4 minute read
DIGITAL ASSETS
The LODE Project has constructed a novel token economic system comprised of the LODE Token (system asset) and the AGX (one-silver gram) and AUX (one-gold milligram) Coin(s). Together, the LODE Token, AGX, and AUX Coins form a global, digital, asset-backed money system. LODE Community Members will be able to send, spend, and build wealth using digital bullionbacked money, enabling a more accessible global financial system.
LODE TOKEN The LODE Token is a security token and it serves as a form of virtual equity, providing a digital bond that represents the receipt for the metal added to the LODE Vaults. LODE Token Holders are considered holders of Virtual Equity in the LODE1 Anstalt (“LODE1”). LODE Token Holders will receive full rewards and 100% of all declared profits of the LODE
Platform.
VIRTUAL EQUITY Virtual Equity provides LODE Token Holders with the financial benefits
associated with regular equity structures. The only difference is that the tokens
currently hold no voting rights. By excluding voting rights, LODE Tokens become more easily transferable and exchangeable around the globe and still rewards the stakeholder with all the financial rights and returns that
traditional equity entails.
100% of all profit distributions will be paid to
LODE Token Holders, no third parties or other investors will receive any distributions. If LODE1 is sold, 100% of the net proceeds after payment of debts and taxes will be paid to LODE Token Holders.
AGX COIN AGX Coin is a stable asset designed for commerce and backed by physically vaulted silver. Designed to be an easy part of everyday commerce, each AGX Coin is backed by one gram of vaulted, audited, and insured 999.9 investment-grade silver.
AUX COIN AUX Coin is a stable asset designed for commerce and backed by physically vaulted gold. Also designed to be an easy part of everyday commerce, each AUX Coin is backed by a one-milligram of vaulted, audited, and insured 999.9 pure gold.
COIN REDEMPTION, MINTING, DISTRIBUTION The two coins will initially be issued on Hyperledger but will be available to move to additional chains, beginning with Syscoin. The design of the coins has been structured to ensure that it is not considered a security under an EU law (MIFID 2), where the LODE Project has legal jurisdiction.
LODE will not accept, process, or facilitate the redemption of AGX for silver and AUX for gold prior to an individual completing their KYC. LODE will follow regulatory compliance. Any LODE facilitated transfers of assets between chains, persons, or exchanges will require both parties to provide proof they have gone through the appropriate KYC and agreed to the terms of the investment contract.
Both AGX and AUX may be transferred off of
the LODE centrally controlled blockchain to a public decentralized network, and vice versa. No Money Service Brokers, Custodians, or Broker/Dealers responsibilities are considered at this time for these transfers.
Similar to LODE Tokens, LODE records AGX/AUX Coin balances in a Hyperledger Fabric-based blockchain.
LODE or affiliated vaulting partners are
capable of minting AGX/AUX Coins for circulation. Each minting event of AGX/AUX Coins will be backed by a signed attestation that the equivalent value of silver and/or gold is held in reserve. The system will verify the cryptographic signature and offline
audits are required to confirm the correct
amount of physical metal that is held.
When AGX/AUX Coins are issued, they represent a bearer claim to the value of the appropriate metal backing the coins. Transfers of coins are permitted between members holding a balance of native AGX or AUX Coins on the Hyperledger Fabric chain, or on public ledgers.
LODE may block transfers to comply with jurisdictional requirements and will not transfer tokens on the owners’ behalf. A blockchain-based audit trail will be maintained to offer proof to auditors and
regulators that LODE has not moved tokens on someone else’s behalf.
REWARDS & MICRO PAYOUTS
REWARDS LODE Token Holders are entitled, by way of contractual rights, to 100% of any profit
distributions, and all proceeds from mergers or acquisitions. Once there is a steady profit
flow, the profits will be distributed on a 52-
day cycle. The beginning of this cycle is yet to be determined. Once LODE believes that the profits are equal to or larger than Interim
Payments, there will be a permanent switch from Interim Payments to payments based on profits.
INTERIM PAYMENTS While the LODE Project is in its growth phase, small payments will still be made each cycle to LODE Token Holders, so as to fulfill the promise of passive income that
was made to early investors. The funds for these payments will come from the invested capital until such a time that the LODE Project is fully profitable. This does shorten
the capital runway and increase the burn rate for the LODE Project, but the board of directors believes that it’s essential to maintain the goodwill of the community that has raised the initial funds.
MICRO-PAYOUTS EVERY 52 DAYS: Every LODE Token which remains on the LODE System ledger will be entitled to receive micro-payouts every 52 days.
All payouts are based on the net spread (ie cost of silver and gold vs. the selling price). The payouts will be calculated and paid out at a rate of 5.25% of the net spread. The payouts will be paid into the LODE Token Holders system wallet on Hyperledger and paid with AGX Coins.
In the future, AGX Coins may be converted into AUX and/or LODE Tokens. KYC and exemption qualifications will be required.
