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Technical Whitepaper v1

July 10, 2018

Copyright © 2018 Polybird.IO

This whitepaper is a working document that is subjected to review and changes.

1. Abstract

With the emergence of blockchain-based digital assets, the need to exchange these assets among counterparties has increased significantly. As thousands of such digital assets and cryptocurrencies are being introduced, which include tokenized securities, the need for a robust and diverse exchange platform has magnified. Indeed, this is just a beginning and we are yet to reach the real potential [1][2][3], which would pave the way for an exchange platform that facilitates trades with robust performance and high-grade security. The digital economy is maturing every day and blockchain technology is constantly changing the way we do business [4][5]. The financial services sector is set for disruption due to advancements in blockchain, digital assets, and cryptocurrencies paradigm. While some potential real use-cases of blockchain may be far away in future, the digital modern economy is already here. The current industry needs a powerful bridge between traditional and emerging asset classes.

At the time of writing this, more than 200 digital assets and cryptocurrency exchanges already exist around the world [6][7]. Generally, there are three types of exchanges: crypto-to-crypto, fiat-to-crypto, and hybrid—which is a combination of previous two exchange types [8]. Whereby, exchanges for tokenized securities are in the development or launch phase, and it is too early to comment on their technical capabilities.

While each of the three types of exchanges tries to serve its users well with the best of its abilities, there are limitations and weaknesses in each. The crypto-to-crypto exchange category is faster and low cost in nature, offering many crypto-pairs and allowing users to trade at ease. However, during times of market volatility and rush, existing users who face difficulty converting cryptocurrencies to fiat in a timely fashion, aka cashing out, will see their portfolio values drop significantly and those who have fiat would find it difficult to take advantage of cheap cryptocurrencies as a buying opportunity, aka cashing in. On the other hand, the crypto-to-fiat exchange category typically offers only a limited number of cryptocurrencies that users can buy, sell, or trade. Overall, an average user has to jump through various exchanges at a given time, to execute a full-round of transaction, just to buy or sell a certain digital asset.

Other major issues with these exchanges are a lack of proper security procedures and processes in place to safeguard users’ assets and a lack of systematic and machine intelligence systems to prevent the price manipulation of illiquid cryptocurrencies in order to safeguard users’ portfolio values. Hence, this ecosystem needs an exchange platform that is institutional-grade, can facilitate ultra-speed processing of transactions, provides a military-grade custodianship and security, delivers transparent and fair listing of digital assets, affords minimal trading and exchange listing fees, has better AI system for market manipulation checks, eases entry and exit, as well as offers user-friendly user interface.

2. Problems

Problems in current exchange platforms are:

2.1 Security Issues

Most exchanges have already suffered from hacks and subsequent losses [9] [10]. Centralized exchanges continue to be honeypots for hackers to attack, as their servers have custody of billions of dollars of users’ funds [11]. Exchange developers can also make honest and accidental errors. DDoS attacks are being frequent nowadays which often leads to frequent downtimes [12] [13]. Weak and unorganized server architecture makes the platform vulnerable and leaves the users’ funds prone to attacks.

2.2 Liquidity Problems

Liquidity is still a problem with many exchanges [14] [15]. Some exchanges have dense orderbook, but lack trading pairs. While other exchanges have shallow orderbook, but high number of trading pairs. One way or the other, exchanges face a major issue dealing with liquidity. This leads to low trading volume in newer exchanges, inspite of better features. The orderbook being shallow generates high slippages when trading, hence leading to losses to traders. Generating liquidity by onboarding institutional investors, trading firms, market makers, miners, and experienced professional traders, requires a team with deep industrial connections and understanding of the markets.

2.3 Poor Customer Service

Most exchanges have a poor customer service [16]. Users have to wait for days to get a reply due to a high backlog of support tickets and inefficient support team. Users on the platform are geographically diverse. Therefore, it is important to understand their minds to run an exchange platform. A little delay in solving problems could lead to tremendous amount of dissatisfaction or even major losses.

2.4 No Globalization and Multilingual Support

Users are global; so should be the platform that facilitates the entry of traders. Most exchanges provide a bare minimum number of language support to their users, which limits the entry of users as they are not able to understand the platform.

2.5 High Fees

Most exchanges still charge heavy amounts and different types of fee [17]. It’s expensive to convert one crypto to another. On top of that, users have to use multiple exchanges to execute a transaction. So, for instance, if John wants to buy EOS, he has to first buy BTC and then buy EOS, and in this process, pay commission twice. There lacks a one-stop solution exchange that meets the end-to-end needs.

