessed and spent at any merchant in our shopping network. Plus, our affiliate rewards systems (the Shopping Community) gives cash back to those who referred the shopper – and even that cash is available instantly to those members. Our shopping and sharing incentive systems allow rewards earned at one TCBA merchant to be spent at another. This benefits our entire merchant network because our members are loyal to the App and service itself. Over-time they change shopping habits to seek-out The Cash Back App when starting their shopping journey – and our merchants benefit through increased sales and loyal customers.
The Cash Back App’s always-available wallet brings a reliable cash collection and payment service that can be used by our members for any purchase. Augmented by the DXC Token’s Appreciative potential, too, the value of cash back earned (and retained) in the wallet increases in value to the customer. This incentivises them to shop frequently at our merchants and services. No other platform exists that does what TCBA and DXC delivers i.e. cash incentive and liquid buying power to members, and value-packed and powerful payment, marketing, and loyalty service to our merchants. Moreover, for merchants, we deliver flexible and ZERO-FEE payments and rich customer shopping and behavioural data analytics.
DXC White Paper Version 2.2.1 pg. 60
Payment Processing
Company Strengths Weaknesses
Visa and
MasterCard
The primary and global credit card payment facilitators. Both Visa and MasterCard are accepted virtually anywhere and are used by the large majority of our target market. Premium cards offer loyalty and rewards schemes for using the card. These programs are funded through Visa and MasterCard’s transaction fees.
Merchants suffer from their fees, but also cannot do business without taking them. As such, merchants are always seeking ways to reduce their card transaction costs. Loyalty and rewards programs have diminished in value to the customer as a result of the narrowing of the profits earned from fees. The card programs, too, cannot deliver high-quality customer shopping data to merchants.
WeChat Pay China’s premier social media platform has 1 billion active monthly users. WeChat Pay is used at over 300,000 stores in over forty countries.
While the merchant offer can vary widely, customers are not incentivised for every payment. As such, member and merchant benefit is limited. The Cash Back App and DXC Token, on the other hand, offers a payment platform with loyalty incentive for every purchase. Members are incentivised to use the App so as to earn cash back every time – and they will seek out new merchants that are discoverable in the App.
AliPay A strong leader in China for mobile and ecommerce payment facility for retailers and wholesalers, AliPay has over 520 million members and handles over 175 million transactions daily.
AliPay can only support settlement in RMB and its usefulness is limited to only Chinese payers (and is therefore not a fully global payment platform). TCBA will be established in the local market, regulations and currency of the countries we operate, and the use of DXC Token’s blockchain and DXC Token, can readily and rapidly perform international and global payments between merchants and members.
PayPal PayPal has over 218 million customers worldwide and can facilitate payments online and on mobile for customers and merchants alike.
PayPal’s focus is online and mobile payments, and so brick-and-mortar business have limited capacity to access their services. PayPal has above-average fees for accepting and transferring funds and does not incentivise shopping and loyalty. TCBA offers ZERO-FEE payments for merchants when users spend with our platform.
Google Pay and
Apple Pay
Digital wallet and online payment platforms that secures a user’s credit cards by encrypting them to the user’s device. They enable the use of NFC (‘PayWave’) credit card payments at point of sale – making payments fast and easy for merchant and customer alike.
Exclusive to the device (Apple Pay requires an Apple device, and Google Pay requires an Android Device) and does not offer any incentivisation programs to the merchant or customer. Nor, do they offer data on the customer to the merchant because the transactions are private.
DXC White Paper Version 2.2.1 pg. 61
Rewards Programs
Company Strengths Weaknesses
American Express
(Amex) Rewards
Globally recognised card processing brand with a higher value rewards program for its customers.
The higher-value rewards program requires higher merchant fees. As such, acceptance of Amex is limited (especially outside of USA). The rewards program is also sometimes varied and earning schemes can be difficult to understand. Annual card fees, limits on earnings per year, and rebates that take many days to receive erode value to the customer.
FlyBuys Australia’s largest loyalty program with over 10 million members. Points are earned on household purchases (namely at Coles Supermarkets) and can be exchanged for gift cards and other rewards.
Means of earning Flybuys points are rather sporadic and generally arbitrary. As such, it is difficult for the customer to predict how many points they can earn for a given purchase or period. Points expire, too, and their value is volatile and has diminished rapidly in recent times. A Flybuys point ‘buys’ a lot fewer rewards these days.
