the white paper - Bitfair

THE WHITE PAPER

1 JUNE 2018

CONTENTS 1.

B I T FA I R E X E C U T I V E S U M M A R Y

3

2. INTRODUCTION

4

2 .1 .

What is Bitfair?

4

2.2.

Pre-sale Overview

4

3.

N E X T G E N E R AT I O N T R A D I N G

5

3 .1 .

B i t f a i r Tr a d i n g

5

3.2.

Tr a d i n g C o n t r a c t s

8

3.3.

SOC Fee

9

3 . 4 . Tr a d e S u c c e s s F e e s

9

3.5.

Margin Requirements

9

3.6. Limit Order Function

10

3 . 7.

Entry Limit Function

11

3.8.

Spread Adjustment Policy

11

3.9.

System Economics and Growth

12

4.

FUNCTIONALITY AND REQUIREMENTS

13

4 .1 Tr a d e r s

13

4.2 Business

14

4.3

15

5.

CRYPTOCURRENCY TRADING 2.0

16

5 .1 .

16

5 .1 .1 . A p p l i c a t i o n S t a c k

16

5 .1 . 2 . D e p l o y m e n t S t a c k

16

5.2.

17

6.

T H E B I T FA I R T E A M

18

6 .1 .

18

6.2. Advisors

20

6.3. Investors

22

Legal Requirements B I T FA I R Te c h n i c a l D e s i g n

Timeline and Roadmap Te a m M e m b e r s

T H E W H I T E PA P E R

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7.

B I T FA I R P R E - S A L E OV E R V I E W

23

7.1 .

Purpose of Pre-sale

23

7. 2 .

F i x e d To k e n Va l u e

23

7. 3 .

D i s t r i b u t i o n o f X B F To k e n s

23

7. 4 .

B i t f a i r X B F To k e n S a l e

24

7. 5 .

XBF Community Airdrop

25

7. 6 .

R e s e r v e d To k e n s 2 7

27

7. 7.

X B F To k e n D i s t r i b u t i o n

27

7. 8 .

E xc h a n g e L i st i n g

27

7. 9 .

Bitfair Projections

28

7.1 0 . X B F To k e n Va l u e f o r e c a s t

29

7.1 1 . C o m m u n i t y D e v e l o p m e n t

29

7.1 2 . X B F S m a r t C o n t r a c t

29

8.

DISCLAIMER OF LIABILITY

30

Bitfair Whitepaper Ve r s i o n : v 2 . 0 2 Date: 1 June 2018 N o t e : T h e l a t e s t W h i t e p a p e r i n o f f i c i a l e n g l i s h l a n g u a g e c a n b e f o u n d a t w h i t e p a p e r. b i t f a i r. c o m .


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1

B I T FA I R E X E C U T I V E SUMMARY Cryptocurrencies have captured international attention due to massive global adoption that is set to disrupt the banking system and other intermediated financial services over the coming decades. Trading currencies are nothing new, but the trading platform system features leave much to be desired. Cryptotrading platforms are still clunky, hard to use and with minimal features. Cryptocurrency integration into mainstream investment markets through derivative contracts has made crypto trading an appealing pursuit for many new institutional traders and hedge funds. With a total market cap of more than $400 billion, crypto trading has become one of the most popular investment opportunities available. Traders find that the technological advances and basic trading features in traditional investment exchanges are completely absent on crypto exchanges. The lack of features leaves many trading opportunities untapped with an associated reduction in profits. Exchanges intended to facilitate buying and selling of cryptocurrency assets are subpar and inefficient. The industry also lacks a variety of trading vehicles to facilitate the various needs of traders and institutional investors. It is clear that cryptocurrencies are going to be a significant roleplayer in the financial landscape for 2018 and beyond. However, an urgent solution is required for the above-mentioned problems. By unpacking and explaining the concept of crypto trading, solutions for its shortcomings can be explored and a thriving crypto trading market can be facilitated. Research showed that there is no existing platform that provides an easy mechanism to profit from general altcoins falling in value. The trading opportunities exists that entail selling a token now and buy it back again at a lower price in future. This strategy can only be implemented if the underlying token is already owned by the trader or investor. Some trading platforms provide leverage trading, which is an option to trade the top cryptocurrencies on margin. Leverage trading is only available on some tokens, providing they have enough liquidity and low volatility to eliminate the inherent risks of operating a leverage exchange. Only the top cryptocurrencies is currently available for margin trading such as Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin, Ethereum Classic, Dash and Monero. Margin trading of these coins are mainly centralised and pricing / contract terms tend to be heavily manipulated by some brokers. When above-mentioned aspects of leverage trading are taken into consideration, compared to an option by providing a pre-defined trading period or expiration policy, it was concluded that the need for holding the underlying asset can be eliminated. Instead, an Over-theCounter trading platform based only on price movement, can be offered. Bitfair was created as a marketplace for traders speculating their opinion on the short-term price movement of any cryptocurrency, be it a positive or negative price movement, without any broker involved. Bitfair provides traders with a new and innovative trading platform and concept. It aims to become a marketplace where crypto enthusiasts can directly enter into a peer-topeer trade via a Smart Option Contract (SOC). The Bitfair flexibility creates additional profit opportunities and trading positions, in altcoins, that are not currently available. This Whitepaper will introduce a new options trading vehicle to the crypto marketplace.


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2

INTRODUCTION

INTRODUCTION

2.1.

WHAT IS BITFAIR?

itfair aims to become a marketplace where crypto enthusiasts can directly enter into a B Over-the-Counter trade via a Smart Option Contract (SOC). This flexibility creates additional trading positions, hedging and profit opportunities in altcoins that are not currently available. Each trade on Bitfair is OTC - peer-to-peer between two individuals – and Bitfair simply provides the marketplace and receives trade fees from each profitable trade executed. All trades are entered into a Smart Option Contract (SOC) for a pre-determined profit/loss during a set trading time contract. vercoming the inherent flaws of traditional trading using the exchanges, traders trading O through Bitfair are allowed to profit from their favorite cryptocurrency price movement, be it uptick or downtick. Bitfair provides the platform to open a short position for most cryptocurrency at an astonishing 1 000x leverage – 10 times higher than most leveraged exchanges - without requiring a centralised broker, and all the problems associated with making and simultaneously trading the market. Bitfair is a new and exciting platform for all serious crypto traders.

