Believers Reward Offering: Everything You Ever Wanted to Know

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Tozex

6 min readFeb 14, 2020

Tozex has developed the Believers Reward Offering (BRO), a new crowdfunding facility that allows companies to finance their development by borrowing crypto assets (stablecoins) from contributors around the world. The contributors will receive interest in the form of tokens, to which a bonus of confidence in the development of the project will be added.

All the conditions of the crowdlending are specified transparently in the smart contract linked to the BRO’s financing operation, guaranteeing the performance of the deal. There is no place for bad faith.

What’s New with the BRO?

The BRO aims to offer a sustainable alternative to ICOs and STOs as a new token-based fundraising mechanism. The BRO allows companies to sharply decrease the pump-and-dump phenomenon, limit volatility, and foster growth by providing equal treatment to all contributors, who are called “believers.” But how?

The BRO allows companies to finance their development through an innovative crowdlending system based on crypto assets. Contributors participate by sending stablecoins such as TUSD or DAI, and they are rewarded with a fix compensation amount and a bonus for the true believers who allow time for the project skyrocket.

Believers are rewarded with TOZ tokens on a quarterly basis for 12 to 18 months, depending on the initial amount invested (the duration of the loan depends on the amount borrowed). All the conditions of the loan are transparent, definitive, and coded in the smart contract. There is no place for bad faith in the reimbursement, which is automated and reflects the initial trust.

How do we limit the volatility of the token used for the interest payments and capital reimbursement?

First, the tokens distribution is diluted over time through the quarterly distribution.

Second, the starting date of each individual loan is not the same, which means that contributors don’t receive their tokens at the same time. The start date of each loan depends on when the contributor borrows the amount. Because the BRO a new way to fundraise, we are better positioned to be the first project to propose it. Our fundraising campaign will stay open for three months or more, depending on market conditions.

Third, we put in place the BRO reward mechanism. It is a token stabilization mechanism and a way to encourage long-term holding by offering an additional reward for those who do not sell their tokens but hold them.

Finally, when you combine the use of a stablecoin for investment, the dilution of token distribution over the time, and the reward for holding, you’ll find that the BRO offers a sustainable new way to raised funds without suffering from the challenging issues found in ICOs and STOs. Moreover, every contributor to this fundraising campaign knows that, which means that the project will only attract true believers in your project and not dumpers.

What Is a Smart Contract?

A smart contract is a computer code that automates a set of execution conditions, including internal and external settings, without the need for a third-party system when it is deployed on a blockchain network. It is a type of digital contract detailing the rules and conditions to be followed in its execution. The parties involved cannot modify them because they inherit the immutability of the blockchain.

How It Works

All the terms of the BRO are specified transparently in the smart contract related to the BRO’s financing operations.

What Is a BRO?

A BRO is an innovative loan in the form of crypto assets (stablecoins) whose repayment terms are determined in advance and known to all. The BRO is the first crowdlending protocol created on the blockchain using smart contract capabilities.

The smart contract contains the initial amount to be reimbursed, the interest payable, the borrowing rate, the duration of the loan, the repayment frequency, and the events triggering the payment. The crypto assets accepted for the loan are stablecoins only, such as DAI or TUSD. The maximum generated annual interest rate is 15% of the original loan amount.

The loan period varies from 12 to 18 months. 50% of the initial loaned amount (capital) is repaid during the first quarter in the form of a stablecoin such as DAI or TUSD, and 50% is repaid over the term of the loan on a quarterly basis in the form of TOZ Tokens. The loan interest is 10%, 12%, or 15% of the capital borrowed depending on the initial amount borrowed, and it is paid quarterly in the form of TOZ Tokens.

When Does the Loan Begin?

The loan start date is calculated as follows:

D = C + Delta (O - V)

D is the loan start date, C is the closing date of the BRO fundraising campaign, O is the opening date of BRO’s fundraising campaign, V is the date of payment by the lender, and Delta is the unit in days.

For example, let’s say the BRO fundraising campaign starts on September 1, 2018, and ends on December 1, 2018. The contributor participates on September 5, 2018, by paying 100 DAI over a period of 18 months.

D = C + Delta (O - V)

D = December 1 + (September 1 - September 5)

D = December 1 + 4 days

D = December 5

The effective start date of the loan is December 5, 2018.

NOTE: We must take full days into account. Regardless of the time at which the contribution is made, the entire day is retained (time zone retained is Central European Time).

When Does the Loan End?

The end date of the loan is calculated as follows:

Y = D + L

Y is the end date of the loan, D is the loan start date, and L is the duration of the loan (12 to 18 months).

In our example, the loan date would be calculated as follows:

Y = December 5, 2018 + 18 months

Y = June 5, 2020

What Are the Loan Terms?

For example, Richard decides to lend 10 000 DAI at a rate of 10% over 12 months on September 22, 2018. The DAI to TOZ rate is one to one: 1 DAI = 1 TOZ

The total amount to be reimbursed is made up of the capital and interest over a period of 12 months. The loan start date is December 23, 2018, and the end date is December 23, 2019. Richard will collect 5,000 DAI in Q1 and 5,000 TOZ over Q1 — 4 (1,250 TOZ per quarter) as principal repayment and 1,000 TOZ as interest over Q1 — 4 (250 TOZ per quarter), for a total of 6,000 TOZ and 5,000 DAI.

When Will the TOZ Tokens Be distributed?

The TOZ tokens start to be distributed at the end of the first quarter, just after the crowdlending operation.

Additional Bonus for Believers

The Tozex reward is a stabilization mechanism and a way to encourage its long-term holding. The bonus is calculated as follows:

M (q) = B (q) x P

M is the amount of bonus paid, B is the number of TOZ token in the wallet, q is the unit representing the associated quarter (e.g., q1 = Quarter 1), and P is the believer bonus fixed at 10%

The payment of the bonus is conditional on the continued preservation of TOZ tokens received each quarter until the following quarter. On the snapshot day, each wallet with no TOZ token withdrawals during the previous quarter is eligible for the bonus. The snapshot occurs every 15 days after the end of each quarter.

Conversely, when TOZ tokens are not kept until the next quarter, the bonus is lost.

For example, Richard receives a 10% bonus based on the amount of TOZ tokens he holds each quarter. Richard receives 961.50 TOZ tokens.