White Paper

Draken.tech

The Fourth Generation of Blockchain...

in Decentralized Finance

TABLE OF CONTENTS

EXECUTIVE SUMMARY 2

What is Blockchain? 2

Mutually-reinforcing benefit between Blockchain and the financial system 3

DRK DEFI ALL-IN-ONE PLATFORM 5

The core layer 5

The Extensions layer 6

The Applications layer 6

BLOCKCHAIN STRUCTURE 7

PROOF-OF-HONOR CONSENSUS 7

Ranking makes a critical change in blockchain world 7

Major advantages of PoH over other consensus mechanisms 8

DaRK PRIVACY PROTOCOL 11

DaRK Privacy Overview 11

Ring Signature: Untraceable Sender 12

Stealth Address: Unlinkable Receiver 12

Condential Transaction: Unknown Transaction Amount 13

A breakdown of DaRK Privacy confidential transactions 13

Encrypted Digital Assets and the DaRK Privacy note 14

How can DaRK Privacy notes be spent? 14

How is note ‘ownership’ defined? 15

How do we get value into DaRK Privacy note form? 15

What is the cost of all of this? 16

What info can be gleaned from confidential transactions? 16

The DaRK Privacy protocol’s trusted setup 17

Why is the DaRK Privacy protocol important? 18

What is in the DaRK Privacy protocol’s future? 18

SMART CONTRACT 2.0 TO BLOCKCHAIN ECOSYSTEM EPICENTER 19

RotoLadder 21

WhiteHole 21

DecenNet 22

DRK CHAIN SPECIFICATIONS 23

APPLICATIONS 24

Traditional use cases 24

Application to interact with DRK chains 25

TENTATIVE ROADMAP 27

RISKS AND DISCLAIMERS 28

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EXECUTIVE SUMMARY

DRK is a decentralized platform for the existing financial sectors of the Draken Group's digital

banking system. The goal of the DRK is to gather all the information stored in a decentralized

authentic ledger and transform payment processes and financial procedures. As a result,

payment becomes cheaper, more convenient, and more secure with a host of automation

capabilities.

To become the future digital banking center of the world, Draken Group aims to develop

Blockchain-based future financial instruments by focusing on two factors:

- Universality: our platform is designed to support 100% transactions globally, regardless

of the currency, law or language

- Intellectuality: unlike any of the conventional accounting systems such as the currently

centralized servers, DRK returns to the origin of exchanging and integrating a

commercial language of computers, as well as the management system to process

countless terms of payment automatically

It focuses on security, fast transaction efficiency and many of the latest decentralized

technologies in the decentralized finance sector to create an all-in-one platform in the Draken

Group system and the global financial industry.

What is Blockchain?

Blockchain is a technology that facilitates trust between trading partners. If you’re familiar with

Bitcoin, blockchain is the underlying technology that makes it possible to transfer currency and

have confidence that transactions are successfully completed. But banking and other industries

are using blockchain (with or without Bitcoin) in a variety of ways.

A blockchain is a secure “ledger” or a list of transactions. The benefits of blockchain come from

two key features:

Distributed

There are numerous copies of the ledger. A public blockchain, like the Bitcoin blockchain, gets

published and copied in multiple places. New transactions get broadcast to a broad network of

participants, who add those transactions to the ledger. Nobody controls the ledger, but the

system is designed so that everybody’s ledger contains identical information.

Immutable

A blockchain should maintain an accurate history of transactions. Because there are multiple

copies of the ledger, it’s hard to alter or delete transactions (or add new information that’s false).

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To do so, you’d need to change every copy of the ledger in every location. That would require

successfully hacking thousands (or more) of computers simultaneously—which is believed to be

impossible.

Mutually-reinforcing benefit between Blockchain and

the financial system

Money Transfers

Sending money to another country is an area ripe for improvement, and banks are already using

blockchain for remittances. Consumers and businesses transmit hundreds of billions of dollars

internationally every year, and the process has traditionally been cumbersome and expensive.

Blockchain-based transfers save banks time and money, but consumers can also benefit. For

example, assume a worker in the U.S. wants to send funds to her home country. In the past,

she’d have to travel to a money transfer office, wait in line for an agent, pay cash, and pay fees of

7 to 10 percent to complete a transfer. The recipient might follow a similar process. But with

blockchain technology, both parties can complete an electronic transfer with mobile

phones—and pay far less.

Inexpensive Direct Payments

When you send or receive a payment, the funds typically move through banks, credit card

processing networks, and other intermediaries. Each step adds complexity, and every service

provider expects to earn a fee for the part they play in your payment.

Merchants can benefit from blockchain technology in several ways:

Swipe fees

When customers pay with plastic, merchants pay processing fees, and those fees eat into

profits. Less-expensive blockchain payment networks may be an option for some

merchants. If nothing else, more competition should lower prices.

Insufficient funds

Customers who pay by check may bounce checks, causing losses and fees for merchants.

Electronic payments from customer checking accounts may also fail. But

blockchain-based payments can provide merchants with certainty within a few minutes

(or less).

Individuals also enjoy receiving payments with confidence. Online “buyers” may try to scam you,

but blockchain-based payments should be quick and irreversible. Plus, they’ll likely be easier

and less expensive than bank products. For example, if you’re selling a high-priced item like a

vehicle, it’s critical to receive payment before handing over the keys. The safest ways to get paid

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currently include cash, wire transfers, or cashier’s checks. But cash is dangerous, wire transfers

are labor-intensive, and cashier’s checks can be faked.

Transaction Details

Banks can use blockchain for more than moving money. The technology is excellent for keeping

track of transactions, and that may be useful in several areas.

Title details

Because ledgers are hard to tamper with, they can make it easier and more efficient to track

ownership. Each transfer of ownership (as well as liens and other events) can go in the ledger,

resulting in a trustworthy source of information about almost any type of property.

Smart Contracts

It may be possible to automate activities that previously added cost, complexity, and delays to

transactions. One such method is with the creation of smart contracts. These computer protocol

contracts can monitor when a buyer makes a payment, when a seller delivers on her end of the

deal, and handle a variety of problems that may arise. Plus, they don’t take vacations or make

mistakes—assuming they are programmed correctly. Smart contracts can be as simple as an

indifferent third-party between a buyer and seller (like the escrow providers we know today),

and they can get substantially more complicated. Combined with open banking, encrypted smart

contracts could lead to faster, automated lending decisions in a marketplace of bidders.

Financial Inclusion

By keeping costs low and allowing startups to compete against big banks, blockchain, and other

technologies can promote financial inclusion. Blockchain-based solutions may better serve those

who avoid bank accounts because of high fees, minimum balance requirements, and lack of

access. Instead of needing assets and regular income for banks, they need a mobile device. In

situations where it’s traditionally hard to identify individuals, digital IDs can provide a

large-scale solution.

Reduced Fraud

Blockchain technology resists hacking, DDOS attacks, and other forms of fraud. It can also help

banks and others identify individuals quickly and accurately through a blockchain-enabled

digital ID. With less fraud, the costs of doing business decrease, and presumably, the savings

benefit everybody.

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DRK DEFI ALL-IN-ONE PLATFORM

The core layer

The core layer manages the agreements formed on the ledger and transition status. It includes

the most basic smart contracts, allowing the creation of different entities and payment

requirements. It also detects when the payment has been completed. It is based on

immutability, system’s transparency and intelligence.