ShopBack An online cash back reward program based in the Asia-Pacific with over 5 million users. Shoppers get a portion of the purchase as cash back (eventually).
Only exists online and not in-store. No loyalty is incentivised to a merchant. Cash Back is earned after some time and only when thresholds are met is a pay-out given.
Cash Rewards An online and in-store rewards program based in Australia. Shoppers earn cash back when purchasing. Cash Back is earned for each purchase (eventually).
No loyalty is incentivised to a merchant. Cash Back is earned after some time and only when thresholds are met is a pay-out given.
Liven A payment and loyalty platform for the hospitality industry. It incentivises loyalty with rewards for purchases. These rewards are loyalty points and tokens.
Rewards are tokens and points that only have value by trading the tokens on the blockchain exchange as an ERC20 token.
Rewardle A loyalty points collection system that earns customers loyalty points when shopping at participating outlets (mainly in hospitality).
Points do not have a cash value and can only be redeemed at the merchants where those points were earned. Redemption value is arbitrary and differs from merchant-to-merchant.
Locify A loyalty points collection system that earns customers loyalty points when shopping at participating merchants.
Points do not have a cash value and can only be redeemed for offers or coupons within the App. Redemption value is arbitrary and differs from merchant-to-merchant.
Standalone Apps
(e.g. McDonalds,
Subway, Starbucks)
Offer loyalty points, exclusive offers to customer and rewards loyalty for the single brand.
As a customer of all or any of these brands, it is necessary to keep each App on a device and maintain its loyalty collection effort. This level of dedication to a particular brand is not typical of customer behaviour. As such, adoption of the programs is limited.
DXC White Paper Version 2.2.1 pg. 63
Disclaimer
PLEASE READ THIS SECTION AND THE FOLLOWING SECTIONS ENTITLED “DISCLAIMER OF LIABILITY”, “NO REPRESENTATIONS AND WARRANTIES”, “REPRESENTATIONS AND WARRANTIES BY YOU”, “CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS”, “MARKET AND INDUSTRY INFORMATION AND NO CONSENT OF OTHER PERSONS”, “NO ADVICE”, “NO FURTHER INFORMATION OR UPDATE”, “RESTRICTIONS ON DISTRIBUTION AND DISSEMINATION”, “NO OFFER OF SECURITIES OR REGISTRATION” AND “RISKS AND UNCERTAINTIES” CAREFULLY.
IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR LEGAL, FINANCIAL, TAX OR OTHER PROFESSIONAL ADVISOR(S).
The DXC Tokens are not intended to constitute securities in any jurisdiction. This White Paper does not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities or a solicitation for investment in securities in any jurisdiction. This White Paper does not constitute or form part of any opinion on any advice to sell, or any solicitation of any offer by the distributor/vendor of the DXC Tokens (the “Distributor”) to purchase any DXC Tokens nor shall it or any part of it nor the fact of its presentation form the basis of, or be relied upon in connection with, any contract or investment decision. The Distributor will be an affiliate of Digital Exchange Commerce Pty Ltd (DXC Token) and will deploy all proceeds of sale of the DXC Tokens to fund DXC Token’s project, businesses and operations. No person is bound to enter into any contract or binding legal commitment in relation to the sale and purchase of the DXC Tokens and no digital asset or other form of payment is to be accepted on the basis of this White Paper. Any agreement is between the Distributor and you as a purchaser, and in relation to any sale and purchase, of DXC Tokens (as referred to in this White Paper) is to be governed by only a separate document setting out the terms and conditions (the T&Cs) of such agreement. In the event of any inconsistencies between the T&C’s and this White Paper, the former shall prevail. No regulatory authority has examined or Approved of any of the information set out in this White Paper. No such action has been or will be taken under the laws, regulatory requirements or rules of any jurisdiction. The publication, distribution or dissemination of this White Paper does not imply that the Applicable laws, regulatory requirements or rules have been complied with. There are risks and uncertainties associated with DXC Tokens and/or the Distributor and their respective businesses and operations, the DXC Tokens, the DXC Token Initial Token Sale and the DXC Token and DXC Token (DXC Token) Token Wallet (each as referred to in this White Paper).
