VELO LEXICONACKNOWLEDGEMENTS - PDF document

1 VELO LEXICONACKNOWLEDGEMENTS Termme�
VELO LEXICONACKNOWLEDGEMENTS Termme�nitionVELO TokenCryptocurrency used in the Velo Protocol FoundationnntityDthatDholdsDVnvODtokensDPVeloDReserveDPoolVDVeloDyollateralDPoolsVDVeloDmepositsRDigital CreditsDigital value units created by posting VELO tokensVelo ProtocolCore Engine of Velo Labs which is comprised of the following:Digital Credit Issuance = Protocol that issues Digital Credit Digital Reserve System = Protocol that manages Velo collateral in order to maintain Digital Credit valueTrusted PartnersPre-vetted business entities that post Velo Tokens in return for Digital CreditRegulatorsyentralDxankVDSecurityDandDnxchangeDyommissionVDMinistryDofDVelo EcosystemNetwork of Trusted Partners and their secondary business/banking/market connections ThanksDtoDtedDMcyalebVDmavidDMazièresVDandDProfessorDRobertDTownsendDfor input and feedback to this paper. IMPORTANT NOTICEThis Document is not a ProspectusThis document does not constitute nor imply a prospectus of any sort. No wording contained herein shouldDbeDconstruedDasDaDsolicitationDforDinvestmentXDwccordinglyVDthisDWhitepaperDdoesDnotDpertainDinDanyDwayDtoDanDofferingDofDsecuritiesDinDanyDjurisdictionDworldwideDwhatsoeverXDNoDregulatoryDauthorityDhasDexaminedDorDapprovedDanyDofDtheDinformationDinDthisDWhitepaperXDRatherVDthisDWhitepaperDconstitutesDaDtechnicalDdescriptionDofDtheDVeloDProtocolVDVeloDtechnologyDorDVnvODtokensDonlyXThis Document is not Advice or an OfferThisDWhitepaperDdoesDnotDconstituteDorDformDpartDofDanyDopinionDonDanyDadviceDtoDsellVDorDanyDsolicitationDof any offer by the distributor/issuer of the VELO tokens to purchase any VELO tokens nor shall it or any partDofDitDnorDtheDfactDofDitsDpresentationDformDtheDbasisDofVDorDbeDreliedDuponDinDconnectionDwithVDanyDcontract or investment decision. No person is bound to enter into any contract or binding legal commitment in relation to the sale and purchase of the VELO t

2 okens and no cryptocurrency or other for
okens and no cryptocurrency or other form of payment is to be accepted on the basis of this Whitepaper. wnyDagreementDasDbetweenDtheDmistributorDandDyouDasDaDpurchaserVDandDinDrelationDtoDanyDsaleDandDpurchaseVDofDVnvODtokensDDisDtoDbeDgovernedDbyDonlyDaDseparateDdocumentDsettingDoutDtheDtermsDandDconditionsDPtheD“TNys”RDofDsuchDagreementXDsnDtheDeventDofDanyDinconsistenciesDbetweenDtheDTNysDandDthisDWhitepaperVDtheDformerDshallDprevailXThisDdocumentDdoesDnotDconstituteDnorDimplyDaD�nalDtechnicalDspeci�cationDofDtheDVeloDProtocolVDVeloDtechnologyDorDVnvODtokensXDsnformationDpresentedDonDthisDwhitepaperVDtechnicalDorDotherwiseVDisDmeantDtoDoutlineDtheDgeneralDideaDofDVeloDProtocolVDVeloDtechnologyDorDVnvODtokensVDtheirDdesignDandDitsDuseWcasesDandDisDsubjectDtoDchangeDwithDorDwithoutDnoticeXDoorDtheDlatestDupWtoWdateDtechnicalDspeci�cationVDcheckDNo Distribution where RestrictedThisDWhitepaperVDanyDpartDthereofDandDanyDcopyDthereofDmustDnotDbeDtakenDorDtransmittedDtoDanyDcountryDwhere distribution or dissemination of this Whitepaper is prohibited or restricted.YouDareDnotDeligibleDtoDpurchaseDVnvODtokensDifDyouDareDaDcitizenVDresidentDPtaxDorDotherwiseRDorDgreenDcardDholderDofDtheDUnitedDStatesDofDwmericaVDareDaDsanctionedDpersonVDorDaDcitizenDinDaDstateDwhichDisDsubjectDtoDOowyDsanctionsDorDtheDowToDrighDRiskDandDOtherDMonitoredDturisdictionsDvistXDToDtheDmaximumDextentDpermittedDbyDtheDapplicableDlawsVDregulationsDandDrulesVDVeloDandYorDitsDa�liatesDandDbusinessDpartnersDshallDnotDbeDliableDforDanyDindirectVDspecialVDincidentalVDconsequentialDorDotherDlossesDofDanyDkindVDinDtortVDcontractDorDotherwiseDPincludingDbutDnotDlimitedDtoDlossDofDrevenueVDincomeDorDpro�tsVDandDlossDofDuseDorDdataRVDarisingDoutDofDorDinDconnectionDwithDanyDacceptanceDofDorDrelianceDonDthisDWhitepaper or any part thereof by you. No representations and warrantiesVeloDandDitsDa�liatesDdoDnotDmak

3 eDorDpurportDtoDmakeVDandDherebyDdisclai
eDorDpurportDtoDmakeVDandDherebyDdisclaimsVDanyDrepresentationVDwarrantyDorDundertakingDinDanyDformDwhatsoeverDtoDanyDentityDorDpersonVDincludingDanyDrepresentationVDwarrantyDorDundertakingDinDrelationDtoDtheDtruthVDaccuracyDandDcompletenessDofDanyDofDtheDinformationDsetDoutDinDthis Whitepaper. SUMMARYVelo aims to create a decentralized settlement network that allows partners to transfer value safely and securely between each other in a timely and transparent way. It uses Stellar to increaseDliquidityDandDtransactionDvolumeVDandDitDhasDaDrobustDfeatureDsetDthatDenablesDTrusted Partners to interact effortlessly with each other and offer services across physical and digitalDbarriersXDTheDVnvODtokenDactsDasDcollateralDtoDensureDsettlementVDrepresentingDtheDvalueDofDdigitalDcreditsDandD�atDdepositsDinDtheDnetworkXDTheDmanyDphasesDofDdevelopmentDareDdesignedDtoDtestVDimproveVDandDperfectDtheDfunctionalityDof the Velo Network while adapting to the changing marketplace and needs of our business partners. Phase 1 will focus on deploying a bullet proof core system that stands against the testDofDactiveVDhighDvolumeDmoneyDtransferDtransactionsDamongDaDlimitedDnumberDofDpartnersXDDPhaseDdDwillDintroduceDaDdecentralizedDcryptoDexchangeDthatDwillDpromoteDliquidityDforDallDdigitalDcreditsDandDVnvODtokenDpairsDandDallowDtheDcommunityDtoDcon�dentlyDgrowXDDPhaseDeDandDfDwillDfocusDonDaddingDnewD�nancialDproductsDthatDcanDserveDtheDunderservedDandDunderbankedDcommunityVDlikeDdecentralizedDlendingXDDThisDstageDofDdevelopmentDwillDalsoDseekDtoDdecentralizeDthe governance of the Velo Protocol as well as build out cash in and cash out points for digital credits and VELO tokens. Velo will build real world use cases for the VELO tokens and digital credits. Through its network of partners Velo has the physical and digital reach to improve the lives of millions ofDunderbankedDandDunderservicedDpeopleDbyDprovidingDfastVDaffordableD�

