Vrenelium Whitepaper 1 1 · 2021. In 2017, the global Blockchain technology market is predicted to...

Vrenelium Whitepaper v1.1 01.08.2018 Page

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Whitepaper

DanielM.Affolter,SaschaP.Lorenz,MaurizioTidei

v1.11stAugust2018


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TableofContents

1 ExecutiveSummary....................................................................................................3

2 ProductsandServices.................................................................................................42.1 VreneliumBlockchain:AnovelapproachwiththeVreneliumDoubleHelix.....................42.2 SmartMempool:MachineLearningenforcedTransactionRatingSystem........................52.3 VRE:ThesustainableCryptocurrencyVrenelium.............................................................52.4 SmartContracting...........................................................................................................62.5 VreneliumAG:Blockchain-Development,ConsultingandCustomizedSolutions..............6

3 Market.......................................................................................................................83.1 MarketSituation.............................................................................................................8

4 FounderandTeam...................................................................................................114.1 Founder.......................................................................................................................11

4.1.1 DanielM.Affolter,lic.iur..............................................................................................114.1.2 SaschaP.Lorenz,M.Sc.................................................................................................114.1.3 MaurizioTidei,M.Sc.....................................................................................................12

4.2 KeyPositions.................................................................................................................124.2.1 Dr.HubertusFremerey.................................................................................................124.2.2 ThomasGrond,MBA....................................................................................................124.2.3 EwaldKornmayer.........................................................................................................134.2.4 ScalingtheVreneliumTeam.........................................................................................13

5 PartnerandLegalInformation..................................................................................145.1 LegalandRegulatoryAdvisory.......................................................................................145.2 TokenClassification.......................................................................................................145.3 SRO-VQF.....................................................................................................................14

6 Roadmap..................................................................................................................15

7 FinancialPlanning.....................................................................................................16

8 ICOFiguresandTokenEconomics.............................................................................17


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1 Executive Summary

Vrenelium: The sustainable and ecologically responsible 3rd generation Blockchain and Cryptocurrency (VRE) from Switzerland Blockchain technology is considered as one of the key technologies of the future. It has many advantages, including decentralized availability, high security through replication, peer to peer transactions without intermediaries, full automation of transactions through smart contracts and many more. But there are also downsides to first and second generation Blockchains, such as: Massive waste of energy; slow and very expensive transactions; bad image, when, for example, crypto currencies are used as a means of payment for illegal transactions; massive accumulation of nodes on a few participants who have built mining farms, etc. Vrenelium takes a new direction. It utilizes all the advantages of Blockchain technology, while eliminating the mentioned disadvantages. Here are just a few key points that make Vrenelium a unique approach for the future of Blockchain ecosystems: - Vrenelium is sustainable. Through its unique PoMW (Proof of Meaningful

Work), the amount of wasted energy will be decreased dramatically. The needed energy will be used for socially responsible projects in the fields of healthcare, science, ecological protection and more.

- Vrenelium is secure. With the Vrenelium Double Helix, several attack

scenarios, like those on former Blockchains, become much less likely or completely impossible.

- Vrenelium is fast. It is vital for a peer-to-peer means of payment to process

transactions rapidly. Due to the machine learning powered Smart Mempool, Vrenelium is a uniquely fast and secure way to pay.

- Vrenelium is transparent. Vrenelium does not want to be the dark net’s next

means of payment. The company is a member of a Swiss SRO (Self Regulatory Organisation) by the Financial Services Standards Association VQF, and is legally overseen by one of the big four global advisory companies.