This layer is entirely free-of-charge to encourage usage and limit the development of other

systems. The only cost to be transmitted is for gas usage and the storage of information.

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The Extensions layer

The Extensions layer manages the actual trading conditions and rules. Most payment requests

are not straightforward; if it comes from a business, it will usually have rules for calculating

taxes, payment terms, deposits or advances. All of these conditions are in the form of extensions

that can be added to payment requests.

This layer is a prelude to great features that have not existed in the field, such as "ongoing bills".

For example, a person might choose this module to split their rent into 30x24 payments to their

landlord, which gives them plenty of liquidity without having to spend large sums of money at

the end of the month. Taxes will be transferred in real time to government agencies. This layer

will be charged. For utilities accrued in the same bill, each utility will charge a fee in which one

part is depreciated and the other is transferred to utility developers. This cost will decrease over

time to increase competitiveness and limit the development of alternative systems. The cost of

these extensions is initially estimated at between 0.05% and 0.5%. As the system grows, the cost

will decrease. This cost will continue to be used to support security and development of

applications. This layer is completely open. Anyone can create their own gadgets with user fees

that will be distributed competitively to attract and encourage developers and the community.

The Applications layer

The topmost layer is the Applications layer, which takes place outside of the blockchain.

Different companies' systems can connect to DRK to make requests or access information.

Accounting, auditing, taxes, debt collection, debt transfer and payment systems can all be

linked. Once a payment system connects to DRK (Mycellium, Coinbase, Bank of America,

Bankin etc.), it will be able to access the user's bill and request immediate payment.

DRK developers will develop applications, including an interface and an API to create and access

payment requests.

Credibility Application

A credit rating system is included in this layer to protect against fraud or shady payers. Part of

the support comes from a trust score (Hogderank) accessed by the system at the core layer,

combined with user credit rating algorithms at the Applications layer. For example, users might

detect if a company is committing fraud when they see other users who have previously declined

payments to this company. Conversely, if a company does not pay the invoice on time, after

accepting the bill, it will also be penalized. Credibility has many other uses; for example,

members of the network with high credit scores will receive reduced costs or access to private

applications.

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BLOCKCHAIN STRUCTURE

DRK Chain is built and optimized on Blockchain 4.0. The consensus mechanism Proof-of-Honor

(PoH) uses HodgeRank to rank nodes based on number of Shares and number of Transactions,

which encourages Draken Group partners to join the network under one node which brings

benefits when interacting with their financial transactions. PoH offers advanced, intelligent node

ranking to eliminate spam and fraud transactions, greatly increase the life of the network and

significantly reduce transaction costs. Smart Contract 2.0 with a multi-tier structure, optimization

and interoperability with other blockchains offers incredible compatibility and expansion with the

DRK platform.

PROOF-OF-HONOR CONSENSUS

Ranking makes a critical change in blockchain world

While the problem of Blockchain Trilemma seems unsolvable (by CAP Theorem ), DRKchain 1

comes up with a new approach, that balances among high security, achieving necessary

scalability and preserving sufficient decentralization.

DRKchain considers each blockchain as a mini Internet architecture and each node as a

website. Obviously, the Internet is a perfect decentralized environment. How do we search

for information contained in millions of websites. PageRank is a well-known algorithm that

Google uses for its Search Engine. The rationale behind ranking is that connection and

linkages make value of any network. A node within a network is important somehow if there

are linkages that refer to it. More referring linkages, more important a node seems to be.

Among millions of web-pages, relative importance of a page is evaluated by hyperlinks

referring to it. PageRank mathematically models web pages as vertices and hyperlinks as

edges of a directed graph, then applies an algorithm to score pages based on their edge graph,

higher score, better importance. In general, the importance of a web-page is based on its

content (its real value), and is fairly evaluated by PageRank. This is similar to a node in a

blockchain, its value can be measured by its transactions.

DRKchain introduces the concept of reputation, that combines the factor of work (or

performance) and the stake. Formally, we have: H = xS + yR, where H is the final honor

score, S is staking score, R is ranking score, x and y are regularized (non-negative)

parameters, x + y = 1.

Staking score is computed by the coin staked into the system, normalized by the total staked

amount. For example, let’s consider 3 stakes, Stake1 = 100, Stake2 = 200, Stake3 = 300.

Then the scores are S1=100/600=1/6, S2=200/600=2/6, S3=300/600=3/6.

Ranking score (normalized) is more complicated. There are several ranking algorithms

available, including PageRank, NCDawareRank, HodgeRank. The idea is that based on the

1 https://medium.com/@nuls/why-it-is-impossible-to-solve-blockchain-trilemma-c03745debb6

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transactions of all nodes (addresses or accounts) in a blockchain network, a ranking

algorithm will score the nodes to rate their importance. Technically, a node with more

transactions should be more important. A transaction is weighted by the value (amount of

coin) it carries. In-transfer to a node will increase its score while out-transfer cause a

decrease. Readers can find details about ranking algorithms in the published research . 2

Our formula is a general setting and it becomes PoS if y = 0. More significantly, ranking

score demonstrates a work (performance) factor on side with stake to make the honor score

of a node. This is equivalent to social reality, a man owns a lot of money, then he has a

reputation, but his work is more essential for his honor.

Now, instead of stake voting in DPoS, DRKchain uses honor voting. That is using honor score

to vote for witnesses who confirm transactions and produce blocks. We mean purely staking

is not the only way to become a block producer. Application developers are important

contributors to the value of a blockchain, since they run their business on its top. They

deserve to have a chance of becoming network operators.

It is clear that application developers create the major value of a network via their business

and transactions. Therefore, in DRKchain, they are granted a right of controlling the

blockchain network powering their apps. That's why we invent Proof of Honor as a

sophisticated balance between the three most important groups: application developers

(value makers), coin holders (value owners) and block producers (network operators). Here,

there is no conflict as happened on PoW or PoS based systems. In long-term perspective, we

suggest a greater parameter for ranking score, i.e. y > x. It will incentivize developers to build

and expand their business on the network and helps preventing malicious whales.

Furthermore, we also believe that running a business is more important than holding money.

DRKchain consensus helps reducing the staking vs cash flow conflict. Cash flow measures the

health of an economy and should be promoted. In contrast, PoS requires a vast amount for

staking, so reduces coin circulation. In Proof of Honor, staking is not the dominant factor,

hence it doesn’t affect negatively to cash flow. Transaction-based rating, on the other side, is

an incentive for coin flows to move more actively, then improves liquidity of the economy.

NEM (XEM) proposed Proof of Importance with a ranking idea similarly to ours. However,

its implemented algorithm is complex and not efficient. We will discuss more technical

advantages of Proof of Honor in comparison with other consensus mechanisms in the last

article of this series.