4 0660069;nancialDservicesVDpoweredDbyDinn
0660069;nancialDservicesVDpoweredDbyDinnovativeDtechnologyVDconnectingDnontraditionalDandDtraditionalD�nancialDinstitutionsDtogetherDintoDaDseamlessDwebXDsnDtheDendVDVeloDseeksDtoDcreateDaDglobalDdecentralized settlement value transfer system that can be used as the backbone of a newparadigmDforDdeliveringD�nancialDservicesDtoDtheDworldXDDD 22 dgrPdnr igafnmtu KEKMtu KEKL The global loyalty management market was valued at in and is expected to reach a value of by The global gift cards market size was valued at in , and is projected to reach by , growing at a CAGR of 15.7% from 2017 to 2023dgrPdnr fVnoglc ePlcVn masVSPmYDXaWn SPlT ePlcVn masV Exhibit 9: Loyalty Points 21 TheDuseDofDaDdigitalDcreditDsystemDmakesDdisbursementsVDrepaymentsVDandDcollectionDimmediateDinDtermsDofDacceptanceDandDveri�cationXDTheDspeedDofDdisbursementDandDveri�cationDalsoDmeansDtheDcapitalDbecomesDmoreDe�cientDandVDthereforeVDcheaperVDprovidingDanDadvantageDfor a lender using the Velo Protocol.wcrossDtheDwsiaDPaci�cDregionDPexcludingDyhinaRVDtheDvolumeDofDconsumerDlendingDinDdaclDwasDwsiaWPaci�cDwlternativeDoinanceDsndustryDReportDdacm) with most of the investorDactivityDbeingDderivedDfromDindividualDinvestorsDPglMRDratherDthanDinstituWDtionalDinvestorsDPfeMRXDwccordingDtoDvendingDplobalDMarketDReportDdacnVDtheDtotalDmarketDcapitalizationDofDcryptocurrencyDlendingDplatformsDisDestimatedDnearlyDUSLmVdaaxDbyDdaddVDillustratingDtheDvastDmarketDopportunityXDThroughDtheDVeloDProtocolDandDVeloDncosystemVDlendingDforDTrustedDPartnersDhasDaDchanceDtoDbeDtransformedVDstreamlinedVDdigitizedDandDmadeDmoreDe�cientDandDcheaper by bypassing traditional banking infrastructure.Loyalty PointsGift cards or cash cards are an alternative form of cash that retailers sell as part of their marketingDstrategyXDpenerallyVDthisDcashDcardDisDboughtDasDaDgiftVDhenceDtheDnameD“giftDcard”XDThe g

5 ift card can be used as cash at the stor
ift card can be used as cash at the store responsible for issuing the card or at its businessDpartnersXDwnotherDalternativeDformDofDcashVDvoyaltyDpointsVDcannotDbeDboughtVDbutDcanDbeDearned through promotions or purchasing activity at the store. Loyalty points are used to retain existingDcustomersDbyDencouragingDthemDtoDcomeDbackDandDspendDpointsDinDexchangeDforDsomeDproducts or services at the store.xothDgiftDcardsDandDloyaltyDpointsDcannotDbeDcashedDoutDandVDinDmostDcasesVDhaveDanDexpiryDdateXDyonsumersDoftenDdoDnotDendDupDusingDtheDcardVDresultingDinDaDwasteDforDtheDpurchaserVDasDwellDasDaDpotentialDlostDopportunityDforDtheDretailerVDasDtheDaverageDgiftDcardDholderDspentDemMDbeyondDthe value of the card.VeloDncosystemDcanDaddressDthisDissueDbyDenablingDaDdigitalDcreditDexchangeDonDaDsecondaryDmarket for gift card and loyalty points that are issued on Velo Protocol. This allows consumers toDfreelyDtradeDtheirDunspentDpointsDtoDothersDwhoDwantDthemVDcreatingDaDmoreDe�cientDmarketD “ASPAC Alternative Finance Industry Report 2018 - KPMG Australia.” 3 Dec. 2018, https://home.kpmg/au/en/home/insights/2018/12/diversifying-growth-asia-pacific-alternative-finance-report.htmlAccessed 12 Jul. 2019. 20 PaymentsyurrentlyVDpaymentsDareDscatteredDthroughoutDaDvastDexpanseDofDmediumsDandDsystemsVDwithDmyriadDendpointsDandDstartDpointsVDcreatingDanDendlessDnumberDofDpermutationsDforDconsumersDandDbusinessesVDandDtheseDoptionsDonlyDcontinueDtoDgrowXDTheDamountDofDdigitalDpaymentsDinDSoutheast Asia was estimated at USD $500B in 2016 WorldDPaymentsDReportDdacmRVDwhileDthe options for sending payment to a business are too numerous to count. The process of coordinatingDandDintegratingDallDtheseDmethodsDfromDpaymentDcon�rmationDtoDsettlementDcanDtakeDdaysDdueDtoDtheDfrictionDexperiencedDatDeachDofDtheDvariousDcounterpartiesDalongDtheDjourneyVDevenDforDtheDmostDwidespreadDglobalDpaymentDserviceDprovidersXThe Velo Ecosystem has t

6 he potential to consolidate the market i
he potential to consolidate the market in Southeast Asia into a widespread payment gateway with digital and physical payment points. This means digital creditsDcanDDbeDDusedDDforDDpaymentDDandDDdirectlyDDsentVDDreceivedVDDandDDsettledDDthroughDDVelo’sDnetwork of Trusted Partners. This also represents an enormous opportunity and use case focused on the unbanked population. The unbanked worker can utilize the virtual or physical agent or e-wallet to make a payment using digital credits outside of the traditional banking system. Velo’s Network of Trusted Partners represents a way to capture this massive �owDbyDallowingDcustomersDtoDmakeDpaymentsDwithDanyDretailerDorDpartnerDviaDtheirDlastDmileDendpointsVDcreatingDaDmassiveDnetworkDofDpaymentDpointsDthatDcanDbeDsettledDdirectlyDwithDpaymentDpartners.SinceDtheDcreditDcrunchDinDdaamVDtheDlendingDmarketDisDundergoingDaDmassiveDshiftDasDtheDbankingDindustryDfacesDcompetitionDandDinnovationDfromDdigitalDbankingVD�nanceDstartupsDandDdisruptorsXDsnDadditionVDthereDareDgreaterDchallengesDtoDaccessD�nancialDloansDviaDconventionalDbanking institutions due to added regulation and tighter credit requirements.TraditionalDbankDlendingVDcreditDscoringDmodelsVDknowWyourWcustomerDpoliciesVDasDwellDasDdisbursementVDrepaymentDandDcollectionDproceduresDareDallDchangingDrapidlyDasDoldDmodelsDareDbeingDreplacedDinDtheDdigitalDworldXDwDblockchainDlendingVDdisbursementVDandDrepaymentDsolutionDstreamlined by stable digital credits would remove the steep barriers for small and medium borrowersXDxyDissuingDaDdigitalDcreditDbalanceDusingDtheDVeloDProtocolVDpeerWtoWpeerDandDsmallDbusinessesDwouldDbeDableDtoDborrowDtoDdigitalDcreditsDmoreDe�cientlyDwithoutDtheDbarriersDofDtheDtraditional banking model.Lending using the Velo Protocol allows for a Trusted partner to receive customer credit and uYyDdataVDthenDprocessDthoseDinputsDinDtheirDownDsystemsDtoDmakeDaDlendingDdecisio

7 nXDwfterDtheDTrustedDPartnerDdecidesDtoD
nXDwfterDtheDTrustedDPartnerDdecidesDtoDlendVDtheyDcanDimmediatelyDdisburseDfundsDthroughDtheDVeloDncosystemVDallDoutsideDtheDtimeDconsumingDrestrictionsDofDtheDexistingDbankingDindustryX “World Payments Report 2018 – World Payments Report.”https://worldpaymentsreport.com/resources/world-payments-report-2018Accessed 12 Jul. 2019. 19 TLd IXVYYCEVXKLX aXDTYMLX WXVILYYSaV DSaV ENgutwmxYlcm LclxamxlfycnMcrdtfmcs WmgoE YOLI mYOLE mPOWmYOLmPOWKeetysxmsi B Xgxxogrgsx Rcogy CLcengsfDTyfgydttn Scxelmsicrtsi SYTwaVSSDXe aODPRDTK IDSEVKPD Rrymrlryp WwunrlmwKmimtywfsrrml Loioftnm B Nsugfs awftxvfwmty Rmlnmw Vytmmfmsi omvymfmxo dgxnggs mYOL csf mPOW WDXaTLXY CVedgXi NDB nXiW NflgiVT LPficVf MVcT SdaaPcT id OVYd LfdidSdY id aXci mNDBCXgifXRliV mNDB id INKEgglV mNDB id NflgiVT LPficVf RYT TSKTIWMPSO VWTLNXX VIWYSNWX CVedgXi NDB nXiW NflgiVT LPficVf MVcT SdaaPcT id OVYd LfdidSdY id aXci mNDBCXgifXRliV mNDB id INKEgglV mNDB id NflgiVT LPficVf RYT TSKTIWMPSO VWTLNXX VIWYSNWX Exhibit 6: MTO onboarding processExhibit 7: Trusted Partner using the digital credits received via th Velo Protocol snDallDcasesVDtheDMTODimprovesDspeedDandDtransparencyDforDallDtheirDtransactionsDbecauseDtheDdigital credits are sent using distributed ledger technology and validated using the Stellar Consensus Protocol.Velo Protocol allows Agents and partners to connect directly and digitally instead of through theDmultipleDlayersDofDtheDcurrentD�nancialDsystemVDsavingDcostsDandDcreatingDmassiveDe�cienciesVDspeedingDupDtheDentireDprocessX MTO Onboarding And Guaranteed Cross Border Settlement Walkthough:An MTO in Thailand has decided to sign up with a Trusted Partner already connected to the VeloDNetworkDbecauseDtheyDwantDtoDenjoyDtheDspeedVDsecurityVDandDlowDcostDofDblockchainDbasedDvalueDtransfersXDDTheyDdepositDaDsmallDamountDofD�atDinDtheDTrustedDPartnersDtrustDbankDaccountXDDThe deposit amount is usually a few days’ worth of t