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2 Products and Services

2.1 VreneliumBlockchain:AnovelapproachwiththeVreneliumDoubleHelix

2.1 Vrenelium Blockchain: A novel approach with the Vrenelium Double Helix

The unique Vrenelium Double Helix – a combination of PoMW (Proof of Meaningful Work) and PoS (Proof of Stake) – makes the Vrenelium Blockchain an advanced, secure and sustainable third-generation Blockchain. A novel approach, Proof of Meaningful Work was developed specifically for the Vrenelium Blockchain to replace the simpler Proof of Work (PoW). While the basic idea, to protect the Blockchain by proving that a certain amount of computation was invested to create every single block, is worth being preserved, the current implementation, using purely artificial computational tasks (hashing), with the sole goal of burning “enough” energy, is much too wasteful to be used productively1 and scales very badly. So we decided to keep the good idea, but to implement it using meaningful computation tasks, so that the energy invested in the proof of the miners’ computational strength is used for calculations that support public scientific research projects (e.g. medical research for cures, chemical research, astrophysical simulations). Aside from this PoMW approach, the Vrenelium Blockchain has an additional adaptive layer of security which uses the Proof of Stake (PoS) method. Vrenelium is secure because, in contrast to other Blockchains that only have a single layer of protection, an attack on its Blockchain would need to fulfil two criteria simultaneously: An attacker would have to possess over 50% of the total computing power available to target the PoMW protection and would have to hold the majority of the stake for an attack on the PoS system. The probability of both conditions being met at the same time is extremely low.


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The Blockchain is scalable because the self-monitoring network enables parameters such as the ratio of PoS to PoMW to be adjusted continuously according to the momentary load situation. It is sustainable because the computing power used for PoMW is channelled into meaningful scientific research and other non-profit projects. Additionally, Vrenelium is ecological because, for the first time, the hybrid approach makes it possible to achieve a significant reduction in the energy consumption required to secure the Blockchain, without having to rely solely on Proof of Stake.

2.2 SmartMempool:MachineLearningenforcedTransactionRatingSystem

The Smart Mempool (SMP), developed exclusively for the Vrenelium Blockchain, is powered by the Helios machine learning platform. The platform was developed and trained to allow transactions to be executed using trust scores, even before definitive confirmation is provided via the Blockchain. This means that sellers have an instant and easily understandable indicator of whether a payment can be regarded as secure, without having to wait for confirmation from the Blockchain. Transactions can be settled much more quickly, making the system more suited to everyday use.

2.3 VRE:ThesustainableCryptocurrencyVrenelium

The cryptocurrency Vrenelium (VRE) will be a key application of the Vrenelium Blockchain. The primary goal for VRE is to be traded on the market and the leading platforms as a secure, highly scalable and sustainable cryptocurrency. It is to become established as a means of payment through strategic partnerships with various service providers and merchants. The advantages of VRE are rapid transaction confirmation combined with low transaction costs, which vary in line with the transaction amount. These costs should essentially be negligible for users, with the cryptocurrency undercutting standard bank charges wherever possible. This will lay the foundations for making VRE a viable means of payment for day-to-day needs. The more sustainable ecological approach adopted for the Vrenelium Blockchain will help to encourage social acceptance of VRE as a means of payment. Vrenelium AG will continue to develop its entire technical ecosystem on an ongoing basis with a view to actively shaping the marketplace over the longer term. Research and development will always be a vital part of Vrenelium AG’s business. In addition, VRE is the means of payment within Vrenelium smart contracts. With the combination of VRE and the Vrenelium Smart Contract, fully automated transactions of any kind can be developed and driven on the sustainable Vrenelium Blockchain ecosystem.


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2.4 SmartContracting

Prokyon, the integrated scripting language developed by Vrenelium, can be used to define data and contracts of any kind and any level of complexity in the Vrenelium Blockchain, referred to as smart contracts, and store them in a form that is protected against manipulation.

2.5 VreneliumAG:Blockchain-Development,ConsultingandCustomizedSolutions

Vrenelium AG has set its focus on developing the in-house Vrenelium Blockchain, Helios (machine learning platform), Prokyon (scripting language), Smart Mempool (SMP) and VRE, the Vrenelium cryptocurrency. It will offer Blockchain and smart contracting services for clients and users in both the private and public sectors. These may include financial services firms, insurers, rights holders (images, sound, film, printed works), certification authorities, private companies of any kind, legal and fiduciary firms, consultancies and public bodies. The integrated scripting language Prokyon can be used to develop domain-specific languages (DSLs) for all manner of specialist application domains. Services can be provided in conjunction with clients’ existing proprietary solutions or with Vrenelium smart contracts (and their dedicated interfaces). The aim is to establish Vrenelium AG as a center of competence in smart contracting over the medium term. The company is also constantly optimizing its Helios machine learning platform which uses deep-learning algorithms to check transactions for plausibility on a permanent basis via the Smart Mempool (SMP) and thus output meaningful trust scores. Helios can additionally be adapted and integrated to deliver bespoke solutions for a wide range of machine learning problems. The SMP, meanwhile, is also to be made available in the form of “software as a service”, including related consulting. Wherever the parties to a transaction depend on that transaction being protected against manipulation and traceable at all times, a tailored solution can be found with the aid of Prokyon (scripting language). Any conceivable legal transaction can be transformed into a Blockchain application.