Major advantages of PoH over other consensus mechanisms

Thanks to DPoS, many blockchains have successfully scaled up to thousands of TPS, for

examples, EOS, WAVES, Steem. Besides its remarkable advantages, DPoS faces some

criticisms. The model allows a small number of rich guys to control the network. In fact, the

list of Block Producers (Top21 delegates, i.e. BPs) of EOS network is almost unchanged for a

long time. EOS faced a corrupt governance in “mutual voting scandal” . Despite of voting, 3

there is less diversity on the BP list and the whole network operation is in control of few

2 https://dl.acm.org/citation.cfm?id=3343160

3 https://cointelegraph.com/news/corrupt-governance-what-we-know-about-recent-eos-scandal

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richest bodies. This contradicts the decentralization philosophy of public blockchains. That’s

why it’s said that DPoS is a pseudo-decentralization. In addition, common voters have lack of

knowledge and skill to assess BPs’ performance (or delegates). Proof of Stake bases on the

idea that money holders should have the right and responsibility. The more coin they own,

the more responsibility they should pay. However, this isn’t always true. There are many

possible cases that BPs commit bad actions. Since all delegates are public, BPs may collude to

compromise the security of the network.

On Proof of Honor (PoH), the Honor score (H) combines staking (S) and transaction-based

ranking (R), formally, H = xS + yR, x + y = 1, x and y are non-negative. Based on voting

rounds, account owners use their honor score to vote for delegates (i.e. BPs). This implies

that PoH has the same scalability as EOS or any DPoS-based blockchains. Now, electors have

ranking scores as the finest criterion to assess node performance before voting. Therefore,

PoH makes a better security and decentralization. Let’s analyze in more details.

In PoH system, application developers can join the governors of the network leveraging their

apps on its top without any staking. The businesses may bring thousands of transactions

valued multi-billions, more than the market cap of coins in circulation. Stakeholders have

incentive to protect the network. App developers have more incentive to protect the network

safe as much as possible, since it keeps not only their money, but it is operating all

transactions of their businesses. Now, gatekeepers are more diversified. This enhances the

security of the network as well as decentralization. Note that Bitcoin now is not truly

decentralized, since it does not rely on miners longer but on tens of (centralized) large

mining pools controlling more than 90% of hashing power. We just want to remind everyone

that it seems impossible to build a perfect decentralization environment (like the Internet).

Instead, making blockchain viable and workable in reality is more important, more useful

and more practical. PoH offers more incentives to app developers, hence, provides better

fairness and promotion for the growth of a blockchain ecosystem.

Similarly to DRKchain’s ranking system, NEM (XEM) project implements NCDawareRank to

evaluate node performance based on token flows and stake, then uses the total rating scores

as weights for a (random) block producer selection. Such a random process is dangerous. No

algorithm can guarantee a truly randomness, simply because it is man-made. Therefore,

malicious nodes can deploy random algorithms to attach the network. That’s why many

blockchains avoid PoS with random selection algorithm. Instead, they apply voting rounds to

choose reliable delegates. DRKchain considers voting a good mean for democracy and

decentralization.

Furthermore, the algorithm used by NEM consensus (Proof of Importance – PoI) is very

complicated to implement and it is not suitable for blockchain space. In web-graph,

NCDawareRank is proven to be better than PageRank. However, on the transaction network 4

of a blockchain, there are some things that contradict the assumptions of NCDawareRank.

DRKchain uses an advanced statistical ranking algorithm – HodgeRank . Among the three 5

ranking algorithms, HodgeRank is the best one in terms of suitability to blockchain network,

spamming resistance and streaming calculation (i.e. online algorithm for real-time updating

4 https://dl.acm.org/citation.cfm?id=2433415

5 https://link.springer.com/article/10.1007%2Fs10107-010-0419-x

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transaction and rating score). Readers can find details on mathematical analysis and ranking

framework in this paper . In the following, we show a brief comparison among the 6

algorithms.

PageRank NCDawareRank HodgeRank

Proximity matrix NO YES NO

Complexity rate X Y Z < Y

Validation NO NO YES

Blockchain

suitability Medium Low High

Spamming

resistance NO Medium High

To finish the article series on DRKchain’s novel consensus mechanism – Proof of Honor

(PoH), we would like to summarize significant advantages of PoH and give a comparison

table with others.

● PoH is energy efficient because it has no mining process.

● PoH has a good scalability as the best DPoS-based blockchains. Basically, it can server

around 5000 TPS and possible to scale much more.

● PoH is easy to upgrade, even to hard-fork without any splitting on the chain.

● PoH offers the best incentive and fairness to app developers.

● PoH is more secure and more democratic (decentralized) than EOS and even several

PoW-based systems thanks to its diversity among delegated members (stakeholders

and app developers).

● PoH is better and more secure than NEM in terms of selecting block producers.

PoW PoS DPoS PoI PoH

Energy saving No Yes Yes Yes Yes

Decentralization

(democracy)

Varies Varies Pseudo Medium Semi-

level

Scalability Low Mediu

m

High Medium High

Staking No Yes Yes Yes Yes

Transaction-based

(performance) credit

No No No Yes Yes

Voting No No Yes No Yes

Fairness & balance

among network

participants

low low Low Medium High

Node honesty and

responsibility High Low

Medium Medium High

Security Varies Varies Medium Low High

6 https://dl.acm.org/citation.cfm?id=3343160

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Note that Bitcoin, initially offered a full decentralization. However, after the birth of mining

pools and ASIC machines, it has become centralized in some sense. In particular, small

PoW-based networks are easily vulnerable by low-cost attacks.

DaRK PRIVACY PROTOCOL

Cryptonetworks have introduced an entirely new asset class: crypto assets. Bitcoin was the

rst crypto asset; today there are over 1,600. People have started buying bitcoin, instead of

gold, as their long-term store of value. Stored under the mattresses of volatile economies, the

world’s most desirable at currencies are being replaced by stablecoins, that can be sent and

received with borderless freedom. Waves of startups now sell crypto assets to investors, not

equity.

For those who value privacy, crypto assets come with a big tradeoff. Transactions are

recorded on a public ledger, displaying amounts involved, inscribing virtual identities of their

senders and receivers. Given the choice, we strongly believe that very few people will willingly

disclose their crypto nancials to the entire world.

The biggest threat to this new token economy is the lack of privacy. Current blockchains

display all transactions publicly — so anyone can see your balances or track your activity.

DRK offers anyone the option to turn on privacy mode in this new world of cryptonetworks,

lets anyone create, send, receive and store their own privacy tokens.

DRK hopes to give these assets and their owners - both now and in the future - the option to

claim their right to privacy.

DaRK Privacy Overview

DRK Privacy Token is UTXO-based. We chose a UTXO-based model over an account-based

model because of the following reasons: 1) In a UTXO model, transactions can be easily

processed in parallel. 2) The UTXO model is stateless. Users can easily use a new address for

every transaction. This improves privacy. Transaction inputs are always linked to existing

UTXOs. Because of this, a sequential transaction order is easily authenticated. It is also easy

to verify if a UTXO is double spent.

The tech stack: DRK embraces a full-stack approach to decentralized privacy, reimagining

technology at every layer. Network Layer: A high-throughput proof-of-stake sidechain using

pBFT, allowing for secure two-way transfers of crypto assets whenever privacy is needed.

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Data Layer: Bulletproofs and RingCT for confidential transactions. Private transactions with 7

zero-knowledge proofs, linkable ring signatures, stealth addresses and confidential

transactions to mask the sender, receiver and transaction amount.

Ring Signature: Untraceable Sender

Untraceable Sender In a ring signature , we have a group of users. A ring signature proves

that a member of the 9 group has signed the transaction, without revealing the identity of the

signer. For example, if you encounter a ring signature with the public keys of Annie, Bob,

John and Peter, you will be able to claim that one of these users is the signer, but not be able

to pinpoint him or her.