8 heir average money transfer volume. The
heir average money transfer volume. The Trusted Partner instantly engages the Velo Protocol by posting VELO tokens of the equivalent valueDasDMTO’sD�atDdepositXDsnDreturnVDtheDTrustedDPartnerDreceivesDtheDsameDvalueDofDdigitalDcredits that will be assigned on the blockchain to the MTO’s sub account. The VELO tokens are now locked in a smart contract that links to the settlement of the digital credit in the system. As a result:cXDTheDMTODisDcreditedDaDdigitalDrepresentationDofDtheirD�atDdepositDthatDtheyDcanDuseDto facilitate transactions in the network 2. The MTO can now send and receive money to and from any other MTOs in the Velo Network regardless of locationeXDVnvODtokensDnowDguaranteeDtheDMTODsettlementDofDfundsVDviaDsmartDcontractVDshould the Trusted Partner fail to meet their obligation for end of period settlementfXDTheD�atDdepositDnowDguaranteesDtheDTrustedDPartnerDsettlementDofDfundsVDviaDsmartDcontractVDshouldDtheDMTODfailDtoDmeetDtheirDobligationDforDendDofDperiodDsettlementwnDendDuserDofDtheDMTODwillDnotDseeDtheDVnvODtokensVDtheDsmartDcontractVDtheDblockchainVDorDevenDtheDdigitaDcreditXDDoorDexampleVDifDaDmigrantDworkerDemployedDinDThailandDwantsDtoDsendDmoneyDhomeDtoDyambodiaVDheDorDsheDwillDapproachDanDMTOVDhandDoverDtheD�atVDputDinDtheDdestination details and pay the fees. Whether the MTO is connected to the Velo Network orDnotVDtheDmigrantDworkerDgoesDthroughDtheDsameDstepsXDDoorDtheDmigrantDworkerVDtheDonlyDdifferenceDtheyDwillDexperienceDbyDusingDaDMTODconnectedDtoDtheDVeloDNetworkDisDlessDfeesVDfasterDtransactionDtimesVDandDbroaderDcoverageDforDsendDandDreceiveDdestinationsX 17 TrustedDPartnersDcanDuseDaDdigitalDcreditDissuedDviaDtheDVeloDProtocolDinDmanyDwaysVDincludingDremittanceVDpaymentsVDlendingVDandDloyaltyDpointsVDorDotherDformsDofDvalueDtransferXDTheDfollowingDuseDcasesDpresentDexamplesDofDtheDvalueDtransferDpathwaysDdigitalDcreditsDwillDenableXDDyrossDborder r

9 emittance will be the focus of the Velo
emittance will be the focus of the Velo Network in Phase 1 of development. The other use cases will come into play later in the Velo story. Cross Border RemittanceplobalDremittanceD�owDisDenormousXDsnDdacmVDglobalDremittanceD�owDwasDestimatedDatDLlaax1 TheDWorldDxankVDdacn). Remittance in Southeast Asia (SEA) amounted to $63.9 billion in daciVDwhileDtransferDfeesDgrewDfromDeMDtoDlXcMDoverDtheDsixDyearsDpriorXDTheDhighDtransferDfeesDare partly due to legacy technology in the formal remittance sector as well as limited access to formalDcurrencyDexchangeDmarketsXTraditionallyVDaDMoneyDTransferDOperatorDPMTORDconductsDcrossWborderDtransactionsDusingDaDsingleDserverDtoDrecordDtransactionsDamongDitsDinternationalDsubsidiariesVDgoingDthroughDtraditionalD�nancialDinstitutionsDorDenteringDintoDaDbilateralDagreementDwithDanDMTODinDanotherDcountryXDThisDlimitsDtheDnumberDofDpartnersDMTOsDhaveVDcreatingDaDfragmentedDandDuncompetitiveDmarketVDresultingDinDhighDtransactionDcostsXDTheDVeloDNetworkDallowsDTrustedDPartnersDtoDtransactDwithoutDintermediariesDsinceDVelo’sDnonWpro�tDentityDandDtheDVeloDNetwork’s Digital Reserve System (DRS) operates under pre-set committed rules that ensuresDVnvODtokenDcollateralDbackDeveryD�atDdepositDandDdigitalDcreditXDVeloVDthusVDcreatesDmoreDe�cientD�nancialDinfrastructureDthatDwillDhelpDourDpartnersDandDconsumersDsendDmoneyDusingDdigital assets cheaper and faster.There are two ways MTOs can use the Velo Protocol to participate in the Velo Ecosystem toDconductDtheirDbusinessoDeitherDbyDbeingDaDTrustedDPartnerVDorDelseDbyDworkingDthroughDaDTrustedDPartnerXDsnitiallyVDsmallerDMTOsDcanDsignDupDwithDanDexistingDTrustedDPartnerDwhoDisDalreadyDinDtheDVeloDncosystemXDUsingDthisDgatewayDallowsDtheDMTODtoDenjoyDtheDbene�tsDofDtheDVeloDncosystemVDDnamelyDDtheDDexpansionDDofDDtheirDDremittanceDDcorridorDDpossibilitiesDDwithoutDDDtheDcorre

10 spondingDincreaseDofDworkingDcapitalDtha
spondingDincreaseDofDworkingDcapitalDthatDwouldDbeDrequiredDinDorderDtoDdepositD�atDinDevery country they want to transfer money.wlternativelyVDanDMTODappliesDtoDbecomeDaDTrustedDPartnerDbyDsubjectingDitselfDtoDaDthoroughDvettingDprocessXDOnceDapprovedVDtheDMTOVDnowDaDTrustedDPartnerVDthenDcanDacceptDsmallerDMTOsD�atDdepositsDandDuseDVnvODtokensDthroughDtheDVeloDProtocolDtoDgetDissuedDdigitalDcreditsDinDtheDformDofDtheirDlocalD�atDcurrencyXDDTheDTrustedDPartnerDMTODwillDthenDbeDissuedDanDequivalentDvalue of digital credit that they can send to other Trusted Partners or other MTOs that are also linked to the Velo Ecosystem. "Record High Remittances Sent Globally in 2018 - World Bank ...." https://www.worldbank.org/en/news/press-release/2019/04/08/record-high-remittances-sent-globally-in-2018Accessed 12 Jul. 2019. Trusted Partners with a longer transaction history and better reputation within the system can haveDaDlargerDcreditDlineDtoDmintDaDdigitalDcreditXDTheDspeci�cDcreditDlineDcomputationDisDleftDforDfuture work.Trusted Partners can also redeem their digital asset for VELO tokens using the ‘Redeem’ methodXDThisDmethodDcausesDtheDTrustedDPartner’sDdigitalDcreditDbalanceDtoDdecreaseVDandDrelease VELO tokens.oinallyVDtheDTrustedDPartnersDcanDmoveDVnvODtokensDfromDaDsmartDcontractDchainDtoDStellarDchainDthrough the ‘Warp’ protocol. Summary of operations Getting Velo Token-Fiat Exchange RatessnDorderDtoDacceptDcreditDcreationDandDredemptionVDtheDmRSSyDmustDtrackDanDaccurateDestimateDofDtheDVeloDTokenW�atDexchangeDratesXDTheDmRSSyDwillDutilizeDtheDoracleDprotocolVDsuchDasDDProvableVDetcVDonDaDsmartDcontractDchainDtoDgetDVeloDTokenW�atDexchangeDratesDonceDthereDareDcreditDcreationVDredemptionVDandDrebalancingDeventsX MethodEffectsmigitalDyreditDisDmintedVDtheDVeloDTokensDholdsDbyDTrusted Partner on a smart contract chain decreased.RedeemmigitalDyreditDisDdecre