No part of this White Paper is to be reproduced, distributed or disseminated without including this section and the following sections entitled “Disclaimer of Liability”, “No Representations and Warranties”, “Representations and Warranties By You”, “Cautionary Note On Forward-Looking Statements”, “Market and Industry Information and No Consent of Other Persons”, “Terms Used”, “No Advice”, “No Further Information or Update”, “Restrictions On Distribution and Dissemination”, “No Offer of Securities Or Registration” and “Risks and Uncertainties”.
DISCLAIMER OF LIABILITY To the maximum extent permitted by the Applicable laws, regulations and rules, DXC and/or the Distributor shall not be liable for any indirect, special, incidental, consequential or other losses of any kind, in tort, contract or otherwise (including but not limited to loss of revenue, income or profits, and loss of use or data), arising out of or in connection with any acceptance of or reliance on this White Paper or any part thereof by you.
NO REPRESENTATIONS AND WARRANTIES DXC and/or the Distributor does not make or purport to make, and hereby disclaims, any representation, warranty or undertaking in any form whatsoever to any entity or person, including any representation, warranty or undertaking in relation to the truth, accuracy and completeness of any of the information set out in this White Paper.
REPRESENTATIONS AND WARRANTIES By accessing and/or accepting possession of any information in this White Paper or such part thereof (as the case may be), you represent and warrant to DXC and/or the Distributor as follows:
a. you agree and acknowledge that the DXC Tokens do not constitute securities in any form in any jurisdiction;
b. you agree and acknowledge that this White Paper does not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities in any jurisdiction or a solicitation for investment in securities and you are not bound to enter into any contract or binding legal commitment and no digital asset or other form of payment is to be accepted on the basis of this White Paper;
c. you agree and acknowledge that no regulatory authority has examined or Approved of the information set out in this White Paper, no action has been or will be taken under the laws, regulatory requirements or rules of any jurisdiction and the publication, distribution or dissemination of this White Paper to you does not imply that the Applicable laws, regulatory requirements or rules have been complied with;
d. you agree and acknowledge that this White Paper, the undertaking and/or the completion of the DXC Token Initial Token Sale, or future trading of the DXC Tokens on any digital asset exchange, shall not be construed, interpreted or deemed by you as an indication of the merits of the DXC Token and/or the
DXC White Paper Version 2.2.1 pg. 64
Distributor, the DXC, the DXC Token Initial Token Sale and DXC Tokens and the Token Wallet (each as referred to in this White Paper);
e. the distribution or dissemination of this White Paper, any part thereof or any copy thereof, or acceptance of the same by you, is not prohibited or restricted by the Applicable laws, regulations or rules in your jurisdiction, and where any restrictions in relation to possession are Applicable, you have observed and complied with all such restrictions at your own expense and without liability to DXC and/or the Distributor;
f. you agree and acknowledge that in the case where you wish to purchase any DXC Tokens, the DXC Tokens are not to be construed, interpreted, classified or treated as:
i. any kind of currency other than digital asset; ii. debentures, stocks or shares issued by any person or entity (whether DXC and/or the
Distributor) iii. rights, options or derivatives in respect of such debentures, stocks or shares; iv. rights under a contract for differences or under any other contract the purpose or pretended
purpose of which is to secure a profit or avoid a loss; v. units in a collective investment scheme;
vi. units in a business trust; vii. derivatives of units in a business trust; or
viii. any other security or class of securities. g. you are fully aware of and understand that you are not eligible to purchase any DXC Tokens if you are a
citizen, resident (tax or otherwise) of Algeria, Bangladesh, Bolivia, China, Morocco, Ecuador, Pakistan, Singapore, United States of America;
h. you have a basic degree of understanding of the operation, functionality, usage, storage, transmission mechanisms and other material characteristics of digital assets, blockchain-based software systems, digital asset wallets or other related token storage mechanisms, blockchain technology and smart contract technology;
i. you are fully aware and understand that in the case where you wish to purchase any DXC Tokens, there are risks associated with DXC and the Distributor and their respective business and operations, the DXC Tokens, the DXC Token Initial Token Sale and the DXC Token and Token Wallet (each as referred to in the White Paper);
j. you agree and acknowledge that neither DXC nor the Distributor is liable for any indirect, special, incidental, consequential or other losses of any kind, in tort, contract or otherwise (including but not limited to loss of revenue, income or profits, and loss of use or data), arising out of or in connection with any acceptance of or reliance on this White Paper or any part thereof by you; and
k. all of the above representations and warranties are true, complete, accurate and non-misleading from the time of your access to and/or acceptance of possession this White Paper or such part thereof (as the case may be).
