TITA PROJECT
WHITE PAPER 1.0
DECENTRALIZED MARKETPLACE FOR GLOBALLY TRADED COMMODITIES, FINISHED GOODS AND COMMUNITY ENHANCED FINANCIAL SYSTEMS

2018

1. ABSTRACT TITA means Buy-Sell in a Native African Dialect. The TITA Project is all about building a decentralised ecosystem powered by Blockchain technology for the buying and selling of locally and globally traded commodities, the finished goods from these commodities and thus enhancing the financial systems of the communities where these commodities are produced. The project is designed to create a solid infrastructure that solves the basic and complicated issues with global trade of commodities and end user’s goods. A commodity is a basic good used in commerce that is interchangeable with other commodities of the same type; commodities are most often used as inputs in the production of other goods or services. Commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade. Some traditional examples of commodities include grains, gold, beef, oil and natural gas. More recently, the definition has expanded to include financial products, such as foreign currencies and indexes. Technological advances have also led to new types of commodities being exchanged in the marketplace. For example, cell phone minutes and bandwidth. We are focusing on commodities as we believe they are the basic inputs to the physical environment that we have to interact with in our daily lives. In this paper we present TITA, a system to facilitate primarily commodity trading from the sources to producers to manufactures and eventually end users and secondarily enhancing community financial systems. TITA uses a blockchainbased system to provide tools for the coordination and incentivizing of participants engaged in buying and selling of commodities that eventually turn into end user’s goods, and to collaborate and support financial products for producer communities using the blockchain. By creating a standard token protocol which embeds defined requirements into the tokens themselves, these tokens can only be purchased and traded among verified participants.
   Commodity trading is one of the oldest forms of human activity. It is central to the global economy. Yet up to now there has been remarkably little research into this important area- (Trafigura) 2. INTRODUCTION 2.1 COMMODITY TRANSFORMATIONS Virtually all agricultural, energy, and industrial commodities must undergo a variety of processes to transform them into things that we can actually consume. These transformations can be roughly grouped into three categories: transformations in space, transformations in time, and transformations in form. Spatial transformations involve the transportation of commodities from regions where they are produced (supply regions) to the places they are consumed. The resources where commodities can be efficiently produced, such as fertile land or mineral deposits, are almost always located away from, and often far away from, the locations where those who desire to consume them reside. Transportation—transformation in space—is necessary to bring commodities from where they are produced to where they are consumed. Just as the locations of commodity production and consumption typically do not align, the timing of commodity production and consumption is often disjoint as well. This is most readily seen for agricultural commodities, which are often produced periodically (with a crop being harvested once a year for some commodities) but which are consumed continuously throughout the year. But temporal mismatches in production and consumption are not limited to seasonally produce agricultural products. Many commodities are produced at a relatively constant rate through time, but are subject to random fluctuations in demand due to a variety of factors. For instance, wells produce natural gas at a relatively steady rate over time, but there can be extreme fluctuations in the demand to consume gas due to random changes in the weather, with demand spiking during cold snaps and falling when winter weather turns unseasonably warm. Commodity demand can also fluctuate due to macroeconomic events, such as a financial crisis that causes economic activity to slow. Supply can also experience random changes, due to, for instance, a strike at a copper mine, or a hurricane that disrupts oil and gas production in the Gulf of Mexico. These mismatches in the timing of production and consumption create a need to engage in temporal transformations, namely, the storage of commodities. Inventories can be accumulated when supply is unusually high or demand is unusually low, and can be drawn down upon when supply is unusually low or demand is unusually high. Storage is a way of smoothing out the effects of these shocks on prices, consumption, and production. Furthermore, the other transformations (in space and form) require time to complete. Thus, commodity trading inevitably involves a financing element. Moreover, commodities often must undergo transformations in form to be suitable for final consumption, or for use as an input in a process further down the value chain. Soybeans must be crushed to produce oil and meal that can be consumed, or serves as the input for yet additional transformations, as when the meal is fed to livestock or the oil is used as an ingredient in a snack. Crude oil must be refined into gasoline, diesel, and other products that can be used as fuels. Though often overlooked, blending and mixing are important transformations in form. Consumers of a commodity (e.g., a copper smelter that uses copper concentrates as an input) frequently desire that it possess a particular combination of characteristics that may require the mixing or blending of different streams or lots of the commodity. Most commodities undergo multiple transformations of all three types between the farm, plantation, mine or well, and the final consumer. Commodity trading firms are vital agents in this transformation process.
