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CHRONOBANK - PHASE 1: A NON-VOLATILE DIGITAL TOKEN BACKED BY LABOUR-HOURS 4 direction and/or implementation of the CBE system. Only valid TIME holders are considered current stakeholders in the CBE system and are the only parties authorised to participate in a poll. 2.2. Labour-Hour Tokens Labour-Hour Tokens (LHT) are the fundamental unit of value within the ChronoBank system. The purpose of these tokens is to provide a non-volatile, inflationaryresistant digital store of value on various blockchains. We envisage these tokens for utilisation in future systems, such as LaborX (see Section 4 for a brief overview). A Labour-Hour Token will be derived from a standard Ethereum ERC20 token and will be tradeable on all major exchanges. The ChronoBank system will ensure that these tokens will always have a 1 to 1 mapping with legally bound promises of labour-hours from various Labour-Offering Companies (LOC). As such, token holders may also redeem these tokens at any given time for their real-world labour-hour counterpart. This section details the various processes required to feasibly sustain the 1 to 1 mapping of LHT to offered labour-hours and ensure the economic stability of the ChronoBank system. 2.2.1. Minting The minting process takes place when a company offering labour-hours (Labour-Offering Company (LOC)) chooses to enter into a legally binding agreement with the CBE. The CBE must then run strict checks (the guidelines of which are described in the business outline [9]) of the LOC wishing to participate in the ChronoBank system. Once the LOC is approved, the CBE and LOC will negotiate on various parameters (summarised in Appendix B) before entering a legally binding contract whereby the LOC promises labour-hours in exchange for LHT (or the fiat equivalent). The CBE will then publish a hash of the contract on the Ethereum blockchain and store the contract on a decentralised storage system such as IPFS [10] or SWARM [11]. This gives a transparent ledger detailing the current state of the backed LHT. The exact mechanisms behind the minting process are non-trivial and we refer the reader to Figures 4 and 5 during the following discussion of the process. When an LOC and the CBE have agreed on terms, the CBE mints the equivalent amount of LHT as labour-hours offered by the LOC, ensuring the 1 to 1 relationship between the two. Of the newly minted tokens, the CBE will retain ρ percent3, providing the remaining (1 − ρ) of minted LHT to the LOC. In practice, the CBE can sell the (1 − ρ) of minted LHT on exchanges and provide the LOC with the fiat equivalent, should they not wish to deal with cryptocurrencies. The ρ percent held by the CBE will be immediately subdivided into the following portions (shown diagrammatically in Figure 5). • fc ∈ [0, 0.01] - A fee charged by the CBE for services provided. • fi - The issuance fee which will go to the rewards contract for TIME token holders (see Section 2.1.2). • S - A portion to be sent to the Security Guarantee Fund (SGF) (see Section 2.3.2). • LT - The total portion sent to the Liquidity Reserve (Section 2.3.1). This fund is further split by a variable percentage, l, into LI (LOC insurance) and L0 (liquidity) (see Section 2.3.1 for further details). For clarity, we write the obvious explicit relation, ρ = fc + fi + S + LT . (2) We expect that the system will maintain fixed fees, but will vary S, l and LT (and hence ρ) on a case-by-case basis to control the stability and viability of the ChronoBank ecosystem. The purpose of the Liquidity Reserve and Security Guarantee Funds are detailed in the Funds Section (2.3) and a brief discussion of the economic feasibility of this system is discussed in Section 3. Figure 4. Procedural overview of the ChronoBank minting process. Figure 5. Fund distribution of minted LHT. 2.2.2. Redemption As LHT are fundamentally backed by real-world labourhours, holders may redeem their tokens at any time for these backed hours. To do so, holders will deposit their LHT into a redemption contract on the Ethereum blockchain. Along with the deposit, holders will provide relevant data detailing their redemption request, such as 3All percentages introduced in this document should be read as decimals. Hence (1 − ρ) ≥ 0.

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