In a ring signature , we have a group of users. A ring signature proves that a member of the 8

group has signed the transaction, without revealing the identity of the signer. For example, if

you encounter a ring signature with the public keys of Annie, Bob, John and Peter, you will

be able to claim that one of these users is the signer, but not be able to pinpoint him or her.

Stealth Address: Unlinkable Receiver

Unlinkable Receiver In a typical cryptonetwork, your public address is all that is needed for

anyone to view your incoming transactions. Your transactions are public and can be easily

linked together to infer your total balances and spending patterns. To avoid transaction

linking, DRK automatically creates multiple unique one-time keys; one for each incoming

transaction, based on the Diffie-Hellman exchange protocol .

In a typical crypto network, your public address is all that is needed for anyone to view your

incoming transactions. Your transactions are public and can be easily linked together to infer

your total balances and spending patterns. To avoid transaction linking, DRK automatically

creates multiple unique one-time keys; one for each incoming transaction, based on the

Diffie-Hellman exchange protocol . 9

7 https://crypto.stanford.edu/bulletproofs/

8 https://people.csail.mit.edu/rivest/pubs/RST01.pdf

9 https://ee.stanford.edu/~hellman/publications/24.pdf

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Condential Transaction: Unknown Transaction Amount

Unknown Transaction Amount A confidential transaction is recorded on the DRK public

ledger but the amount is 11 obscured. Validators can still verify the transaction without

knowing the exact amount, as every confidential transaction includes a zero-knowledge proof

of the transaction’s validity. Zero-knowledge proof is a powerful cryptographic proof that

enables the prover to demonstrate a statement is true without revealing any of its contents.

DRK employs related work such as CryptoNote and advanced techniques in short 10

non-interactive zero-knowledge proofs that require no trusted setup, such as Bulletproofs, to

reduce transaction size (shrink the size of cryptographic proofs from over 10kB to less than

1kB).

A condential transactionis recorded on the DRK public ledger but the amount is obscured.

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Validators can still verify the transaction without knowing the exact amount, as every

condential transaction includes a zero-knowledge proof of the transaction’s validity.

Zero-knowledge proof is a powerful cryptographic proof that enables the prover to

demonstrate a statement is true without revealing any of its contents. DRK implements

Bulletproof, short non-interactive zero-knowledge proofs that require no trusted setup and

shrink the size of cryptographic proofs from over 10kB to less than 1kB.

A breakdown of DaRK Privacy confidential transactions

There are really two questions here: what is the DaRK Privacy protocol and how does it

work? For a lightning summary of how this thing works: it’s not a ZK-SNARK, it’s an

10 https://cryptonote.org/whitepaper.pdf

11 https://people.xiph.org/%7Egreg/confidential_values.txt

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algebraic zero-knowledge proof that utilizes Boneh-Boyen signatures to create a commitment

scheme with a highly efficient range proof embedded into each commitment.

Right, well that’s cleared everything up then. So I’m going to focus on answering what the

DaRK Privacy protocol is. What is it doing when transactions are sent to it? To start with, we

need to describe what we mean by ‘confidential transaction’.

A confidential transaction is a transfer of value between two or more entities, where the

values being transferred are not visible to observers.

Confidential transactions have come in several forms, from ring signatures to ZK-SNARK

circuits. Similar to ZCash, the DaRK Privacy protocol uses the concept of encrypted ‘notes’

and join-split transactions.

Encrypted Digital Assets and the DaRK Privacy note

The DaRK Privacy protocol does not represent ‘value’ like a traditional balance, which maps

owners to how much they own. Instead, value is represented by notes. A note contains the

following public information:

● A DaRK Privacy commitment: an encrypted representation of how much ‘value’ the

note holds

● An Ethereum address of the note’s owner

A note has the following private information

● The value of the note

● The note’s viewing key. Knowledge of the viewing key enables a person to decrypt the

note (but not spend it)

One owner can have multiple notes. A digital asset that conforms to the DaRK Privacy

protocol will contain a note registry, which allows a smart contract to recover the public

information of every unspent note that currently exists.

How can DaRK Privacy notes be spent?

A DaRK Privacy note owner can ‘spend’ their notes in a join-split style confidential

transaction. In this transaction, the note owner will destroy some unspent DaRK Privacy

notes they own. In their place, they will create a set of new notes. The sum of the values of the

new notes must be equal to the sum of the values of the old notes, plus a public commitment

(I’ll get to that in a bit, but for now let’s assume this is worth 0).

So imagine Alice has two DaRK Privacy notes worth 100 tokens combined. If she wants to

send Bob 20 tokens, Alice would create one or more notes owned by Bob, whose values sum

to 20. She would then create one or more notes owned by her, the sum of which is 80 tokens.

She would then create a DaRK Privacy zero-knowledge proof that proves this relationship in

zero-knowledge (i.e. Alice does not reveal to anybody how much the notes are actually worth,

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just that the balancing relationship holds). The DaRK Privacy token smart contract will then

validate this zero-knowledge proof, destroy Alice’s input notes and then create the output

notes in its note registry.

When Alice is creating Bob’s notes, she constructs note viewing keys that Bob will be able to

identify, via a non-interactive secDRK-sharing protocol. Bob is dependent on Alice to act

‘trustfully’ in this regard and not provide viewing keys that can be decoded by observers. This

is already implicitly required — after all Alice could broadcast to the world how much she is

sending Bob if she did not want the transaction to be confidential.

How is note ‘ownership’ defined?

Every confidential transaction also requires digital signatures — a signature is required for

every input note, signed by the input note’s owner. The message of the signature is a hash of

the zero-knowledge proof. This provides an implicit acceptance that the note owners are

satisfied with the outcome of the confidential transaction, and want the transaction to be

processed.

How do we get value into DaRK Privacy note form?

Confidentially transfering value is nice, but without a way of getting ‘value’ (let’s call this v)

into the DaRK Privacy cryptosystem it all seems a bit academic. This is done via that ‘public

commitment’ in a confidential transaction. Assume that the DaRK Privacy token is linked to

a public ERC-20 token. If the DaRK Privacy zero-knowledge proof requires a public

commitment value v != 0 in order for the balancing equation to be correct, this means one of

two things:

1. If v is negative, the output notes are worth -v more than the input notes;

2. If v is positive, the input notes are worth v more than the output notes

If Alice issues a confidential transaction where v is negative, the DaRK Privacy token smart

contract will transfer -v public ERC-20 tokens from Alice to its own contract address.

Effectively, the DaRK Privacy token smart contract acts as a custodian of the ERC-20 tokens

while they are in confidential note form. Naturally, if this token transfer is rejected (e.g. Alice

doesn’t have enough tokens) then the transaction will be aborted.

If Alice issues a confidential transaction where v is positive, this represents a conversion from

DaRK Privacy notes into public ERC-20 tokens. The DaRK Privacy token smart contract will

transfer Alice v public ERC-20 tokens.

There’s one small caveat — the amount of tokens being transferred is actually v multiplied by

a scaling factor. This is because the range of integers a DaRK Privacy note supports is

smaller than that of an ERC-20 token. Our proof of concept deployment to main-net

supports numbers from 0 to about 1 million and our full implementation of the DaRK Privacy

protocol will support approximately 32-bit integers (more on that in a bit). ERC-20 token

balances, on the other hand, are represented by 256-bit integers.

