A Next-Generation Chainless Web3 Financial Operating System and Platform Beyond Blockchain

——Open, Trustworthy, Secure, Tamper-Proof——

Borderless Transparent Financial Platform Based on Blockchain

Weisha Zhu

 Brian Cui, Tiegeng Lu, Chunyuan Liu

February 8, 2025
Email: query@chainless.hk

Preface

Why Is the Boundless Platform Also Called the Chainless Platform?

The Boundless Financial Platform, based on blockchain technology, is also known as the Chainless Platform. “Boundless” refers to the seamless integration of Web2 and Web3 technologies, transcending the boundaries of current Web3 and Web2 projects. However, the term “Boundless” is widely registered, making intellectual property protection challenging. The English term “Chainless” is precise, literally implying something slightly less than a blockchain. What is missing? The competitive multi-party bookkeeping of blockchains. The Chainless Platform uses random bookkeeping by fixed nodes, similar to the bookkeeping methods of BSC and EOS. Unlike them, it uploads the hash values of its transaction ledger to the Bitcoin blockchain, inheriting Bitcoin’s credibility. The Chainless Platform also offers centralized efficiency and speed, achieving the fastest bookkeeping in the blockchain domain, with a block generation speed of 0.5–0.6 seconds per block.

“Chainless” lacks a direct Chinese equivalent; translating it as “无链” (no chain) may mislead readers into thinking there is no chain. In this document, the Chainless System and the Boundless Financial System are synonymous and used interchangeably. The term “Chainless Platform” is adopted hereafter.

The Chainless System comprises three components: the Chainless Mini-Program Platform, the Multi-Signature Multi-Backup Wallet, and the Simi Universal Community Software. The Chainless Financial Platform is essentially a financial-focused mini-program platform. No such product exists in current blockchain ecosystems, and categorizing Chainless as blockchain technology would undervalue its innovation. As blockchain technology matures and shifts toward applications, the Chainless concept may align with future trends. For example, Solana, once criticized by insiders as a “blockchain prone to downtime,” achieved remarkable success. The future will prioritize applications meeting user needs, not technical classifications.

Addressing the Three Major Pain Points of Cryptocurrencies

The Chainless System is a new financial architecture centered on high efficiency, robust security, and low costs, aiming to blend Web2 user experience with Web3 autonomy, addressing three critical pain points in cryptocurrency finance:

1. Addressing the Payment Speed Pain Point

Payment speed is the most significant challenge, with blockchain elites striving for over a decade to develop solutions, none of which rival Web2 payment systems. Without surpassing Web2 payment systems technically, Web3 cannot succeed in payments or replace Web2 financial platforms. The Chainless System matches centralized system speeds while offering cryptocurrency transparency, allowing anyone to view general ledger data and full ledgers via a browser—a feat unattainable by Web2 financial systems.

2. Addressing the Coin Loss Pain Point

Coin loss is the second-largest pain point after payments. Security surpassing banks and automatic asset inheritance are essential for Web3, enabling users to truly control their assets. The Chainless System targets this goal.

3. Addressing the High Bookkeeping Cost Pain Point

Bookkeeping consumes excessive resources, making ledger clerks’ “salaries” exorbitant, a frequent criticism. Proof-of-Stake (PoS) mitigates this but offers limited improvement, with costs still far exceeding centralized bookkeeping.

Product and Technical Features

• Transparent General Ledger + Sub-Ledger Dual-Ledger Design: Users control sub-ledgers, while the system manages general ledger bookkeeping and auditing.
• High-Speed Ledger: 0.5-second block generation, eliminating PoW/PoS consensus, significantly reducing costs.
• Multi-Signature Multi-Backup Secure Wallet: Prevents loss, supports inheritance, and optimizes user experience for mainstream adoption.
• Supports Multiple Stablecoins for Transaction Fees: Includes core modules like NFTs, unlimited contract accounts, cross-chain payments, and decentralized order book trading.
• Innovative Cross-Chain Protocol: Ensures no single party can control or misappropriate user assets during cross-chain transfers, preventing malfeasance by project teams.
• Utilizes Bitcoin System for Proof of Existence: Ensures auditable, tamper-proof ledgers.
• Supports Real-Name and Anonymous Accounts: Overcomes blockchain ledger exposure of account balances.
• Adds a Community for Cryptocurrency Projects: The universal community empowers projects with WeChat-like control, truly implementing DAOs.

Inheriting Web2 Achievements

Historical progress builds on inheritance and development, and the internet is no exception. Web3 must inherit Web2 and internet achievements to become mainstream. Unlike market definitions of Web3, we emphasize inheritance, defining Web3 as click, push, and own. Web1 is characterized by clicking, Web2 by pushing; this definition inherits their strengths. The Chainless System embodies this philosophy, integrating Bitcoin’s machine trust, Web2’s efficiency, and Web3’s data sovereignty into a next-generation transparent financial platform with operating system characteristics.

