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Numeum™

 

 

A token worth its weight in real assets. An ecosystem for digitized finance.

 

 

 


 

 

US compliance is the primary concern shaping the design of the Numeum ecosystem. Where most other blockchain businesses are operating outside the US with refusal to do any business with US residents, Blockchain Assets AI is positioned to serve the high demands of US-regulated markets. Between securities laws, trade restrictions, money transmitter laws, and tax reporting requirements, the barriers to entry are set high, and we will be working closely with regulators to build a better, stronger, faster financial system.

Blockchains are distributed digital registries for property. Tokens are digital contracts you own. To bring the old financial world fully in to the digital era, consider tokens a form of ‘electronic security paper’ with anti-counterfeiting measures only made possible through computer cryptography. A user’s ‘private key’ is a digital equivalent to their signature, thumb print and retinal scan, rolled in to a string of numbers and letters that must match exactly in order to transfer any of the user’s property, or to authenticate as the user. The designs of blockchain technologies mathematically enforce these rules.

 

The Numeum Token

Numeum is a ‘securitized token’ being issued in full compliance with SEC regulations.

Blockchain Assets AI, Inc. (“BAAI”, a Wyoming corporation) is raising funds through a preferred stock offering with attached warrants redeemable for Numeum tokens. Half of capital raised in funding rounds is allocated to the ‘Numeum Reserve’, backing the creation of initial tokens for shareholders. Numeum Tokens are non-voting and represent a pro rata ownership interest in “Numeum Reserve”, a segregated fund managed by Blockchain Assets Advisors, LLC (“BAA”), a wholly-owned subsidiary of the Parent Company, and NOT shareholder interests in BAAI itself or BAA. Other activities and interests of BAAI are not reflected in the value of Numeum tokens.

1 Numeum tracks the Net Asset Value of ‘the reserve’ divided by circulating Numeum supply.

The Numeum Reserve is a portfolio of AI-managed trading accounts in multiple markets with a portion held as precious metals in secured vaults. Markets traded may include commodities, equities, bonds, currencies, and crypto-assets. An array of different algorithms are trading segregated strategies, within a risk management framework. Machine learning is employed to constantly improve and generate algorithms in ways that humans can’t. Trading algorithms operate in every liquid market we have tested profitable models in. When physical holdings are depreciating, hedging will be performed to shield from draw down. Professional traders oversee daily operations and step in as needed.

By distributing risk and opportunity across several independent marketplaces, we aim to reduce price volatility and protect from negative market events. By focusing on safer asset classes, hedging, and active AI management, we aim to increase the opportunities for token price appreciation. Additionally, fees and other income generated by the Numeum ecosystem are fed back in to the reserve, constantly increasing the backing of each circulating Numeum token.

The reserve acts as a liquidity pool for the entire Numeum ecosystem, reducing costs in backing the creation of various asset-denominated tokens on demand. Blockchain Assets AI earns half of Numeum Reserve’s income and gains as performance-based management incentive. Transparent bookkeeping and regular audits of reserve assure accurate pricing of Numeum, and verify backing of all tokens in the ecosystem. Traders will have access to Numeum’s transparent books throughout the day, which will be summarized as a signed message on the blockchain and pushed to a web page.

Numeum is liquid and fully backed. During business hours, verified Numeum holders may redeem their tokens for national currency (via bank transfer) or any number of assets in the reserve. Premiums and delivery costs will be incurred. Minimum block requirements for redemption may also apply.

Optionally, there will also be a number of discounted products available for redemption, such as gift cards and airfare. By partnering with companies we are able to provide greater redemption value in products and services at sub-market rates. We may partner with local businesses for redemption offers, and have particular interest in building a network of coin & bullion dealers.

Market maker algorithms may be deployed on Numeum and other tokens in the ecosystem to provide liquidity and stability with price shelves and ceilings. This allows market participants to trade within a range of spot, and Numeum Reserve will earn premiums on demand.