2.6 Slow KYC and AML Process

The usual KYC/AML check process is slow due to a heavy backlog and the support staff is unavailable to communicate with the waiting users. This friction in the onboarding process leads to dissatisfaction among users. Traditional method of verification requires significant amount of time and following a long list of procedures, which results in long queue of unverified users. Especially when it comes to fiat, which means more regulatory checks, users have waiting time of weeks. Most of the time, these checks are also not done properly [18].

2.7 Listing Issues

According to various media reports, existing exchanges charge outrageous amount of listing fees [19], in the name of maintaining liquidity and infrastructure costs. This leads to increased barriers to entry and many blockchain startups back off from being listed and usually end up in illiquid exchanges, which are difficult to enter and trade due to shallow orderbooks.

2.8 Poor Airdrop Support

Most exchanges in existence do not support numerous airdrops, which leads to dissatisfaction among users. Airdrops are becoming a new way of building communities that support and use the products of these early-stage blockchain companies. By assembling a good community of users, airdrops can become new way of funding and liquidity, among many other benefits. Often, these airdrops or ‘free-money’ is a gateway for newbies to enter into the crypto trading world.

2.9 Low Trading Pairs

Most exchanges provide a limited number of digital assets and cryptocurrencies on their platforms, which leads to market fragmentation. Arbitrage opportunities often develop due to such market fragmentation and causes high slippage due to less liquidity. Options for users are limited and they have to hop from exchange to exchange to meet their needs. Also, high number of transactions leads to higher trading fees, which are subject to high taxes in countries like the United States.

3. Introducing: Polybird Platform

We at Polybird believe that meeting the end-to-end needs of an exchange userbase is of utmost importance to create a sustainable and efficient ecosystem. Hence, we are introducing a third generation exchange platform, Polybird. Polybird is made of Poly which symbolizes the multiple features of our ecosystem and Bird which symbolizes the freedom and ease of access to enter the blockchain world through our platform. With your help, we will make Polybird the largest and most efficient ‘World Exchange,’ which will house major asset classes such as cryptoassets, stocks, bonds, currencies, commodities, etc.

3.1 Polybird Ecosystem Features

3.1.1 Powerful Matching Engine

We are building Polybird to serve the global audience. Hence, it is important to have a high-performance future-ready trade engine. At general server configuration level, our trade engine can process 500,000 tps. So if we use 10 servers in load-balance configuration, we can have 5,000,000 tps trade engine.

3.1.2 Strong Multilingual Support

Polybird would support four languages in the initial phase: English, Korean, Japanese, and Chinese. This applies to all interfaces like desktop, mobile web interface, mobile applications, and desktop and mac clients. We will be adding more languages later on such as Dutch, French, German, Taiwanese, Vietnamese, Filipino, etc.

3.1.3 Multiple Device Support

Polybird will support cross-trading platform for various devices as following and would add more platforms as per user demands:

  1. Website based client
  2. Android native client
  3. iOS native client
  4. Mobile responsive HTML5 client
  5. Windows PC Client
  6. MacOS Client
  7. REST API Client

3.1.4 Military-grade secure wallet or PolyWallet

At Polybird, security of funds is our utmost priority and the custody management is divided into 3 parts:

1. Hot Wallet: It generally refers to the wallet used for deposits and often account for 1-10% of exchange’s funds. But Polybird’s hot wallets will account for 0.9% of users’ funds.

2. Cold Wallet: These are the wallets which are accountable for most of the exchange’s funds and kept offline. Nearly most exchanges stored 90-99% of funds in cold wallet. Yet, for better security measures, Polybird would be storing 39.1% of users’ fund in cold wallet.

3. Military grade secure wallet or PolyWallet: Polybird will be one of the first to house a military-grade secured custodianship. This wallet will be created with support from third parties. This wallet will account for storage of rest 60% of the funds.

3.1.5 Liquidity Pool - PolyPool

Liquidity is king! Polybird will take measures to ensure a deep orderbook and create a liquidity pool of institutional investors, professional traders, market makers, and so on, called PolyPool. This pool will be responsible for heavily filled orderbooks and reduced arbitrage opportunities and higher efficiency.