   ● ‘’ Commodities undergo transformations... in space… through logistics and transportation... in time... through storage... and in form… ...through processing’’
   2.2 COMMODITY AGENTS The sale and purchase of commodities is usually carried out through futures contracts on exchanges that standardize the quantity and minimum quality of the commodity being traded. For example, the Chicago Board of Trade stipulates that one wheat contract is for 5,000 bushels and also states what grades of wheat can be used to satisfy the contract. There are two types of traders that trade commodity futures. The first are buyers and producers of commodities that use commodity futures contracts for the hedging purposes for which they were originally intended. Theses traders actually make or take delivery of the actual commodity when the futures contract expires. For example, the wheat farmer that plants a crop can hedge against the risk of losing money if the price of wheat falls before the crop is harvested. The farmer can sell wheat futures contracts when the crop is planted and guarantee a predetermined price for the wheat at the time it is harvested.

2.3 COMMODITIES SPECULATORS The second type of commodities trader is the speculator. These are traders who trade in the commodities markets for the sole purpose of profiting from the volatile price movements. Theses traders never intend to make or take delivery of the actual commodity when the futures contract expires. Many of the futures markets are very liquid and have a high degree of daily range and volatility, making them very tempting markets for intraday traders. Many of the index futures are used by brokerages and portfolio managers to offset risk. Also, since commodities do not typically trade in tandem with equity and bond markets, some commodities can also be used effectively to diversify an investment portfolio. 2.4 SMART CONTRACTS Over the past few years, Turing-complete programming languages have been implemented into decentralized Blockchains. These systems use “smart contracts” (software programs stored on-chain that are automatically implemented upon specific conditions being satisfied), to add and modify data algorithmically however a user designs it. This data extends well beyond simple account balances, 5 and may include metadata, account restrictions, transfer rules, as well as any other calculations a regular computer can perform. The most widely used Turing-complete blockchain, Ethereum, grew out of a frustration with trying to implement complex logic on top of Bitcoin. Ethereum simplifies the task of implementing complex financial logic on a blockchain. With only a few lines of code, smart contracts can transfer assets or establish escrow conditions to be executed algorithmically, with all the benefits of blockchains as described earlier. In other words, if two parties enter into a smart contract, and each party presents their asset, the transaction is automatically effected without risk of failure; if one party fails to present its asset, the other party retains its asset and can move on. There is no risk of payment on one side, and the failure to deliver on the other side. The smart contract can be designed to effect a transaction instantaneously, or can be designed to effect upon future conditions begin met.