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On top of this, the technology behind Vrenelium is highly scalable. Anyone in the open-source community may create solutions based on the Vrenelium Blockchain and play a part in its further development. Vrenelium’s integrated scripting language Prokyon, the open protocol and user-friendly APIs, provide an ideal environment to foster growth in this developer community.


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3 Market

3.1 MarketSituation

The enormous success of the crypto-currency Bitcoin in 2017 has given rise to an above-average number of companies and existing companies have changed or expanded their offer. Most companies specialize in marketing and advising on existing technologies. Very few companies are on the market with their own Blockchain developments. Virtually all statistics are showing great growth opportunities in the Blockchain technology market segment. The following presentation by Statista shows the market potential of the Blockchain technologies within the next three years 2018-2021. Size of the Blockchain technology market worldwide from 2016 to 2021 (in million U.S. dollars)

“This statistic presents the market for Blockchain technology worldwide from 2016 to 2021. In 2017, the global Blockchain technology market is predicted to reach 339.5 million U.S. dollars in size and is forecast to grow to 2.3 billion U.S. dollars by 2021.” [Statista17] “The global Blockchain technology market is expected to reach USD 7.74 billion by 2024, according to a new report by Grand View Research, Inc.” … “The market is expected to grow rapidly owing to numerous benefits that it provides, such as eradication of the requirement of a financial institution to validate transactions, reduction of duplicative record keeping, eliminating


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reconciliation, minimizing error rates, and facilitating faster settlement. With the use of said technology, the databases could become universal in nature, thereby allowing multiple institutions to use them at the same time, to bring various diverging systems closer together and to help increase the general efficiency. The increasing demand for this technology across financial services, consumer or industrial products, technology, media & telecom, healthcare, transportation, and the public sector is largely responsible for driving the market toward growth. The major drivers include the growing interest of the BFSI (Banking, Financial services and Insurance) sector and more merchants accepting crypto currencies, among others. The probable opportunity of this technology further includes the instant settlement of various financial transactions and achieving optimized settlement options for the netting and clearing process.” [GWRes16] In general, Blockchain technologies are now seen as the driving force behind one of the biggest technology growth markets of the next few years. The „Gartner Special-Report“ about the prospects of Blockchain technology: The Blockchain Revolution Promises to Touch Every Industry. The Blockchain revolution began with bitcoin, which used distributed ledger technology to foster trust in a currency and transaction mechanism not backed by any government or traditional institution. Visionary entrepreneurs and CIOs building and expanding digital businesses are keeping the flow of transformation going. Their goal is to reinvent the very nature of commercial activity by removing intermediaries and enabling more-fluid business processes to be conducted in diverse ecosystems.”


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https://www.gartner.com/technology/research/Blockchain/ This chart of the renowned “Gartner Hype Cycle for Emerging Technologies" shows researchers predicting a plateau for the Blockchain technology in 5 to 10 years. Demand will rise until 2022-2027 leading to significant growth rates of the whole economic segment. Through its consistent focus on the Blockchain technology market, coupled with its early market launch, Vrenelium AG has the best chance of establishing itself in Switzerland, and internationally, as a recognized specialist in the field of distributed ledger technologies (i.e. Blockchain technology). Assuming a market share of 0.5% for Vrenelium AG, based on the forecasts above, this would translate into $11.5 million in 2021 and 10% would reach $231 million. These assumptions relate to sales with purely the Blockchain applications. Turnover generated by the cryptocurrency Vrenelium is difficult to estimate at this time. Due to its sustainable, socially responsible and ecological background, VRE holds considerable potential for Vrenelium AG and also for numerous third-party suppliers in the Vrenelium ecosystem.


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4 Founder and Team

4.1 Founder

4.1.1 Daniel M. Affolter, lic.iur

Co-Founder, Chairman of the Board, Attorney at Law A lawyer by profession, he began programming computers as a young middle school student. That enthusiasm has accompanied him throughout his career: He was involved in large-scale software projects in the public sector at the beginning of the 1980s, and in his work as a lawyer for various private companies, he was regularly involved in the technological aspects of business. In his professional life he has always closely monitored the business possibilities of software. For several years he appeared as a speaker on B2B and B2C topics. Several companies he founded are successfully established in the Swiss market.