3.1.6 Advanced AI & Algorithmic Engine

This engine will be responsible for keeping checks on any market manipulations to ensure protection of market participants at large. Polybird will deploy AI-based price manipulation prevention systems for the market to protect the users.

3.1.7 Instant Exchange

Polybird would be first of its kind to introduce an instant exchange within its platform to facilitate direct conversion of one crypto to another without visiting related trading pairs. This will help new users to get their desired crypto instantly.

For example: A user has NEO and wishes to convert them into EOS. In general case, this user has to sell his NEO tokens first in say NEO-BTC market trading pair. Now the user has to move to EOS-BTC market and buy EOS using BTC he received from selling NEO. Hence, this user has to pay trading fees twice for getting his desired crypto because the exchange doesn’t allow direct conversion of any crypto.

But at Polybird’s instant exchange, any users can directly convert their current crypto into whichever they want. Users just have to go to Instant Exchange on their account wallet’s page and navigate to Instant Exchange page from the link mentioned. This is possible because the Instant Exchange Platform will contain several bots which will perform the trades for users at market price instantly.

Working Mechanism: A user has BCH and wants to have XRP. The bot would perform the similar trades as traders do i.e. sell BCH for BTC and buy XRP using the BTC in BTC trading market. But the difference here would be that the fees would be 25% less than the fees required in general way i.e. for two trades. But if the users choose to pay with our token, Polybird Token, then the effective fees would be 50% only.

Currently only Changelly provides instantly conversion of crypto and fiat but they have unreasonably high fees, not to mention the transactions fees required to deposit and withdraw to any other exchanges.

Most importantly, this mechanism can also be replicated in various asset classes from commodities to real estate, as the users pay less fees and are able to transact more.

3.1.8 Intuitive User Interface

Since we aim to deliver ease of access and usability to novice, professional and institutional traders alike, Polybird would have 3 different types of user interface:

1. Basic User Interface

This user interface would primarily target new-comers and novice traders by default, so they would be able to understand the basic options like buy/sell, long/short, stop-loss, etc. as well as get comfortable with these functions. This would allow them to easily input the value and perform various trades without expert guidance or advice. This interface would support both day and night modes as well. This would be the default interface for web and mobile devices.

2. Advanced User Interface

Built keeping professional traders in mind, Polybird’s user interface would feature various types of advanced ordering system, as well as charting tools for in-depth analysis. This interface would be available on mobile, tablet, and desktop. This interface would also include night and day mode. While we want to ensure that the default trading dashboard meets every need of the traders, our users are free to access this dashboard and rearrange it according to their needs.

3. Professional or Institutional User Interface

This would be geared towards institutional traders and market makers. It would have pre-built trading bots allowing retail and institutional traders to test out their strategies and perform high frequency trading as per their requirements. In addition to the above, Polybird would hold poll and ask for users’ feedback about improvements that can be made in all the interfaces every quarter. Polybird platform would integrate of MetaTrader 4, TradingView, and others for more trading options.

3.2 Polybird Derivatives – PolyDer

Majority of the digital asset exchanges are not made with sound financial knowledge as most of the advanced trading options are missing out there. This leads users to use multiple exchanges, which leads to more hassle and higher costs. Furthermore, very few exchanges provide derivative products, using low liquidity as a reason. These exchanges have low liquidity even in spot trading and let users to deal with the frustration of long order processing to even no order execution.

With PolyDer, we strive to solve such problems, especially in derivative digital asset markets. PolyDer would offer leveraged products like perpetual swaps, futures, options, and several other products in various asset classes, where needed. This would allow our users to hedge their risks to manage portfolio in all types of markets.

PolyDer would be a peer-to-peer derivatives trading platform, that would offer spot and leveraged products. Users would be able to test, learn, and explore our platform using our trading bots and other tools for algorithmic trading. Users are free to choose their own product and market depending on their personal risk-taking capabilities and understanding of the chosen product. In the beginning, PolyDer would use a single digital asset for profits, losses, deposits, withdrawals, and settlements, for reference. We would introduce fiat on getting approval from respective authorities, or tokenized fiat, with more developments.

4. Polybird Mechanics

In this section, we would explain the various mechanisms which would be used on Polybird platform, in no particular order. This includes various technical and non-technical details, which would help our users and investors to understand how Polybird would work.