Numeum token supply is not capped and supply is not restricted by any means. Newly issued Numeum is sold at a small mark-up, absorbing high market demand and stabilizing price. The mark-up earned on new tokens goes to the reserve, delivering value to all Numeum holders.

Tokens represent wealth stored in the Numeum ecosystem, and there is always room for more without diluting any value. Being redeemable, circulating token supply will shrink when holders claim redemption value. Naturally expanding and contracting supply as needed.

 

The Numeum Ecosystem

Numeum is more than just a token, it is the kernel of our asset-backed financial system. It provides the framework, vision, resources, and liquidity to power a suite of services anchored in real-world wealth.

With the intention of minimizing costs and maximizing economic flow, we are building a fully-licensed payment network including cross-border remittances. A (Visa or MasterCard) debit card will be available for spending from accounts. Transfer fees should not exceed 1% and in most cases will be nominal.

Our platform will appeal to merchants for lowering costs, expanding market reach, nullifying inflation, and providing market data. Merchant services will include the ability to seamlessly process cryptocurrency payments.

User friendly web and smartphone apps integrate wallet, transfers, trading, and merchant features. Tax reporting features are built-in for IRS compliance and user convenience. Capital gains and income are automatically tracked and logged, available for user’s accounting needs.

Account restrictions will be required for US regulations, meaning that only KYC/AML-approved parties will be allowed to participate in the Numeum ecosystem. Some transfers may be prohibited due to securities or commodities regulations. We are working to minimize the impacts of US-specific regulations on non-US users, and find the best ways to serve our global community. International crypto exchanges may list Numeum and other tokens, with only users registered in the Numeum ecosystem able to withdraw.

We will offer referral incentives to grow the Numeum user base. Merchants can send rewards to their customers. There are advertisers that pay incentives for actions, views and purchases, we may give users opportunities to earn tokens in these ways. Blockchain Assets AI develops applications and partnerships to expand the Numeum ecosystem.

 

Currency-Pegged Tokens

NuDollar is a ‘stablecoin’ backed by reserve assets and always redeemable for 1 USD (only) of value. In the future we may tokenize other popular currencies in the same way, NuEuro, NuYen, NuFranc.

We are exploring the ramifications of issuing “legal tender tokens” representing vault holdings of precious metal coins issued by the US Mint. According to legal tender laws in several US states, capital gains tax would not apply. Although there may be strong legal grounds and state-level acceptance, the IRS maintains the position that all precious metal trades are to incur capital gains tax as collectibles.

Pegged Tokens are non-voting and represent a pro rata ownership interest in certain segregated Funds managed by BAA, a wholly-owned subsidiary of the Parent Company, and NOT shareholder interests in BAAI itself or BAA.

 

Asset-Pegged Tokens

Multiple tokens tracking values of commodities, securities, baskets, indexes, or AI-managed portfolios will be launched within the Numeum ecosystem. Tokens can be created or liquidated on demand, hedged by reserve holdings and market orders. Some assets that typically trade on futures markets may be priced to reflect a standard weighted average of rolling contracts. Assets will be denominated in minimal practical units, with decimal fractions.

Example Asset-Pegged Tokens:

  • Gold, Silver, Platinum, Palladium, Rhodium
  • Coffee, Cocoa, Sugar, Canola, Lumber
  • Corn, Wheat, Rice, Oats, Soybeans
  • Crude, Gasoline, Natural Gas, Coal, Uranium
  • Copper, Steel, Aluminum, Nickel, Lithium
  • Precious Basket, Energy Basket, Consumer Basket
  • LME Index, CRB Index, GSCI Index, SP500
  • US10Y, US30Y, SJNK, “AI-Traded Bonds”

“Token shifting” is a feature that allows any token to be exchanged directly to any other token. Liquidity is provided through Numeum Reserve and overflowing to market orders. All fees are covered in spread with a small mark-up earned. A user may choose to have any incoming tokens shifted to one token in particular, such as gold or dollars.