4.1.2 Sascha P. Lorenz, M.Sc.

Co-Founder, Senior Software Engineer In his early years, Sascha Lorenz was thrilled with the possibilities that opened up on his first Sinclair home computer running on BASIC. A little later he gained experience with home computers like Commodore 64, Atari ST, Amiga and the first ATs with Pascal, C, C ++ and assembler. After studying software engineering at the University of Applied Sciences Constance, Sascha Lorenz worked in several software companies of various sizes as a developer, and periodically in technical project management and software architecture. Among others, he worked for an aerospace industry company, as a member of a research project for empirical systems. As Head of Development in a fund management company, he developed quantitative and qualitative risk analysis and automatic trading systems. He later worked as a software architect in a Swiss eGovernment company. In 2014, together with Maurizio Tidei, he founded contexagon GmbH, a company specializing in machine learning, big data analytics, contextual computing and sensors. He also gained a Master of Science (Computer Science) degree with a thesis about Machine Learning and Big Data Analytics.


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4.1.3 Maurizio Tidei, M.Sc.

Co-Founder, Senior Software Engineer A PC enthusiast of the first hour, Maurizio Tidei gained his first computer programming experience as a child on the Commodore 64 and later as a teen on 486 PCs. During and after completing his studies in computer science (software engineering, Dipl.-Inf (FH)), 2001-2006 at the University of Applied Sciences Konstanz, he gained several years of professional experience as a software engineer in international projects for a software company in St. Gallen, meeting strict security criteria for the pharmaceutical industry. In addition, he co-developed a platform using emerging revolutionary web technologies, which evaluated the price development of commodities, gold and silver coins graphically and interactively in web browsers. In 2010, he took the leap to self-employment, with the implementation of an idea for a web-based, distributed system that analyzes the linking of billions of websites and their placement in search engine results, which is still being used today by hundreds of webmasters and online marketing agencies. In 2014 he founded contexagon GmbH with Sascha Lorenz and in 2015 he gained a Master of Science degree (M.Sc. Computer Science) with a thesis about Contextual Computing and Modern Programming Languages.

4.2 KeyPositions

4.2.1 Dr. Hubertus Fremerey

Physicist, Philosopher, Mathematical Advisor, Leader of Vrenelium Ethics Commission After studying physics at the University of Bonn, Hubertus Fremerey finalized his dissertation in the field of quantum mechanics with summa cum laude. Even while still studying physics, he was already programming the former IBM mainframes, and for all his professional life, he continued to work in software development and quality assurance. For several years now, he has been employed as a scientific peer reviewer and author in a prestigious British faculty of philosophy.

4.2.2 Thomas Grond, MBA

Head of Communications Thomas Grond knows the world of computers as well as the world of media. After spending a few years working as a programmer on mainframe systems, he went on to educate himself as a language teacher, ran a language school, and eventually switched to journalism.


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Here, he worked as a radio reporter and moderator, was part of the set-up team for a private television station in Switzerland and held leading positions in two large media organizations with national and European orientation. During his studies he obtained a Master of Business Administration from the University of Strathclyde in Glasgow.

4.2.3 Ewald Kornmayer

Head of Sales (B2B) Ewald Kornmayer has broad experience in leadership, technical management, management, development management and production management. In his professional live he has held responsibility for the design, development and manufacture of highly complex machines, assemblies and components, as well as for the development of medical products and their authorization, e.g. FDA verification and validation.

4.2.4 Scaling the Vrenelium Team

Vrenelium’s core team is currently working with several freelancers in various disciplines and has strong support by partner companies. During the ICO, Vrenelium will hire additional team members. The founders have a broad network of experienced talents in development, security and system engineering, and several interested engineers are currently waiting to get on board.


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5 Partner and Legal Information

Vrenelium AG is constantly collaborating with several companies and institutions to prepare a sustainable ICO and is setting up frameworks for a solid and sustainable approach.

5.1 LegalandRegulatoryAdvisory

One of the big-four audit and advisory companies is counseling Vrenelium AG regarding the regulatory and tax requirements of the planned ICO in Switzerland. Furthermore, this company advised and supported Vrenelium AG with the Registration as a self-regulatory organization ("SRO"), including preparation and compilation of all necessary Documents (such as forms, declarations, MLA instructions).

