WHAT IS THE PURPOSE OF THIS INITIATIVE?
WHAT IS THE CBN FOUNDATION AND WHAT ARE ITS FUNCTIONS?
CBN Foundation is a Liechtenstein foundation established for guiding the efforts of participants of the CBN. The foundation’s assets are set apart from the private assets of the founders. The Foundation has no members, participants or shareholders. It operates pursuant to the foundation documents and the articles of association. The information on the founders and management of the Foundation as well as its assets will always be available to the public. We are currently in consultations with representatives of the Liechtenstein government and the financial market regulators to confirm that CloudEO tokens, as anticipated in the Whitepaper, do not represent securities. We received a “No Action Letter” on September 7th, 2017.
WHAT ARE THE COMMERCIAL AND OTHER RISKS ASSOCIATED WITH THIS INITIATIVE?
In Section 6 of the Whitepaper, we address the operational, regulatory, general commercial and other risks associate with the project.
WHY IS THE CBN FOUNDATION ESTABLISHED IN LIECHTENSTEIN?
In the recent months, we have reviewed a number of jurisdictions and decided to start our initiative out of Liechtenstein. The country has the most developed and comprehensive legal framework for Stiftungen (“foundations”) – arguably the most suitable legal entity form for driving blockchain initiatives. The country is bordered by Switzerland to the west and south and Austria to the east and north. It takes the best from these two legal systems incorporating the laws and legal principles into its own regulation. Liechtenstein has an area of just over 160 square kilometers (62 square miles) and is the fourth-smallest in Europe with an estimated population of 37,000. Economically, Liechtenstein has one of the highest gross domestic products per person in the world, when adjusted for purchasing power parity, and the highest when not adjusted by purchasing power parity. Liechtenstein is a principality governed under a constitutional monarchy. It has a form of mixed constitution in which political power is shared by the monarch and a democratically elected parliament. There is a two-party system and a form of representative democracy in which the prime minister and head of government is responsible to parliament. The judiciary is independent of the executive and the legislature. Liechtenstein is participating in the European Economic Area (EEA). As of June 2016, around 5,000 of 23,000 EU legal acts were in force in the EEA. There is some further cooperation with the EU via Switzerland, as Liechtenstein is highly integrated with the Swiss economy, being in the monetary union with Switzerland. Liechtenstein is one of the most educated nations. In 2006 Programme for International Student Assessment report, coordinated by the Organisation for Economic Co-operation and Development, ranked Liechtenstein’s education as the 10th best in the world. In 2012, Liechtenstein had the highest PISA-scores of any European country. The country has been known in the past as a tax haven; however, it is no longer on any blacklists of uncooperative tax haven countries. Our experience with country’s senior representatives of the government and regulators indicates their strong dedication to transparency in business and desire to promote the country’s image as a legitimate finance center with advanced regulation of virtual currency and related business models.
WILL THE CBN FOUNDATION PUBLISH A WHITEPAPER?
Yes. The draft of the Whitepaper is available here. We have made it available for an open discussion and are currently collecting and processing feedback. The final version will be released by the CBN Foundation shortly before the anticipated Token Generating Event (TGE). You are welcome to provide your feedback and inquiries to us at firstname.lastname@example.org
WHERE CAN I ACCESS COMPREHENSIVE INFORMATION ON TRENDS IN THE SATELLITE AND OTHER GEOSERVICES INDUSTRIES?
We list resources in Section 7 of the Whitepaper. One of them is What is the economic impact of Geo services? Prepared by Oxera for Google, January 2013.
WHO ARE THE INITIATORS OF THE CBN FOUNDATION? HOW WILL THE GOVERNING BODY BE BUILT?
We list them together with the management and the development team in Section 5 of the Whitepaper. This is a strong team of business, legal, satellite, geoservices and blockchain professionals. The supreme authority of the CBN Foundation is the Foundation Council, established and run using best practices for non-profit board formation. It manages the Foundation and represents it in any legal relations.
WHAT ISSUE IN THE GEOSERVICES INDUSTRY WILL THE CLOUDEO BLOCKCHAIN NETWORK RESOLVE?
Most transactions in the geoservice market are undertaken as “projects”, where the technical work is performed in a discrete, unsynchronized and highly manual process, documented by complex contractual paperwork and accompanied by rigorous financial operations connecting multiple parties using different currencies and methods of payment.