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The scaling factor picked depends on the ERC-20 token being linked to. For our proof of

concept confidential DRK deployment, a DaRK Privacy note with value 1 is equal to 0.1 DRK.

What is the cost of all of this?

The DaRK Privacy protocol uses a bespoke commitment scheme that enables highly efficient

range proofs. As a result, the amount of computation required by the verification smart

contract is much smaller than one might expect. The overwhelming contributor to a

confidential transaction’s gas costs is the elliptic curve arithmetic required to validate the

DaRK Privacy zero knowledge proof. It costs 3i + 4j elliptic curve scalar multiplications to

validate a proof, where i is the number of input notes and j is the number of output notes.

Each confidentialTransfer transaction also requires a single elliptic curve bilinear pairing

comparison to verify.

The reason I’m using such odd wording is because the gas costs of these arithmetic

operations is likely to go down in the future due to protocol upgrades implemented by geth

and parity (EIP-1108 ). It currently costs about 900,000 gas to issue a confidential 12 13

transaction that contains 4 notes (this is the total gas cost, not just the cost of validating the

cryptography of a transaction). If/when EIP-1108 goes live, the gas costs will fall to about

200,000–300,000.

What info can be gleaned from confidential transactions?

With that out of the way, any protocol that converts something public into something private

will reveal information at the entry and exit points of the cryptosystem.

If you’re adding tokens into note form, an observer will know that the value of the output

notes is at least the amount you’ve converted.

Similarly, after redeeming v tokens, an observer will know that the remaining DaRK Privacy

notes are worth v less than the input notes.

These problems can be ameliorated by combining public conversions with additional DaRK

Privacy notes. For example, imagine Bob has a note worth 100 tokens that he wants to

convert into public token form. Instead of just issuing a conversion, Bob should add

additional input notes into his transaction and also generate some output notes, even if the

extra input and output notes are worth 0. This will prevent an observer from figuring out how

much of Bob’s confidential holdings he has converted, even if he has converted all of it and is

left with a pile of notes worth nothing.

DaRK Privacy notes have ‘owners’ defined by Ethereum addresses. On the surface, note

ownership is not anonymous; the DaRK Privacy protocol includes a Monero-style

stealth-address protocol to derive Ethereum addresses that are single-use and cannot be

linked to any other Ethereum address (e.g. if you have a DaRK Privacy wallet, I can ‘send’ a

12 https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1108.md

13 https://etherscan.io/tx/0x6cb6bccb6d51445ce026dd76b8526e8014a6a276255d22e4f5be26f8efb891fb

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note to an Ethereum address you control, but nobody but you and me will know this is the

case). The protocol supports both stealth addresses (which require a specific wallet to work;

you need two public/private key pairs so a regular Ethereum account won’t work) and regular

Ethereum addresses (which are not anonymous — if you own a note everybody will be able to

see that).

The more users of a dual public/confidential asset, the greater the privacy provided. For

example, when testing our main-net deployment, I converted 50 DRK into DaRK Privacy

notes and sent a bunch to my colleagues. Obviously, the sum of all the notes is 50 DRK so a

single note can’t encrypt very much. Now imagine that somebody else created 1000 DRK

worth of confidential notes, and we split and merged a few of our notes — it would be

impossible to identify how much DRK any of these notes had, other than they would have

1050 DRK as a maximum.

To reduce this to extremes — if I converted 10 DRK into a single DaRK Privacy note, this

gives no privacy at all. The ability to create notes worth zero is important to maximize

privacy — if you were going to convert 10 DRK and wanted a single note for ease-of-use, you

should also create a few notes worth 0 DRK to mask how much each note is worth.

Naturally, a ‘lazy’ use of the protocol will leak information. For example, imagine you

converted 10 DRK into 5 notes, where 4 were worth 0 DRK. If you then forgot about these

notes and never used them in future transactions, it would be fairly obvious to observers that

the un-used notes were worth nothing. Always issuing zero-value notes in join-split

transactions, and using them in future join-split transactions minimizes the amount of

information available to external observers.

The DaRK Privacy protocol’s trusted setup

The reason the DaRK Privacy protocol is highly efficient is that we combine Boneh-Boyen

signature and Pedersen-style commitments into a single commitment scheme with a highly

efficient range proof embedded into the commitment. This comes at the cost of requiring a

database of elliptic curve points to be generated before the DaRK Privacy protocol can be

used. This database is required to construct proofs, but is not needed to verify them.

A bit like ZCash, this trusted setup generates a ‘toxic waste’ private key and if knowledge of

that private key is leaked, it can be used to effectively double-spend, and the protocol

becomes unusable.

So how do we deal with this? Well, for one we don’t just expect you to trust us. We have

developed a scalable multiparty computation protocol that enables anybody to engage in the

trusted setup process. If you participate, you generate a piece of ‘toxic waste’ that, naturally,

should be destroyed. The trusted setup private key, the thing that must be destroyed at all

costs, can only be recovered by piecing together every participant’s toxic waste. So if a single

person acts honestly the scheme is completely secure and can only be ‘cracked’ by solving one

of the discDRKe logarithm-based problems (of which the entirety of elliptic curve

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cryptography rests; if somebody cracks the discDRKe log problem we’ve all got bigger

problems on our hands than the security of the DaRK Privacy protocol!).

We will be announcing the formal description of our trusted setup process in the coming

months and will begin to collect participants. It is similar to ZCash’s ‘powers of tau’

ceremony, albeit for a very different end as the DaRK Privacy protocol is not a ZK-SNARK.

We want the trusted setup protocol to be simple to take part in and we want to engage the

wider Ethereum community in this process, to create a trusted setup database that has the

trust and confidence of the community.

Our deployed proof-of-concept smart contracts use a trusted setup that was generated

internally, as implementing our multiparty computation trusted setup is going to take several

months. Until we have completed this phase the DaRK Privacy protocol is very much

use-at-your-own-risk. Whilst I naturally destroyed the toxic waste, there is no way to prove

that I did.

One final point: The size of the trusted setup database grows linearly with the size of the

protocol’s range proof. Our proof-of-concept database supports integers between 0 and

1,048,575 because I wanted a database small enough to fit inside a github repo without being

a pain to download. Our full implementation will support a much larger range of integers.

Why is the DaRK Privacy protocol important?

Well of course I’m going to say this is important, I’m the most biased person you could ask on

this topic! But here’s why I think this is a real game changer: The DaRK Privacy protocol

enables the creation of generic confidential digital assets. We picked DRK to start with but

with the press of a button the DaRK Privacy protocol can be applied to any ERC-20 token. It

also enables the construction of purely confidential assets that don’t have any kind of ERC-20

token equivalent. No extra cryptographic circuits required, no additional trusted setup

processes needed. For the first time ever, it’s possible to create confidential digital assets on

Ethereum, obtaining the immutability and decentralization benefits of public blockchains

without sacrificing privacy.

DaRK Privacy zero-knowledge proofs are also very efficient to construct, and are well within

the capabilities of hardware wallets. This opens up the exciting possibility of issuing

confidential transactions directly from hardware wallets and never exposing sensitive private

keys.

What is in the DaRK Privacy protocol’s future?

We also have several extensions to the DaRK Privacy protocol in the works, and will be

releasing our full vision of the DaRK Privacy protocol over the first half of 2019. This

includes several important milestones:

1. A confidential decentralized exchange, where people can trade different DaRK Privacy

assets in complete confidentiality — neither the quantities or prices of orders can be

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gleaned from processed orders. The decentralized exchange uses the relayer pattern to

achieve this, as well as a bespoke DaRK Privacy DeX zero-knowledge proof (three

actually, I’ll be talking about this in depth once our DeX paper is finalized).

2. Confidential weighted voting. Governance mechanics that respect the privacy of a

user’s vote are essential a large range of financial applications and the DaRK Privacy

protocol’s efficient range proofs make this achievable.

3. Anonymous identity sharing schemes. Being able to prove that you’re part of a group,

without revealing who in the group you are is an essential component for many

compliance and KYC processes and our DaRK Privacy token standard will support this

kind of identity system.

Combined together, this will give builders the tools needed to create the next wave of

decentralized financial services; digital assets with implicit privacy and confidential

governance mechanics built in from the ground up.

SMART CONTRACT 2.0 TO BLOCKCHAIN ECOSYSTEM

EPICENTER

There is recent focus on decentralized systems because they promise new classes of

applications free from intermediaries, create new economies of scale and offer

unprecedented user control of data. Smart contract functionality offers users the ability to

create applications that grant these advantages. With this tool in hand, people increasingly

romanticized a new internet known as the decentralized internet (or web3), where apps will

be even more powerful and spectacular than they are now. Decentralized applications would

be developed over an infrastructure of economically secured blockchain systems.

It soon became apparent that, as “decentralized operating systems”, blockchains cannot

themselves handle applications more resource-hungry than Cryptokitties without improving

many things. These events created a public frenzy to innovate and improve on decentralized

infrastructure, so that useful decentralized applications could be produced.

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For example, the blockchain by itself is a very poor storage apparatus. One of the important

realizations was that one cannot store files economically on-chain . Indeed, a ledger shared 14

by thousands of users, where each piece of data is replicated amongst each user is not

practically capable of hosting data beyond the megabyte scale.

Therefore, many important developments within decentralized systems should and do

happen outside the blockchain — certain layer 2 solutions, private P2P networking solutions,

storing files etc. The actual blockchain and other separate components sum up to form the

decentralized internet.

Although decentralized systems are potentially revolutionary, not many people will join the

decentralized internet if the technology sucks, which means that the decentralized tech stack

can’t be that much worse (barring the interesting property of decentralization) than existing

solutions.

Currently, no part of the stack is complete, with the DNS, storage and computing layer

development being especially early. A typical mantra is “we will build a DApp using a

blockchain to take advantage of blockchain immutability etc., and even if we have to store our

files in some centralized location it’s OK” . 15

What Smart Contract 2.0, DRK plans to revolutionize the whole stack by combining and

improving upon existing technologies.

14 https://blog.wavesplatform.com/web3-0-the-road-ahead-for-waves-9bd8a51f63ce

15 https://techcrunch.com/2016/07/02/andy-jassys-brief-history-of-the-genesis-of-aws

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Smart Contracts 2.0 = RotoLadder + WhiteHole + DecenNet + DaRK .

1) RotoLadder - Democratized smart contract architecture for everyone = Multi-tier

structure + Building-block templates.

2) WhiteHole Protocol - Decentralized oracle & payment gateway for Web 3.0

applications = ChainLink + Band Protocol + more.

3) DecenNet Protocol - Decentralized data storage and encryption as backbone of

decentralized internet = IPFS + Filecoin + Ocean Protocol + more.

4) DaRK Protocol - Decentralized privacy for open finance and big data processing =

DaRK Protocol + CryptoNote + BulletProof + Oasis Protocol + more.

RotoLadder

Smart contract 2.0 is "Smart contract for everyone" thanks to RotoLadder - the multi-tier

smart contract architecture. Tier 1 is for technical developers. Tier 2 is for non-tech users to

create "real life applications". We will deploy multiple "templates" for non-tech users to

create Dapp for specific businesses. Our smart contracts can also be plugged into the most

advanced technologies (such as IPFS, ChainLink, Band Protocol, Ocean Protocol, etc.) in the

blockchain universe to form a complete ecosystem.

WhiteHole

The problem: smart contracts can't access data on their own. When developers implement

their chosen smart contract, they encounter a connectivity problem. Their smart contract is

unable to connect with key external resources like off-chain data and APIs. This lack of

external connectivity is due to the method by which consensus is reached around a

blockchain's transaction data and is a problem for every smart contract network.

Centralized oracles are a point of failure: Connecting smart contracts to data inputs through a

single node creates the same problem that smart contracts themselves seek to avoid, a single

point of failure. With a single oracle node, your smart contract is only as reliable as that one

node.

The solution: a highly reliable decentralized oracle network.

WhiteHole’s decentralized oracle network provides the same security guarantees as smart

contracts themselves. By allowing multiple WhiteHoles to evaluate the same data before it

becomes a trigger, we eliminate any one point of failure and maintain the overall value of a

smart contract that is highly secure, reliable, and trustworthy.

Smart contracts require secure middleware to connect them to real world data, which will

trigger the contract. Smart Contracts Require End-to-End Reliability: Smart Contracts

provide the ability to execute tamper-proof digital agreements, which are considered highly

secure and highly reliable. In order to maintain a contract's overall reliability, the inputs and

21

outputs that the contract relies on also need to be secure. WhiteHole provides a reliable

connection to external data that is provably secure end-to-end.

WhiteHole arms smart contracts with secure access to data feeds, APIs and payments. It uses

multiple inputs to prove contractual performance, as well as multiple outputs to affect

outside systems and/or send payment to complete the smart contract.

WhiteHole connects your smart contracts to the inputs (any External API - data sources and

APIs they need to function) and outputs it needs (send payments anywhere from your

contract to bank accounts and payment networks). Building a truly valuable smart contract

requires the use of multiple inputs to prove contractual performance, as well as multiple

outputs to affect outside systems and/or send payment to complete the smart contract.

WhiteHole provides your smart contract with the inputs and outputs it needs to reach its full

potential.

The WhiteHole network provides reliable tamper-proof inputs and outputs for complex

smart contracts on any blockchain. Your smart contracts will be connected to real world data,

events and payments.

We work with Banking Technology Leaders like SWIFT, helping connect banks to smart

contracts with Enterprise Grade Oracles . We're consistently selected by leading 16

independent research firms as a leader in smart contract design and real world

implementation . We work closely with leading computer science academics and top security 17

researchers to put cutting edge security research into practice.

DecenNet

DecenNet Protocol lets you address large amounts of data and place the immutable,

permanent links into blockchain transactions. This timestamps and secures content without

having to put the data itself on the chain.

DecenNet is kickstarting a Data Economy by breaking down data silos and equalizing access

to data for all, in order to become a decentralized data exchange protocol to unlock data for

AI.

Our mission is to unlock data because society is becoming increasingly reliant on data,

especially with the advent of AI. However, a small handful of organizations with both massive

data assets and AI capabilities attained worrying levels of control which is a danger to a free

and open society. We aim to unlock data, for more equitable outcomes for users of data,

using a thoughtful application of both technology and governance. Our team and community

is committed to kick-starting a New Data Economy that reaches every single person,

company and device, giving power back to data owners and enabling people to capture value

from data to better our world.