Caution Note on Forward-Looking Statements
All statements contained in this White Paper, statements made in press releases or in any place accessible by the public and oral statements that may be made by DXC and/or the Distributor or their respective directors, executive officers or employees acting on behalf of DXC or the Distributor (as the case may be), that are not statements of historical fact, constitute “forward-looking statements”. Some of these statements can be identified by forward-looking terms such as “aim”, “target”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “if”, “is”, “intend”, “may”, “plan”, “possible”, “probable”, “project”, “should”, “would”, “will” or other similar terms. However, these terms are not the exclusive means of identifying forward-looking statements. All statements regarding DXC and/or the Distributor’s financial position, business strategies, plans and prospects and the prospects of the industry which DXC and/or the Distributor is in are forward-looking statements. These forward-looking statements, including but not limited to statements as to DXC and/or the Distributor’s revenue and profitability, prospects, future plans, other expected industry trends and other matters discussed in this White Paper regarding DXC and/or the Distributor are matters that are not historic facts, but only predictions.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual future results, performance or achievements of DXC and/or the Distributor to be materially different from any future results, performance or achievements expected, expressed or implied by such forward-looking statements. These factors include, amongst others:
a) changes in political, social, economic and stock or digital asset market conditions, and the regulatory environment in the countries in which DXC and/or the Distributor conducts its respective businesses and operations;
b) the risk that DXC and/or the Distributor may be unable or execute or implement their respective business strategies and future plans;
c) changes in interest rates and exchange rates of fiat currencies and digital assets; d) changes in the anticipated growth strategies and expected internal growth of DXC and/or the Distributor;
DXC White Paper Version 2.2.1 pg. 65
e) changes in the availability and fees payable to DXC and/or the Distributor in connection with their respective businesses and operations;
f) changes in the availability and salaries of employees who are required by DXC and/or the Distributor to operate their respective businesses and operations;
g) changes in preferences of customers of DXC and/or the Distributor; h) changes in competitive conditions under which DXC and/or the Distributor operate, and the ability of DXC and/or
the Distributor to compete under such conditions; i) changes in competitive conditions under which DXC and/or the Distributor operate, and the ability of DXC and/or
the Distributor to compete under such conditions; j) war or acts of international or domestic terrorism; k) occurrences of catastrophic events, natural disasters and acts of God that affect the businesses and/or operations
of DXC and/or the Distributor; l) other factors beyond the control of DXC and/or the Distributor; and m) any risk and uncertainties associated with DXC and/or the Distributor and their businesses and operations, the DXC
Token, the DXC Token Initial Token Sale and the Token Wallet (each as referred to in the White Paper).
All forward-looking statements made by or attributable to DXC and/or the Distributor or persons acting on behalf of DXC and/or the Distributor are expressly qualified in their entirety by such factors. Given that risks and uncertainties that may cause the actual future results, performance or achievements of DXC and/ or the Distributor to be materially different from that expected, expressed or implied by the forward-looking statements in this White Paper, undue reliance must not be placed on these statements. These forward-looking statements are Applicable only as of the date of this White Paper.
Neither DXC, the Distributor nor any other person represents, warrants and/or undertakes that the actual future results, performance or achievements of DXC and/or the Distributor will be as discussed in those forward-looking statements. The actual results, performance or achievements of DXC and/or the Distributor may differ materially from those anticipated in these forward-looking statements. Nothing contained in this White Paper is or may be relied upon as a promise, representation or undertaking as to the future performance or policies of DXC and/or the Distributor. Further, DXC and/or the Distributor disclaim any responsibility to update any of those forward-looking statements or publicly announce any revisions to those forward-looking statements to reflect future developments, events or circumstances, even if new information becomes available or other events occur in the future.
Market and Industry Information and No Consent of Other Persons
This White Paper includes market and industry information and forecasts that have been obtained from internal surveys, reports and studies, where Appropriate, as well as market research, publicly available information and industry publications. Such surveys, reports, studies, market research, publicly available information and publications generally state that the information that they contain has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of such included information.