11 asedVDtheDVeloDTokensDholdsDby Trusted P
asedVDtheDVeloDTokensDholdsDby Trusted Partner on a smart contract chain increased. TheD‘Warp’DprotocolDusesDStellar’sDrashDTimelockDyontractDPrTvyRDtoDimplementDcrossDchainDswapsDbetweenDStellarDandDaDsmartDcontractDchainXDOnDaDsmartDcontractDchainVDaDsmartDcontractDfor managing the cross chain asset needs to be deployed in order to support moving the Stellar asset to a smart contract chain. The smart contract for managing the cross chain asset needs to implement the following interface:wfterDtheD‘Warp’DprotocolDhasDlockedDVnvODtokensDonDtheDStellarDchainVDtheD‘Warp’DprotocolDwillDthen mint VELO tokens on the smart contract chain and lock it with the hash(secret) given by a Trusted Partner.vaterDonVDtheDTrustedDPartnerDmustDcallDtheD‘ylaim’DmethodDwithDtheDsecretDinDorderDtoDclaimDVnvODtokensDonDaDsmartDcontractDchainXDSubsequentlyVDtheDTrustedDPartnerDcanDlockDtheirDVnvODtokensDin the smart contract chain with the DRS contract in order to mintMinting Digital CreditsThe Digital Reserve System provides the following interface:OnceDaDTrustedDPartnerDhasDdepositedDVnvODtokensDtoDaDsmartDcontractDchainVDaDTrustedDPartnerDcanD“lock”DitsDVnvODtokensDupDinDexchangeDforDdigitalDcreditsDDbyDcallingD‘Mint’DDmethodDonDtheDDigital Reserve System Smart Contract (DRSSC). The Digital Reserve System uses the digital creditY�atDconversionDratesDinDaDsmartDcontractDinDorderDtoDstabilizeDtheDpriceDasDaDparameterXDLater on the DRSSC will log the event into a smart contract chain. 14 Mvtteui Srul dlf Vvwyes Ywmxyli Vewyulwx Onwo dewyVwvyvgvs Xtewy Mvuywegy MoeruB clsv axlw Ruylwmegl Pegrsryeyvw TwegslNrnryes Wlxlwnl XoxyltWlymyeyrvu XoxyltOmrnoWV lRmogWmn cgcocRoW omRgnRTocig scR rnWm cgoWmXRTWIgcocRoW TminnBTaRcg omRgnXWm omRgnRTocigLcgo C Srmg oidWgn ig R nfRmo TigomRTo Esmt PRml lmioiTieKiTd C rgeiTd RnnWon cg R TrnoiVcRg freocBncYgRormW RVVmWnnLigcoim RnnWo WsWgo TmWVcon ig EMRV DXVaVKVR PY LMYPOTML aV YcWWVXa dIXPVcY Y

12 SIXa KVTaXIKa WRIaNVXS PTKRcLPTO CdXeTMa
SIXa KVTaXIKa WRIaNVXS PTKRcLPTO CdXeTMa YSIXa KVTaXIKa WRIaNVXS Exhibit 5: Process Flow for Warp Protocol VnvODtokensDandDtheDdigitalDcreditsDareDordinaryDStellarDassetsVDsubjectedDtoDallDtheDrulesDandDsemantics of all Stellar assets. Stellar provides a solid foundation for maintaining a robust ledger ofDaccountDbalancesXDroweverVDStellarDdoesDnotDsupportDtheDcomplexDsmartDcontractDsemanticsDnecessaryDtoDbuildDtheDentireDVeloDProtocolDonDtopDofDitVDhenceVDtheDsmartDcontractsDcanDbeDbuiltDusingDanyDsmartDcontractDplatformDsuchDasDnthereumVDTendermintVDorDnvrynetDWDanDintelligentD�nancialDserviceDplatformXVeloDProtocolDwillDutilizeDaDcrossWchainDprotocolDcalledD‘Warp’VDcoWdevelopedDwithDnvrynetVDtoDprovideDaDbridgeDbetweenDtwoDdifferentDblockchainsVDStellarDxlockchainVDdesignedDforDrealWtimeVDreliableDdigitalDassetsDmovementDandDaDSmartDyontractDyhainVDwhichDprovidesDtheDabilityDtoDdeployDandDexecuteDsmartDcontractsDinDorderDtoDbuildDtheDmigitalDReserveDSystemXnxhibitDgDshowsDtheDoverallDprocessD�owDforDtheDWarpDProtocolMoving the Stellar Asset to a Smart Contract ChainToDmintDdigitalDcreditsDthroughDtheDVeloDProtocolVDVeloDTokenDasDanDordinaryDStellarDassetDmustD�rstDbeDtransferredDtoDaDsmartDcontractDchainDinDorderDtoDlockDVnvODtokensDonDmRSDasDcollateralDfor the digital credit.Velo uses ‘Warp’ protocol to move VELO tokens from the Stellar chain to a smart contract chain. TrustedDPartnersDwillDinteractDwithD‘Warp’DthroughDaDcommandDlineWtoolVDwPsVDorDwebDportalXDWhileDfrontendsDwillDbeDconnectedDtoDtheD‘Warp’DprotocolVDtheyDareDalsoDconnectedDtoDaDsmartDcontractDchain to facilitate Trusted Partner interaction with the DRS smart contract.VeloDconsistsDofDaDcollectionDofDprotocolsDandDsoftwareDobjectsDthatDmakeDupDtheDcomponentsDdescribed so far in this paper. It pulls inspiration from various blockchains and software systems to achieve its goals. OverviewVeloDisDaDsetDofDsmartDcontractsDwh

13 ichDareDusedDtoDissueDdigitalDcreditDonD
ichDareDusedDtoDissueDdigitalDcreditDonDanDextensionDofDtheDStellar network called EvryNet that supports smart contract functionality. The VELO token is issuedDonDtheDStellarDblockchainDnetworkVDwhichDisDusedDforDVnvODtoken’sDtransactionDsettlementDand clearance.ARCHITECTURE votingDmechanismDrunDbyDDanDDindependentDooundationVDwillDbeDresponsibleDforDadjustingDtheDrulesDimplementedDbyDtheDmRSXDPerhapsDallDVeloDTokenDholdersVDwhoDwillDbeDimpactedDunderDanyDappliedDchangesDtoDtheDmRSVDwillDbeDaskedDtoDvoteDonDrulesDandDpoliciesXDTheDpolicyDchangesDcouldDincludeDcapsDonDdigitalDcreditDissuanceVDsettingDofDlendingDratesVDsettingDofDborrowingDratesVDaddingDfunctionalityDtoDtheDmRSVDandDtheDspeci�csDofDVeloDcollateralDpoolDrebalanceDoperationsXDTheDspeci�cDvotingDmechanismDfor the governing council has yet to be determined.veveragingDproprietaryDdataDgatheredDoverDtimeVDtheDVeloDProtocolDaimsDtoDprovideDdataDanalyticsDinDrealDtimeVDandDtoDtailorDitsDoperationsDtoDdeliverDcreditDscoringDtoolsDtoDrateDTrustedDPartnersXDwfterDanDextensiveDhistoryDofDbeingDaD“goodDactor”DandDaDvaluedDpartDofDtheDVeloDncosystemVDaDTrustedDPartnerDwouldDobtainDaDrighDReputationDScoreXDObtainingDthisDstatusDwould unlock the ability to borrow VELO tokens from Velo Labs as part of the process to obtain digital credits. Negative effects associated with defaulting on payment of fees on borrowed tokensDwouldDbeDre�ectedDinDaDvowDReputationDScoreVDresultingDinDlimitedDaccessDtoDtheDVeloDncosystemXDPenaltiesDandD�nesDcouldDalsoDapplyXA Network of Fiat to Digital Asset On/Off Ramps In order to fully realize the vision of Velo as a decentralized settlement network that allows partners to safely and securely transfer value between each other in a timely and transparentDwayVDVeloDwillDseekDoutDpartnersDthatDallowDforDexchangeDbetweenD�atDandDdigitalDassetsVDincludingDtheDVnvODtokenXDxyDbuildingDanDextensiveDglobalDnetworkDo