5.2 TokenClassification

Vrenelium and its legal advisor have assessed the VRE ICO Token as well as the VRE Token in accordance with the “Guidelines for enquiries regarding the regulatory framework for initial coin offerings (ICOs)” of the Swiss Financial Market Authority FINMA of 16 February 2018 under Swiss law. Considering the characteristics of the respective tokens Vrenelium and its legal advisor come to the conclusion that under Swiss law the VRE ICO Token qualifies as an asset token until it is transferred from the Ethereum to the Vrenelium Blockchain. Thereafter the VRE token qualifies under Swiss law as a payment token.

5.3 SRO-VQF

The VQF (Verein zur Qualitätssicherung in Finanzdienstleistungen) is the leading, largest, officially recognised self-regulatory organisation (hereinafter: "SRO") pursuant to the Federal Act of 10 October 1997 on the combating of money laundering and the prevention of the financing of terrorism in the financial sector. The registration of Vrenelium AG as a SRO-member of the VQF is an important cornerstone of the seriousness and reliability of Vrenelium AG. Like this Vrenelium AG ensures trough the installed KYC- and AML-processes, that it will comply with the goals set by VQF as mentioned above.


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6 Roadmap

This roadmap is based on the assumption that the ICO raised enough capital to scale the team accordingly, the legal situation is the same as today's and the technical requirements do not change significantly meanwhile. All times specified are to be understood as estimates. We try our best to comply with them, but can not guarantee them. 3rd and 4th Quarter 2018 ICO - Initial Coin Offering (private and public sale)

Onboarding of further team members

2nd Quarter 2019 Start of Miner Acquisition 3nd Quarter 2019 Start of Vrenelium Testnet 4th Quarter 2019 Planned launch of Vrenelium Blockchain

Planned transfer of VRE ICO Tokens to VRE Tokens on the

Vrenelium Blockchain

Planned launch of VRE Wallets on new Blockchain


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7 Financial Planning

The financial key values for the Vrenelium ICO are: ICO target: 6.000.000 CHF Hard Cap: 22.175.000 VRE ICO Token All raised funds will be used for:

- Development of the Vrenelium Blockchain ecosystem to market maturity: Hiring of further software engineers (server, security, mobile iOS and Android), network administrators, test engineers, supporter and PR experts

- Hardware and operating costs (e.g. data center fees) - Office Rent - Public Relations, Marketing, Sales - Fees (e.g. exchanges) - Legal Consulting - Administration (e.g. Accounting, Back Office)

Assumptions are based on a capitalization of 6 million and vary in line with the capital stock. The main part of the funds are used directly for the development of the Vrenelium Blockchain and ecosystem. As a sign of commitment to the project, all Vrenelium AG employees accept a part of their salary in VRE, 70% with a holding period of minimum two years.

Development60%

Hardware7%

OperatingCosts6%OfficeRent

6%

PR,Marketing,Sales7%

Exchange8%

LegalConsulting5%

Administration1%

Other14%

UsageofICOFunds

Development Hardware OperatingCosts OfficeRent

PR,Marketing,Sales Exchange LegalConsulting Administration


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8 ICO Figures and Token Economics

During the ICO and the development, the VRE ICO Token will be issued on the Ethereum Blockchain as ERC-20 Token. These will be converted to native VRE token after successful commissioning of the Vrenelium Blockchain. The total number of VRE ICO Tokens Issued is 24’100’000 Tokens with a total of 19’900’000 VRE ICO Tokens for sale. The ICO is separated in two stages: private and public sale. During the private sale the minimum amount for sale is 500 VRE ICO Token. 1 VRE is offered at 1.30 CHF, with the following bonuses during private sale period: Ø 1st week: 15% Ø 2nd week: 10% Ø 3rd week: 5% Ø Referral bonus 10% Ø Quantity bonus 5% starting at 5000 VRE ICO Token Vrenelium AG holds 4.200.000 VRE, 70% with a holding period of 2 years. For Vrenelium AG the same ICO process applies as for all other ICO participants. The mathematical limit of Vrenelium coins is 78.000.000 VRE. This limit will be reached with logarithmic approximation in 2070. All VRE ICO Tokens are transferred to the Vrenelium Blockchain 1:1 when it is launched successfully. Updates to this whitepaper will be announced on www.vrenelium.com.

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