Save for DXC, the Distributor and their respective directors, executive officers and employees, no person has provided his or her consent to the inclusion of his or her name and/or other information attributed or perceived to be attributed to such person in connection therewith in this White Paper and no representation, warranty or undertaking is or purported to be provided as to the accuracy or completeness of such information by such person and such persons shall not be obliged to provide any updates on the same.
Restrictions on Distribution and Dissemination
The distribution or dissemination of this White paper or any part thereof may be prohibited or restricted by the laws, regulatory requirements and rules of any jurisdiction. In the case where any restriction Applies, you are to inform yourself about, and to observe, any restrictions which are Applicable to your possession of this White Paper or such part thereof (as the case may be) at your own expense and without liability to DXC and/or the Distributor. Persons to whom a copy of this White Paper has been distributed or disseminated, provided access to or who otherwise have the White Paper in their possession shall not circulate it to any other persons, reproduce or otherwise distribute this White Paper or any information contained herein for any purpose whatsoever nor permit or cause the same to occur.
No Offer of Securities or Registration
This White Paper does not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities or a solicitation for investment in securities in any jurisdiction. No person is bound to enter into any contract or binding legal commitment and no digital asset or other form of payment is to be accepted on the basis of this White Paper. Any agreement in relation to any sale and purchase of DXC Tokens (as referred to in this White Paper) is to be governed by only the T&C’s of such agreement and no other document. In the event of any inconsistencies between the T&Cs and this White Paper, the former shall prevail. You are not eligible to purchase any DXC Tokens in the DXC Token Initial Token Sale
DXC White Paper Version 2.2.1 pg. 66
(as referred to in this White Paper) if you are a citizen, resident (tax or otherwise) or green card holder of the United States of America or a citizen or resident of the Republic of Singapore. No regulatory authority has examined or Approved of any of the information set out in this White Paper. No such action has been or will be taken under the laws, regulatory requirements or rules of any jurisdiction. The publication, distribution or dissemination of this White Paper does not imply that the Applicable laws, regulatory requirements or rules have been complied with.
Risks and Uncertainties
Prospective purchasers of DXC Tokens (as referred to in this White Paper) should carefully consider and evaluate all risks and uncertainties associated with DXC, the Distributor and their respective businesses and operations, the DXC Token Initial Token Sale and the DXC Token and Token Wallet (each as referred to in the White Paper), all information set out in this White Paper and the T&C’s prior to any purchase of DXC Tokens. If any of such risks and uncertainties develops into actual events, the business, financial condition, results of operations and prospects of DXC and/or the Distributor could be materially and adversely affected. In such cases, you may lose all or part of the value of the DXC Tokens.
DXC White Paper Version 2.2.1 pg. 68
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DXC White Paper Version 2.2.1 pg. 71
Tour of The Cash Back App
The Home Screen
Search: For product, services, or Merchants categories. The App is geo-fenced and will automatically display the nearest merchants to your location.
Gift Cards: Buy discounted gift cards for national brands
Services: Get access to discounted services like travel, insurance, telecommunications and more and receive cash back.
Nearby: Find merchants nearby that give you cash back, loyalty cash, and accept DXC Tokens as payment.
Wallet: Use the Apps advanced banking platform to collect your cash back and loyalty cash which is instantly available after every purchase. The wallet also gives you access to your DXC Tokens for shopping, cashing out and trading. Transfer funds from your wallet to your bank account or pay a friend.
Deals: Receive the latest special member offers from merchants.
My Account: Helps you manage your details, and to achieve our KYC policy so we can deliver maximum benefit to you.
Around Me (Map View)
Use the map view to see merchants and national brands located all over the country that accept DXC Token through The Cash Back App.
Search by Gift Card providers, Stores, or show all locations together.
DXC White Paper Version 2.2.1 pg. 72
Around Me (Proximity View)
Find Merchants listed by proximity to your location. Every TCBA Merchant accepts DXC Tokens for everyday shopping needs. When you make an eligible purchase with these merchants, you earn cash back, loyalty cash instantly as well as DXC Tokens.
Scroll through the list of merchants nearby. Tap the merchant of interest to see detailed information as shown on the screen below.
Shopping - Merchant Details
It’s easy to see how much cash back and loyalty cash you earn for shopping at each merchant by viewing its detail in The Cash Back App. DXC Tokens are earned as a derivation of the cash back earned.