14 fDdigitalDbanksDandDregulatedDcryptocurr
fDdigitalDbanksDandDregulatedDcryptocurrencyDbrokersDandDexchangesVDtheDVeloDNetworkDcanDensureDthatDtheDVnvODtokenDisDcollateralDthatDhasDrealDworldDvalueDandDguaranteesDcashDsettlementVDshouldDtheDneedDarise. The Velo team is in the process of actively engaging with potential partners to make the goalDofDdecentralizedDsettlementDnetworkDwithD�atDoffDrampDcapabilityDaDrealityX PHASE 2Velo Decentralized Crypto Exchange and OTCTo promote liquidity in VELO and involve more participation in the Velo Ecosystem from bothDnewDandDexistingDpartnersVDVeloDplansDtoDbuildDitsDownDdecentralizedDexchangePmnXRDforDtheDexchangeDofDVeloDtradingDpairsDonlyXDTheDexchangeDwillDdisplayDanDorderDbookDfor VELO tokens and digital credit pairs stacked with liquidity from a collection of participants. All members will require being vetted by Velo to be reliable liquidity providersDbeforeDbeingDallowedDtoDjoinXDParticipantsDwillDbeDdedicatedDmarketDmakingD�rmsVDTrustedDPartnersDthatDwantDtoDoptimizeDtheDuseDofDtheirDdigitalDcreditsDandDVnvODholdingsVDdigitalDassetDmanagementD�rmsVDdigitalDbanksVDandDotherDexchangesDthatDmeetDtheDrequirements of Velo. Velo will operate an OTC service through the Velo Crypto nxchangeVDhelpingDtoDaddDcriticalDliquidityDinDtheD�rstDyearDofDoperationsXDTheDpurposeDofDtheDmnXDwillDbeDtoDprovideDaDrobustDmarketplaceDtoDexchangeDVnvODforDdigitalDcreditsDandDotherDdigitalDassetsXDWithDmoreDliquidityDandDtradingDvolumeVDspreadsDbetweenDdigitalDcreditDpairsDwillDnarrowDandDtheDentireDvalueDtransferDsystemDwillDbecomeDmoreDe�cientXDVeloDisDcurrentlyDexploringDwithDitsDlegalDadvisorsDtheDlicencesDandDregulatoryDapprovalsDrequiredDforDitDtoDconductDsuchDservicesDinDdifferentDjurisdictionsXPHASE 3 and 4Decentralized Lending of Digital CreditsThe holy grail of traditional banking disintermediation is decentralized peer to peer lending. wlthoughDthisDbringsDaDhostDofDregulatoryDchallengesVDVe

15 loDfeelsDthatDcreatingDaDdecentralizedDl
loDfeelsDthatDcreatingDaDdecentralizedDlending operation between businesses is a more immediately viable goal. The very same mechanismsDusedDinDmoneyDtransferDcanDbeDadjustedDtoDallowDdigitalDcreditsDtoDbeDlentDbetweenDTrustedDPartnersXDDwgainVDdigitalDcreditsDwouldDrepresentDrealDworldD�atDdepositsDinDtheDnetwork and also be backed by VELO token collateral. TheDbene�tDofDusingDVeloDNetworkDwouldDbeDinDreceivingDdynamicDlendingDratesDthatDadjustDtoDsupply and demand for digital credit loans. Pricing would be transparent and representative ofDrealWworldDdemandDfromDbusinessDpartnersXDDsnDPhaseDeVDonceDtheDVeloDNetworkDhasDprovenDitselfDasDaDsafeVDfastVDandDcheapDmethodDofDvalueDtransferVDdevelopmentDwillDmoveDtoDcreateDaDdemocratic and fair decentralized business to business lending network as well. Voting on Changes to the Velo ProtocolsnitiallyVDtheDrulesDofDtheDmRSDwillDbeDsetDbyDVeloDvab’sDdevelopersDtoDensureDsmoothDoperation of the nascent Velo Protocol as the network gathers users and liquidity. As the Velo ncosystemDgrowsDandDtheDdistributionDofDVeloDTokenDholdersDbecomesDmoreDdecentralizedVDaD 2.2.3 The Foundation and Third-Party Oversight of the Velo ProtocolOnce Velo Labs generates VELO tokens they will be transferred to an independent Foundation to ensure transparency and proper governance. The Foundation will be responsible for monitoring the function of the Velo Protocol. This will include the Digital yreditDsssuanceDmechanismVDtheDmigitalDReserveDSystemVDandDtheDbalancesDandD�owsDofDtheDReserveDPoolVDyollateralDPoolsVDandDotherDVnvODtokenDpoolsDthatDrelateDtoDyommunityDandDStrategicDmevelopmentXDDsnDadditionVDtheDooundationDwillDhireDaDerdDpartyDtoDauditDallDaspectsDofDtheDVeloDProtocolVDfromDcodeDfunctionVDtokenDbalancesVDandDgeneralDoperationsXDDTheDVeloDTeamDhopesDthisDlevelDofDdisclosureDwillDgiveDcon�denceDtoDmarketDparticipantsDand Trusted Partners as well. Details on the Fou

16 ndation will be forthcoming later. Vgi g
ndation will be forthcoming later. Vgi gWSRaRdTW cWTXRdYic loxun gusurvu fooyloxun Toyyrturry fooy CNK nWae loxuns CLNK nWae loxuns nWae loxun P BL nWae loxun P BM nWae loxun P BKINK nWae loxun prwsu LKK nWae loxuns o BL nWae loxun prwsu NK nWae loxuns o BM nWae loxun prwsu MKK nWae loxuns o BKIN nWae loxun prwsu BLKK ov Vwywtry Trutwt BLKK ov Vwywtry Trutwt BLKK ov Vwywtry Trutwt nWae loxuns nWae loxuns nWae loxuns lrustut frrtnur MKR DWMNO Tngcmxt osfYc dnct vo un E VSL MKR EWMNO Tngcmxt osfYc dnct anwm un DCI VSL MKR CMaXamSd LiWVam NllnSfTW Vgi imrrt TontrrstTn lXfmuXfm X KniiXucsXi Pnni yXivc crvXi un uec afdfuXi Yscafu yXivcB LRS wfii egoW IB mgcWfl mg mYW PWlWioW OggdTn lXfmuXfm X KniiXucsXi Pnni yXivc crvXi un uec afdfuXi Yscafu yXivcB LRS wfii lnyc CIB mgcWfl mg mYW LgddSmWiSd Oggd Exhibit 4 : DRS Rebalance Mechanism Toyyrturry fooy nryuu ov miV LKK vrom LKDKKK nWae loxuns vrom LKDKNK nWae loxuns 2.2.1 Reserve PoolWithin the Digital Reserve System construct is a Reserve Pool of VELO tokens held by the Foundation. The DRS can use the VELO tokens held in the Reserve Pool to manageDtheDvalueDofDtheDcollateralDbackingDdigitalDcreditsDandD�atDdepositsXDThisDmanagementDwillDensure that settlement of credits in the Velo Network is guaranteed. The DRS will also track the Reserve Pool to Collateral Pool ratio to ensure that the rebalancing mechanism operates in the mostDe�cientDmannerDwithinDprescribedDriskDlimitsXDsnitialDstressDtestingDofDtheDsystemDidenti�edDthe highest stress scenario as one where digital credit issuance increases greatly while VELO priceDsharplyDdeclinesXDwsDtheDsystemDisDcurrentlyDdesignedVDthisDcombinationDisDhighlyDunlikelyDas a large spike in digital credit issuance should create market demand for the VELO token andDincreaseDitsDpriceXDsnDanyDeventVDtheDmRSDwillDincludeDriskDparametersDandDlimitsDaroundDaDminimum Reserve Pool to Collateral Pool ratio coupled with actio