2.5 COMMUNITY ENHANCED FINANCIAL SYSTEMS Whether they’re aware of it or not, whether they care about it or not, all financial institutions have a significant impact on communities. By directing the flow of credit in our economy, they decide the shape of our world – the houses we live in; the businesses we work for and buy from; and the activities that protect or destroy our environment. Community considerations may be addressed through corporate social responsibility statements or staff engagement programmes, but, if concern for real-world impact isn’t at the heart of a bank’s business model, no amount of window-dressing will outweigh the damaging effects of its core activities. RBS, Barclays and HSBC all have sustainability policies, but are also the UK’s biggest bank lenders to the coal industry. HSBC also provides banking services to fracking company Cuadrilla, while Barclays is a major investor in Third Energy, which plans to frack in North Yorkshire. With financial institutions wielding this much power to affect our lives, the democratic control offered by the mutual model is an important mechanism for accountability and influence. Unless we know and can control what our money is doing, we have no guarantee that profit is not being prioritised over people or planet. Thankfully, a growing number of alternative finance options offer not just disintermediation, but the opportunity to join a community of investors with the same vision, such as a democratically owned renewable energy system. Similarly, Ecology Building Society is not a geographical community, but a community of shared value: our members believe in the power of money to build a more sustainable future, funding homes that respect the environment, low-impact lifestyles and resilient local economies. The existence of these national communities of interest suggests we also need to think about community impact on a larger scale. In a world of global financial interconnections and systemic environmental threats, it’s no longer credible to argue that a bank should only consider its impact within a fixed geographical boundary

3. PROBLEMS Here, we address some of the basic and pressing challenges of global commodity trade and how it affects the end products that we see today. These are the problems the TITA is aimed at providing a solution to. ● CASH SETTLEMENT - Cash settlement is a process for settling a futures contract by payment of the money difference rather than by delivering the physical commodity or an instrument representing such physical commodity such as warehouse receipt. The main drawback in cash settlement is that the commodities spot wholesale market is not an organised one (globally). Commodity prices vary from location to location and also in accordance with their quality characteristics, variety and preferred end-uses in different locations. There is no single unique cash price quotation for a commodity valid throughout the country at any given time ● CREDIT LINES - Access to international markets becoming more constrained as a result of tighter credit lines of intermediaries in developed markets. ● TECHNOLOGY - The physical commodities markets have often been laggards when it comes to innovation and cutting-edge technology. That's because they are among the least regulated. Commodities have been able to avoid much of the increasing regulatory scrutiny of financial markets because of the vast number of unregulated geographic areas where they are produced, stored and shipped. The same would apply to barrels of oil or bags of coffee. ● LOGISTICS - Commodity traders know that a typical metals shipment is not just from mine to smelter or refiner to purchaser; rather, it can involve ships, trains, warehouses, and factories along the way. And even when that shipment sits in on a barge or vessel for a month or in a factory for a year, its ownership can change multiple times. The quality of the supply chain of raw materials is being held to higher standards, and requires a greater transparency of the provenance and traceability of shipments. ● REGULATORY FRAMEWORK - Today, despite Government's’ efforts to curb financial regulation, global financial markets are contending with an expanding regulatory framework. The commodities markets are far from immune as regulatory bodies aim to scrutinize participants and enforce transparency and stability.
4. EFFECTS OF THE BLOCKCHAIN TECHNOLOGY ON COMMODITY TRADING A Blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. Blockchain technology, which has already been adopted by gold traders, is starting to show the potential to transform other sectors of the global physical commodities markets. William Blaire partner Brian Singer said that cryptocurrencies and their underlying technology have the ability to bring a large portion of the world’s population out of poverty (Forbes 2015). While it wouldn't necessarily boost commodity prices, the innovation could offer a secure means of exchange of raw materials, open up channels of trade among buyers and sellers that had until now have been perceived as credit risks, and provide more transparency and liquidity to a market that has slowly lost favour among financial institutions.
   The technology provides a way of accounting for financial transactions. It was developed as a means of addressing the vulnerability of stored data on exchange of assets. Fungible assets are much easier to convert to tokens because they can generally be broken down into smaller units (like bitcoin), and a token can stand for a group of objects (e.g., a pile of gold) rather than a set of individual objects (e.g., a warehouse full of unique works of art). Implementations of the Blockchain technology have been seen with gold, the most liquid commodity traded. As of November 1st 2017, you can own physical gold as a digital asset in a digital wallet and transfer that holding to any other wallet on the network. Although gold has multiple tradable products (spot, futures and options, ETPs, indices, physical), blockchain accomplishes what none of the other offerings do -- the ability to bring together all market participants (miners, refiners, wholesale traders, financial institutions, investors and traders and the retail sector).