See additional business information and trading hours. Get directions using the mobile maps.
DXC White Paper Version 2.2.1 pg. 73
Gift Cards
Buy discounted eGift Cards with DXC Tokens and wallet cash and receive the gift cards instantly. The list of national brands that accept DXC Token and TCBA wallet funds on The Cash Back App is long and continually grows. Use DXC Tokens to buy petrol, groceries, alcohol and more.
Shopping Community
A key benefit of The Cash Back App is that it allows you to build a network from which you can earn commission. By sharing the App, you create your own Shopping Community.
When friends in your shopping community shop, you earn an affiliate commission. It’s our way of saying ‘thank you’ for referring us to your friends, and for promoting The Cash Back App.
Your friends join your shopping community by signing up with TCBA via your custom share link. The friends who sign up under your link join into your ‘Level 1’. Friends who join TCBA with friends from your first level go under them on your level 2. This is repeated to 5 levels. You earn a percentage of each person’s shopping whenever they are in your 5 levels.
DXC White Paper Version 2.2.1 pg. 74
Existing Wallet (Pre ICO)
Add Funds: Transfer external funds to the wallet.
Withdraw Funds: Transfer funds from the wallet to external accounts.
BPay: This feature is only available in Australia to pay bills online. It will be replaced by the DXC Token link post ICO.
Pay a Friend: Transfer funds to another members wallet instantly at no cost.
Accounts & Cards: Attach a credit or debit card to the App wallet.
Wallet Pin: Set or change the PIN access to the wallet.
My Transactions: View a record of all wallet transactions.
My Loyalty Cash: View the amount of Loyalty credit you have at participating merchants.
Security Statement: View the PCIE compliance and payment statements.
Sharing the App
The planned viral growth of the App is significantly assisted by the inbuilt share function.
Sharing the App is easy which improves the Cycle Time (the time it takes a new member to share the App with others). New members share the App with others for the following reasons:
They want others to benefit They want to build their Shopping Community The want to support a charity or organisation
Johan Wick
Johan Wick Member ID:20
DXC White Paper Version 2.2.1 pg. 75
Updated Wallet (Post ICO)
Post ICO the wallet will be updated to include a new balance to display “My Tokens”, “Token Value” and “DXC Tokens” screen.
My Tokens: Shows the number of Tokens that the member owns either as a result of earning them by shopping or having purchased them during the ICO or from any Exchange.
Token Value: Shows the value of all tokens that the member owns expressed in local country dollar value.
DXC Tokens Tab: Opens the main DXC Tokens screen which provides the member with various indicators and market charts of current and past values of DXC Token in each country of operation. The buy and sell DXC Token function is accessed from this screen.
DXC Token Wallet (Post ICO)
This is the main DXC Token screen which provides various DXC Token indicators including:
The current number of tokens owned The current value of tokens owned DXC Token charts for each country displayed by either: 1 hour, 1 day, 1 week, 1 month, 1year, or All time. The buy DXC Token tab displays all external exchanges where DXC Token can be bought and sold. The sell DXC Token function enables the member to either:
Convert DXC Token to instant cash in their wallet Transfer DXC Token to another member’s wallet Withdraw their DXC Token to sell it on an external exchange
DXC White Paper Version 2.2.1 pg. 76
Token Definitions
What are the attributes of a DXC Token?
• DXC Tokens can be used to purchase goods and services at participating merchants which meets the Utility Token test.
• DXC Tokens increases in value as members shop as commissions are earned which meets the Security Token test. • DXC Tokens are backed by cash which meets the Stablecoin test.
Based on the above DXC Tokens could be classified as a Hybrid Token. DXC/TCBA believes that the DXC Token is an Asset backed Digital Currency. In countries like the USA where DXC Tokens would be considered a Security Token (as per the Howie Test) it cannot be offered for sale during the ICO. This however does not prevent DXC Tokens from being used in the USA. Should DXC/TCBA at a future date seek to raise funds in an ICO for the USA it would first need to obtain SEC approval.
What is a Utility Token?
Utility tokens are simply app coins or user tokens. They enable future access to the products or services offered by a company. Therefore, utility tokens are not created to be an investment.