The Chainless System’s Path of Inherited Innovation

Web2 boasts technical advantages but lacks an ecosystem platform like Ethereum. Using Web2 technology and Bitcoin’s philosophy to build a Web3 financial platform is a historic innovation. Cryptocurrencies currently use two ledger types: blockchains and Directed Acyclic Graphs (DAGs). The next chapter’s Indexed General Ledger offers a third solution, resolving the conflict between public, tamper-proof ledger data and centralized processing.

The underlying blockchain structure of the Chainless System is a multi-chain system. Blockchain technology is mature, and Chainless represents a shift in approach, requiring minimal technical introduction. Without relying on PoW or PoS consensus, the Chainless System meets Web3 requirements, achieves Nakamoto’s machine trust standard, surpasses Web2’s security and privacy, and matches its usability.

The system consists of a general ledger cluster and individual sub-ledger clusters. The general ledger ensures transparency and tamper-proofing via blockchain; sub-ledger clusters feature multi-signature, multi-backup wallets, enhancing user control and addressing cryptocurrency wallet pain points. It also solves payment challenges Nakamoto left unresolved, combining centralized system efficiency with Bitcoin’s machine trust, ensuring Bitcoin-like credibility.

A blockchain’s chain is a transaction ledger. The Chainless System calculates hash values per block and uploads them to Bitcoin’s SegWit area. Anyone can download this ledger and verify hashes. It is not a single blockchain but relies on multiple hidden chains, rendering the “chain” invisible. Inheriting Bitcoin’s openness and machine trust, the Chainless System addresses blockchain’s pain points, offering greater security and eco-friendliness while preserving Nakamoto’s libertarian ideals.

Designing a Web3-compliant financial system means inheriting Bitcoin’s philosophical value, using Bitcoin and blockchain technology to create a new general ledger structure. Inheriting humanity’s most advanced achievements is our inspiration for future innovators.

White Paper Structure

This white paper consists of five chapters, including this preface and four additional chapters:

Chapter 1: Chainless System Structure and Application Examples introduces a high-efficiency ledger model with fixed-node random bookkeeping, hash uploading, and verifiable transaction ledgers, alongside an innovative secure, user-friendly wallet design.

The new version of the white paper is very different from the February 2024 version. At that time, two solutions were adopted: one was a transparent centralized solution written by GreatFree, and the other was a transparent solution based on blockchain and cryptocurrency technology, both of which realized the index ledger. The outstanding feature of the new version is that Brian Cui’s team used a multi-party computing solution based on TSS to achieve cross-chain. The project party cannot touch user assets alone, which improves the project’s overall level. Readers can compare the differences between the two solutions.

Chapter 2 is about incentives, mainly the principles of direct incentives and “participation is mining”; it improves the unreasonable aspects of blockchain indirect incentives. Lu Tiegeng implemented the POP algorithm based on headcount. This is a general algorithm with adjustable parameters and wide adaptability.

Chapter 3: Governance and Indirect Incentives explains that DAOs suit ecosystem community governance but not user community building. Indirect incentives offer a novel approach to recognizing historical user contributions, with user community governance methods pioneered here.

Chapter 4: Project Team Composition and Development Approach draws on Ethereum’s experience, addressing the Ethereum Foundation’s legitimacy issues and implementing Bitcoin’s “shareholders, employees, and users as one” philosophy.

References Appendix

Chapter 1 Examples of Application and Structure of Chainless system

This white paper proposes a novel financial technology architecture—the Chainless Platform—designed to integrate the user experience of Web2 with the decentralized characteristics of Web3. The platform employs a ledger structure separating the general ledger and sub-ledgers, specific distributed data structures such as Directed Acyclic Graphs (DAG), and practical Byzantine Fault Tolerance (PBFT) consensus algorithms to achieve secure and efficient data validation and transactions. Cryptocurrency technology, with its mature cryptographic foundation and transaction models, provides an effective pathway for implementing the Chainless Platform, particularly through its digital signature and transaction verification mechanisms. For ease of understanding, this document focuses on elaborating the design features of the Chainless Platform. For detailed technical specifics on implementing the Chainless Platform using cryptocurrency technology, please refer to Reference [5]: Technical Yellow Paper: Features of the Chainless Platform Based on Cryptocurrency Technology.