2.2.

PRE-SALE OVERVIEW

Over the past year, the Bitfair team has been building its innovative matching algorithm and Smart Contracts on which the trading services will be launched. The next development phase is the Beta release of the Bitfair trading platform that will in turn use its own crypto token, the XBF token, as trading fare on the Bitfair ecosystem. his Whitepaper highlights key stages and features of Bitfair and the exciting roadmap in T which future products will be developed. itfair’s official launch has been scheduled for Wednesday, 1 October 2018, with major B improvements planned for 2019. As a unique advantage, Bitfair is offering pre-payment of the XBF token in advance for use on the Bitfair platform. Future traders on Bitfair will be allowed a pre-payment of up to 720 000 000 XBF tokens at the initial market value of $0.05 per XBF ($1,000 = 20 000 XBF). This Whitepaper will provide further details of the pre-sale and main sale, including the potential advantages, of XBF token ownership. The binding terms and provisions of XBF token sale will be outlined in the terms and conditions stipulated on the Bitfair website (https://bitfair.com).

B I T FA I R .C O M T H E W H I T E PA P E R

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BITFAIR TOKEN TICKER

XBF

PRE-SALE START DATE

9 July 2018, 10:00 (UTC-2)

PRICE OF XBF TOKEN

$0.05

NUMBER OF TOKENS ON SALE

720 000 000 (720 million)

FURTHER TOKEN ISSUE

Only a once-off token issue within the sale

SECURED METHOD OF TOKEN PURCHASE

BTC, ETH, XRP, BCH, LTC, XMR & Wire transfer

TOKEN DISTRIBUTION DATE

48 hours after token sale event

EXCHANGE LISTING PRICE

$0.50 per XBF token

EARLY BIRD PRE-SALE BONUS (starting 9 July 2018) AMOUNT OF XBF TOKENS PURCHASED

ADDITIONAL BONUS

ROUND 1 – MIN $25,000

75%

ROUND 2 – MIN $10,000

50%

ROUND 3

40%

ROUND 4

30%

A purchase of $10,000 or more XBF during Round 3 and 4 of the Pre-Sale Event will receive an additional 10% bonus allocation.

3

NEXT GENERATION TRADING 3.1.

BITFAIR TRADING

raders on the Bitfair platform will be able to place trading outcomes on any altcoin in various T trading contracts known as our Collar Bull/Bear Spread Option.


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Example 1: Trading a 15-minute contract. John notices that the current price of NANO is at $10 and believes Nano’s price will go up in the next 15 minutes. John knows that Bitfair offers fixed trading options for Nano in the 15-min trading contract. He opens a buy order for 2 000 Nano tokens @ $0.10 ceiling within the 15min trading contract on the Bitfair trading platform. He needs an account margin of $200 to be locked into the Smart Option Contract (SOC). John’s required trade margin is 2 000 x $0.10, with maximum profit or loss = $200. ohn also needs XBF tokens for the SOC, calculated at 1% of the trade margin. He requires 4 J XBF Tokens (XBF @ $0.50 per token) for the SOC. If John does not hold any XBF tokens, he will require an additional 1% or $2 for the SOC in ETH that will be used to execute an instant buy of XBF tokens on the Bitfair Exchange. 50% of the XBF tokens collected through SOC fees will be burned by Bitfair, resulting in XBF token supply decreasing.

Steve sees an open “buy/long” order for Nano and believe that Nano price will drop in the next 15 minutes and that the other trader has not considered certain market factors. Steve wants to enter a SOC with John but can only afford to do so for 1200 Nano tokens (Bitfair allows a trade to be matched partially or in full). Bitfair match Steve’s and John’s open orders and the two parties are now entered into a SOC for 1200 Nano tokens at a floor of $0.10 during the next 15-min trading contract. Steve’s required trade margin: 1200 x $0.10 down = $120 Steve also needs XBF tokens for the SOC calculated at 1% of the trade margin. He requires 2.4 XBF tokens (XBF @ $0.50 per token) for the SOC. If Steve does not hold any XBF tokens, he will have to pay the 1% or $1.20 for the SOC in ETH that will be used to execute an instant buy of XBF tokens on the Bitfair Exchange. John still has an open order for the remainder of 800 Nano tokens until matched by another trader.


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Steve and John are now in a SOC for 1200 Nano tokens at a price movement of $0.10 from the $10.00 Nano price. The SOC will execute when the $0.10 price movement or ceiling is reached at $10.10 (in favour of John) at any moment during the SOC 15-min period. The SOC will also execute when the $0.10 price movement down or floor is reached at $9.90 (in favour of Steve) at any moment during the same SOC 15-min period.


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If the price movement of $0.10 floor (down) or ceiling (up) is not reached during the 15-min trading contract, the SOC will mature and automatically execute at the experation of the contract. In this instance, the SOC will execute on the 1200 Nano tokens and the profit/loss calculated by Bitfair. The profit calculated will be distributed whilst the remaining balance will be returned without any trade fees. Example 2: SOC executes without floor or ceiling reached. Using the scenario from Example 1, the SOC executes after 15 minutes at a price of $9.94. John has incurred a loss of $0.06 per Nano or $72, calculated by 1200 NANO x $0.06 (down $0.06 from $10 when SOC was entered). John receives back $48 from the SOC trade and $72 is distributed by Bitfair to Steve. Steve’s trading account will be credited with $71.28 after the Trade Success Fee of 1% has been deducted. John is the profitable trader in this scenario. It is his responsibility as the profatible trader to pay a Trade Success Fee on all trade profits.

3.2.

