Sharpe Platform Token Whitepaper

Abstract

This white paper describes the Sharpe Capital Financial Markets Protocol and Investment
Platform. The Sharpe Capital Investment Platform brings together a multitude of
novel innovations in smart contracts, quantitative trading, machine learning, linguistic
analysis and artificial intelligence. Principally, we are issuing Sharpe Platform
Tokens (SHP). SHP provides a proof-of-stake that permits platform participants to
earn service fees in ETH in exchange for providing sentiment toward global equities
and blockchain assets through our web and mobile platforms. Users are rewarded
with service fees in proportion to the accuracy of the sentiment they provide, utilising
a proof-of-reputation mechanism.

The sentiment data collected is complemented with an array of natural language
processing (NLP) strategies for performing linguistic analysis, including automated
sentiment, emotional response, and contextual frame analysis. These novel approaches
to understanding market dynamics, both in equity markets and blockchain
assets, have been developed in collaboration with scientists at leading academic institutions.
Together, these data provide a valuable source of insight for hedge funds,
asset managers and private participants, and therefore a valuable revenue stream
through the sale of these insights.

Sharpe Capital has developed a proprietary, automated quantitative trading algorithm
driven by a hybrid machine learning and artificial intelligence model, bringing
together microeconomic fundamentals, macroeconomic data, real-time world events,
crowd-sourced market sentiment and NLP-driven linguistic analysis, into an overarching
model capable of managing a robust, high alpha portfolio across various asset
classes. Sharpe Capital will operate a proprietary investment fund operating much
like an automated enhanced index fund to further generate revenue to support the
SHP community economy.

The proof-of-stake metric allows us to infer the level of confidence that platform
participants have in the sentiment they provide, which, when coupled with an immutable
proof-of-reputation stored on the Ethereum blockchain, permits weighting
of sentiment to determine both the size of service fees paid to each user, and the
level of confidence to place upon each sentiment indication received. Through direct
crowd-sourcing of participant sentiment, we can ensure our automated models continue
to capture human, affect-driven & cognitive processes, in addition to microeconomic
fundamentalist and linguistic analysis based asset value forecasting. This
is unlike a prediction market – there are no losses for incorrect predictions, merely
a reduction in the user’s immutable reputation score, and consequently, the size of
future payments. Likewise, consistently accurate users will increase their reputation,
earning larger and larger payments in exchange for their insight. SHP also provides
a mechanism for hedge funds and institutional participants to access our proprietary
models, acting as a usage fee.

Utilising blockchain technology serves two additional purposes for Sharpe Capital:
to create a decentralised, ‘trustless’ immutable trade ledger, such that any individual
can view all our previous trades and fund performance with absolute confidence.
This eliminates any dependency on trust for fund disbursement, and any
possibility of fund manipulation at an institutional or individual level; to permit
unrivalled community governance using both consensus-based and democratic votebased
governance models enabling the community of SHP owners to determine the
direction of Sharpe Capital’s future.

The Sharpe Financial Markets Protocol aims to describe a new gold standard for
hedge fund management, leveraging blockchain technology to provide a low barrier
to entry, continuous liquidity, anti-corruption protections, international access and
optimal risk-adjusted returns. Our longer term goal, therefore, is to develop the
Sharpe Crypto-Derivative (SCD) token, subject to necessary approvals. This first-inclass
token creates the foundations for a solid link between blockchain assets and
the global economy, and will ultimately provide possible payment of dividends to
participants. Through our community governance structure, in which SHP holders
have the right to table and vote on motions which guide the direction of Sharpe
Capital, we ultimately aim to deliver a suite of investment products with various
risk profiles and across multiple asset classes, including blockchain assets. The timeline
for SCD issuance is Q1 2019. An independent crowd-sale will be held for the
issuance of SCD tokens, from which 100% of the proceeds will be directly invested
using our proprietary trading technology.

In light of the many corrupt or ethically questionable practices in the industry,
leading to disasters such as the collapse of Barings bank and the $2bn loss by UBS
due to a single rogue trader, we are making the technology underpinning our Financial
Markets Protocol freely available for any corporation or fund to use internationally.
Our grand vision is to eliminate corruption in global financial markets while
still protecting each individual corporation’s proprietary information. This technology
permits any institution to be instantly audited by any member of the public or
regulatory body. Ultimately, the Financial Markets Protocol demonstrates how we,
as a society, can eliminate financial malpractice in our lifetime through widespread
adoption of Sharpe trustless ledger service technology, putting an end to ’man-made’
economic disasters, and help stabilise global economies; ultimately, for the benefit
of all people.

The SHP pre-sale begins on November 6th 2017 at 14:00, and the crowd-sale begins
on November 13th 2017 at 14:00 UTC, with a maximum raise of $20MM equivalent
in ETH. SHP provides platform participants with the right to earn ETH service fees
for their market insight across many asset classes, in proportion to the amount of
SHP held. SHP enables the community to vote on the creation of new funds, the
development of new products, and on changes to other aspects such as service fees
paid and capital allocation. SHP will be continuously liquid, directly convertible to
ETH without the requirement of a counter-party

Sharpe Platform Token Website
Sharpe Platform Token Whitepaper

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