Pegged Tokens are non-voting and represent a pro rata ownership interest in certain segregated Funds managed by BAA, a wholly-owned subsidiary of the Parent Company, and NOT shareholder interests in BAAI itself or BAA.

 

Business-Issued Tokens

Once established, the Numeum ecosystem will be an ideal platform for issuing private tokens for crowdfunding and other uses. There are many purposes a business may wish to issue tokens for, we provide technology and support to issue any compliant token within the Numeum ecosystem.

Crowdfunding is an industry that we intend to tokenize for greater liquidity. Beyond startups, many crowdfunding platforms have launched, since the passing of the JOBS act, that facilitate investments as small as $20 in secured loans for real estate, cars, and small businesses. Agricultural lending to US farmers is just one sector we have great interest in crowdfunding – a secure sector that borrows billions annually and needs access to capital. Our goal is to make crowdfunding a more popular and practical retail investment.

Corporate equity is coming to the blockchain and we will be ready to legally issue public shares when the SEC gives approval. The US-compliant nature of the Numeum ecosystem means that we are already compliant with all the restrictions and oversight required by the SEC.

Loyalty points are another major use case for business-issued tokens. With so many company loyalty programs, having a central wallet to store and transfer points with exchange functions will please customers. New point earners can be notified by email/SMS to register an account.

Vouchers & tickets are among some of the business use cases we may develop products around later.

 

Information Security

As with all financial technologies and especially when handling blockchain assets, security is our top priority. There have been too many horror stories of poor security standards with trusted parties. We are building our security procedures around the highest standards set in the industry, and are even striving to improve on these. Not only are account funds highly secured, personal information is kept encrypted.

Multi-signature keys segregate account authority, making accounts much harder to compromise.
BitShares supports a unique ‘account recovery’ feature which allows a user’s lost keys to be restored.

Offline air-gapped cold storage wallets are kept in vaults for signing crypto-asset transactions out of the reserve. For this reason, there may be some delays to withdraw. Strict anti-fraud measures will be in place to prevent unauthorized withdrawal, sacrificing convenience for safety.

We encourage all blockchain users to employ air-gapped wallets for long-term holdings. We will work to educate and empower our users to follow best practices, including distribution of hardware wallets.

 

A Choice of Blockchains

BitShares provides an ideal established platform to issue Numeum and other tokens. BitShares is designed to provide many financial services in a decentralized and community-governed way, including the first open source decentralized exchange. Built on Dan Larimer’s original Graphene Blockchain design, the same engine powering the Steem social media network (Steemit.com). The bottlenecks in scalability facing other blockchains will not be a problem.

EOS is the latest incarnation of Graphene Blockchain technology, with a focus on executable Web Assembly programming, making it the most capable blockchain distributed computer yet – but still very new. We may develop future applications with EOS as it proves itself secure.

BitShares features we benefit from include:

  • 3-second block time (fastest)
  • Up to 100,000 transactions per second
  • Very low fees (under $0.01 today)
  • Human-readable addressing
  • Account recovery options (unique)
  • Secure token smart contracts with features
  • Decentralized exchange engine (provably fair)
  • Open source wallets for mobile, web & desktop
  • Active community governance & development

The amount of energy consumed by all the DPoS (Distributed Proof-of-Stake) nodes currently comprising the BitShares network is so minuscule that it could be offset by a single wind turbine. By leveraging the efficient BitShares network, our energy costs are near-zero. We plan on operating several BitShares nodes to contribute to network strength and reduce latency.

BitShares charges very low transfer fees and even lower fees for DEX orders (see: https://cryptofresh.com/fees). These blockchain fees can be paid by users in Numeum, then BTS (BitShares blockchain token) is drawn from our ‘fee pool’ by the blockchain. Numeum users don’t need BTS to pay for transactions, but they may have the option to use BTS. Fee pool rates are variable through an ‘exchange rate’ and will be set slightly higher than base rate, surplus fees collected go to reserve. It is in everyone’s best interest to keep fees negligible to support widespread daily use.

Please research BitShares to learn more about the technology behind Numeum.