TRADING CONTRACTS

Bitfair will launch with initial trading contracts of 15 minutes, one hour and 24 hours. All SOC trades will execute if the floor or ceiling price is reached during the trading contract. If the floor or ceiling price is not reached, all SOC trades will execute at the expiry of the respective trading contract. Bitfair will support the following trading window contracts as liquidity increases on the platform:

• • • • • • •

15 minutes 1 hour 8 hours 24 hours 7 days 30 days Any predefined


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3.3.

SMART OPTION CONTRACT (SOC) FEE

All OTC orders that are matched will require XBF tokens for the trade. The SOC Fee is calculated at 1% of the required trade margin. For example, if a trader commits a $100 margin to enter a trade, the SOC will require 1% or $1 of XBF tokens. The SOC is powered by XBF tokens and in such the SOC Fee is only payable in XBF tokens. Trader holding XBF tokens If the trader holds XBF tokens, the required SOC Fee will be deducted from their XBF balance. Trader holding no XBF tokens If the trader does not hold the required SOC Fee in XBF tokens, the trader will require an additional $1 margin for the trade. Bitfair will use the SOC Fee paid to execute an instant buy of XBF tokens at the current prevailing rate on the Bitfair Exchange. 50% of XBF tokens collected through SOC Fees will be burned by the Bitfair platform to execute the trade, thus resulting in the XBF token supply constantly decreasing. Based on simple economic principles, decreasing the supply while increasing the demand will increase the pricing point, thus benefiting all long-term XBF token holders. As an utility token with an ever decreasing supply and real-world use, future traders will benefit from pre-purchasing the XBF tokens. 3.4.

TRADE SUCCESS FEES

Bitfair will implement fees for all profitable trades after it executes. Such success fees will only be calculated on the final funds moved to the profitable trader. The profitable trader is responsible for the Trade Success Fees calculated only on the profit portion from each trade. Bitfair implements different Trade Success Fees for each trading contract. Bitfair’s Trade Success Fees are calculated as follows:

3.5.

TRADING CONTRACT

TRADE SUCCESS FEE ON PROFITS

15 minutes

1%

1 hour

2%

8 hours

3%

24 hours

3%

7 days

5%

30 days

8%

Any predefined by trader

10%

MARGIN REQUIREMENTS

Any trader wanting to open an order on the Bitfair Platform will need to hold the required ETH in their trading account as margin. As Bitfair only provides the trading platform whilst all trades are OTC, the margin required for any trade will be equal to the maximum profit or loss that can be sustained from any specific trade.


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itfair only requires the maximum loss margin to be blocked during the period of the SOC B trade. This will allow any trader to open multiple positions on the platform. The required margin for a trade will only be blocked by the SOC once any open order has been matched by another order. All other open order positions held, without the required margin, will be closed. This is to ensure a trader can open any amount of orders but can only enter into a matched trade having the required margin to honour the maximum amount of loss possible during the OTC trade. Example 3: Margin requirement. J ohn has an account balance of $130 (calculated based on his ETH holdings at the current prevailing ETH/USD rate). He wants to open favourable order positions on various altcoins. John decides to open the following order positions:

Buy Buy Sell Sell Sell

2500 ADA @ $0.03 profit = $75 required margin 125 EOS @ $0.4 profit (buy) = $50 required margin 10 ZEC @ $5 loss (sell) = $50 required margin 1500 CVC @ $0.05 loss (sell) = $75 required margin 150 NEO @ $0.60 loss (sell) = $90 required margin

ith John holding these open order positions, a trade is matched OTC for 1 500 CVC @ $0.05 W loss with required margin of $75. The $75 of ETH will be blocked whilst John enters into a SOC for that specific trade. As John does not hold enough margin in his Bitfair account to honour potential losses on some of the other open orders when matched peer-to-peer, these open orders will automatically be closed by the Bitfair platform. This is to ensure all trades are OTC and that the trader can pay the maximum loss during any specific trade. After the CVC trade has been entered, John will have another $55 margin available for trading and the following open order positions will thus remain available for matching: Buy 125 EOS @ $0.4 profit (Buy) = $50 required margin Sell 10 ZEC @ $5 loss (Sell) = $50 required margin

he above two orders each require a $50 margin with John holding a sufficient balance. T John’s balance of $55 is not enough to match the ADA and NEO orders and for this reason, needs to be closed. 3.6.

LIMIT ORDER FUNCTION

he Bitfair trading platform is user friendly and extremely simple to understand and trade T on. All SOC trades can only execute in two possible ways – floor or ceiling price called the knockout price or time expiration. All traders know exactly what the maximum amount of profit or loss is that can be sustained during any trade, as all trades are OTC at a predefined price during an agreed period.


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ny cryptocurrency on the Bitfair platform should have open order positions or liquidity A available on one side of the trade. It is expected that the most liquidity will be open long positions with many traders holding a long term bullish view of the market. When open long positions are available, any trader wanting to open a short sell position for that specific crypto will instantly be matched OTC and be placed within a SOC for that specific trade. If a trader wishes to also open a long position for any order, the trader will join the queue of open orders until matched by Bitfair. Bitfair’s matching algorithn will match open orders on a firstcome basis. ny open orders held by a trader will execute when matched by another trader. As the price A movement of cryptocurrencies are extremely volatile and can swing massively in a short amount of time, Bitfair has implemented a limit order function. Example 4: Limit order function. John wants to open a order for 500 LSK @ $1.50 profit (buy) with a required margin of $750 (500LSK x $1.50 floor/ceiling = $750) when the price of a LSK token is trading for $30 per LSK. John opens his order when the price is at $30 per LSK token and does not want this order to remain open until matched as the price of LSK may drastically change. John opts to enter a limit order stop function at the price of $35.00. he limit order function will close John’s open order when the LSK price has reached $35.00 T and his open order has not yet been matched. This will result in John’s order staying open until matched, closed by himself or LSK reaches a price $35.00. 3.7.

