A New World-Class Crypto Exchange: A Cross-blockchain Crypto Exchange with P2P Fiat Conversion Function

https://kryptono.exchange

1. Preamble

At the time of this Whitepaper, more than 200 crypto exchanges already exist around the world. Some focus only on crypto-to-crypto trades, while others focus on crypto-to-fiat trades. While each exchange category serves its users well, there are inherent limitations and weaknesses in each category. The crypto-to-crypto exchange category is faster and low cost in nature, offering many crypto-pairs, and allowing users to trade at ease. However, during times of market volatility, as it is the case in the past few months, existing users who face difficulty converting cryptocurrencies to fiat in a timely fashion (cashing out) will see their portfolio values drop significantly and those who have fiat find it difficult to take advantage of cheap cryptocurrencies for buying opportunity (cashing in). On the other hand, the crypto-to-fiat exchange category typically offers only limited number of cryptocurrencies that users can buy/sell. In addition to the numerous restrictions imposed by these exchanges, the amount of fiat a user can buy/sell is also often limited to small to moderate amount. Other major issues with these categories exchanges are: (1) the lack of proper security procedures and processes in place to safeguard users’ assets; and (2) the lack of systematic and machine intelligence systems to prevent the price manipulation of illiquid cryptocurrencies in order to safeguard user’s portfolio’s values.

The Kryptono Exchange [1] is created to address these shortfalls.

Kryptono (a.k.a. Krypto NOW or Crypto NOW) will be a new world-class crypto exchange that places an emphasis on security and protection of users’ assets. It has the advantages of a crypto-to-crypto exchange (i.e. fast and seamless user experience) and also allows users to trade cryptocurrencies and fiat via a peer-to-peer network supported by Kryptono. This is how we hope to bring crypto finance to the next level and to the masses.

2. About Kryptono Exchange

At Kryptono Exchange, we strongly believe in creating a seamless and thoughtful user experience when it comes to trading cryptocurrencies. We believe the following elements will be crucial: (i) speedy and intuitive user graphical interface (ii) world class security measures to protect user’s assets (iii) transparency of the accounting system for users to track account deposits and balances (iv) organized and responsive customer service and (v) robust measures to prevent price manipulation of ill-liquid cryptocurrencies.

Figure 1: Trading History Screenshot.

Having these objectives in mind, the Kryptono Exchange is designed with the following technical features:

  • Architecture: All components of the Kryptono Exchange will be built to scale to infinite traffic and workload using parallel computing technology and architecture. The workload and traffic will be distributed uniformly to servers in data centers across the world. For instance, on a top machine, our single price matching engine can reach 3.5 million orders per second. Since these engines are working in parallel, if we were to carry 1000 pairs of cryptocurrencies (within a theoretical limit), we can reach up to 3.5 billion orders per second using 1000 servers working in parallel. These load balancing operations are run automatically without the need for rewriting and re-deploying the software.
  • Security: Kryptono manages crypto assets based on 2 tiers. The first tier is the AI-based fraud detection and prevention system for detecting frauds and manipulation. The second tier is the multi-level and multi-sig actions with human monitoring for large amounts of crypto withdrawal, a process similar to banking systems. Account access will require 2-factor authentication (2FA) with either SMS or Google Authenticator to prevent unauthorized entry. We will also require email confirmation in addition to 2FA for any withdrawal to give users a final chance to review the withdrawal and also to prevent unauthorized transactions. Industry best practices will be adopted to secure users’ data and infrastructure according to ISO/IEC 27001, and the CryptoCurrency Security Standard. We realize that security tends to be inversely proportional to convenience. Hence, we believe that this measure will strike a balance between convenience, and providing adequate protection of user’s assets in preventing fraud and generating trust in the system.

Figure 2: our AI-based system for fraud detection and prevention with respect to the price manipulation.

  • Customer Support: Our customer support portal will be designed to be fully integrated with the Zendesk support. Each issue reported will be processed and resolved with a ticket ID via email, and if necessary, through phone calls. Users will be able to see all of their tickets organized for easy management. Our customer support will be provided 24/7 with English, Korean, Chinese, and Vietnamese languages as a start. We will also deploy Artificial Intelligent (AI)-based price manipulation prevention systems for illiquid cryptocurrencies to help protect the users’ portfolio value.
  • AI-Based Price Watching System: We also deploy Artificial Intelligent-based price manipulation prevention systems for illiquid cryptocurrencies to help protect the users’ portfolio value.
  • Peer-to-peer Crypto-Fiat Conversion System: Please see section 3 for more info.
  • Supported Cryptocurrencies: We will support cryptocurrencies across various blockchains such as ETH, BTC, USDT, and ERC20/ERC223 tokens.
  • Regulatory and KYC/AML compliance: We believe in financial transparency. Traders and users will be subject to and required to pass our KYC/AML policy. It is also our aim to obtain the relevant exchange licenses where required.
  • API support: Open API for 3rd party automatic trading will be provided. The API will allow traders and third parties to build trading programs according to their desires. We wish to become a platform for ordinary to professional investors and large institutional investors alike. We believe that API support will help bring investors from the equity markets to the crypto markets, hence potentially providing the crypto community with better liquidity.
  • Multi-language support: Kryptono website and app will support multi-languages such as English, Vietnamese, Korean, Chinese, etc.
  • Device support: Kryptono will support web browsers and major platforms such as iOS (subject to App Store approval) and Android.

Figure 3: Account system with built-in security and KYC levels.

Figure 4: Customer support page integrated with Zendesk for managing issues via tickets

3. Peer-to-Peer Crypto-Fiat

To boost convenience and liquidity, Kryptono also provides peer-to-peer crypto-fiat trading features, which allows users to trade any cryptocurrency listed on our exchange for fiat with other users within the Kryptono network. For added security, the Kryptono platform will keep the crypto on escrow while the buyer transfers the fiat directly to the seller. We believe that this function will be very helpful in lowering the entry barrier of traditional equity investors to crypto/ICO investments. This allows global market access with local trading for crypto traders.

Currently, the bank accounts of the buyer and seller must be within the same country (i.e. trades are limited to domestic money transfers) to ensure ease of trading with respect to the speed and convenience, as well as customer support. We are also exploring the possibility of cross border transfers in the near future.

During the peer-to-peer trading process, we will allow the buyer and seller to communicate directly with each other via our messaging system. The contents of the communications and the trade contract created by both seller and buyer will be archived in the event of potential disputes. When a dispute arises, our customer service team will step in to assist the disputing parties. This innovative peer-2-peer feature of ours is being prepared for a U.S. patent application. Upon the filing of the application, more details about this feature will be published.

4. Kryptono Token — the KNOW Token

We will issue a fixed amount of 1 billion KNOW tokens (aka K NOW — an ERC223 token with 10 decimal places) to incentivize the community to build a great crypto ecosystem. KNOW token will be used to pay for the transaction fees on the Kryptono Exchange, along with ETH and BTC, but at a discounted rate. The initial price is set at USD0.10 and will be traded publicly on our exchange. More information about our token can be found on our smart contract code [2] and the address at 0xb41f09a973a85c7F497c10B00a939dE667B55a78. There will be no ICO for KNOW.

Figure 5: the KNOW Token

The KNOW tokens will be distributed as follows:

  • 15% will be given away to users on our platform, partners, and bounty programs.
  • 40% will be sold on the Kryptono exchange over time for traders to buy to pay for transaction fees. Transaction fees will be used primarily to pay for continued software platform development and maintenance, operational costs, business development and marketing.
  • 10% will be sold to private funds for strategic partnerships
  • 20% will be for management and advisors.
  • 15% will be reserved for employees and future expansion.

5. Cross-Blockchain Exchange

Our support for cross-blockchain coins/tokens will make Kryptono Exchange a comprehensive exchange solution. Tokens from different blockchains will be traded seamlessly on the Kryptono Exchange.

6. XPAD: The Launching Platform for Great ICO Projects

XPAD is a platform for helping community projects with great and innovative ideas to launch their ICO projects. XPAD will have a community of fully vested and screened investors ready to participate in any ICO launch on XPAD. We will also have a team of experts to conduct thorough due diligence on the projects hosted on XPAD.

7. Revenue Sources

Our revenue will come from transaction fees incurred on the platform (trading, listing, and XPAD service). Our mission is to bring crypto to the masses. We do not plan to charge more than 0.1% for crypto-to-crypto trades and 1% for peer-to-peer trades (the latter of which is more expensive as it involves more manual work and human intervention via customer services). To the best of our knowledge, this proposed fee schedule is about 50% less than what is currently charged by other leading exchanges.

Users will also receive a discount when using KNOW to pay for transaction fees. Fees relating to trading, listing, XPAD services and bot trading via API usage will be published online on May 30 at the following website:

https://kryptono.exchange/fees.html

8. Future Work — New Blockchain Integration for Fast Payment Processing

We are also in the process of developing a blockchain that aims to: (1) confirm transactions at speeds comparable to the VISA/MASTERCARD networks; and (2) allow anyone with a PC or MAC to become a miner in the form of screen-saver applications using the parallel computing technology we developed in-house. This ensures the true decentralization of the blockchain network. Such mining feature has been tested on the Ethereum Ropsten Testnet [3] as a poll of PCs working together and has been successfully mined ETH and confirmed blocks.

Together with the Kryptono Exchange, we aim to bring blockchain technology and cryptocurrencies to the masses, serving ordinary citizens for their everyday needs.

9. Timeline

The Kryptono Exchange will be released based on the following schedule:

  • May 1, 2018: Open for account registration and KYC on https://kryptono.exchange. Early adopters will receive free KNOW tokens after completing basic KYC checks. Trading will be by-invite only.
  • June 1, 2018: Open to the public for trading. BTC, ETH, USDT and a few other ERC20 tokens will be available for trading. Alpha release.
  • July 1, 2018: XPAD will be launched for future ICO projects. Other blockchain’s coins/tokens will be supported. More ERC20/ERC223 token pairs will be added. Beta release.
  • First Quarter, 2019: Alpha release of the super-fast blockchain for payment
  • Second Quarter, 2019: Blockchain integration with the exchange.

10. Krypto Community

All communications will be published on the telegram community channels located at:

https://t.me/kryptono

and our blog site is located at:

https://medium.com/@kryptono

Please join us for up-to-date information, promotion, and perks.

11. Team

We are a team of blockchain developers, cryptographers, research scientists, software engineers, and experts from massive parallel computing, big data/machine learning and finance background. We work with 100 plus members from leading universities such as Harvard, Stanford, Yale, MIT, Cornell, Georgetown, UCLA and UC Berkeley. Our focus is on bringing blockchain technology to the masses.

Our team is led by the following people:

William H. Nguyen, Ph.D.

Founder and CEO

William is the inventor, educator, blockchain developer, and serial entrepreneur with many successful ventures. He is the author of the U.S. Patent Pending Technology [4] allowing one to build a massively scalable and transactional cryptocurrency wallet that can handle billions of users, which is the foundation of the GIFTO wallet for GIFTO Protocol (the fastest ICO in Asia). Before that, he is the inventor of the advanced collaborative telecommunication technology empowering EdooPAD and its auxiliary applications, which were featured on many renowned technology review blogs such as Engadget and Android Authority [5–6]. He was a featured/invited speaker at various scientific conferences and universities. Over the past 10 years, William has built many social networking, on-demand video streaming, telecommunication, and search engine applications serving tens of millions of users worldwide in the areas of business communication, media, education, and entertainment. In addition, his team also built computer/network/data security applications serving defense, banking, and telecom industries in the U.S., Europe, and Middle East.

William is the former Alfred P. Sloan/U.S. Department of Energy Postdoctoral Fellow at Harvard Medical School. While at Harvard, he developed theory and mathematical/computational methods for understanding operating principles underlying the genetic regulation networks in living organisms [7]. Before Harvard, he was the Institutional Doctoral Fellow in Computational Science at the U.S. Department of Energy’s Lawrence Livermore National Laboratory, developing massive parallel algorithm for molecular dynamic simulations of large biological systems. William is currently pursuing the research and development of the new blockchain technology suitable for payment service. William graduated summa cum laude (Highest Honors) from the University of California-Davis campus. His full profile can be found here:

https://www.linkedin.com/in/williamhnguyen/

Celeste Kwon

Chief Operating Officer

Celeste ran the business development and partnerships at Bithumb, one of the largest exchanges in Korea and the world. Celeste switched her career from the traditional banking industry to crypto with a belief that blockchain will be THE financial marketplace with widespread benefits to all the participants.

For the past 12 years, she worked for global financial institutions, assuming senior roles in strategic planning, portfolio management and corporate banking in Korea, UK and Singapore. She managed a billion dollar portfolio directly with global & regional heads of Standard Chartered bank and MUFG based in Singapore. Her full profile can be found here:

https://www.linkedin.com/in/celeste-jiseon-kwon-1468264a/

Yingyu Wang

Chief Legal Advisor

Ying is the co-Founder of Taylor Vinters Via, a law firm known for its expertise in Technology Law and Intellectual Property Law in Singapore. She is the only female noted by The Legal 500 AP as a leading individual for Tech, Media & Telco Law from 2016 to 2018 and Chambers & Partners for Intellectual Property (IP) Litigation 2017 in Singapore. She was also a finalist for “Woman Lawyer of the Year” award by Asian Legal Business in 2017.

Ying is a proponent of blockchain technology and believes that its proper development and deployment is crucial as the world gets smaller. Some of her clients in the blockchain space include Nebulas, Gifto, Switcheo and BitGuild. Her full profile can be found here:

www.linkedin.com/in/yingyu-wang

Charles Thach

Member of the Board of Directors

Charles is a Member of the Board of Directors of Kryptono Limited. Currently, he is the Chief Crypto Officer of GIFTO, one of the most successful application tokens in the world, and one of the fastest sold-out Token Generation Events in Asia. He previously worked at top tier investment banks in various roles in Washington DC, Boston, Paris, New York and Hong Kong. He co-authored the first AML/KYC policy and procedures at Societe Generale and subsequently initiated and participated in selection of blockchain technologies to implement such procedures as the requirements evolved.

Throughout his 15-year banking career, Charles has developed in-depth knowledge of the global banking systems, negotiated and concluded derivatives trading relationships with over 500 counterparts, ranging from regional banks to global hedge funds. He cultivated relationships with financial institutional clients that over the course of a decade generated hundreds of billions USD in transaction notional, with products ranging from simple payment mechanisms to sophisticated financial derivatives such as correlation/variance swaps and swaptions.

Charles believes that blockchain technology’s main feature is to enable transactions that reduce transaction costs, which will then enable efficient capital market frontier and minimize wars, economic disparities and physical borders. Charles holds an MBA degree from HEC Paris and earned his BS degree from Georgetown University. He is also a Certified Alternative Investment Analyst. His full profile can be found at:

https://www.linkedin.com/in/charles-thach-466468/

12. References

1. https://kryptono.exchange

2. https://github.com/kryptono.exchange

3. https://ropsten.etherscan.io/

4. US Patent Application No.: 62/590,659

5. https://www.engadget.com/2014/06/25/voxypad-clever-ios-tool-for-real-time-sharing-of-photos-and-doc/

6. https://www.androidauthority.com/voxypad-review-518452/

7. http://msb.embopress.org/content/2/1/2006.0012

13. Disclaimers

13.1 NO WARRANTY FOR INFORMATION PROVIDED IN THIS DOCUMENT

All information is provided without any warranties of any kind and Kryptono Limited, its employees, officers and/or advisors make no representations and disclaim all express and implied warranties and conditions of any kind and each of Kryptono Limited, its employees, officers and/or professional advisors assume no responsibility or liability to you or any third party for the consequence of relying on such information, errors or omissions in such information or any action resulting therefrom.

The information set out in this document may contain statements that are deemed to be “forward-looking statements”. Such statements are prospective in nature and are not statements of historic facts. Some of these statements can be identified by forward-looking terms such as “aim”, “target”, “project”, “should”, “anticipate”, “believe”, “if”, “intend”, “may”, “plan”, “could”, “estimate”, “probable”, “expect”, “possible”, “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 unforeseeable 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 adjustments, updates, expansions, revisions, independent verifications and amendments.

Kryptono Limited 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. Kryptono Limited also expressly disclaims any obligation or undertaking to update or revise any forward-looking statements except to the extent required by law and neither Kryptono Limited, 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 Kryptono Limited intends to achieve all the goals set out in this document, the goals may change or may not be achieved without any notice to you in case of unforeseen circumstances.

13.2 THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER

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

13.3 THIS DOCUMENT DOES NOT CONSTITUTE ADVICE

The contents of this document do not constitute 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.

13.4 THIS DOCUMENT DOES NOT CONSTITUTE AN AGREEMENT

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

13.5 THIS DOCUMENT IS NOT AN ADVERTISEMENT

This document is for general information purposes only and is not an advertisement, nor is it intended to be used to call for an offer on behalf of Kryptono Limited. The distribution of this document may be restricted or prohibited by law or any regulatory authority in your jurisdiction. Recipients of this document should inform themselves of, and comply with, all such restrictions or prohibitions and Kryptono Limited does not accept any liability to any person in relation thereto.

13.6 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 does not imply that it is compliant with any relevant laws, regulations and rules. This document has not been examined or approved by any regulatory authority. 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 this document to function as intended, or at all.