1.1 Technical Features of the Chainless Platform

The Chainless Platform adopts a modular architecture, built upon a deeply optimized version of the NEAR protocol, establishing an enhanced underlying consensus layer. Through improved consensus mechanisms, optimized state sharding, and permission management, the platform significantly enhances transaction throughput and scalability, creating a comprehensive Blockchain-as-a-Service (BaaS) and Wallet-as-a-Service (WaaS) Web3 infrastructure platform. Simultaneously, it integrates Web2 user experience optimization strategies to lower the entry barrier for users.

• Transparent Indexed General Ledger

The Chainless Platform employs an optimized data structure and access control, achieving near-Web2 financial system efficiency through an efficient indexing mechanism based on random-selection, non-competitive bookkeeping. Compared to blockchain systems using competitive consensus, this model significantly reduces transaction latency and operational costs, making it suitable not only for currency issuance functions or scenarios (e.g., batch payments, account custody, account monitoring, transaction filtering, automated audits, fund aggregation, and fund management) but also for high-frequency trading and large-scale data processing applications.

• Bitcoin Credit Root Timestamp Service

The Bitcoin system pioneered the timestamp protocol, ensuring the immutability of transaction history and establishing a foundation of trust. The Chainless Platform leverages Bitcoin’s blockchain immutability as a credit root, storing the hash values of its transaction ledgers on the Bitcoin blockchain to establish verifiable audit trails. This model effectively reduces the costs of competitive consensus and positions the Chainless Platform as a joint Layer-2 solution based on Bitcoin and other mainstream public blockchains.

• Transparent Ledger Data Verification

The Chainless Platform ensures data integrity through a transparent data verification mechanism, preventing tampering even in a designated-node bookkeeping model.

The platform provides a dedicated browser, supporting real-time user auditing of ledger data.

It supports third-party data downloads and participation of bookkeeping nodes.

The open-source nature of the platform’s system code enhances transparency and trustworthiness.

• Innovative Cross-Chain Protocol

The Chainless Platform adopts a Multi-Party Threshold Signature Scheme (TSS)-based Multi-Party Computation (MPC) protocol, using key sharding and distributed signatures to ensure that no single party can independently control or misappropriate user assets during cross-chain transfers, significantly enhancing asset security.

(a) TSS Key Management

No single participant holds the complete private key. A single private key is mathematically split into multiple “key shares” distributed among different participants. Generating a valid signature requires a predetermined number (threshold) of key share holders to participate in an MPC process. The complete private key is never reconstructed or centrally held.

(b) TSS Signature Generation

The signature process is a collaborative computation among participants holding key shares. They communicate to compute a single signature without exposing their individual key shares or reconstructing the complete private key. The result is a standard single signature.

(c) TSS High Security

TSS enhances security by not revealing the multi-signature process, showing only a single signature. It does not record which key shares or participants were involved in the signature. Any group of key share holders meeting the threshold can participate in secure MPC to generate a signature, avoiding single points of failure.

The Chainless Platform, built on mature blockchain technology, ensures system security and stability while inheriting the automated regulatory features of cryptocurrencies, reducing management costs.

1.2 The overall structure of the chainless system

1.2.1 Components of the Chainless System

The “Chainless System” adopts an innovative hybrid distributed ledger model, comprising a distributed general ledger and user-controlled sub-ledgers.

1.2.1.1 General Ledger

1.2.1.1.1 Composition

The general ledger adopts a modular design, consisting of the Currency Indicator, Sub-Ledger Latest Transaction Records, Sub-Ledger Hash Index Table, Indicator Table, Transaction Log, and Verification Log. Unlike traditional accounting ledgers, this general ledger resembles Bitcoin’s blockchain ledger, emphasizing data immutability and transparency. Compared to Bitcoin’s ledger, it supports a broader range of account types to accommodate more complex business scenarios and asset management needs.

• Currency Indicator

Serves as an identifier for digital asset types, used to distinguish and manage different cryptocurrencies or tokens, representing the total amount of such assets. Its primary role is to validate external transactions, as sub-ledger transfers (in or out) trigger changes in the Currency Indicator.

• Sub-Ledger Latest Transaction Records

The general ledger maintains the latest transaction record for each sub-ledger of a given currency, with the sum of all sub-ledger records equaling the Currency Indicator’s recorded value.

• Sub-Ledger Hash Index Table

An optimized hash index structure maintains the hash indices of sub-ledgers, enabling data linkage and consistency verification between the general ledger and sub-ledgers.

• Indicator Table and Log

The indicators for different currencies form the Indicator Table, and changes to this table constitute the Indicator Log.

• Transaction Log

Records all verified transactions as a complete record of transaction history.

• Verification Log

Records the hash values of the Transaction Log computed at checkpoints and stored on the Bitcoin blockchain, corresponding to the log at that time, forming the Verification Log.