ENTRY LIMIT FUNCTION

ost traders know at what price they would prefer to buy or take a short sell position on M any cryptocurrency. Traders are not always online to open orders when their token has hit its preferred entry price. Bitfair provides traders with the ability to place a future order with its entry limit function. By using the entry limit function, a trader will be able to open a new order at a specific price in advance. Example 5: Entry limit function. John sees the price of LSK is $35 and rising very fast. He wants to open a short sell order for 500 LSK @ $1.50 floor when the price has reached $40 per LSK. John uses Bitfair’s entry limit function to open the above order only when the price of LSK reaches $40. T he entry limit function will open an order for John when the LSK price has reached $40. 3.8.

SPREAD ADJUSTMENT POLICY

itfair operates a Spread Adjustment Policy (SAP) for all open orders that have not yet been B matched into a SOC. In line with the SAP, the spread price of each cryptocurrency will be adjusted to reflect the fair trading spread in relation to the trading contract and price. This ensures that the floor and ceiling value always remains relevant to the current price of any cryptocurrency. uring a SAP adjustment, all open orders will have the long or short quantity adjusted with D the new spread price, keeping the total margin requirement for the open order static. This will


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ensure that the buy and sell spread stays relevant to the trading price of the cryptocurrency. Example 6: Implementation of the Spread Adjustment Policy. Before SAP ohn holds an open order on Civic token for 1000 CVC @ $0.07 profit (buy), which requires J a $70 margin. During an required SAP adjustment, the CVC spread needs to be adjusted to $0.08 in accordance with the SAP. John’s open order must be adjusted whilst keeping his margin requirement the same. After the SAP, John will now have an open order on Civic token for 875 CVC @ $0.08, which still requires the same $70 margin. The Bitfair Spread Adjustment Policy will be implemented on the following two conditions: Monthly SAP The monthly SAP will be implemented on the last Saterday evening of each month at 23:59:59 (UTC-2) for all open orders. During the monthly SAP, all open orders on Bitfair will be adjusted to reflect the correct opening spread in relation to the price of the cryptocurrency at that moment. Volatility SAP In the unlikely event of extreme price volatility for a certain cryptocurrency, where the price has moved by more than the SAP volatility tolerance for the trading contract since the last monthly SAP, Bitfair will trigger the volatility SAP by adjusting the cryptocurrency spread. 3.9.

SYSTEM ECONOMICS AND GROWTH

Bitfair provides the platform for traders to directly enter into an OTC trade on agreed pricing outcome during a fixed contract time frame. Bitfair implements lower trade commissions for shorter SOC trading contracts, as the SOC will have a guaranteed executable time where trading funds will be moved, and Trade Success Fees are collected. Bitfair requires the constant transfer and burning of XBF tokens, making it beneficial for any trader to pre-purchase and hold the XBF tokens. The Bitfair platform will be profitable within its first month of trading. It is estimated that Bitfair will trade more than $150 million in cryptocurrencies contracts within the first three months of its launch. It is projected that more than $100 million in cryptocurrency contracts will be traded on Bitfair daily by the end of 2018. All traders who participate in the Pre-Sale stage will automatically become eligible to join the Bitfair VIP Club for a period of 12 months as a token of appreciation. The Bitfair VIP Club is set to launch in 2019. As an exclusive VIP trader of Bitfair, all pre-sale participants will benefit from members-only offerings and discounts on trade success fees. Traders who also hold XBF tokens in advance and long term, will profit from the deflationary supply of XBF tokens through the SOC Fee burning mechanism. This will ensure an everdecreasing amount of XBF tokens available and will benefit long-term holders of XBF tokens.


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FUNCTIONALITY & REQUIREMENTS 4.1.1. TRADERS Understanding the conditions of the trade (or SOC) he majority of trading platforms implement extremely complicated trading options, methods T and outcomes. The underlying rules and conditions supporting these trading contracts are often misunderstood by the general trader wishing to participate. This can lead to extremely risky trade conditions and a complete loss of capital for the unexperienced cryptocurrency trader. itfair provides a simple solution. All trades have only two conditions that would trigger B the SOC – price movement within a known time contract. All trades have a predetermined price movement (up or down) within the fixed SOC time period. This allows traders to easily understand the Bitfair platform and profit from their personal knowledge and opinion about the cryptocurrency market movements in future. Profiting from any price movement Bitfair’s ultimate goal is to afford traders the ability to profit from a cryptocurrency downward price movement. This model typically cannot be implemented in the current marketplace due to liquidity and volatility risks and constraints associated with trading altcoins on margin. Bitfair will provide users the opportunity to enter into a OTC trade for any type of price movement on a variety of altcoins. This includes profiting from an altcoin when the price is falling in value. Limited capital outlay and capital protection Trading any asset on margin carries a high risk of capital loss. Bitfair will not allow users to be exposed to more capital loss than what was placed on any option trade within the fixed trade period contract. Traders know exactly what their potential profit or loss is during any trade executed on the Bitfair platform.


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24/7 trading, speed and reliability for traders

Fast orders

Traders require a system that can process orders instantly when two parties wish to enter into an option trade. Bitfair was designed to scale and can process thousands of SOCs per second.

Trading API’s

Bitfair will release a full suite of API’s available to trading bots and advance traders to open orders via API’s. It will be appreciated that these API’s cannot in any way affect the price or outcome of any trade, a problem with current crypto exchanges.

IOS and Android applications

As part of the 2019 Roadmap, Bitfair will release its Android and IOS Applications making it easy for the community to manage their crypto-trading requirements. F ast processing

raders require a system that can process deposits and withdrawls quickly. Bitfair T accepts instant deposits via ETH and cater for automatic withdrawls with three daily top-ups of this wallet. Bitfair will also add support for various other cryptocurrencies and deposit methods.

Security of working capital

Traders expect guarantees for the security of their invested capital. Bitfair will be transparent in the way that it holds users’ funds on the platform. As part of the Roadmap, Bitfair will also release its own Asset Exchange in 2019.