Just like an electronics dealer might accept orders for a video game that will be released several months later, a start-up can create utility tokens and sell digital coupons for the services or products it is developing.
A good example is Filecoin, which raised $257 million through the sale of tokens. These tokens will allow users access to its decentralized cloud storage platform (Katalyse.io, 2018).
What is a Security Token?
A security token is a digital asset that derives its value from an external asset that can be traded. Therefore, these tokens are subject to federal laws that govern securities. Failure to comply with these regulations could result in severe consequences including penalties and potential derailment of the development of a project.
On the other hand, security tokens can offer a vast array of applications if the start-up abides by all the regulatory requirements. The most promising of these features is the ability to offer tokens as a digital representation of shares of a company’s stock.
For instance, Overstock recently announced that ZERO, one of its portfolio companies, would hold an ICO to fund the creation of a licensed security token trading platform. The ZERO tokens will be issued according to SEC regulations (Katalyse.io, 2018).
Security Tokens or Utility Tokens?
The major difference between security tokens and utility tokens is in the intended use and functionality of the tokens. Security tokens are created as investments. Token holders are given dividends in the form of additional coins every time the company issuing the tokens earns a profit in the market.
Users holding the security token also get ownership of the company. Blockchain offers a platform that can be used to create a voting system that allows investors to exercise control on the company’s decision-making process.
Utility tokens, on the other hand, are not intended to give their holders the ability to control how decisions are made in a company. They merely enable users to interact with a company’s services.
Both security and utility tokens can increase in value if the prices of the tokens appreciate in the market. And since they can both earn some profit, many people may still find it difficult to differentiate them. Here is the Howey test formulated by SEC to enable you to classify a cryptocurrency token as either a security or utility token (Katalyse.io, 2018).
The Howey Test
This test uses two simple questions to differentiate between security tokens and utility tokens:
• Are the token holders allowed to provide funding for the company’s capital and receive a portion of the profits? • Does the fundraising effort of the ICO entail investment in the project where profits are generated entirely from the
effort of individuals other than the creators or founders of the project? The token is likely to be a security token if the answer to any of these two questions is ‘yes’ (Katalyse.io, 2018).
DXC White Paper Version 2.2.1 pg. 77
What is a Stablecoin?
Stablecoin refers to a new class of cryptocurrencies which offer price stability and/or are backed by reserve asset(s). In recent times, stablecoins have gained enough traction as they attempt to offer the best of both world’s – the instant processing and security of payments of cryptocurrencies, and the volatility-free stable valuations of fiat currencies. Stablecoins are unlikely to be adopted by average consumers for everyday retail payments i.e. there is no point to purchasing a token for cash that you use to purchase a morning coffee.
Fiat-collateralized stablecoins
Fiat-collateralized stablecoins maintain a fiat currency reserve, like the U.S. dollar, as collateral to issue a suitable number of cryptocoins. Other forms of collateral can include precious metals like gold or silver, as well as commodities like oil, but most of the present-day fiat-collateralized stablecoins use dollar reserves. Such reserves are maintained by independent custodians and are regularly audited for adherence to the necessary compliance. Tether (USDT) and TrueUSD are popular cryptocoins that have a value equivalent to that of a single U.S. dollar, and are backed by dollar deposits.
Crypto-collateralized stablecoins
Crypto-collateralized stablecoins are backed by other cryptocurrencies. Since the reserve cryptocurrency may also be prone to high volatility, such stablecoins are “over-collateralized” – that is, a larger number of cryptocurrency tokens is maintained as reserve for issuing a lower number of stablecoins. For example, $2,000 worth of ether may be held as reserves for issuing $1,000 worth of crypto-backed stablecoins which accommodates for up to 50 percent of swings in reserve currency (ether). More frequent audits and monitoring add to price stability. Backed by Ethereum, Maker Dao’s DAI is pegged against the U.S. dollar and allows for using a basket of crypto-assets as reserve.
Non-collateralized stablecoins
Non-collateralized stablecoins don’t use any reserve but include a working mechanism, like that of a central bank, to retain a stable price. For instance, the dollar-pegged Basecoin uses a consensus mechanism to increase or decrease the supply of tokens on need basis. Such actions are similar to a central bank printing bank notes to maintain valuations of the fiat currency. It can be achieved by implementing a smart contract on a decentralized platform that can run in an autonomous manner (Seth, 2018).