1.2.1.1.2 Responsibilities

The general ledger employs a high-availability distributed cluster architecture to ensure data redundancy and system resilience. Its core responsibilities include:

• Sub-Ledger Linkage and Index Maintenance

Through the Hash Index Table, the general ledger achieves efficient data linkage with sub-ledgers, ensuring cross-ledger data consistency and maintaining timely index updates for efficient data retrieval.

• Sub-Ledger Transaction Legality Verification

The general ledger performs strict validation of all transactions initiated by sub-ledgers, ensuring compliance with predefined rules to maintain system integrity and security.

• Audit Trail Data Anchoring

The general ledger stores hash digests of the latest sub-ledger transaction entries, enabling auditability and immutability through comparison with complete sub-ledger transaction records.

1.2.1.2 Sub-Ledger

1.2.1.2.1 Composition

Sub-ledgers exist in the form of multi-signature, multi-backup secure wallets, maintaining a reconciliation relationship with the general ledger. These wallets combine the public and private key functionalities of blockchain wallets with Chainless sub-ledger capabilities. The sub-ledger is a personal transaction log, structured with blockchain wallet public/private key functions and account structures.

1.2.1.2.2 Responsibilities

Sub-ledgers can establish anonymous or KYC-compliant accounts, making it difficult for others to trace anonymous accounts through KYC accounts.

Sub-ledger designs incorporate a complete minimal banking system cluster structure, enabling highly autonomous and comprehensive account management.

Sub-ledgers store users’ complete transaction logs, achieving localized and privatized data management.

The wallet serves not only as a Chainless sub-ledger but also supports the storage and management of cryptocurrencies, NFTs, and other digital assets.

Multi-signature and multi-backup functionalities provide strict control over asset access, enhancing account security.

1.2.1.3 Transaction Process

Transactions are divided into external and internal transactions. External transactions follow the same principles as blockchain cross-chain transactions, categorized as incoming or outgoing. Internal transactions refer to transfers within the Chainless system. When a sub-ledger transaction is triggered, the general ledger verifies its legality. Upon verification, the amounts in the sub-ledger and general ledger are updated. After transaction completion, both the sub-ledger and general ledger store the current transaction record, and the general ledger updates the Hash Index Table to ensure data consistency.

1.2.1.3.1 Internal Transactions

In internal transaction scenarios, to ensure the consistency and accuracy of general ledger data, the system employs a combination of local consensus and distributed verification. Transaction parties reach a local consensus by confirming the transaction result, which is then validated by the general ledger system to ensure numerical accuracy, avoiding resource consumption from global consensus. The transaction’s scope is limited to the involved parties and the general ledger, with each party responsible for their interests, achieving separation of rights and responsibilities. Although transactions are initiated by the general ledger, to address data transmission uncertainties in distributed environments, the general ledger performs final confirmation after both parties’ validation, ensuring data consistency and preventing errors.

Internal transactions between sub-ledgers refer to asset transfers between two accounts on the Chainless chain. This process is a multi-stage coordinated workflow ensuring accuracy and security, comprising four core steps:

• Initiator’s Multi-Signature Transfer Request: The initiating device generates and submits a multi-signature transfer request, emphasizing request security through a preset multi-device verification mechanism.
• Recipient’s Confirmation: Upon approval of the multi-signature request, the recipient receives a notification and must confirm acceptance, ensuring awareness and agreement to the asset transfer.
• Initiator’s Execution Confirmation: After recipient confirmation, the initiator confirms execution, serving as the final confirmation before the transaction takes effect.
• Transaction Completion and Status Update: Once the initiator confirms execution, the transaction completes, and the system updates the asset states of the involved accounts to reflect the transfer.

Note: Internal transactions do not affect the Currency Indicator.

1.2.1.3.2 External Transactions – Incoming

Digital assets in the Chainless system are transferred from external blockchain networks via cross-chain technology, supporting both fiat-backed and cryptocurrency forms. To simplify wallet design, fiat assets are uniformly converted to ERC20 token standards. The cryptocurrency transfer process follows mature cross-chain technical specifications. Unlike internal transfers, incoming external transactions trigger an increase in the corresponding currency’s amount in the Currency Indicator, reflecting the effective introduction of external assets.

Sub-ledger external incoming transactions refer to transferring assets from an external blockchain (non-Chainless chain) to the Chainless chain via a cross-chain bridge. This process includes two core steps:

• External Chain Asset Locking and Transfer: Users transfer a specified amount of assets to the cross-chain bridge’s smart contract on the external blockchain, typically accompanied by asset locking to ensure legitimacy.
• Cross-Chain Event Monitoring and Asset Generation: The cross-chain bridge system monitors asset transfer events on the external chain. Upon detecting a compliant event, the bridge generates the corresponding amount of assets in the user’s account on the Chainless chain, enabling asset mapping and circulation from the external chain to the Chainless environment.