Customer support

Traders expect fast and reliable customer support. Bitfair will implement customer support via email and 24/7 platform support via webRTC on its website - a first for cryptocurrency traders by having immediate access to live support. 4.1.2. BUSINESS Easily accepted deposit methods itfair only accepts ETH for the beta launch, but will accept user deposits in major B cryptocurrencies such as BTC, ETH, XRP, BCH and LTC in the near future. Bitfair will also consider implementing various local depositing methods such as Bank Transfer and credit card payments in the near future. Tokens required for trading itfair will issue ERC20 tokens called Bitfair Smart Token (ticker: XBF) that traders will require B to enter into any OTC trade on the Bitfair platform. Transparent cryptocurrency pricing mechanism itfair has implemented the Cryptocompare API to determine the price of any cryptocurrency B at any given time. This ensures Bitfair remains open and transparent in the price of each cryptocurrency and to give traders the confidence that Bitfair nor any other trader can manipulate the OTC trade in any possible way. With Bitfair, each trade is OTC, remains open,


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transparent and fair, and will be recorded on the blockchain. Simple derivative trading platform Bitfair’s derivative trading platform implements a state of the art matching algorithm. Each OTC trade is entered into a SOC. Each trade on Bitfair only has a primary and secondary condition before executing the SOC. The primary condition for execution is the agreed ceiling and floor price between traders and the secondary condition is the trading contract expiry time before the SOC will execute. Support altcoins price fluctuations Traders can enter into their preferred trade outcome on the Bitfair platform. This will allow any user to profit from the price fluctuation of their favorite altcoin – be it up or down price fluctuations. Limiting risk B itfair eliminates the risk of losing more than a trader’s capital by matching orders into SOCs based on their margin requirements and account balance for the set trading contract period. Bitfair’s beta launch includes trade contracts of 15 minutes, 1 hour and 24 hours as the maximum time before any SOC will execute. Bitfair will provide alternative trading contracts in the near future (8 hours, 7 days, 30 days, predetermined per trade contract period), including other innovative trading products and methods such as Quick Trade and dedicated OTC exchange set to launch in 2019. 4.1.3. LEGAL REQUIREMENTS User identification itfair will maintain strong user identifications for KYC and AML procedures to adhere to B certain regulatory requirements. Geographical limitations B itfair is unfortunately not available to traders that is a citizen of, or resides in, Mainland China, USA, Iran, Bolivia, Cuba, Algeria, Morocco and North Korea. Bitfair is working hard to ensure compliance with geographical regulations and that Bitfair is available to all cryptocurrency traders in the world, including the USA. Ability to view SOC trades itfair will record each SOC trade and provide the ability to view these trades online or via B .csv download or an API. All trades will also be recorded on the blockchain. Regulatory classifications ompared to margin trading platforms using a broker, Bitfair offers simple, OTC platform C where two individuals directly enter into a SOC trade. Regulatory adoption with regards to options trading as a derivative in cryptocurrency is very much a grey area. Bitfair has allocated a large portion of its budget to ensure compliance in all regulatory jurisdictions.


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5

CRYPTOCURRENCY TRADING 2.0 5.1.

BITFAIR TECHNICAL DESIGN

5.1.1. APPLICATION STACK

API: AdonisJS Frontend SPA: React/Redux Persistent data store: Postgres Performance data store, Pub/Sub & queues: Redis

5.1.2. DEPLOYMENT STACK The Bitfair infrastructure is designed from the ground up to be highly scalable and available. The front-end builds are served by AWS’ vast CDN network via S3. API’s are run on an auto-scaled Kubernetes cluster, which allows better management through modularity and the ability to easily deploy the software at scale. The community is welcome to reach out to the Bitfair development team on Slack (https://bitfairhq.slack.com) with any techstack related question.


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5.2.

TIMELINE AND ROADMAP

5.2.1. TIMELINE

APRIL 2017 CONCEPT Bitfair concept is born MAY 2017 FUNDING - Early round investment raised - Team selected JUNE 2017 DEVELOPMENT - Platform development started - Draglet becomes exchange provider DECEMBER 2017 MVP - Matching algorithm complete

JANUARY 2018 TESTING - First phase testing of Bitfair - TokenGet & Blockchain Mob appointed as ICO partners FEBRUARY 2018 FUNDING - Foxtail Marketing, Crowdcreate and Msconsulting appointed as oﬃcial marketing partners -Public announcement to be at the Crypto Invest Summit in LA

5.2.2. ROADMAP


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5.2.3. ROUTE TO BITFAIR SALE EVENT AND OFFICIAL LAUNCH

9 July 2018

To be announced

1 October 2018:

Bitfair’s 2018 pre-sale event

Bitfair MVP beta release to select traders

Bitfair officially launches for public trading

Security audits performed by Forgenix

XBF starts trading on exchanges

ICO starts

6

T H E B I T FA I R T E A M 6.1.

TEAM MEMBERS

Thomas van der Spuy – Bitfair Co-Founder Thomas has several years’ business experience at top level management. He co-founded Callpay in 2014 which is currently negotiating an acquisition. Thomas holds both a B.Compt Accounting and LLB Law degree from the University of South Africa. Thomas is excited about Bitfair and also deeply invested – he has locked his founder’s tokens with a long-term view.


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Greg van der Spuy – Bitfair Co-Founder Greg is not related to Thomas. He is a well-established tech investor and entrepreneur. With a coding background and introduction to Bitcoin in 2011, Greg instantly fell in love with Bitcoin and other cryptocurrencies. He is one of the co-founders of Affinity Mining, successfully mining cryptocurrency in Iceland for thousands of Investors. Greg is currently the CTO of Affinity Mining Ecosystem.

Devonne Burger - Bitfair’s Chief Technical Officer (CTO) Devonne is known in the developer’s world as a coding ninja. He was the architect of the Callpay platform. As CTO, Devonne was responsible for the development of the Callpay platform from the ground up, becoming the first platform globally to achieve the Level 1 PCI-DSS v3.0 certification from MasterCard and VISA. Today, Callpay is a leading provider of various payment methods in Turkey and South Africa, processing billions in payments annually.