4.1 Software Architecture Blueprint

Designed for high-performance and robust operation, PolyMatch—Polybird’s matching engine, our users would experience negligible lags or delays in accessing the dashboard as well as placing or canceling orders. Executions would be high-speed, as PolyMatch would be built from scratch using powerful languages: Java, Go, and C++. PolyMatch would be a low-latency, high throughput, and high-availability matching engine to process trades up to multimillion tps.

The entire software architecture would be hosted using high-availability infrastructure with geo-replication, load-balanced, and powerful backup mechanisms. PolyMatch would have auto-healing features, highly scalable design, and failover mechanisms.

4.2 PolyDer Mechanisms

In this section, we would discuss some of the mechanisms used in PolyDer platform to offer peer-to-peer trading with spot and leveraged products like perpetual swaps, futures and several others.

4.2.1 Contract Mechanisms

  1. Spot contracts refer to trading at spot prices, that is, immediate buying or selling at current market prices. This also means immediate settlement of the terms of contract. Since spot contracts are not leveraged products, it allows users to trade at low cost, expose themselves to high volumes, and safeguard their capital. PolyDer spot trading would be accessible to all Polybird exchange users by default.

  2. Futures contract is a derivative product and is an agreement to buy or sell a financial instrument at a predetermined price at a predetermined time in future. They are either physically settled or settled in cash. In futures, traders don’t have to use 100% of their collateral as margin, since PolyDer would provide leverage up to 50x. PolyDer would perform all calculations in a certain stablecoin and with various options for trading, users can explore the derivatives market.

  3. Spread contract is a derivative product and consists of sale of futures contracts as well as for offsetting them. This would allow traders to hedge their positions for better risk management. Over course of time, we would add many assets. We hope through PolyDer, we would create more liquid market for Polybird ecosystem as well as for the digital asset world.

4.2.2 Order Mechanisms

1. Market Order

This order type is executed instantly on current market price. This order type simply processes existing orders in the orderbook. It is often used to save time and perform instant trades. In this case, traders need to put the quantity and the direction of their order. For example, if a trader places a following market order, the order type would execute a ‘sell’ order of ‘100’ contracts at current market price:

Quantity: 100.00
Direction: Sell

2. Limit Order

Under this order type, traders have the choice of price in addition to the features of a market-order order type. So instead of settling at a current market price, traders can set a certain price, with quantity and the direction of the trade. This order type is primarily responsible for liquid orderbook at any exchange. However, this order may or may not be processed depending on the market trends and pricing. Here traders have to enter a price, quantity, and direction to place a limit order. For example, if a trader places a following limit order, it would put a ‘buy’ order of 125 contracts at the price of 9589 in the exchange orderbook for execution. Successful execution depends entirely on market conditions.

Quantity: 125.00
Limit Price: 9589.00
Direction: Buy

3. Stop Order

A stop order, otherwise referred to as stop-loss order, is an order-type to buy or sell a given product in the market at a stop price. Once the market price reaches the stop price, the stop order becomes a market order. As the name suggests, this order is often used to minimize loss. Stop orders are three types:

3.1 Market Stop Order

This type of stop order is triggered when the limit price reaches the market price and is executed at best available market price.

3.2 Limit Stop Order

This order type generally creates a range between a trigger price and stop price. This type of order is executed at the limit price, rather after the stop price. Once the stop price is reached, the order changes to limit order. For this type of order, traders need to enter the quantity, stop-limit price, stop-order price, and direction of the trade. For example, let’s assume a trader creates the following limit stop order. In this order, trade will execute a ‘sell’ limit order of ‘1269’ contracts at a limit price of ‘7556’ when the market price reaches ‘7560’.

Quantity: 1269 
Stop Limit Price: 7556
Stop Order Price: 7560
Stop Order Type: Limit
Direction: Sell

3.3 Trailing Stop Order

A trailing stop order is a special type of stop order. In a trailing stop order, the trade position remains open to protect gains and continues to move as long as the position gains. If the price reverts, a stop order is triggered and executed at the market price instantly. Generally, there are two types of trailing orders: positive trail or negative trail. In a trailing stop order, a trader has to enter a quantity, stop order type, trail value, and a direction. For instance, if a trader places the following trailing stop order, it will execute a ‘buy’ order at a market price of ‘1025’ contracts when the price reverts back to higher side by ‘168’ units from the market value achieved after placing the order.