Significant efforts have been made to better orchestrate the existing system, but the problems inherent to the approach remain. Today, in the CloudEO Store, a customer transaction triggers a technical file which steers the automated transaction involving different data sets from different suppliers in different currencies and organizes the delivery to the customer. In parallel, the system meters and monitors the financial aspects and, monthly, generates summaries of consumed using the traditional invoicing and payment. The fact that there is a separate contractual framework for each geoproduct and service complicates the matters. In this system, there is still a requirement for a minimum transaction size to still allow a profitable transaction. Currently there is no system of receiving and encouraging the crowdsourcing for geodata –thus limiting the participation to a small number of players.
WHY ARE BLOCKCHAIN AND SMART CONTRACTS (TOKENS) THE ANSWER TO RESOLVING THIS ISSUE RATHER THAN CONVENTIONAL CONTRACTS AND CASH?
Using the technical capacity of smart contracts to run an integrated immediate exchange of content and funds within one automated transaction is the next important step to make smallest transactions (‘micro-geoservices’) and crowdsourcing feasible. Synchronizing the collected data is critical to building and expanding the Internet of Things (IoT) and combining it with Big Data and Artificial Intelligence (AI), that may not be successfully driven by disperse and limited geocontext.
The CBN Foundation will enable the development of the necessary set of tools and modules to handle all kind of geoservices in a smooth and undisrupted way across multiple sources and enabling diverse participation in an “open-source” manner allowing contributions and consumption of geodata and geoservices from the broad geoservices community. We can define each technical transaction in a smart contract represented by a token containing terms and conditions while automatically monitoring the completion of each transaction and triggering legal and business consequences anticipated therein.
WHO ARE CBN FOUNDATION’S FOUNDERS AND TEAM MEMBERS?
The Foundation’s founders are experienced professionals with experience in satellite industry, law, investment banking, computer engineering and blockchain. The project team initiating the establishment of this Foundation has already built a marketplace using data from multiple sources and experimented with tokens, using them in a project with the European Space Agency (ESA) which enabled transactions between the ESA and international R&D communities. In that pilot project, academic and industrial researchers procured satellite data-as-a-service or software-as-a-service from data providers and satellite operators by using tokens authorized by ESA. Inspired by the success of that project, we seek to build a broader decentralized network and tokenize the geoservice industry.
WHAT IS THE FUNCTION OF A LICENSE PROVIDED BY CLOUDEO AG TO THE FOUNDATION?
CloudEO is a pioneer of shared economy in geoservices. Provided that the TGE is completed as outlined in the Whitepaper, for consideration equal to the Ether amount received for the 20% of all tokens distributed by the Foundation at the TGE, CloudEO AG will grant to the Foundation a license authorizing the CBN community to use CloudEO’s know-how and intellectual property associated with the company’s order orchestration system. Upon receiving such license, but no later than ten (10) days from the TGE, the Foundation shall retain CloudEO AG for the period of four (4) years to act as an impartial steward for the CBN.
HOW MANY TOKENS ARE ISSUED?
The token will be generated at a Token Generating Event (TGE) following the ERC223 standard ). The total supply of tokens generated will be 1,1259*109. See section 3.7 of the Whitepaper for more details.
WHAT IS METHODOLOGY FOR TOKEN DISTRIBUTION?
In October 2017, the CBN Foundation will generate 1.1259*109 tokens.
Of these 1.1259*109 tokens, the Foundation will reserve 28.5% for distribution to stakeholders of the existing ecosystem – individuals and entities, who have contributed to the ecosystem either as geodata or software providers, geoanalytics developers, distribution partners, service providers, or those in other professional capacities. (CloudEO currently has approximately one hundred partners in its ecosystem). Additionally in October 2017, in exchange for digital currency, the Foundation will distribute to early supporters up to 5% of all CloudEO tokens allocated for the TGE.
Through the end of 2017, the Foundation will distribute 40% of tokens, through a TGE to the international blockchain community, satellite and geo-enthusiasts, and individuals and enterprises willing to participate in building and developing the CBN, with the goal of enabling and promoting the use of geodata and geoservices on a decentralized blockchain network. The price for the tokens distributed through the TGE will be determined through a transparent Amsterdam tender mechanism.
WHAT WILL HAPPEN WITH THE REMAINING TOKENS?
Upon completion of a successful TGE, the Foundation will reserve remaining tokens for members of the CBN community, who may subsequently earn tokens through development work and professional and other services delivered to the CBN in the period post-TGE through the Fall of 2021.