Linda Botha – Bitfair’s Chief Marketing Officer (CMO) Linda is a web psychologist with a natural instinct for growth. She is the founder of Scarlets Web, one of South Africa’s leading online marketing companies. After five successful years running Scarlets Web, Linda became a supplier of cryptocurrency mining hardware to the South African market. Linda joins Bitfair as CMO.

Jacques Lazarus – Bitfair’s Chief Design Officer (CDO) Jacques started as a Senior UX/UI Designer at SQIM for the DevOps department. He is responsible for overseeing all design and innovation aspects of Bitfair’s products and services, including product design, graphic design, user experience design. He specialises in building Desktop, Mobile/Web Based Applications, Websites, Prototypes and Brand Design. Jacques is excited to impress the Bitfair community.

Charl Crowie – Senior Developer Charl started as a developer at Double Eye before joining Callpay. As a solutions architect, Charl has gained years of experience working under extreme system pressures. Charl is responsible for scaling Bitfair and delivering a world class solution to the commuity.


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Stelio Gouveia – Senior Developer Stelio studied Computing and Information Technology at The London Metropolitan University and is currently the CTO at Under the Influence. He was one of the earliest believers of Bitcoin and today considers himself a global citizen. Stelio designed the Bitfair platform foundation to ensure its scalability.

Amae van Niekerk – Investor Relations Amae has a corporate background as an account executive with public relations experience. Amae gained extensive experience in cryptocurrency as Corporate Sales Representative at Affinity Mining and now joins Bitfair to manage investor relations. She looks forward to working closely with our community.

Magdel Steyn – Marketing Coordinator Magdel has a thorough understanding and knowledge of radio and marketing. As owner of her own media company, She joins Bitfair to manage marketing relations and promote the XBF token. Magdel welcomes the Bitfair community to reach out to her with any marketing ideas or opportunities.

6.2.

ADVISORS

Marco Farrell He is an experienced IT contractor and was introduced to cryptocurrency in 2014. Today Marco resides in the UK and is a fulltime crypto trader. Marco brings a wealth of knowledge to Bitfair and will ensure the experience of traders will be world class on the Bitfair platform. Marco is excited at what Bitfair will bring to the crypto trading community and to be advising the management team of Bitfair.


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Andrew Henwood Andrew is the CEO of Forgenix, a leading security and compliace company for the payment card industry. Andrew has more than 20 years’ experience in cyber security consulting and together with the Forgenix team, will ensure that Bitfair is one of the most secure platforms in cryptocurrency. The Bitfair management team has allocated 6% of the token sale funds to security and entrust Andrew to be advising them with regards to system security.

Justin Stanford Considered one of South Africa’s most succesfull entreprenuers, Justing brings a wealth of business experience to the Bitfair team. Justin is the co-founder of Esset Southern Africa and 4di Capital. Listed by Forbes in 2013 as one of the most succesfull entrepreneurs under 30 in Southern Africa, Justin will guide the management team to ensure Bitfair becomes one of the most respected and leading trading platforms within the crypto marketplace.

Wollie Wolmarans Wollie completed his honours degree in Accounting Science and obtained his CA(SA) qualification as a chartered accountant. He is a director of Vertex Global Wealth and will be offering his financial guidance and assistance to the Bitfair management team. Wollie is excited to be advising the Bitfair team and believe that Bitfair is not only required by traders, but also one of the most innovative offerings within the cryptocurrency eco-system.

Jean-Pierre van der Spuy Jean-Pierre is the ultimate tech strategist. As the founder of Interactive Vision, MyTrade and co-founder of Callpay, Jean-Pierre was responsible for the strategy and growth of each platform. He will advise Bitfair Management Team with growth strategies. JeanPierre looks forward to growing Bitfair as the leading cryptocurrency trading platform for swing traders and day traders. Regarding Bitfair’s strategy and future improvements, Jean-Pierre expects Bitfair to outperform every investor’s hopes.

DR Antonie Kotzé Antonie is a financial engineer with vast experience in derivatives pricing, modelling, valuation, model verification and validation. His 24 years’ of experience includes expertise in all financial derivatives (OTC - vanilla and exotic, on-exchange - margining), OTC clearing, Basel II/III regulations, IFRS 9 and expected credit losses (ECL), simulation, stress testing, AIRB, VaR, Expected Shortfall and CVA. Antonie holds a PhD in Theoretical/Mathematical Physics from the University of the Witwatersrand (South Africa) where Quantum Chaos Theory was his field of interest. As a former Rand Afrikaans University (currently University of Johannesburg) faculty member, Antonie is also a renowned expert in financial mathematics, modelling, software development and training.


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6.3.

INVESTORS

VDSP Investment Group The VDSP Investment Group was formed by Bitfair’s co-founder Greg van der Spuy. It was the first investor in Bitfair and provided the Bitfair team with the financial requirements to launch this unique and innovate trading exchange.

Calvara Group Calvara Group is part of the investors that provided the capital to ensure Bitfair’s launch. Calvara Group joined as one of the original investors in Bitfair as it truly believes in the Bitfair management team to deliver a world class trading platform to the overall cryptocurrency environment.

B I T FA I R . C O M

THE B WLHUIE T EPA PAPPEERR PAG PAGEE \\ 2222

7

B I T FA I R P R E - S A L E OV E R V I E W 7.1.

PURPOSE OF PRE-SALE

Bitfair is offering to potential users of its platform the right to pre-purchase their own Bitfair utility token (ticker: XBF) through a pre-sale event that commences on 9 July 2018. The XBF token is based on the decentralised Ethereum market standard smart contract ERC20 token. Formed within the blockchain and subject to automatic execution upon the occurrence of predefined criteria and events, and subject to certain conditions, XBF tokens are valid indefinitely and are the property of their respective holders. Bitfair is incorporated in Anguila and will apply to register with the Anguilla Token Offering Act (AUTO) under the laws of Anguilla. It will be subject to market best practice auditing in accordance with AUTO regulations, thereby ensuring total transparency and absolute accountability of all Bitfair activities. Anguilla has been chosen for its favourable climate of digital innovation, including registration process for new digital token offerings. BF tokens bestow on its holders special product benefits, including increased rewards X depending on user activity. XBF tokens are not stocks, securities or their equivalent and therefore do not create the right of ownership or disposal of Bitfair or its assets. XBF tokenholders do not exert any influence over the decision-making of the company or its activities. XBF tokens will be distributed in direct proportion to the amount paid by the participants during the Token Sale Event in accordance with Bitfair’s terms and conditions. All organisation and implementation processes connected to a successful Bitfair Token Sale Event have been prepared in accordance with industry best practices and supported by TokenGet and the team from Blockchain Mob. The Bitfair team will also be supported by its Investors, Advisory Team including MSconculting, CrowdCreate and Foxtail Marketing to ensure a successful Token Sale Event. 7.2.

FIXED TOKEN VALUE

uring the pre-sale and ICO, a single XBF token is valued at $0.05 or $1,000 = 20 000 D XBF token. The XBF token will be released on the Bitfair Exchange, within 48hrs after the conclusion of the token sale. XBF tokens will launch on the Bitfair Exchange at a price of $0.50 per XBF token.

7.3.

DISTRIBUTION OF XBF TOKENS

T he Bitfair ICO will see a total of 1.2 billion XBF tokens distributed


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Revenue raised from the Bitfair Token Sale Event will be allocated in accordance with the approved budget agreement.

The management and advisory team has broken down the following high-level priority allocations:

7.4.

Bitfair XBF Token Sale

The Bitfair ICO will see a total of 1.2 billion XBF tokens distributed

PRE-SALE START DATE

9 July 2018, 10:00 (UTC-2)

PRICE PER XBF TOKEN

$0.05

TECHNICAL LIMIT TO THE NUMBER OF TOKENS

1 200 000 000 (1.2 billion)

FURTHER TOKEN ISSUE

Only a once-off token issue via the pre-sale event

SECURED METHOD OF TOKEN PURCHASE

BTC, ETH, XRP, BCH, LTC, XMR & Wire transfer

TOKEN DISTRIBUTION DATE

No later than 48 hours after the token sale

EXCHANGE LISTING PRICE

$0.50 per XBF token


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Bitfair - the most exciting pre-sale of 2018 Bitfair will hold a pre-sale for traders at huge discounts. The pre-sale will commence on 9 July 2018 at 10:00 (UTC-2).

AMOUNT OF XBF TOKENS PURCHASED

ADDITIONAL BONUS

Round 1 – Min $25,000

75%

Round 2 – Min $10,000

50%

Round 3

40%

Round 4

30%

A purchase of $10,000 or more XBF during Round 3 and 4 of the Pre-Sale Event will receive an additional 10% bonus allocation.

7.5.

XBF COMMUNITY AIRDROP

13% of all XBF tokens will be allocated towards a community airdrop pool that will be released to the Bitfair community in the following way:


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Communtiy Airdrop & Strategic Marketing Partners itfair will airdrop XBF tokens to various community members and strategic marketing B partners. These tokens will be allocated to help grow the Bitfair community through a strategic digital marketing campaign, including dedicated YouTube videos, write-ups, posts, and tweets. Community support is required for translation work, finding bugs and errors, many marketing and expert discussion forums such as Bitcointalk, the contribution of community leaders, banner ads, and contributions to selected publications which specialise in cryptocurrency and blockchain. The airdrop campaign will be available at airdrop.bitfair.com. The Bitfair marketing team will allocate and airdrop these tokens to the respective wallets. The Bitfair team is calling on its community to get involved in their XBF marketing airdrop campaign.

FIRST NUMBER OF SIGN-UP TRADERS

XBF SIGN-UP BONUS

1 000

5 000

5 000

2 500

10 000

1 000

100 000

250

250 000

100

The airdrop tokens received on sign-up will be locked from being sold or transferred from the Bitfair platform. Traders will only be able to use these airdrop tokens to trade on the Bitfair platform for a period of 12 months whereafter it will be allocated to the community airdrop pool. Bitfair will announce pre-signup before the ICO - so keep an eye out. Trading Bonus itfair will airdrop XBF tokens to active traders as a trading bonus. To become eligible for the B trading bonus airdrop, a trader will have to complete three successful trades per week, each with a minimum of $100 margin requirement. A trader will need to make these trades for a minimum period of six consecutive weeks. The trading bonus airdrop will be distributed to the first 10 000 traders that qualify for a trading bonus as per the following tiers: FIRST NUMBER OF QUALIFYING TRADERS

XBF TOKEN BONUS

1 000

10 000

1 000

5 000

1 000

4 000

1 000

3 000

1 000

2 000

5 000

1 000

All trading bonuses will be eligible to be sold or transferred once received as a trading bonus by the active trader. There would be no conditions attached to these tokens.


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7.6.

RESERVED TOKENS

A certain number of tokens have been reserved for Bitfair advisors, early investors, the founders, and the development team. These tokens are locked and cannot be sold onto the free market for a period of 12 months, as to ensure the maximum value and future growth of XBF tokens. 7.7.

XBF TOKEN DISTRIBUTION

BF tokens will immediately be tradeable on the Bitfair Exchange. The ERC20 standard token X - XBF token - can be claimed within 48 hours after the sale event has ended. Please note that the team expect the sale event to be sold out in record time and in this instance, XBF tokens can be claimed at a much earlier date. 7.8.

EXCHANGE LISTING

BF tokens power Bitfair SOC and are required for every trade. If the trader does not hold X XBF tokens, Bitfair will execute an instant buy of XBF on the Bitfair Exchange. XBF tokens will be listed and immediatly available for trading on Bitfair (XBF/ETH pairing), Etherdelta and HitBTC. Bitfair has applied for, busy negotiating token listings and expect to be listed on the following leading exchanges: • Binance • Bitfinex • Upbit • Huobi • KuCoin • Changely • Bancor • Okex • Bithumb • Bitstamp


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7.9.