Quantity: 1025
Stop Order Type: Trailing
Trail Value: 168
Direction: Buy

4.2.3 Margin Mechanisms

Margin refers to the amount required to execute a leveraged position, i.e., borrowing to execute any position higher than the existing balance in a given account at order execution time. There are two components of a margin trade:

  1. Initial margin refers to the minimum initial amount required to enter the position or execute a leveraged trade order
  2. Maintenance margin refers to the minimum amount required to sustain any position from getting liquidated

PolyDer would use two mechanisms for margining:

1. Cross Margin

Cross margin refers to the margin instrument order that utilizes full available funds of a trader. This margin is shared with open positions, which can draw more funds from the account to avoid liquidation. In this case, an order is initialized by initial margin. If in any case the position enters ‘loss’, funds would be withdrawn from the account to sustain the trade. Similarly, if the position enters ‘profit’, the unrealized profit would be added to margin account balance. This is often used to hedge existing positions and arbitrage to avoid liquidation by exposure to one side of trade. For instance, creating a 10x leverage position in BTCUSD spot contract and hedging it with BTCUSD future contract.

  Funds available:0.5 BTC i.e. 3,500 USD

  Position 1:
  Contract Type: BTCUSD spot
  Position Size: 70,000 USD 
  Contract Price: 7,000 per BTC
  Leverage: 10x
  Direction:	Buy

  Position 2:
  Contract Type:     BTCU18 futures 
  Position Size:     10 lots (1 lot = 1 BTC, ~71,000 USD)
  Contract Price:	 7,100 USD per BTC
  Requirements:      10% of position size (~7,100 USD)
  Direction:         Sell

Since the positions are in opposite directions with the same instrument series, the margin values would be reduced by 5x. Hence, the new margin requirements would be:

  Initial Margin: 	                        2% of 71,000 USD, ~1,420 USD
  Available Balance:	                2,080 USD
  Initial Position Price Difference:        100 USD
  Allowed Position Price Difference:	308 USD (2080/10 + 100) 

2. Isolated Margin

An isolated margin is a margin instrument with margin restricted to a certain amount of funds. If the margin falls below the maintenance level, the position gets liquidated. In this case, trader’s liability is limited to the initial margin utilized. In case of liquidation, any balance a trader may have will not be used to add margin position. For example, in case of 25x leverage, position will be liquidated after 4% move against the position. Similarly, in case of 10x leverage, 10% move can liquidate the position. While using the isolated margin feature, traders can adjust their leverage on fly with leverage sliders.

4.3 Transaction Mechanism

4.3.1 Deposit Mechanism

Polybird deposits would be open at all times unless otherwise stated and would be instantly credited to the account. Polybird would have a hybrid model with combination of hot wallet, cold wallet, and vault. In general, users would be assigned a unique hot wallet address and for PolyDer, a unique cold wallet address. Deposits would be moved from hot wallet to cold wallet and then vault. Since Polybird would house a military-grade secure wallet service PolyWallet, users will have an option to use PolyWallet address as default address to ensure maximum security.

4.3.2 Withdrawal Mechanism

Due to multiple past incidents in the markets that resulted in loss of millions of dollars, Polybird aims to protect users’ funds against unauthorized withdrawals by implementing strong withdrawal mechanism.

1. On the basis of amount

1.1 Amount <= $1,000 USD: Since hot wallet would be used for these transactions, these can be processed quickly.

1.2 Amount > $1,000 USD & < 100,000 USD: These amounts would be processed every 6 hours. Since we would be accessing cold wallet for these transactions, we have to ensure high-level of security. The timing would be 00:00 UTC, 06:00 UTC, 12:00 UTC & 18:00 UTC. Any withdrawal request would be put into a batch and would be processed in the next coming withdrawal timing.

1.3 Amount > 100,000 USD: These amounts would be processed once a day at 15:00 UTC daily. Since we would be using our vault for these transactions, highest level of security needs to be maintained.

2. Withdrawal Limits

2.1 PolyDer

PolyDer would have withdrawal limits assigned to their users as following:

Tier 1: Unverified Account: Withdrawal up to 0.5 BTC daily

Tier 2: Verified Account: Withdrawal up to 100 BTC daily

Tier 3: Corporate Account: No daily limits

2.2 Polybird Exchange

Since Polybird Exchange would list all blockchain-based tokenized assets, withdrawal limits would be divided into two types: individual account and corporate account. Individual account will have a 100K USD limit, whereas there would be no limit on corporate accounts, each trading day.