DecenNet adopts fully homomorphic encryption to modify and extract features from data

without exposing the data, and adopts Schnorr signature for load balancing between

16 https://create.smartcontract.com/sibos17

17 https://www.gartner.com/doc/3698947/cool-vendors-blockchain-applications-

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centralized servers & blockchains. Important data are hashed data and the hash stored

on-chain. The DRKchain blockchain can validate massive amount of output from AI/IoT

devices. IoT devices (sensors, cameras, microphones, etc.) armed with DRKchain can

mutually validate data streams produced by these IoT devices. DRKchain users in this case

should equip themselves with a blackbox or Trusted Execution Environment (TEE) where

data is decrypted & analyzed locally without potential leaking.

DRK CHAIN SPECIFICATIONS

Mainnet specifications:

1. Epoch ~ 600 blocks

2. Validators ~ 200-250

3. Block time ~ 2 seconds

4. TPS ~ 1000

5. Block reward added to validator contract instead of miner

5.1. After 2 epochs (maybe dynamic based on number of validators, and called R =

reportable range and much smaller than LD), if a validator did not seal any

block, anybody can submit report Tx with loyalty point receiver, a validator

address. The Report is processed with validator contract call and reverted if its

wrong.

5.2. Penalized Amount based on stake of reported Validator follows formula and

shared to other validators(based on stake of each)

5.2.1. Amount = B * S * (MAX(2**(P-L), 1)) >= B * S

5.2.2. S = Stake of reported Validator

5.2.3. B = Percent parameter, 0 < B < 1

5.2.4. P = Penalized times of Validator

5.2.5. L = Loyalty point

5.2.6. Self report is possible to reduce 50% of penalized amount

5.2.7. If total stake + reward is not enough, the amount will be equal to this

and validator will be kicked.

5.3. Report’s conditions:

5.3.1. Reported Validator joined at least R blocks.

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5.3.2. No proof of any sealed blocks in last R blocks (state in contract).

5.3.3. At least R blocks from last reported time.

5.3.4. A valid Validator address as loyalty point receiver.

5.4. Reporter’s advantages:

5.4.1. Part of penalized amount.

5.4.2. loyalty point added if L – P < 3, which is helpful if reported in future.

5.5. Loyalty point:

5.5.1. Reduce penalized amount, if reported.

5.5.2. Received as a reward for a successful report.

5.5.3. Received after every X blocks sealed.

APPLICATIONS

Traditional use cases

Coins for Open Finance

• Increases the Bank’s FIAT Deposits (Liquidity) by attracting customer funds

o Offer customers’ new utility on funds (Transacting)

o Provides new savings products (Fixed Term / Call Accounts)

o Application for Securitisation (Collateralisation)

• Readiness for Central Bank Digital currencies

o Commercial Bank Stable Tokens

o Commercial Bank money as well as Coin and Note on and off-ramp to CBDC

Tokenised Markets for Investment Banks

• Primary Debt & Equity Markets

o Issuance, Book Building, Auction, Interest Payment, and Term Renegotiations

• Secondary Debt & Equity Spot Markets

• Alternative Token Markets

o Gold, Silver, Platinum, Diamonds, Oil, and more

• Tokenised P2P Synthetic Futures

o No exportation of value, capital flight, or BoP requirements

o Forex Futures (Hedging / Cover) Markets

o Global Shares and/or Commodity Futures Markets

o Carbon Credit / Green Energy Futures Markets

o Equity Future Markets

24

Digital Currency for Central Banks

• Net Interbank Settlements

• Treasury Notes, Bills and Bonds Management

• Foreign Stable Token Exchange

o B2B Cross Border Payments

• Mass Market Digital Currency

o Remittance of Social Grants

Managing Debentures Issuing

• Debt tokenisation

• Debt modelling through capital and interest tokens

• IOI / book building

• Auction / sale processes

• Extension to support Equity Token issuance

Application to interact with DRK chains

The circumstances behind the use of the DRK chain are broad as described above. This system

automates global transactions in real time, replaces the entire audit process, eliminates manual

tax collection, simplifies international payments, allows computers to communicate on the same

Financial field and offers the most advanced payment terms available to everyone.

Online payment

For example, shopping on Ebay requires payment by credit / debit card, leading to the risk of

disclosing sensitive information. However, if you choose to pay with DRK, your user data is

completely protected. Ebay will send a payment request from The Applications layer. The

transaction will be pending at The core layer. The user's account will automatically detect it and

request payment confirmation from the user. A transfer transaction will be made with the lowest

cost without disclosing payment information.

Users can avoid unwanted credit / debit card payments that the service charges are unclear,

because the DRK platform provides the ability to authenticate payments through algorithms

rating credibility, even before the payment takes place. Security, simplicity and extremely low

cost are what DRK platform provides for transactions.

Automate Accounting and Auditing

Accounting

With DRK Platform, the accounting process is done automatically and in real time. In addition

to cost savings, this allows for better financial management, faster and with more information.

DRK Platform allows digitization of accounting systems, which are already taking time to double

the efforts through documentation and regular checks. These manual tasks can now be fully

25

automated. DRK Platform will shift the role of a CPA to consulting and support activities. This

system provides more time for high value work, such as analysis, estimation and strategy

planning.

Credit notes, orders, refunds, and all accounting concepts are available on the DRK Platform.

The system will be compatible with UN / EDIFACT standards and can be updated to the latest

standards.

Auditing

The audit will be conducted in real time. This is called Smart Audit. The blockchain audit

solution can become a reliable and economical alternative to manual auditing today, offering

significant benefits for improving the effectiveness of audits.

The use of blockchain for accounting is an opportunity to simplify compliance and improve

double entry. The principle of double entry goes back to the Renaissance, giving managers

confidence in their reports. Today, to prove trust, independent auditors need to verify the

information of large corporations in an expensive process both in time and money. The auditing

firm then becomes a trusted third party to ensure the accuracy of the information by financial

statements. However, the auditor maintains responsibility for other companies, creating

unreliability. Therefore, instead of hosting internal accounts and publishing them after an

annual audit, companies can keep accounts in a decentralized, secure database that is shared

and with blockchain technology. All accounting entries are then entered into the register.

Incapability of correcting past information means no chance of forgery. Therefore, suspicious

adjustments at the end of the year will be more difficult to implement. Most importantly, the

company benefits from this system in real time. Shareholders and external partners also have

access to information in real time. Audit costs become negligible, and data entry no longer

requires manual checking.

DRK Chain is a decentralized register that acts as a trusted source, enabling "smart audits" to be

implemented in real time. It includes all purchases made by the company. Instead of having to

double entry, when the purchase information appears in the purchase account and in different

bank accounts, one can see inside the blockchain that a purchase account tied to the supplier is

linked with payment and bank account, which can then be tracked, immutable and verified.

B2B invoicing

Billions of invoices are shared each year between companies, most of which are sent by paper or

email that needs to be backed up. This causes a lot of errors, especially when it comes to

payment terms or complex tax rules. With DRK platform, companies can share invoices directly

via ledger; invoices will no longer be duplicated since accounting systems will be connected and

updated immediately. A company waiting for payment will be able to detect delays immediately,

something that will less likely happen thanks to the development of invoice payment systems.

This company will be able to pay on an optimal day at the time of receiving the request.