WHO MANAGES THE TOKENS?
The executive bodies of the CBN Foundation reporting to the community created by the Foundation.
WHO ESTABLISHES THE BUDGET AND MANAGES IT?
The CBN Foundation, through the bodies elected to manage its operations.
HOW WILL THE FUNDS BE USED (NON-PROFIT, PROFIT-ORIENTED)?
The CBN Foundation will be a non-for-profit foundation. The CBN community, guided by the Foundation, will consist of profit and non-for-profit organizations dedicated to developing a comprehensive decentralized network consisting of satellite companies, geodata providers, car industry, crowd sourcers, developers, and other contributors to the CBN.
WHAT METHOD FOR VALUING THE CLOUDEO TOKEN WILL BE USED?
We will announce the token price shortly before the TGE. The price will be calculated using the size of the ecosystem method. We anticipate that token price appreciation will be driven by the speed of the token adoption. The entire economic value of the ecosystem is modeled based on economic assumptions, and then divided among the token holders contributing to the ecosystem. CloudEO tokens will not pay any dividends, and there will be no buyback. However, if the CloudEO token is widely adopted as anticipated in the Whitepaper, this would have a positive effect on the value. To calculate it, we model the size of the geoservices market that CloudEO token can represent and divide it by the total number of tokens in existence. For further details please see Exhibit A herein that will be published shortly before the TGE.
WHAT AMOUNT OF CAPITAL IS ANTICIPATED THROUGH THE TGE?
The Whitepaper anticipates three rounds of token generating, with a budget assigned to each. See Section 3 of the Whitepaper for details.
IS THE MAXIMUM TOTAL OF TOKENS LIMITED?
The total number of tokens is limited. The Ether amount that the Foundation will be raising will be announced prior to the TGE and shall depend on the legal recommendation.
ON WHICH BLOCKCHAIN WILL THE TGE BE CARRIED OUT?
Ethereum (Ethereum with a smart contract)
WHICH CRYPTOCURRENCIES SHOULD BE OFFERED (BTC, ETH, LTC)?
WILL PARTICIPANTS PARTICIPATE IN THE TGE WITH FIAT MONEY (CHF, EUR, USD)?
WHO MANAGES THE PRIVATE KEYS TO THE CONTRIBUTION WALLETS?
A third-party technical service provider.
DO THE TOKENS REPRESENT SHARES OF A COMPANY?
To participate in the CBN, you need to acquire a CloudEOtoken. However, we emphasize in the strongest possible terms that a CloudEO token does not represent ownership or a security interest in the Foundation or any other entity. Nor is a CloudEOtoken related to any other assets or properties. The token does not represent a debt owed by the Foundation or any other entity and shall not be considered a debenture. To acquire CloudEOtokens, you need to be genuinely interested in contributing geodata, skills, time, energy and expertise to the CBN by becoming a member of the CBN community of volunteers. If you determine that CloudEO token may constitute a security subject to regulations in any country, we strongly advise you not to acquire them and suggest you immediately notify us of any possible risks.
IS PARTICIPATION IN THE TGE RESTRICTED (FOR EXAMPLE, ONLY EU COUNTRIES)?
Every effort is being made to avoid structuring CloudEO token as a security. Currently, we anticipate offering the tokens globally, but may reconsider depending on the recommendations.
WHAT MEASURES ARE PLANNED TO MEET DUE DILIGENCE (KYC, ANTI-MONEY LAUNDERING)?
We will retain a reliable and reputable third-party to run due diligence and implement best practices.
ARE BOUNTIES PLANNED?
Yes, although there is no schedule developed yet. We anticipate that some bounties will be given to contributors to the current ecosystem that has about 100 partners already.
WHO WILL PROGRAM THE BLOCKCHAIN?
The tokens will be generated as described in Section 3 of the Whitepaper. They will be pre-mined and will be generated on Ether. It is anticipated that most of the technical work will be done by CloudEO, Datarella and a third-party technical service provider.
DO YOU PROVIDE YOUR OWN PROGRAMMER / OR OUTSOURCED OR CARRIED OUT BY THIRD PARTY -SUPPORT?
Datarella and CloudEO are among the initiators of the Foundation. A third party will also be retained to provide technical services to the Foundation.