4.4 KYC & AML Verification Mechanism

Since Polybird would be host to many game-changing blockchain-based financial products, it is important to perform proper Know Your Customer and Anti-Money Laundering verifications before onboarding users onto the platform. Our mechanism would help us onboard global users within a few minutes. It’s clear how current exchanges delay KYC & AML checks for weeks and sometimes even months. This is still a major issue at top exchanges and serves as a big cause of dissatisfaction early-on, especially during times of high-volatility when the demand is high and there are more user registrations. Hence, in order to simplify the process, we would perform automatic KYC & AML checks for our new users so they can access all the features of the platform. Following are the types of mechanism we will be using:

4.4.1 Artificial Intelligence Mechanism

This mechanism would deploy artificial intelligence to perform KYC & AML checks for onboarding new users. Examples of service providers include Netverify by Jumio, Shuftipro, Trulioo, etc.

4.4.2 Blockchain Based Mechanism

Since blockchain based application services are under development, we plan to use these projects in future. Examples of service providers include Civic, Traceto, etc.

4.5 Audit Mechanism

Polybird is dedicated to being a transparent ecosystem to gain the trust and confidence of our users. Among other measures, we would be releasing quarterly and yearly audits. Following is the audit information we would be providing:

4.5.1 KYC and AML Audit

We would be performing KYC and AML audits of our userbase, which would include total number of users; verified and unverified, new registered users, token issuers, any money-laundering or fake KYC attempts and cases, top referrals, etc., and present these in our audit.

4.5.2 Proof of Solvency Audit

To ensure any event like Mt. Gox never occurs with Polybird, we would be preforming Proof of Solvency to ensure we have kept users’ fund safe just as they have trusted us to. There are two types of audits under this:

1. Proof of Liabilities

Under this audit, Polybird would provide proof of the existence of funds. To ensure much better transparency, we would also publicly display all our wallet addresses.

2. Proof of Assets

Under this audit, Polybird would present how much assets we hold apart from users’ funds. This audit would be supported by our financial audit where we would present our profits earned.

4.5.3 Financial Audit

This audit would comprise our detailed profits, fund allocations, tokens issued, capital raised through our IEO platform and several other financial metrics. This would help users, market makers, institutions, and firms to gain a better sense of our financial health and our performance.

4.6 Polybird’s issuance platform – PolyIEO

As explained in the general whitepaper, issuance can be conducted on the platform via Initial Exchange Offering (IEO). This would give multiple technical benefits to the issuer, which includes, but not limited to:

  1. Security and custodianship mechanism: Securing private keys in cold storage, powerful DDoS protection, secure SSL certifications, and several others mechanisms for ensuring better security. Issuers and investors could also use our vault to ensure maximum and military-grade security of their digital assets.

  2. Listing: All PolyIEO offerings are eligible for immediate exchange listing without any extra fees right after the end of an offering.

  3. Regulations: Audits and reports on the issuer and issuance would be provided and documented on blockchain for transparency, trust, and to help investors make an informed decision. Each offering would be thoroughly verified and details would be documented and stored on blockchain. On the other hand, Polybird will provide regulatory guidance and support to issuers—not to be confused with legal advice.

  4. Targeting mechanism: While PolyIEO would provide a global audience by default, adequate amount of update and notifications would be shared with a certain number of users directly who previously invested in a similar offering or showed interest to invest in a similar offering. This targets the offering to a certain set of relevant investors and increases the chance of successful closing.

  5. KYC & AML verification: Our users need to go through KYC/AML only once and not several times to participate in multiple offerings. For a frequent investor, one-time KYC/AML checks save users time and is more convenient.

  6. Payment option: Multiple payment options would be given on the platform, such that the users are free to choose which payment options they would like to use, though usage of Polybird tokens is incentivized.

  7. Operations: PolyIEO would minimize back-office operations and make operations more seamless, therefore activities like managing private keys, keeping the assets in safe custody, etc. would be more seamless on the platform.

  8. User interface: The user interface would be very intuitive. Users would have to select an offering like any other token in an exchange, select a funding method, and simply buy. PolyIEO dashboard would be similar to our exchange dashboard, such that users can participate in an offering as seamlessly as buying a crypto from any exchange.

5. Appendix

5.1 Terminology

• Airdrop – A procedure of distributing tokens for free in return of certain specified activity like registration, holding tokens, following on social media etc.