1.2.1.3.3 External Transactions – Outgoing

In the Chainless system’s asset outgoing process, unlike internal transfers, the Currency Indicator reduces the amount of the transferred currency. Outgoing transactions use a multi-signature mechanism requiring verification by both system and user private keys, with users able to flexibly configure multi-signature participants. The system private key employs an “N-of-M” threshold signature scheme (e.g., two of three private keys are valid), while user private keys support up to 12 keys, allowing users to customize the signature threshold (e.g., 12-7 or 3-2). Sub-ledger owners can execute asset transfers only after multi-signature verification is passed.

Sub-ledger external outgoing transactions refer to transferring assets from the Chainless chain to an external blockchain (non-Chainless chain) via a cross-chain bridge. This process includes three core steps:

• Initiator’s Multi-Signature Transfer Request: The initiating device constructs and submits a multi-signature transfer request targeting the cross-chain bridge smart contract on the Chainless chain, emphasizing request security through a preset multi-device verification mechanism.
• Chainless Asset Locking and Status Update: Upon approval of the multi-signature request, the cross-chain bridge smart contract updates the asset status of the involved accounts, typically accompanied by locking Chainless assets to ensure legitimacy and prevent double-spending.
• Cross-Chain Event Monitoring and External Chain Asset Unlocking/Generation: The cross-chain bridge system monitors asset transfer events on the Chainless chain. Upon detecting a compliant event, the bridge unlocks or generates the corresponding amount of assets in the user’s account on the external blockchain, enabling asset mapping and circulation from the Chainless environment to the external blockchain.

1.2.1.4 Summary

The general ledger stores only the latest transaction entries and corresponding hash indices of sub-ledgers for user queries, without maintaining individual sub-ledger transaction logs. Individual transaction logs are stored in sub-ledgers for user custody, achieving a unique distributed ledger structure for peer-to-peer payments that combines centralized transaction efficiency with blockchain ledger characteristics, enabling users to control their own data. The latest transaction records of the general ledger and sub-ledgers form a transparent ledger for user queries. The general ledger’s immutability is ensured through hash indexing and distributed consensus mechanisms.

The Chainless System, through its innovative architectural design, ensures transaction efficiency and user autonomy while maintaining data security and verifiability.

1.3 Chainless Platform Functions

The key functions of the Chainless System include Indexing, Verification, Anonymity, Query, Storage, Notification, Alert, and Community functions.

1.3.1 Indexing Function

The Chainless System adopts a refined layered ledger architecture, with its core design philosophy centered on distinguishing the data storage responsibilities of the general ledger and sub-ledgers to achieve a balance of data privacy, security, and transaction efficiency. The general ledger, as the core system component, maintains only a concise summary of sub-ledger transaction states (i.e., the latest transaction entries) rather than complete transaction logs, significantly reducing storage pressure on the general ledger and improving system efficiency and scalability. For data privacy, historical transaction records exist only in user-controlled sub-ledgers, not retained by the general ledger. External entities cannot access historical transaction details without sub-ledger log synchronization. Even with synchronized logs, sub-ledger owners can control disclosure levels through access control policies, further enhancing privacy protection. Data integrity is ensured through hash verification, guaranteeing log authenticity even if sub-ledger logs conceal information. Users can independently verify their sub-ledger transaction records to ensure data consistency.

The general ledger and sub-ledgers are linked through a Hash Index Table, which is particularly crucial in an anonymous environment, providing essential support for the reconciliation system and enabling a unique distributed ledger structure for peer-to-peer payments. This system combines the efficiency of centralized transactions with the characteristics of a blockchain ledger, laying the foundation for the practical application of Web3.

The Chainless System uses a hash-chain-based data structure to ensure the immutability and verifiability of transaction records. Each transaction record generates a unique hash value via a hash function, linked to the previous record’s hash, forming a blockchain-like chain structure. The general ledger stores the current transaction record and the hash of the previous record, enabling transaction history traceability. If the source chain ID differs from the target chain ID, it indicates an external transaction; otherwise, it is a regular transaction. For external transactions, if the target chain ID is the Chainless ID, it is an incoming transaction; otherwise, it is an outgoing transaction.

1.3.2 Verification Function

The Chainless System employs a tri-party verification mechanism to ensure the trustworthiness of the transaction computation process. Participants include the transaction sender, receiver, and the general ledger machine, forming the basis for distributed consensus. The core of transaction verification lies in the joint confirmation of transaction results by both parties and the general ledger machine, with this local consensus ensuring the accuracy and immutability of the computation process. Verification results are temporarily stored in the general ledger’s index ledger for quick retrieval and validation, while permanently recorded in sub-ledgers as irreversible evidence of transaction history. This dual-storage strategy ensures both immediate verifiability and long-term preservation of transaction history, enhancing the system’s overall security and transparency.