17 nable contingency plans that secure the
nable contingency plans that secure the system’s operation.2.2.2 Maintaining Velo Collateral Pools’ Value Link with Digital Credit and Fiat Deposits The Digital Reserve System will algorithmically rebalance the VELO token Collateral Pools backing the issued digital credit to maintain a 1:1 value link between the digital credit and the VnvODtokenDandDtheDoriginalD�atDdepositXDWhenDaDTrustedDPartnerDreceivedDaD�atDdepositDfromDaDendDuserVDtheyDthenDengageDtheDVeloDProtocolDtoDgenerateDaDdigitalDcreditDbyDpostingDandDlockingDan equivalent value of VELO tokens via the Velo Protocol. The DRS then tracks these pooled tokens by assigning them to a collateral pool that is linked with the digital credit issued and adjustingDtheDamountDofDtokensDinDtheDpoolDatDanyDgivenDtimeDtoDmaintainDtheDvalueDatDinitialDwtDtheDtimeDofDcreationVDtheDvalueDofDtheDdigitalDcreditDequalsDtheDvalueDofDVnvODtokensDdepositedDasDwellDasDtheD�atDoriginalDdepositedDwithDtheDTrustedDPartnerXDwfterDthisDperiodVDhoweverVDtheDpriceDofDVnvODtokensDwillDnaturallyD�uctuateDonDtheDopenDmarketDasDaDfunctionDofDsupplyDandDdemandXDsnDresponseVDtheDmRSDwillDautomaticallyDrebalanceDtheDamountDofDVnvODtokensDinDtheDyollateral Pool to maintain the 1:1 value link with the value of digital credits created. If the price of VnvODtokensDgoesDupVDthenDVnvODtokensDwillDbeDremovedDfromDtheDyollateralDPoolDandDreturnedDto the Reserve Pool. This action reduces the number of tokens in the Collateral Pool to maintain 1:1 link between collateral value and digital credit value. If the price of Velo Token goes down relativeDtoDtheDdigitalDcreditVDthenDtheDmRSDwillDaddDVnvODtokensDtoDtheDyollateralDPoolDfromDtheDReserveDPoolVDtoDmaintainDtheDvalueDlinkDofDcollateralDvalueDandDdigitalDcreditDvalueXwnDOracleDsystemDthatDintelligentlyD�ltersDspeci�cDpricingDsourcesDwillDdetermineDVeloDpriceDforDrebalancing and its methodology will be p

18 ublished to the community prior to use t
ublished to the community prior to use to maintain transparency. Contingency plans will be in place to account for severe market dislocations and trading halts where a price is not available. Digital Reserve SystemTheDotherDkeyDcomponentDofDtheD�rstDversionDofDtheDVeloDProtocolDisDtheDmigitalDReserveDSystemVDwhich is an algorithmic rule set applied via smart contract that manages the Reserve Pool and theDindividualDyollateralDPoolsDbackingDeachDissuanceDofDdigitalDcreditXDsnDlaterDdevelopmentVDtheDDRS will also manage the lending of VELO tokens to Trusted Partners. TheDgoalDofDtheDmRSDisDtoDachieveDe�cientDtokenDsupplyDmanagementDwhileDensuringDdigital credits are backed by the proper amount of collateral and are tied to the value on initialD�atDdepositsXDDTheDmRSDisDcomprisedDofDaDrebalanceDmechanismDthatDworksDbetweenDtheDDDReserveDPoolDandDyollateralDPoolsDbackingDdigitalDcreditDandD�atDdepositsDbyDadjustingDVnvODtoken numbers based on VELO token price so at any given time the locked VELO collateral is of equivalent value to the digital credits. OILIPEMRa WR BDTXNVI YIORTKNP Sngamt VXrvftfufnm osnXattatIfdfuVi EsaYfu MttvVmXa osnXattatDvy csnl KxXeVmda Sea LnvmYVufnm dsVmut TKNP Sngamt cns OVsgau Iayainolamu BsVsaC Dnssnwt csnl Sea LnvmYVufnmuea LnvmYVufnm dsVmut YIOR Wrmfot cns OVsgau Iayainolamu SsvtuaY RVsumas W BB DCYIOR Wrmfot csnl Sea LnvmYVufnm SsvtuaY RVsumas ontut YIOR WrmfotVt XniiVuasVi yfV Tain RsnunXni Tain RsnunXni fttvat IfdfuVi EsaYfu un SsvtuaY RVsumastYfnr BIEKECEDKrvoeculro SsvtuaY RVsumas Wvyt YIOR Wrmfot csnl KxXeVmda Iydicogf WsvtufeScsuofst Exhibit 3 : Velo Protocol borrowDdigitalDcreditXDDTheDprevalenceDofDhighDdigitalDcreditD�owDatDthisDstageDwillDallowDVeloDtoDbuild smart lending functionality that connects participants to each other in a reliable and safe wayXDDwdditionallyVDPhaseDeDwillDalsoDincludeDtheDintroductionDofDaDmechanismDtoDletDtheDcommunityD

19 voteDonDcertainDparametersDofDtheDVeloDP
voteDonDcertainDparametersDofDtheDVeloDProtocolVDthatDwillDincludeDPbutDisDnotDlimitedDtoRDtheDadditionDofDnewDfunctionsVDtypesDofDassetsVDandDlendingDratesXDDDTheDspeci�cDdetailsDofDthisDmechanismDareDstillDbeingDdiscussedXDDDPhaseDeDisDplannedDtoDbeDcompletedDbyDQcDdaddXsnDPhaseDfVDVeloDwillDaddDinDaDReputationDSystemDforDpartnersDthatDwillDevaluateDhistoricalDuseDofDtheDProtocolDandDtheDVeloDncosystemDandDallowDfavorableDtermsDforDdigitalDcreditDissuanceVDlendingVDandDaccessDtoDcertainDfeaturesXDPhaseDfDwillDinvolveDtheDbuildingDofDaDworldwideDnetworkDofD�atVDdigitalDcreditVDandDVnvODtokenDonDandDoffDrampsXDDThisDstepDwillDusherDinDrealDworldDliquidityDandDinteroperabilityDforDallDTrustedDPartnersDandDendDusersXDDPhaseDfDshouldDbeDcompleteDbyDQeDTogetherVDallDtheseDcomponentsDwillDallowDTrustedDPartnersDtoDtapDintoDtheDreachVDoperationalDe�ciencyVDandDtransparencyDofDtheDVeloDProtocolDandDitsDunderlyingDdistributedDledgerDtechnology. The Velo Protocol enables multiple business use cases that are all based on its coreDfunctionoDissuingDdigitalDcreditsDthatDareDtiedDtoD�atDdepositsDandDbackedDbyDVnvODtokenDcollateral and that can be used for frictionless value transfer with guaranteed settlement.PHASE 1Digital Credit Issuance TheDmigitalDyreditDsssuanceDmechanismDallowsDanyDvettedDbusinessDPiXeXVDTrustedDPartnerRDonDthe network to receive digital credits by posting VELO tokens to the Velo Protocol. The Trusted Partner does this to enable trustless settlement of the digital credits in the system. The Velo ProtocolDlocksDtheDVnvODtokensDinDaDsmartDcontractDthatDisDtiedDtoDaD�atDdepositDheldDbyDtheDTrustedDPartnerDasDwellDasDtheDdigitalDcreditsXDDThisDeWlegDcontractDensuresD�nalDsettlementDofDdigitalDcreditsDthroughoutDtheDVeloDNetworkDandDtiesDtheDVnvODcollateralDtoDbothDtheD�atDdepositDand the digital credit.The Velo Protocol diagram below show the way the Digi

20 tal Credit Issuance will work. The Foun
tal Credit Issuance will work. The Foundation is the independent entity that holds all non-circulating VELO tokens and oversees operation of the Velo Protocol. VELO tokens act as collateral to the digital credit and are managed by the Digital Reserve System (DRS). The Trusted Partner buys the VELO tokens from the market as needed or borrows the VELO tokens from the Foundation for a fee. These methodsDforDobtainingDVnvODtokensDareDdemonstratedDinDexhibitDeX 1.2.3 Underlying Distributed Ledger TechnologyTheDVeloDProtocolDisDtheD�nancialDinfrastructureDthatDissuesDdigitalDcreditsDbasedDonDdistributed ledger technology (DLT). DLT creates a decentralized system for trust and transactionDvalidationDusingDconsensusVDwherebyDmultipleDnodesDagreeDonDaDproposedDtransaction and then update the ledger held by each node. Transactions in the Velo Ecosystem will be validated by implementing the proven Stellar Consensus Protocol.Development of the Velo Protocol will be rolled out in phases. Each phase will add critical functionality to meet the needs of the Velo Network and its partners as it grows. New features will focus on improving liquidity of digital credits and VELO tokens and adding structuralD�exibilityDtoDprovideDnewDtypesDofDservicesDandDimproveDtheDpartnerDexperienceXDWe believe this phased approach allows Velo to conduct real world testing and improvement to theDVeloDProtocolDwhileDincorporatingDfeedbackDfromDusersDinDaDtransparentDwayXDDDOverDtimeVDweDwill continually make the Velo Ecosystem more robust and the Velo Network more usable and secure.snDPhaseDcVDslatedDtoDbeDfullyDlaunchedDatDtheDendDofDQcDdadcVDtheDVeloDProtocolDwillDconsistDof two main components: a Digital Credit Issuance mechanism and the basic version of the migitalDReserveDSystemXDDmuringDPhaseDcDoperationsVDweDenvisionDhavingDonlyDaDfewDTrustedDPartnersDoperatingDinDtheDremittanceDandDmoneyDtransferDspaceXDDDmuringDthisDphaseVDVnvODtokensDwillDhaveDal