• AML – Abbreviation of Anti-Money Laundering. A process which involves analyzing customer data and detecting suspicious transactions.

• Arbitrage – Buy and selling of securities, currencies or commodities in different markets in order to take advantage of differing price for the same asset.

• Blueprint – A reproduction of technical drawing or software architecture.

• Crypto – Short form for cryptocurrencies and cryptoassets

• Custodian – A specialized financial institution who is responsible for safeguarding a firm’s or individual financial assets, but not engaged in banking services.

• Fiat – A currency which is issued by government, made as legal tender and is not backed by any physical commodity. In general terms, money by law.

• Illiquid – Refers to asset or market with low liquidity. That can’t be easily sold or exchanged for cash.

• KYC – Abbreviation of Know Your Customer. A process used by firms specially banks, to obtain information about their customers’ identity and address.

• Liquidity – The ease with which an asset or security can be converted into cash or quickly brought and sold in the market without affecting the price.

• Market Maker – Otherwise known as liquidity provider. A firm or individual that quotes both buy and sell prices in a financial instrument held in orderbook at all trading time.

• Matching Engine – A core of exchange platform. A software which matches buy and sell orders existing in orderbooks.

• Military-grade – A term used interchangeably with strong, tough, intense and high-quality.

• Orderbook – An electronic list of buy and sell orders for a specific financial instrument series, at a trading venue.

• Slippage – Filling of order at a different price than asked price.

• Smart Contracts – A blockchain technology code consisting of an algorithm that stores terms of agreements and automatically executes those terms on meeting the terms.

• System Architecture – A conceptual model that defines the high-level structures, behavior and views of a system.

5.2 References

  1. McKinsey & Company (2016, May). How blockchain can change the world. Retrieved April 21, 2018 from
  2. Marlin, Daniel (2017, December 22). What Is Blockchain And How It Will Change the World? Retrieved May 1, 2018 from
  3. Ulieru, Mihaela (2016, June 23). Blockchain: what it is, how it really can change the world. Retrieved May 7, 2018 from
  4. Bhan, Kanav (2018, April 3). Digital economy and the Impact of Blockchain. Retrieved May 6, 2018 from
  5. Catalini, Christian (2017, December 8). How blockchain technology will impact the digital economy. Retrieved May 10, 2018, from
  6. 24 Hour Volume Rankings (All Exchanges), CoinMarketCap. Retrieved May 1, 2018, from
  7. All Digital Currency Exchanges Volume Ranking, Coinhills. Retrieved May 1, 2018 from
  8. Boanda, Lorena (2018, April 27). Different types of crypto exchanges. Retrieved May 7, 2018 from
  9. Neuron (2018, March). List of cryptocurrency exchange hacks. Retrieved May 8, 2018 from
  10. Quoine (2018, April 26). Timeline of significant crypto exchange hacks. Retrieved May 10, 2018 from
  11. Crytoware (2018, July). Most Notable and Costly Cryptocurrency Hacks and Scams. Retrieved May 11, 2018 from
  12. Cloudflare. Why are cryptocurrency sites being targeted by DDoS attacks? What is a cryptocurrency? Retrieved May 11, 2018 from
  13. Althauser, Joshua (2017, December 12), CoinTelegraph. Report Shows Cryptocurrency Exchanges Most Common DDoS Victims Worldwide. Retrieved May 11, 2018 from
  14. Bitcoinchaser (2017, June 23), Steemit. The Myth of Cryptocurrency Liquidity. Retrieved May 11, 2018 from
  15. Encrybit (2018, June 26), Medium. Liquidity Problems. Retrieved July 27, 2018 from
  16. Binance customer reviews (2018, July), Cryptocompare. Retrieved July 27, 2018 from
  17. Roberts, Jeff John (2018, June 20). Robinhood CEO Takes Aim at Bitcoin Exchanges’ High Fees. Retrieved July 27, 2018 from
  18. Tassev, Lubomir (2018, June 5). Research: Majority of EU, US Exchanges and Wallets Fail to KYC Users. Retrieved June 18, 2018 from
  19. Russo, Camila (2018, April 3). Crypto Exchange Charge Millions to List Tokens, Report Says. Retrieved June 12, 2018 from
  20. Cointelegraph (2017). Where to Issue ICO Tokens: Platform Review. Retrieved June 18, 2018 from

5.3 Further Information

• Website:

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• Reddit:

• LinkedIn:

• Medium:

• Email: