TokenCard Executive Summary
The Debit Card
TokenCard is a debit card usable at payment terminals around the world, including ATMs. TokenCard customers back/fund their own card with allowances from ERC20 compatible contract wallets. At launch, TokenCard will allow users to fund their card with ETH, TKN and up to five of the following tokens that will be elected for inclusion by the community: REP, MKR, DGD, ICN, MLN, GNT, 1ST and SNGLS.
The TKN Token
TokenCard is creating the TKN tokens for a limited time. A fixed number will be created during the presale, and no more will be created thereafter. The TKN Token provides a TKN holder with the right to use the TokenCard for transaction using TKN without having to pay additional licensing fees (transaction fees charged by third party card issuers and payment system providers remain applicable). Payments made with TokenCard using tokens other than TKN is, however- in addition to the transaction fee charged by the card issuing partner – subject to the payment of a license fee as remuneration for the use of the software protocol developed as part of the TokenCard project. The TKN Asset Contract, accrues this 1% licensing fee on debit card transactions using tokens other than TKN. TKN holders can burn their TKN in return for a pro-rata share of accumulated licensing fees through a unique mechanism licensed from New Alchemy called “Cash and Burn”. Fees from card swipes will be assessed in the token being used to fund the swipe. These fees will be sent directly to the TKN Asset Contract. Over time, this contract will – in a fully automated way and without any management required- accrue tokens in proportion to the tokens used by TokenCard customers around the world. For a full description of the TKN token, see section 7.
Cash and Burn
At any time, a holder of TKN can “Cash and Burn” the TKN. Thereby, a holder of TKN burns and in return receives a pro-rata share of licensing fees held by the TKN Asset Contract. The holder will irrevocably destroy the TKN, and in exchange, the TKN Asset Contract will transfer the respective tokens to the holder.
TKN Creation Event
TokenCard aims to create $4.5mm of TKN for sale in exchange for ETH and other tokens from our initial token partners. We believe so strongly in the future of the token economy that not only are we the first company to offer to create our tokens in exchange for other tokens, we will give contributions in certain tokens a discount.
For full details on the TKN Creation Event, see section 9.2. In brief, the tokens will be sold at a discount to early buyers at a rate sliding from 150 TKN : 1 ETH down to 100 TKN: 1 ETH at the $4.5mm mark. If the cap is reached, we will continue to sell and create TKN for 24 hours – this will protect those who wish to participate in the event if all tokens sell out quickly.
Those who purchase with other tokens from our approved list will receive a 2.5% – 5% TKN bonus, depending on the token.
If funds are raised to the cap and ETH is priced at $50, about 21 million tokens will be created.
Copyright 2017, Monolith Studio. Contact mel@monolith.ventures
Use of Funds
The proceeds from the funds will finance development, partnership programs, float (both fiat and token), operations, regulatory and most importantly, marketing and customer acquisition.
Most of these costs are somewhat fixed. For more details read our Use of Funds section 9.7.
Because of this, any money we receive from pre-sales over our minimum will largely go to marketing and customer acquisition. This creates a value multiplier for the project: as we have more money we will be able to spend a higher percentage on customer acquisition and boost spending commensurately.
We believe issuing TokenCard in China will be critical to building the transactional volume for the card. Entering the Chinese market from the outside can be difficult and expensive; the more successful our TKN creation event, the more quickly we will be able to capture this market.
Prudence: Reserve Tokens
We have some concerns about other project’s capitalization in these early days of the token economy.
In particular, most projects dilute out their token holdings by 80%; this dilution isn’t equity dilution, but worse – often giving away 80% of gross revenues. This may be imprudent.
Lessons from modern markets show that both debt and equity are useful tools for raising capital.
Therefore we are minting an amomunt of 15% of all TKN but not offering them for sale during this presale.
These TKN will not be issued or sold during the initial pre-sale and are locked in a smart contract. If at some point it seems advisable for the TokenCard project to sell more tokens, some or all of these may be offered in an auction format or some other format that suits the capital needs of the project.
In the interim, these TKN will not be used in any way. They will not be considered as issued for Cash and Burn calculations. They will not grant anyone other usage benefits in the TokenCard system.
It is possible these TKN will never be issued, however, we feel it is prudent to have some backup if needed. In any event, TokenCard will engage directly with TKN holders to seek guidance and market reaction before any of the Reserve tokens are offered.
The Future
We have big plans. Our mobile app will allow customers a number of features that they cannot easily access with other digital currency and token wallet apps. Read more in Section 4.1.
We aim over time to bring about a world which makes access to tokens far easier than it is today, far more intuitive, with far less friction.