1.3.2.1 Verifying External Transfer Data Accuracy

For external asset transfers, such as Bitcoin, the system uses indicators (e.g., Bitcoin Indicator) to manage asset quantities. When the indicator receives external data and updates the asset quantity, the system computes and stores the hash value of the current record in the target hash location. The verification process is initiated by the client, who, upon receiving indicator data, verifies the hash value to confirm the legitimacy and accuracy of the data source. For incoming external transactions, only the target hash is verified. If verification passes, the client computes the hash value of their own record to ensure data consistency. This hash-chain design ensures the integrity and verifiability of transaction records, effectively preventing data tampering.

1.3.2.2 Verify that the external transfer data is correct

During user transfers, the recipient verifies the hash value of their received record to confirm account data accuracy. Each transaction record includes two hash values: the source transaction hash and the hash of the current transaction. If the hash value does not match the computed result, the system rejects the transaction. This dual-hash verification mechanism ensures the reliability of data sources and the accuracy of the data itself.

Current Tranction

Source chain ID

Hash 1

Target chain ID

Hash 2

data„„

Last Tranction	Source chain ID	Hash 1	Target chain ID	Hash 2	data„„
Current Tranction	Source chain ID	Hash 2	Target chain ID		data„„

Current Tranction

Source chain ID

Hash 2

Target chain ID

Hash 3

data„„

From Table 3, the first hash ensures the data source, and the second hash ensures data accuracy. The machine performs the final verification, confirming transaction validity and removing the “previous” record to maintain the data chain’s integrity. This design simplifies the verification process, requiring only the verification of the expenditure and receipt records’ hash values to ensure data accuracy. Sub-ledger records exist in the general ledger as summaries, with sending and receiving data stored for verification. The system draws on the blockchain’s “previous block” chain structure and adopts the DAG’s “previous record” concept to simplify data linkage. General ledger data is public, while complete ledgers are privately held by users, achieving privacy protection. This verification process effectively mitigates the risk of “double-spending.”

1.3.2.3 Verifying General Ledger and Sub-Ledger Totals Consistency

The Chainless System employs multiple verification mechanisms to ensure data consistency and transaction security. By summing the latest sub-ledger data in the general ledger and comparing it with the indicator data, the system verifies data accuracy. Verification occurs before and after transactions to ensure numerical accuracy. For external transfers, the system first updates the Currency Indicator value, recalculates the total, and performs verification. Upon verification, the external transfer program, using public/private key verification, is executed. One machine in the computing cluster is controlled by the user via multi-signature, and the verification process uses concurrent execution, with the indicator updated only upon verification. Sub-ledger transaction logs are stored in individual sub-ledgers, inaccessible to the general ledger by default unless explicitly authorized by the sub-ledger owner. This data isolation strategy further enhances user data privacy and security.

1.3.3 Anonymity Function

Anonymity Mechanism: The Chainless System introduces a user register mechanism to achieve transaction anonymity and privacy protection. Each user can define multiple registers, with a default configuration of 10 to prevent general ledger data bloat.

User Register Mechanism: Designed to disperse large assets, this mechanism hides the true scale of user assets by distributing large funds across multiple registers and performing multiple transfers. The general ledger stores only the latest transaction summaries and associated hash values of sub-ledgers, not complete transaction histories, further enhancing privacy protection.

Hidden Transfer Function: Sub-ledgers provide hidden transfer capabilities, automatically executing two transfers to ensure that transaction data displayed on the general ledger does not expose the user’s true asset scale. This design ensures transaction efficiency while protecting user asset and transaction privacy.

1.3.4 Query Function

The query function is divided into general ledger queries and sub-ledger queries.

1.3.4.1 General Ledger Query

The general ledger query function is designed to provide comprehensive system status and transaction information while balancing user privacy and data security. Query functions include:

• Currency Indicator queries, allowing users to monitor the total amount of various digital assets in the system in real-time.
• Arbitrary account name and address queries, enabling correspondence queries between user identities and addresses.
• Sub-ledger latest transaction record queries, restricted by sub-ledger owner permissions, accessible only with explicit user authorization or public sub-ledger information.
• Statistical data queries, providing transaction volume and count statistics by currency and time dimension, presented in chart form for user analysis and system status understanding.

These query functions collectively build a transparent, auditable, and user-controlled data query system.

1.3.4.2 Sub-Ledger Query

The sub-ledger query function focuses on user-controlled data disclosure and privacy protection. Query functions include:

• Sub-ledger owners can query their account names, internal currency accounts, and address correspondences.
• Autonomous selection of disclosed contact methods.
• Statistical query functions similar to wallet queries, providing transaction data analysis within sub-ledgers.
• Sub-ledger data disclosure permissions are fully controlled by the owner through flexible configuration settings. By default, sub-ledger query permissions are closed to third parties, ensuring data privacy and security. This design reflects high user autonomy over their data while ensuring system security and privacy.

1.3.5 Storage Function

The storage function is divided into general ledger storage and sub-ledger storage.

1.3.5.1 General Ledger Storage

The Chainless System’s general ledger architecture adopts a distributed cluster design, consistent with traditional centralized cluster architectures, ensuring real-time data synchronization and high availability. The general ledger includes an optional sub-ledger backup service, which requires active configuration and payment by the sub-ledger owner. This design balances data security and user autonomy, with the general ledger cluster ensuring core data robustness and the backup service providing additional data assurance options.

1.3.5.2 Sub-Ledger Storage

Sub-ledgers are deployed within multi-signature, multi-backup secure wallets, offering significant advantages in functionality and security compared to existing hardware wallets. The secure wallet design emphasizes robust asset storage and management. For detailed storage specifics, refer to the “Secure Wallet” section in the system documentation. This design highlights the high security of sub-ledger assets, reducing single-point failures and private key leakage risks through multi-signature and multi-backup mechanisms, providing users with a reliable asset management solution.

1.3.6 Notification Function

The Chainless System employs a multi-channel notification mechanism to ensure timely transaction information delivery and enhance user experience. For recipient users, the system provides notifications via SMS, email, and the Simi community platform to meet diverse user preferences. For sender users, the system provides transaction success notifications to confirm smooth completion.

1.3.7 Alert Function

The Chainless System implements comprehensive anomaly monitoring and alert mechanisms to ensure system stability and security. The system detects and alerts on anomalies such as program errors, unauthorized login attempts, failed transaction sends, timeout operations, and device hardware errors. These alert mechanisms aim to promptly identify potential security threats and system failures, enabling administrators to take swift action for repairs and protection. This proactive monitoring and alerting strategy effectively reduces risks, safeguarding user assets and data.

1.3.8 Community Function

The Chainless System builds a fully functional community platform to promote user interaction and system iteration. The platform includes a bulletin board and private messaging functions, providing convenient communication channels. The core of the messaging function lies in supporting public testing and community-driven iteration of system upgrades. Users can provide feedback on upgrade versions through community comments, a prerequisite for releasing upgrades. Participating users receive corresponding rewards, reflecting the value of community contributions. System upgrade decisions are community-driven, with users confirming new code versions via voting, and new code is made public on GitHub, ensuring transparency and community autonomy. This community function design enhances user connectivity and achieves democratic, decentralized system upgrades.

1.4 Multi-Signature Multi-Backup Secure Wallet

1.4.1 Problems to Address

The Chainless System aims to build a unified financial asset management platform supporting cryptocurrencies, Non-Fungible Tokens (NFTs), and fiat assets. For fiat assets, the system converts them to ERC20 token standards to simplify wallet design and asset management. To achieve complete user control over assets, the system focuses on addressing the following secure wallet issues:

• Private key loss and security.
• Multi-device verification.
• Asset inheritance.
• Ease of use.

Multi-signature wallets are considered the closest solution, effectively resisting hacker attacks. For the Chainless System’s individual sub-ledgers, multi-backup is particularly critical. The platform aims to provide a unified solution tailored to the future trends of Web3.

1.4.2 Multi-Signature Multi-Backup Wallet Implemented Based on Cluster Technology

The Chainless System adopts a distributed cluster architecture, including one master node and at least two sub-nodes, to achieve high availability and security. The master node handles global scheduling, while sub-nodes manage external communication and data backup. Sub-nodes and the master node form a peer-to-peer network for wallet scheduling, with each sub-node having independent backup capabilities, storing backup data on cloud devices. Nodes can be devices such as mobile phones, computers, or home cloud servers.

Through cluster scheduling, the system equips “hard wallets” with multi-signature and multi-backup capabilities without requiring traditional QR code connections. Due to the peer-to-peer architecture, private key generation can occur offline on each device, with devices unaware of each other’s private keys, which are stored encrypted on local devices and the cloud. This cluster scheduling design provides banking system functionality and ease of use, surpassing traditional cryptocurrency wallets’ performance. The multi-backup implementation further enhances system security, exceeding traditional banking security standards, laying the foundation for Web3 infrastructure and enabling complete user control over assets.

