Tokenomics of the new RialtoTrade.com platform

In our introductory post about our new Rialto Trade platform we explained that the upcoming platform will feature our existing algorithms as well as add the new service of crypto baskets for simple, once-click diversification, and enable deposits and withdrawals of Bitcoin and Ether. Now it’s finally time to talk about the new tokenomics model.

Reasons for change of tokenomics

On our Rialto.ai platform, users were only able to access our products by depositing XRL tokens, which proved to be a high barrier to entry for new users, resulting in poor user experience, while giving lower than anticipated benefits for existing token holders and crowdsale supporters.

With the limited market potential of this model, the sustainability of the platform came into question as did adequate maintenance of the platform, further product development, and ultimately long term viability of the business. In light of the changing market conditions and lower returns from the cryptocurrency market making operations (our core platform product), we decided to develop new products such as crypto baskets, and upgrade the deposit and withdrawals options to include BTC and ETH. These changes will increase the appeal of the platform to a much broader market and will maximize our business potential.

In order to support the user base growth and to make the RialtoTrade.com platform sustainable, two types of fees will be introduced. First type is a product based (e.g. market making algorithm) usage fee that is charged daily and covers the operational cost of the platform (e.g. trading fees, blockchain transaction fees, cryptocurrency custodian fees, user onboarding and support) and the second type is a fee based on the profit generated by individual users, that will contribute to the business profit.

With implementation of these changes, XRL tokens will cease to trade on exchanges and function as utility for accessing the platform or reducing fees. The new RialtoTrade.com platform will not utilize the XRL or any other utility token for accessing the platform. However, this amendment will not prohibit existing token holders from accessing the platform or using or benefiting from Rialto services.

To implement this change, all XRL token holders (as taken from Ethereum blockchain) on 15th November 2018 at 14:00 CET will have a preferential user account without profit fees (second type of fees). In addition, each such holder will automatically be eligible to receive (for no payment) “preferred equity shares” of the company. By distributing up to 75% of the company’s equity to our supporters free of charge we are leading our industry by giving everyone the possibility to partake in our future business growth and value, while protecting our token holders’ interests and rights in a regulatory compliant manner.

Holding structure and free equity distribution

The operator of RialtoTrade™ (www.rialtotrade.com) and Rialto.ai online trading platforms is iTrade LTD, incorporated in the blockchain island of Malta and applying for licensing under the newly established legislation as a Virtual Financial Asset (VFA) service provider. iTrade LTD is an operating company that is 100% owned by RialtoTrade AG, our holding company established in the Principality of Liechtenstein, a member of the UN and the European Economic Area (EEA) with the highest GDP per capita in the world.

While iTrade LTD is the operating company and conducts all of the business operations related to Rialto.ai and RialtoTrade.com online platforms, any net profits made will be distributed to RialtoTrade AG Holding company that manages all shareholder relations and dividend distribution.

Today, RialtoTrade AG has a total of 50,000 shares issued:

  • 12,500 voting shares (25%)
  • 37,500 non-voting preferred shares with 10% higher annual preferred dividend (75%)

RialtoTrade AG owns 100 percent of the outstanding shares of iTrade Ltd.

Eligible recipients of preferred equity shares

All XRL token holders recorded on the Ethereum blockchain under token contract 0xB24754bE79281553dc1adC160ddF5Cd9b74361a4 at 14:00 CET on 15th November 2018, as well as all Rialto.ai platform users who have withdrawn their assets from the platform through depositing XRL tokens, are eligible to receive their pro rata amount (based on all outstanding eligible XRL tokens) of the preferred equity shares in the RialtoTrade AG holding company. Unfortunately, due to administrative costs, the minimum amount of XRL tokens required for eligibility is 1337.

RialtoTrade AG will distribute 75% of preferred non-voting shares (37,500) in proportional amounts based on the 100,000,000 total XRL token supply. For example: a holder of 100,000 XRL tokens will be eligible to receive approximately 38 shares.

Digital share register on the blockchain

RialtoTrade AG will utilize a blockchain based digital share register provided by Liechtenstein based company Own AG (www.weown.com), which will enable us to tokenize its shares in the future.

Increased benefits for our supporters

What do you have to do to receive the preferred shares

All eligible users were invited to register an account on the Rialto.ai platform and verify it by 1st December 2018. Currently approximately 75% of eligible users have registered, therefore we are extending the registration period until midnight CET on 31st December 2018 in order to register and verify the remaining users.

By verifying your account (providing user information through the KYC process) you have fulfilled KYC requirements necessary for later allocation of your preferred shares. Distribution of preferred shares will commence in January 2019.

NB: Please note that for regulatory purposes, the Rialto.ai platform restrictions on KYC as outlined in point 3 of our Terms of Use differ for our new equity distribution process. According to best practice of Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism, we currently cannot onboard citizens of:

  • Ethiopia
  • Bosnia and Herzegovina
  • Trinidad and Tobago
  • Iraq
  • Tunisia
  • Syria
  • Sri Lanka
  • Vanuatu
  • Yemen
  • Iran
  • Democratic People’s Republic of Korea (DPK)

All other citizens are fully eligible to complete the KYC for preferred share distribution purposes.

Extended registration period and subsequent platform launch

The compliance of the new Rialto Trade platform and its holding structure is the most important pillar for our successful market launch and future growth. Due to the extended registration period, the RialtoTrade.com platform will launch immediately after all users are registered or at the latest after the extended registration period expires on 31st December 2018.

Should you wish to, existing Rialto.ai users can continue to request asset withdrawals before the new platform launches, without affecting their eligibility for the equity distribution. For more details please see this Steemit article.

Users who have opted to migrate their accounts and assets to our new RialtoTrade.com platform have had, and will continue to have, their assets the same during this time (i.e. not utilized for algorithmic trading). However, in light of the extended offline period, we have decided that any profits generated by market making algorithm using the company’s own funds during this period, will be distributed on a pro rata basis to those user accounts that leave their assets deposited with us throughout the transition period.

Conclusion

With these changes, we believe that we are setting a best practice example for our industry. It is important for this information to reach as many supporters as possible, so if you know of anyone else who may also hold our tokens, please send them a link to this article. We would also appreciate a share on crypto related social media channels, platforms and forums.

We’re very excited for this new chapter in our company’s life. We believe the changes introduced will allow our new platform to grow much faster and be much more transparent for our supporters and users alike.

If you have any questions about our changes, please feel free to email us at connect@rialtotrade.com.

FAQ

In response to questions raised by our users in relation to this article we also published this FAQ.

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