BITFAIR PROJECTIONS

YEAR 1 PROJECTIONS

EXPECTED TRADING - $MLN

OCT

NOV

DEC

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

YEARLY

15 MIN CONTRACT

$7,5

$22,5

$45,0

$90,0

$270,0

$810,0

$1 620,0

$2 430,0

$3 645,0

$5 467,5

$6 834,4

$8 543,0

$29 777,3

1 HR CONTRACT

$5,0

$15,0

$30,0

$60,0

$120,0

$240,0

$480,0

$720,0

$1 080,0

$1 620,0

$2 025,0

$2 531,3

$8 921,3

$100,0

$200,0

$400,0

$600,0

$750,0

$937,5

$2 987,5

8 HR CONTRACT

24 HR CONTRACT

$2,5

$7,5

$22,5

7 DAYS CONTRACT

$45,0

$90,0

$180,0

$360,0

$540,0

$810,0

$1 215,0

$1 518,8

$1 898,4

$6 687,2

$50,0

$100,0

$200,0

$400,0

$600,0

$900,0

$1 350,0

$1 687,5

$2 109,4

$7 396,9

$150,0

$300,0

$600,0

$900,0

$1 125,0

$1 406,3

$4 481,3 $60 251

30 DAYS CONTRACT

TOTAL TRADING VOLUME

$15

$45

$98

$245

$580

$1 430

$3 110

$4 790

$7 435

$11 153

$13 941

$17 426

AVERAGE DAILY VOLUME

0,5

1,45

3,15

8,17

18,7

47,67

100,32

159,67

247,83

371,75

464,69

580,86

$0,150

$0,450

$0,975

$2,450

$5,800

$14,300

$31,100

$47,900

$74,350

$111,525

$139,406

$174,258

$0,15

$0,25

$0,20

$0,25

$0,30

$0,40

$0,50

$0,75

$1,00

$1,20

$1,40

$1,55

1 000 000

1 800 000

4 875 000

9 800 000

19 333 333

35 750 000

62 200 000

63 866 667

74 350 000

92 937 500

99 575 714

112 424 516

577 912 730

500 000

900 000

2 437 500

4 900 000

9 666 667

17 875 000

31 100 000

31 933 334

37 175 000

46 468 750

49 787 857

56 212 258

288 956 365

XBF TOKENS REQUIRED

$ VALUE - $MLN ESTIMATED XBF TOKEN VALUE XBF TOKENS

XBF TOKENS BURNED

$602,664

2018 -2019 Notes to Projections itfair forecast trading contracts to grow rapidly during the initial months with more than B $100mln in trading volume within the first 3 months. Forecast show that the 15min trading contract will contribute approximately 50% of Bitfair trading volume due to quick trading turnaround. Bitfair will require to burn almost 25% (288 956 365) of the capped XBF token supply during the first year. It is estimated the XBF token value to be around $1.55 by the end of year 1 Calculations are based on an Ethereum price of $1000.00 (0.00155 ETH). The future value of ETH will impact the above forecast. his forecast is to assist a trader in assessing the opportunity to buy XBF tokens in advance. Utility Tokens are highly T speculative. Each trader must do their own research.


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7.10. XBF TOKEN VALUE FORECAST

XBF TOKEN PRICE FORECAST

0.00155 eth

$1.80 $1.60 $1.40 $1.20 $1.00 $0.80

2018 -2019

$0.60 $0.40 $0.20 JUL

7.11.

AUG

Sep

oct

nov

DEC

Jan

FEB

MAR

APR

MAY

JUN

JUL

COMMUNITY DEVELOPMENT

Should the XBF tokens not all sell out during the Pre-Sale and ICO, unsold and unallocated XBF tokens will be transferd to the community airdrop pool. This pool is managed by the Bitfair marketing team and will be used to build the community, ensure Bitfair’s success and ultimately grow the value of the XBF token. Bitfair airdrop campaign will be available at airdrop.bitfair.com

7.12. XBF SMART CONTRACT

The link to the smart contract can be found here – https://github.com/BitfairHQ/contracts


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8

DISCLAIMER OF LIABILITY The purpose of this Whiteaper is to present Bitfair and information relating to the Bitfair project to potential Token holders in light of the proposed Token Launch. This information is not intended to be exhaustive and does not constitute a contractual relationship. Its sole purpose is to provide relevant information to potential Token holders in order for them to determine whether to undertake, of their own accord, a thorough analysis of the project with the intent of acquiring Tokens. his Whitepaper does not constitute a prospectus of any sort or a solicitation for investment, T nor does it in any way amount to an offering or a solicitation of an offer to buy any securities in any jurisdiction. It is not, therefore, composed in accordance with, and is not subject to, laws or regulations designed to protect investors in any jurisdiction. T he XBF token is a utility token. It is not in any way or form a digital currency, security, commodity, or any other type or form of financial instrument. XBF tokens can only be used for the purposes as set out in this Whiteaper. It shall not be used for any other financial purposes, including but not limited to, any investment or speculative purposes. Certain statements, estimates and financial information contained in this Whitepaper constitute forecasted (predicted) statements or information. Such predictions involve both known and unknown risks and uncertainties which may cause actual events or results to differ materially and substantially from the estimates or the outcomes implied or expressed in such forward-looking statements. This English language Whitepaper is our primary official source of information about the Token launch. And the information herein may from time to time be translated into other languages or used in the course of written or verbal communications with existing and prospective customers. In the course of such translation or communication, some of the information may become lost, corrupted or misrepresented/mistranslated. he accuracy of such (alternative) communications cannot be warranted. In the event of any T conflicts or inconsistencies between such translations and communications and this official English language Whitepaper, the provisions of this English language original document shall always prevail and can be found at whitepaper.bitfair.com Bitfair will be available and functional for trading purposes before the XBF tokens are released for trading.

JOIN

OUR TRADING REVOLUTION T H E W H I T E PA P E R

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