   The Royal Mint, along with the Chicago Mercantile Exchange, established Royal Mint Gold blockchain, a digital asset token to represent physical ownership of gold held in the vault at the Mint in South Wales. Earlier this month, Euroclear and Paxos announced that a group including Société Générale, Citi and Scotiabank had completed the first pilot of the Blockchain-based gold trading platform developed by Euroclear. Furthermore Canada's GoldMoney announced a Blockchain product providing clients the ability to trade gold in cryptocurrencies. [Fungible assets are typically easier to tokenize because the general set of tokens are linked to a general set of interchangeable asset components.] Before the Blockchain was designed and implemented, transactions were recorded in an accounting ledger and eventually as entries in a spreadsheet or database stored in computer systems. This could be risky because it isn't always secure. Data can be out of date, tampered with or deleted. Digitally distributed ledgers address this concern. Rather than storing data on a server or database, blocks exist on multiple computers and networks in different locations. Should a change come about in the chain, it will immediately and simultaneously be reflected in every copy. The advantage is that the duplication of digitally distributed ledgers provides a safety mechanism. Cryptographic proofs lock in the transaction order chain in perpetuity, eliminating any disputes over the sequence of events. The Blockchain is verified and validated by the high degree of visibility of every transaction, ensuring consensus. With no sole, central authority, everyone in the chain is a manager of equal stature. Blockchain could help commodity traders transcend conventional market barriers. It also ensures timely settlement, expedites capital allocation and provides proof of collateral.
   Its use by gold markets paves the way for increased transparency in physical commodities. That should be just the beginning of a broader adoption of ledger technology that will transform the commodity sector, including other precious and industrial metals, energies, grains and softs.
5. CASE STUDY 5.1 CASE 1 Imagine a group of companies like Vitol, Trafigura, Webb Energy that want to trade oil with one another. Normally they'd exchange paperwork and keep their own lists of trades. If they could move to a blockchain-based system for trading their oil, they could potentially reduce paperwork and have more robust recordkeeping. There are many consortiums sprouting up that aim to replace paper trading systems with blockchain trading systems. They generally don't aim to tokenize real-world assets directly, but rather to use a blockchain system to enable trading of real-world assets.
   5.2 CASE 2 An international chocolate maker in Brazil, for example, might have several production units in different regions, each forecasting a certain level of demand for cocoa, dairy products, sugar and energy. As such, establishing a decentralised trading desk that serves different business units across an organisation can be a useful strategy when hedging against commodity price fluctuations.
   5.3 CASE 3
   A Local Content Monitoring board in a country like Nigeria, Kenya or South Africa want to monitor and keep track of the amount, size, quantity and quality of the natural resources it has. Having access to data is real work, but with the implementation of a blockchain based service in commodities, these Agencies can keep track of Mineral and Agricultural resources Manufactured or Produced Locally to the Point of Exportation. We will bear in Mind that transactions and collation of data is verified by users maintaining the network thus, tracking of these commodities are transparent and information cannot be adulterated or tampered with.
6. THE TITA ECOSYSTEM We believe TITA will increase growth in producing communities, establish wealth by creating self-sustaining, community enhanced financial systems. “Self sustaining” means the wealth in the community as a whole grows, and “community-owned” means participants in the existing community take on most of the key roles within the ecosystem.
   6.1 TITA CENTER A platform designed to operate like an e-commerce marketplace where Raw Materials and their finished products intersect. This will give our users good product visibility and ensuring that high quality standards are met whilst partnering with logistics services to ensure timely delivery.
   6.2 TITA EXCHANGE A second stage platform designed to provide robust trading services, connected with several trading floors around the world giving real time prices and tools used for trading futures contract. The use of robotic API’s will be to implemented to enable automatic and semi automatic trade executions for users.