WHAT ARE THE DETAILS ON THE POTENTIAL VALUE DEVELOPMENT OF CLOUDEO TOKEN, INCLUDING A DESCRIPTION OF DRIVERS AND A DESCRIPTION OF POTENTIAL DYNAMICS/VOLATILITY?
The value of the tokens will depend on the volume of the business conducted using the tokens and the number of CBN participants. In a stable environment, where participants trust the token as a valuable contracting and payment method, each token has the value of the traded transaction it represents and the volume of the transactions and the demand for tokens determines their price. With a fixed number of tokens and an increase in transactions involving those tokens, the demand and represented value is projected to increase.
Tokens must be seen an agreement to participate in the CBN community and contribute to the CBN development. Until the trust of the participants in the stability of the system has grown and until transaction size of the overall market reaches a statistically large basis, fluctuations of the value can be expected. Starting from tokenizing a small fraction of the geoservices market today, we aspire to expand the use of the token to the entire US $270 billion existing market of geoservices. As the tokenization expands to cover more data and services, the price of the token is projected to grow as well. In an open-source manner, all participants of the CBN may benefit from the created wealth, while making enabling access to geoservices to more people and companies.
One of the Foundation’s tasks will be to stabilize the system and build up mechanism benefiting all participants in the CBN community to prevent critical instabilities of the system and token fluctuation. The Foundation will introduce rules for holding provisions and preventing high speed trading activities.
DESCRIBE THE ASPECTS AROUND DATA SECURITY?
Datarella and a third-party technical service provider will perform tasks associated with the broad aspects of data security, including token design and sale; code audit of launch contracts; accounting and reporting; as well as hot wallet/cold storage services and support.
EXHIBIT A – TOKEN VALUATION METHOD
For a CloudEO token holder, the value of the token comes from token price appreciation driven by token adoption (different from speculative price appreciation). In this case, the entire economic value of the ecosystem is modeled based on economic assumptions, and then divided among the token holders contributing to the ecosystem. CloudEO tokens will not pay any dividends, and there will be no buyback. However, if the CloudEO token is widely adopted as anticipated in the Whitepaper, the value is expected to increase. To calculate it, one needs to model the size of the geoservices market that CloudEO token can represent and divide it by the total number of tokens in existence. Please consider the below as an example of such calculation:
As an example, for CBN to serve the potential market of US$270 B, the market has to adopt CloudEO tokens for enabling minimal transactions of 0.01€ – thus requiring at least 2.70e11 CLEO.
One may assume that certain part of CLEOs will be inactive and to have room for potential inflatory effects, Foundation will need a multiple of this. Also, it needs to enable in principle that individual tokens can be attributed at least for several years to one specific event.
According to this, the Foundation will generate 2e50 tokens which equals 1,259*10e15
2e50 means that 50bit tokens will be generated. These tokens are smallest unit called CLEO.
1 CLOUDEOTOKEN = 10e6 CLEO
Therefore, the Foundation will generate:
1.259*10e9 CLOUDEOTOKENs = 1.259*10e15 CLEOs
[Value Assessment to be published upon preliminary feedback from the CBN community]
EXHIBIT B THE FOLLOWING TERMS ARE FREQUENTLY USED IN THE GEOSERVICES INDUSTRY
|API||Application Programming Interface|
|CDR||Critical Design Review|
|DaaS||Data as a Service|
|EOhopS||Earth Observation data hosted processing for Science|
|EOhopS packages||Offerings for data, software and IT as a Service for EOhopS|
|EO-SSO||Earth Observation – Single Sign-On|
|ESA||European Space Agency|
|ESRIN||European Space Research Institute|
|GIS||Geographic Information System|
|GPC||CloudEO GeoProduction Center|
|GUI||Graphical User Interface|
|HTTP||Hypertext transfer protocol|
|IaaS||Infrastructure as a Service|
|ICT||Information and Communication Technology|
|IPR||Intellectual Property Rights|
|ITT||Invitation To Tender|
|OGC||Open Geospatial Consortium|
|OOS||CloudEO Order Orchestration|
|ORR||Operation Readiness Review|
|OSS||Open Source Software|
|OTS||Off the shelf|
|PaaS||Platform as a Service|
|SAR||Synthetic Aperture Radar|
|SoW||Statement of Work|
|T0||Assumed Start Date|
|VMT||Virtual Machine Template|
|WxS||Suite of webservices for EO: Web Map Service (WMS), Web Feature Service (WFS), Web Coverage, Service (WCS) and Web Processing Service (WPS).|