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CHRONOBANK - PHASE 1: A NON-VOLATILE DIGITAL TOKEN BACKED BY LABOUR-HOURS 2 Figure 1. An overview of the ChronoBank system. This diagram shows the system’s constituents and their interactions. CBE refers to the ChronoBank Entity, LOC to Labour-Offering Companies, LHT to Labour-Hour Tokens and TIME to the token purchased during the crowdsale. of the LHT system through careful management of the system’s underlying processes. This section will provide details describing the proposed processes, practices, and operations undertaken by the CBE and its associates. An overview of the functionality of the ChronoBank system’s constituents is shown in Figure 1. The system as a whole is designed with the intent of a single deployment per economic region. For instance, the system could be deployed once in Australia using the value of one labour-hour in the Australian economy, measured in Australian dollars. As this document is an abstract description of the system, it does not refer to any region-specific implementation but instead refers to generalised system parameters that must be tailored for each region. With few exceptions, all processes and structures described in this document may have slight variations in implementation between regions in which ChronoBank operates. The initial implementation of the CBE will utilise the Ethereum[6] blockchain; however, future implementations may tokenise assets on alternative blockchain systems (e.g. Waves [7], Bitcoin [1]) when it is deemed appropriate. The CBE provides economic benefit both to the environment in which it is deployed, and to a group of stakeholders that assist the CBE by providing initial operating capital. Unlike the region-specific deployment of the CBE system, only one group of CBE stakeholders (a.k.a. TIME token holders) exists globally. These stakeholders provide initial operating capital to the CBE in the form of both fiat and cryptocurrencies, in exchange for a portion of future profits attained by the CBE. 2.1. Stakeholders & TIME Tokens In order to fund the development and operation of the ChronoBank system, there will be a fundraising phase known as the crowdsale. During the crowdsale, individuals may purchase TIME tokens at a fixed rate, which provides the token holder with the right to receive a proportion of the profits arising from the operation of the system. In addition to the entitlements regarding the system’s operating profit, holders of TIME tokens will also be granted the right to vote on important decisions regarding the ChronoBank system. TIME tokens will be developed utilising the Ethereum ecosystem, specifically leveraging the ERC20 token standard[8]. The ERC20 specification will be extended to provide voting functionality and rewards distribution; this is discussed further in Sections 2.1.3 and 2.1.2 below. 2.1.1. Crowdsale During the crowdsale, TIME tokens will be created as necessary and sold at the fixed price of 100 TIME tokens for 1 bitcoin (BTC). There is no limit to the number of TIME tokens generated during the crowdsale; however, no further TIME tokens will be generated after this phase of the project. ρ fc fr fi S Total percentage of minted LHT taken by the CBE Fee taken during minting by the CBE Fee taken during redemption by the CBE Issuance fee taken during minting Percentage of minted LHT put into the SGF LT Percentage of minted LHT put into the Liquidity Reserve L0 Percentage of minted LHT used for LOC insurance M Number of months until L0 is transferred into the SGF l Percentage of LT used for LOC insurance P Interval between TIME token reward payouts Table 1. List of abstract variables and constants used throughout this paper for reader’s reference. See the Appendix for further details.

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