   6.3 THE TITA TOKEN The TITA token will be referred to as “TITA” and will be issued to serve as fuel for the ecosystem And as a form of exchanging on the platform to give incentives to users, to encourage trade and to build a trust less platform (escrow) to facilitate market activities, Provide database for Producers, Manufacturers, Supplies and other Agents in the Supply Chain Circle. It will also be used as the staking unit for selecting block producers, as well as a single medium to pay for costs incurred by the TITA Network. Holding TTA equates to having a partial role in the TITA project. The TITA which works on the Decentralised database Platform for commodities exchange has also been designed for tracking goods globally and information storage services and serve as a tool to provide financial agent to provide Micro credit services to all the agents mentioned above.

Token consistency will be ensured as new tokens would not be minted after the smart contract has been published. The TITA network token “TITA” will be built on the Ethereum block chain which is designed to execute smart contracts. Tokens in the Ethereum ecosystem can represent any fungible tradable good: coins, loyalty points, gold certificates, IOUs, in-game items, etc. Since all tokens implement some basic features in a standard way, this also means that your token will be instantly compatible with the Ethereum wallet and any other client or contract that uses the same standards. Using Ethereum, you can create a contract that will hold a contributor's money until any given date or goal is reached. Depending on the outcome, the funds will either be released to the project owners or safely returned back to the contributors. All of this is possible without requiring a centralized arbitrator, clearinghouse or having to trust anyone.
6.7 TOKEN DISTRIBUTION 250M tokens will be created . ● Distributed to the community – Private Sale – 5% / Pre ICO – 15% / Mainsale – 30% ● Founders and Team – 9% ● Ecosystem – 15 % ● Reserve – 15% ● Advisors and Marketers – 3% ● Bounty and Campaign – 2% ● Token Sale Cost – 1%
6.8 Use of Funds ● Project Development- 50% ● Daily operation Expenses of daily logistics management -15% ● Reserve Kept in reserve to cope with any emergency- 15% ● Buy back tokens to ensure liquidity- 5% ● Legal fees- 5% ● Token Sale costs- 1% ● Branding, Promotions and Marketing- 9%
7. COMMUNITY NETWORK EMPOWERMENT By creating a fully decentralised ecommerce platform and providing robust trading services we are in the process of converting rights to real world assets into a digital token on a Blockchain. Every member of our community is not bound by geographical location and is given an equal opportunity to benefit from the ecosystem we aim to create.
8. HOW WE WILL DRIVE ADOPTION TITA aims to create a value adding platforms that are transparent and cater for the day to day needs of the average man through decentralised commodities trading programs and exciting marketplaces. We are building from the ground up and taking into cognisance every level of production and distribution. The tokenized asset class will be beneficial and incentivised to ensure continuous adoption by partnering agencies to ensure a smoother and trust less business ecosystem.
Disclaimer This document is for information purposes only and is not an offer or a call to sell stocks or securities. TITA tokens are not securities User acknowledges, understands, and agrees that TITA tokens are not securities and are not registered with any government entity as a security, and shall not be considered as such.
Absence of guarantees of income or profit There is no guarantee that TITA tokens will grow in value. There are no guarantees that the price of TITA tokens will not decrease, including significantly, due to some unforeseen events, or events over which the developers have no control, or because of force majeure circumstances. Risks associated with Ethereum
TITA tokens will be issued on the Ethereum blockchain. Therefore, any failure or malfunctioning of the Ethereum protocol may lead to the trading network of TITA tokens not working as expected.
Regulatory uncertainty
Blockchain technologies are subject to supervision and control by various regulatory bodies around the world. TITA tokens may fall under one or more requests or actions on their part, including but not limited to restrictions imposed on the use or possession of digital tokens such as TITA tokens, which may slow or limit the functionality or repurchase of TITA tokens in the future. Risks of using new technologies
TITA tokens are a new and relatively untested technology. In addition to the risks mentioned in this document, there are certain additional risks that the team of the TITA token cannot foresee. These risks may manifest themselves in other forms of risk than those specified herein.