21 readyDbeenDlistedDonDmultipleDexchangesD
readyDbeenDlistedDonDmultipleDexchangesDandDbothDtheDmigitalDyreditDsssuanceDmechanism and DRS and its algorithmic rebalancing operations will be fully tested under active use. An independent foundation will be responsible will be responsible for overseeing the Velo ProtocolDandDtheyDwillDhireDaDerdDpartyDtoDaddDanotherDlayerDofDoversightVDsoDallDparticipantsDareDcon�dentDinDtheDVeloDProtocol’sDoperationDfromDtheD�rstDdayXDsnDPhaseDdVDtheDplansDareDtoDaddDaDmecentralizedDVeloDyryptoDnxchangeDthatDwillDhelpDfacilitateDdeepDcrossDassetDliquidityDforDVnvODtokensDandDdigitalDcreditsXDDnventuallyVDtheDexchangeDmayDopen to trading other digital assets. The OTC service will be operated through through the Velo yryptoDnxchangeVDhelpingDtoDaddDcriticalDliquidityDinDtheD�rstDyearDofDoperationsXDDOtherDpartnersDmayDalsoDbeDinvitedDatDthisDpointDtoDparticipateDasDliquidityDprovidersDonDtheDexchangeXDDDmeepDliquidityDwillDpromoteDhigherDtransactionDvolumesVDtightDspreadsVDandDmassiveDuserDadoptionXDDPhaseDdDisDplannedDtoDbeDcompletedDandDrunningDbyDtheDendDofDQeDdadcVDifDnotDearlierXsnDPhaseDeVDonceDtheDVeloDncosystemDisDfullDofDTrustedDPartnersVDeachDwithDmanyDactivelyengagedDusersVDVeloDwillDlookDtoDofferDdecentralizedDlendingDsolutionsDforDthoseDwhoDwantDtoDCOMPONENTS OF THE VELO PROTOCOL AND HOW IT WORKS Many cryptocurrencies are limited for payments due to their latency and the time-consuming consensus process which prevents the currency from being able to process high transaction volumesXDmueDtoDtheseDlimitationsVDcryptocurrenciesDhaveDyetDtoDposeDaDrealDthreatDtoDtheDleadingincumbentsDinDtheDpaymentDspaceXDWhenDcomparedDtoDtheDperformanceDofDtheDSWsoTDnetworkVDcryptocurrencies offer a viable means for much faster point-to-point transfer of money between entitiesVDbeDitDbusinessesDorDindividualsXDTransactionsDofDtheseDtypesDcanDcommonlyDtakeDupDtoDtwoDtoDthreeDbusinessDdaysDtoDsettleVDwhereasDtheDleadingDblockchainD

22 technologiesDareDableDtoDdo this instant
technologiesDareDableDtoDdo this instantly depending on the platform deployed.The reason Stellar was chosen as the technology for issuance of the VELO token is because itDisDoneDofDtheDfastestVDcheapestVDmostDe�cientVDandDsecureDblockchainsDinDtheDmarketXDWhenDlookingDatDtheDmajorDblockchainsVDxitcoinDisDonlyDableDtoDprocessDeWfDtransactionsDperDsecondDandDnthereumDdaDtransactionsDperDsecondXDoromDaDtransactionDcostDperspectiveVDnthereumDand Bitcoin are cost prohibitive for small payments due to high network activity. The Stellar blockchainDcanDcompleteDcaaaDtransactionsDperDsecondVDwhichDisDespeciallyDsuitableDforD�nancialDscenariosDsuchDasDremittancesDandDpaymentsXWhenDcomparedDwithDRippleVDwhichDhasDaDfewDtechnicalDsimilaritiesDtoDStellarVDthereDareDseveralDkeyDdifferencesDworthDhighlightingXDDDStellarDenjoysDequallyDfastDperformanceDwithDaDslightlyDcheaperDtransactionDcostsXDwdditionallyVDStellarDitDisDmoreDeasilyDscalableVDandDisDaDuniquelyDsustainableDplatformDforDdecentralizedD�nancialDproductsDandDservicesXDwnotherDmajorDdifferenceDbetweenDStellarDandDRippleVDhoweverVDisDinDtheDbusinessDethosDofDtheDtwoDcompaniesoDRipple is focused on the improvement of traditional banking corridors with an aim to replace SWsoTVDwhereasDStellarDisDdirectlyDalignedDwithDtheDprovisionDofDbroaderD�nancialDservicesDtoDtheDunbanked/underbanked market segment. Stellar also has the lowest eco-footprint of any of the blockchain providers which keeps operating and environmental costs at a minimum.wsDaDresultVDStellarDwasDtheDbestDforDVnvODtokenDissuanceVDasDtheDdigitalDcreditsDissuedDthroughDtheDVeloDProtocolDwillDbeDableDtoDbene�tDfromDtheDhighDliquidityVDhighDperformanceVDminimalDcostVDand security offered by the Stellar Network. BITCOINETHEREUMSTELLARRIPPLETransaction yon�rmationDTimeUp to 1 hourUp to 15 minutes3 to 5 seconds3 to 5 secondsAverage Transaction Fees$5.45 per transaction$0.30 p

23 er transactionLaXacDforDeaaVaaaDtransact
er transactionLaXacDforDeaaVaaaDtransactionsLaXacDperDdaaVaaaDtransactionsTransaction Per Second3 transactions 7 transactions per secondeVaaaTDtransactions cVgaaDtransactions per secondMechanismProof of WorkProof of WorkStellar Consensus Protocol (SCP)Proof of Correctness Exhibit 2: Blockchain comparison table wtDaDhighDlevelVDVeloDisDanDopenDprotocolDthatDenablesDTrustedDPartnersDtoDreceiveDdigitalDcredits on a distributed ledger. The digital credits are collateralized by VELO tokens that link theDcreditsDtoD�atDdepositsXDTrustedDPartnersDcanDuseDtheDdigitalDcreditsDinDtheirDdayDtoDdayDoperationsDthroughDtheDblockchainXDDyurrentlyVDtheDprimaryDcomponentsDthatDformDtheDVeloDProtocol are the Digital Credit Issuance mechanism and the Digital Reserve System (DRS). The DRS ensures that digital credits will settle anywhere in the network and are always backed by right amount of VELO token collateral.MoreDtechnicallyVDVeloDisDaDsetDofDsmartDcontractsDthatDareDusedDtoDissueDcreditDlinkedDtoD�atDdepositsDandDbackedDbyDVnvODtokensDonDnvryNetVDaDprotocolDthatDsupportsDmanyDsmartDcontractDfunctionalitiesXDTheDVnvODtokenDitselfDisDissuedDonDtheDStellarDblockchainDnetworkVDwhichDisDusedDfor the VELO token’s transaction settlement and clearance.OnceDTrustedDPartnersDreceiveD�atDdepositsDfromDbusinessDpartnersVDtheyDcanDinstantlyDreceive an equivalent amount of digital credits by posting VELO tokens through the Velo Protocol as collateral. The DRS is a key factor in keeping the digital credits backed by VELO fully collateralizedDandDrepresentativeDofDtheDoriginalDvalueDofDdepositedD�atDwhileDtheDpriceDofDVnvODtokensD�uctuateDinDtheDopenDmarketXDTheDmRSDisDdesignedDtoDensureDstabilityDbyDmanagingDtheDnumber of VELO tokens held as collateral. The aim is to maintain the relationship between token value and digital credit value as close to 1:1 as possible.The quality of the business network and ecosys