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Government and Taxes

Governments require companies to report on all transactions, which can create errors and

duplicates. The DRK Platform allows governments to view specific transactions they have access

to in real time. Furthermore, developing a module to collect VAT taxes will redirect the cash flow

automatically. Whether it belongs to the government or not, for the first time, we can see a clear

improvement in the DRK to simplify and make tax collections transparent and transparent.

Blockchain technology provides government agencies the ability to detect financial instability,

fraud, money laundering and financial crime early to take action based on these observations.

Transparency of organizations

DRK Platform proposes a framework that enables organizations to gain transparency in a

convenient way through informing their account information in real time and to anyone for

collating and using the data.

IoT and smart contracts

An interesting opportunity over the coming years will undoubtedly be the way in which objects,

machines and artificial intelligence will interact with each other, automatically negotiating and

determining payment terms. They will now need a payment system to determine the reasons

and conditions of a transaction.

Simplify commercial tools

DRK platform will allow businesses and individuals to easily access tools such as margin or debt

transfer. It only takes 1 click to select a payment address on delivery or to secure a deposit for

the apartment based on deposit instead of money transfer based on trusting in the host's

account.

TENTATIVE ROADMAP

2020 - Foundation establishment

Technical direction:

- Building DRK chain

- Improving technology structures such as consensus algorithms, storage layer

capabilities, product interoperability, security and transaction speed

- Launching DRK Mainnet

- Building the ecosystem’s complementary products

Market direction:

- Introduction and education about DRK

- Universalizing base knowledge for Draken Group's partners

- Organizing Blockchain community expanding programs

- Building the user base for products in the ecosystem

27

- Recruiting human resources for Blockchain and Dapp development

2021-2022 : Accelerate user and DApp development

Technical direction:

- Researching and improving technology structures

- Increase the number of nodes in DRK chain

- Building structures for the DRK DeFi platform

- Supporting Dapp construction forces

Market direction:

- Implementing global Marketing

- Creating relationships with cryptocurrency leaders in various countries

- Organizing and constructing representative offices in various countries

- Organizing and participating in Blockchain-related events

- Searching for market partners with complementary technology

2022- future: DRK platform to the top

Technical direction:

- Testing and refining DRK platform’s topology

- Introducing MVP DRK DeFi platform

- Partially integrating Draken Group banking system

- Improving and upgrading DRK chain

- Building nodes for associated financial institutions using DRK DeFi platform products

Market direction:

- Organizing seminars to introduce product manuals

- Organizing marketing in the fields of banking, finance and cryptocurrency

- Attracting financial institutions to participate in the ecosystem

- Creating examples for business models on DRK platform to expand its scale

- Encouraging users to participate in the use of the group’s products

RISKS AND DISCLAIMERS

By accessing the information set forth in this document or any part hereof, you represent and

warrant to DRK that you unconditionally and irrevocably accept and agree with the

following:

No Viewing in a Restricted Territory

28

It may not be lawful for individuals or certain categories of individuals in certain

jurisdictions, to view this document. Individuals who wish to view this document must first

confirm they are not subject to any laws or regulations that prohibits or restricts them from

viewing this document. In particular, unless permitted by the applicable laws and

regulations, any offering of the coins mentioned in this document (the “Coins”) should not be

made, nor any documents should not be sent, directly or indirectly, in or into, countries

where participating in the sale of the Coins is prohibited. For avoidance of doubt, it is not

intended that any offering of the Tokens is being made in the People’s Republic of China or

the United States. DRK shall not be responsible for individuals who access this document

from territories whose laws or regulations prohibit such access of this document or where

any part of the document may be illegal. Such individuals do so at their own risk.

Information Only

All information is provided without any warranties of any kind and DRK, its employees,

officers and/or advisors make no representations and disclaim all express and implied

warranties and conditions of any kind and each of DRK, its employees, officers and/or

professional advisors assume no responsibility or liability to you or any third party for the

consequence of reliance on such information, errors or omissions in such information or any

action resulting therefrom. The information contained in this document may contain

statements that are deemed to be “forward-looking statements,” which are prospective in

nature and are not statements of historical facts. Some of these statements can be identified

by forward-looking terms such as “aim,” “target," “anticipate," “believe," “could," “estimate,"

“expect," “if," “intend," “may," “plan," “possible," “probable," “project," “should," “would,"

“will” or other similar terms. However, these terms are not exhaustive.

Forward-looking statements inherently contain risks and uncertainties as they relate to

events or circumstances in the future. Therefore, the information, opinions and forward-

looking statements, including estimates and projections, in this document in respect of the

anticipated roadmaps, development and projected terms and performance of the relevant

entities, are selective and subject to updating, expansion, revision, independent verification

and amendment. DRK is not making any representation or warranty or undertaking,

including those in relation to the truth, accuracy and completeness of any of the information

set out in this paper. DRK also expressly disclaims any obligation or undertaking to update or

revise any forward-looking statements except to the extent required by law and neither DRK,

its employees, officers or professional advisors make any assurance, representation or

guarantee that any event referred to in a forward-looking statement will actually occur.

Whilst DRK intends to fulfil all the goals set out in this document, in case of unforeseen

circumstances, the goals may change or may not be achieved without any notice to you.

No Offer

This document is for information purposes only, and does not constitute or form, and not

intended to be, an offer or solicitation of an offer to buy or sell, subscribe for, underwrite or

purchase any form of investment or securities or other financial instruments, nor shall it or

29

any part of it form the basis of, or be relied upon, in any way in connection with any contract

or investment decision relating to the same.

No Advice

None of the contents of this document constitutes legal, financial, tax or other advice. You

must conduct your own due diligence and ensure you comply with all local laws regarding

cryptocurrency, tax, securities and other regulations in your jurisdiction. We encourage you

to consult with the relevant professional advisors independently.

No Agreement

This document shall not be relied on to enter into any contract or to form the basis of any

investment decision. Any agreement(s) between DRK and you are to be governed by a

separate document (“Sale Document”). In the event of any inconsistency between this

document and the Sale Document, the respective Sale Document shall prevail.

Regulatory Risks

The regulatory status of cryptographic tokens, including any digital currency, digital assets

and blockchain applications is unclear or unsettled in many jurisdictions. The publication

and dissemination of this document do not imply that any relevant laws, regulations and

rules have been complied with. No regulatory authority has examined or approved this

document. Where any relevant governmental authority makes changes to existing laws,

regulations and/or rules, or where financial institutions make certain commercial decisions,

it may have a material adverse effect and/or impair the ability of any relevant entity referred

to in the document to function or operate as intended, or at all.

Other Disclaimers

This document is private and contains information about DRK, but it does not represent the

entire content of DRK. The content of this document is subject to change in accordance with

changes in the relevant laws and regulations, business situation and industry outlook, as well

as the judgement of the management team. There may be changes in political, social,

economic and stock or cryptocurrency market conditions and/or that there is no or little

acceptance/adoption of the relevant Blockchain system and/or Coins, such that the relevant

Blockchain system and/or the Coins become no longer commercially viable. Where

references have been made to third-party websites or sources of information, we may not

have sought further verification as to the accuracy, completeness, or timeliness of the

information referred to therein, and no warranties whatsoever are made as to the same.

This is not the final version of White papers. Adjustments and additional information will be

made by DRK Developers.

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