24 tem will be the key and a primary focus
tem will be the key and a primary focus of commercial and technology development. Trusted Partners will bring their business networks to the Velo Ecosystem and each of the networks will be able to connect to the other. We envisionDremittanceDserviceDprovidersVDeWwalletsVDandDotherD�nancialDservicesDtoDbeDableDtoDseamlesslyDutilizeDeachDother’sDfunctionalityVDandDthisDwillDdriveDquickDadoptionDofDtheDVeloDProtocol and distributed ledger technology in general. 1.2.1 Velo TokensVELO tokens are utility tokens designed to ensure the settlement of digital credits issued in the ecosystem by being used as smart contract locked collateral for value transfers. Value for VELO token holders will increase as demand for digital credits grow and transfer volumes increase with the addition of more business partners and end users. The VELO token’s utility lies in its double feature as both collateral and as an entrance requirementDtoDtheDVeloDncosystemXDnachDuseDofDtheDVeloDncosystemDstartsDwithDtheDdepositDofD�atDandDtheDissuanceDofDaDmatchingDamountDdigitalDcreditsDbyDengagingDtheDVeloDProtocolVDwhichDrequiresDVnvODtokensXDwsDmoreDTrustedDPartnersDjoinDtheDVeloDncosystemDandDasDeachDofDtheirDbusinessesDgrowVDtheDdemandDforDnewlyDissuedDdigitalDcreditsVDandDsubsequentlyDVnvODtokensVDwillDalsoDgrowXDTheDexpansionDofDtheDVeloDncosystemDwillDcreateDdemandDforDVnvODtokensDinDtheDopen market because Trusted Partners will need to purchase or borrow the tokens to receive digitalDcreditsDtoDmeetDtheirDoperationalDdemandsXDmigitalDcreditD�owDandDsettlementDwillDbeDmanaged by the Digital Reserve System whose operation will facilitate the growth of the network and the value of the VELO token in an orderly manner. 3 INTRODUCTIONBackgroundVelo intends to create a guaranteed decentralized settlement layer with a highly liquid value exchangeDonDaDfederatedDpermissionedDblockchainDtechnologyDbetweenDTrustedDPartnersXDsnitiallyVDthes

25 eDpartnersDmayDtakeDtheDformDofDlargeDre
eDpartnersDmayDtakeDtheDformDofDlargeDremittanceDprovidersVDbanksVDorDeWwalletsXDnachDpartnerVDinDturnVDwouldDbeDconnectedDtoDthousandsDofDendDusersDthatDwouldDbeDableDtoDinteract with any other partner in the network.TheDremittanceDmarketDisDanDexceptionallyDlargeDaddressableDmarketDthatDcanDimmediatelyDbene�tDfromDVeloXDmespiteDtheDrecentDadvancementsDinD�nancialDinfrastructureVDitDremainsDdi�cultDtoDdoDaDcrossWborderDmoneyDtransferDbetweenDdifferentDtypesDofDinstitutionsDandDserviceDproviders. Velo’s technology allows trustless and secure digital credit transfers that will remove friction and barriers from the current value transfer process. Velo will enable any one Trusted Partner to transact with any other Trusted Partner at any time and any place once theyDbecomeDpartDofDtheDVeloDncosystemXDThisDwouldDallowDbusinessesVDmigrantDworkersVDandDend- consumers to get better service at a lower cost than provided by current offerings.snDadditionDtoDremittanceDscenariosVDtheDVeloDNetworkDwillDalsoDincludeDaDwiderDrangeDofD�nancialDservicesDwhichDwillDrequireDtheDuseDofDsmartDcontractsXDwsDStellarDisDoneDofDtheDbestDblockchainDnetworksDforDdigitalDassetDtransactionsVDtheDVeloDNetworkDwillDalsoDexpandDblockchainDadoptionDofDStellarDandDwillDincludeDsmartDcontractDfunctionsDonDnvryNetVDwhichDwillDalsoDenableDcross-chain solutions.What is Velo? VELO ECOSYSTEM Digital Credit Issuance Digital Reserve SystemECOSYSTEMEXTENDED NETWORKCross Border RemittanceLendingValue TransferPaymentsLoyalty Points Exhibit 1: Velo Ecosystem TABLE OF CONTENTS Abstract 1. Introduction 1.1 Background3 1.2 What is Velo? 1.2.1 Velo Tokens4 4 1.2.3 Underlying Distributed Ledger Technology2. How the Velo Protocol works 6 2.1 Digital Credit Issuance7 2.2 Digital Reserve System8 2.2.1 Reserve Pool 2.2.2 Maintaining Velo Collateral Pools’ Value Link with Digital Credit and Fiat Deposits

26 2.2.3 The Foundation and Third-Party
2.2.3 The Foundation and Third-Party Oversight of the Velo Protocol9 2.3 Velo Decentralized Exchange and OTC 2.4 Decentralized Lending of Digital Credits 2.5 Voting on Changes to the Velo Protocol 2.7 A Network of Fiat to Digital Asset On/Off Ramps3. Architecture13 3.1 Overview 3.2 Move Stellar Asset to a Smart Contract Chain 3.3 Minting Digital Credits Summary of operations15 3.4 Getting Velo Token-Fiat Exchange Rates 4.1 Cross Border Remittance 4.2 Payments20 4.3 Lending 20 4.4 Loyalty PointsSummary23 Important NoticeVelo Lexicon ABSTRACTVelo’s core mission is to build a decentralized settlement network that allows partners to safely and securely transfer value between each other in a timely and transparent way. The initial focus is to serve partners in the remittance and money transfer markets of Southeast Asia. The immediate effects of Velo’s partners using Velo technology will be felt by the large population of underbankedDandD�nanciallyDunderservedDinDtheDregionVDasDtheyDenjoyDlowerDfeesVDfasterDtransactionsVDand wider coverage; all without having to directly interact with Velo technology or VELO tokens.wsDtheDuseDofDdigitalDassetsDincreaseVDthereDisDaDneedDforDtoolsDdesignedDtoDbridgeDtheDgapDbetweenDthe physical and digital world. The barriers between various forms of digital payments must be knockedDdownDforDcompetitivenessDandDproductivityDtoDincreaseDforDallD�nancialDinstitutionsVDbothDlarge and small.Velo’sDobjectiveDisDnotDtoDreplaceDexistingDbankingDinfrastructureDorD�atDmoneyVDbutDinsteadDtoDcomplement and connect them to a wide array of partners through a blockchain payment systemDthatDalsoDprovidesDforDtrustlessVDguaranteedDsettlementXDVelo’sDtechnologyDbasicallyDactsDasDaDguarantorDtoDallDdigitalDcreditDtransfersDinDtheDnetworkVDfosteringDtrustDbyDprovidingDaDcollateral layer backing all transactions. The collateral value is representative

27 of the value of inDtheDsystemXDTheDVeloD
of the value of inDtheDsystemXDTheDVeloDNetworkDconnectsDTrustedDPartnersVDwhichDareDbusinessesDthatDhaveDbeenDvettedDandDapprovedDtoDjoinDtheDnetworkVDtoDeachDotherDthroughDtheDblockchainXDThisDallowsDendDusersDofDeachDpartnerD�rmDtoDaccessDtheDbene�tsDandDservicesDofDotherDpartnerD�rmsDthatDareDpart of the Velo Network.migitalDcreditsDareDtheDmediumDofDexchangeVDandDtheirDsettlementDisDguaranteedDbyDVeloXDTheDVnvODtokenDisDissuedDonDtheDStellarDblockchainDnetworkVDanDopenWsourceDdistributedDledgerDusedDspeci�callyDforDpaymentsXDwsDdescribedDonDstellarXorgVD“StellarDhasDnoDownerrDifDanythingDit’sDownedDbyDtheDpublicXDTheDsoftwareDrunsDacrossDaDdecentralizedVDopenDnetworkDandDhandlesDmillionsDofDtransactionsDeachDdayXDvikeDxitcoinDandDnthereumVDStellarDreliesDonDblockchainDtoDkeepDtheDnetworkDin sync.” The VELO token is used by Trusted Partners as collateral for receiving digital credits and representsDaDvalueDlinkDbetweenD�atDdepositsDandDdigitalDcreditsXDTheDVeloDNetworkDisDaDpermissionedDsettlementDlayerDthatDavoidsDdirectDtransfersDofD�atDmoneyDwhileDstillDenablingDparticipantsDtoDconductDe�cientDandDsecureDcrossWborderDtransactionsXDwsDanDoptimizedDliquidityDmanagementDlayerVDVeloDaimsDtoDdevelopDaDcollectionDofDsystemsDthatDwillDpromote liquidity among partners and the ecosystem. One such system will take the form of a decentralizedDexchangeDandDyetDanotherDwillDintelligentlyDsearchDforDcrossWcountryDbalancesDthatDoffsetDtheDnetDpaymentD�owVDallowingDexpedientDclearingVDandDminimizingDriskXDTrustedDPartnersDcanDexchangeD�atDmoneyDofDoneDoriginDcountryDforDcreditsDbackedDbyDVnvOXDSmartDcontractsDwillDbeDemployedDtoDlinkDVnvODcollateralDtoDdigitalDcreditsDandDactualD�atDdepositsVDallowingDdigitalDcredits to be used securely for intraday transactions with other Trusted Partners. Next Generation Financial Protocol Velo T