1.4.3 Implementation of the Solution

The Chainless System adopts a home-cloud-centric distributed cluster architecture, comprising two mobile phones (one as the primary communication device interacting with the external world, called the master phone, and one as the backup phone for data backup) and a home cloud (or computer), forming a secure and autonomous “micro-banking” system. This cluster design ensures high asset security and user control without external interference. The system includes three private keys stored on the master phone, backup phone, and home cloud, secured through multi-signature mechanisms (e.g., 3-1, 3-2, or 3-3). Users can flexibly configure multi-signature strategies based on transaction amounts, such as no signature for transactions below 1,000 $, 3-1 for below 3,000 $, 3-2 for 3,000–10,000 $, and 3-3 for above 10,000 $. When multi-signature is not required, the wallet simplifies to backup and quick payment functions, enhancing ease of use.

Additionally, the system supports data backup to multiple online storage locations, such as home clouds, public clouds, or Chainless system clusters, further enhancing data security. This home-cloud cluster architecture provides users with a secure, autonomous, and highly customizable asset management solution.

1.4.3.1 Private Key Replacement

The Chainless System adopts strict security policies and user-friendly processes for private key management and replacement.

The three devices (e.g., master phone, backup phone, and home cloud) can independently configure personalized security measures, such as enabling facial recognition transfers on the master phone with password verification as a fallback, drawing on mature payment system experiences.

The system emphasizes private key immutability; once set, private keys are encrypted and stored on their respective devices, accessible only by the wallet scheduling program. If users need to replace a private key, they must create a new account and transfer assets, increasing account management complexity.

Transfer operations aim to provide a convenient experience similar to mobile banking, with multi-signature processes automatically handled in the background, requiring users only to confirm transaction intent via the interface.

The system supports password changes, but private key changes require account replacement, balancing user convenience and system security.

1.4.3.2 Online Backup

The Chainless System employs a multi-layer online backup strategy to enhance data redundancy and security, available for user selection. Each host’s private key is independently encrypted and backed up to the cloud, downloadable and decryptable by the user. File backups also use a distributed strategy, with each host backing up its own data, decrypted using its private key. For non-24/7 online devices like backup phones, the system automatically synchronizes ledger data and NFT metadata upon reconnection via cluster scheduling. Online backup data is minimal, mainly including private keys and critical inheritance files. Sub-ledger transaction data does not require online backup and can be generated from the general ledger transaction log. Users can request data from the Chainless System as needed, with a fee per download, making it more cost-effective than continuous online backups.

1.4.3.3 Multi-Signature Verification

The Chainless System uses a cluster-coordinated multi-signature verification mechanism to ensure the security of external transfers. When initiating an external transfer, the master phone dynamically initiates the appropriate multi-signature verification level (e.g., 3-1, 3-2, or 3-3) based on the transaction amount. The master phone sends verification requests to the other two devices in the cluster, and the transfer proceeds only after multi-signature verification is complete. This mechanism significantly enhances transaction security, effectively preventing single-point failures and private key leaks.

1.4.3.4 Graded Payment

The Chainless System introduces a flexible graded payment mechanism, implementing different security levels via multi-signature:

• 3-1 Level (Small Transactions): Uses password/fingerprint/facial recognition verification, with secondary verification information provided by the system. Users can set and modify limits.
• 3-2 Level (Large Transactions): Requires the master phone and one other device, using password/fingerprint/facial recognition verification, with secondary verification information. Users can set and modify limits.
• 3-3 Level (Very Large Transactions): Requires all three devices, using password/fingerprint/facial recognition verification, with secondary verification information. Users can set and modify limits. These levels apply to internal Chainless System multi-signature applications.

For external transfers, after secondary confirmation, the system initiates the transfer, with the Chainless System participating in multi-signature. Users can set up to 12 private keys. This graded payment and multi-signature mechanism ensures transaction security while providing user autonomy and flexibility.

1.4.3.5 Transfer Tracking

The Chainless System introduces a transfer tracking mechanism to enhance transaction transparency and traceability. Unlike traditional cryptocurrency on-chain tracking, the Chainless System uses a more efficient strategy: it directly tracks the recipient’s general ledger confirmation result rather than relying on complex on-chain transaction records. Once the recipient’s general ledger confirms the transaction, the system immediately notifies the sender, ensuring timely transaction status updates. This mechanism simplifies transfer monitoring, improves confirmation efficiency, and provides real-time feedback.

1.4.3.6 Data Synchronization After Resultis confirmed

The Chainless System performs data synchronization after transaction result confirmation to ensure ledger backup consistency and reliability. Specifically, the system initiates ledger backup synchronization immediately after confirming the transaction result to update the distributed ledger’s state. Unlike traditional cryptocurrency systems, which rely on blockchain’s distributed consensus for data consistency, the Chainless System’s design emphasizes data synchronization needs post-transaction confirmation to maintain internal data consistency and integrity, safeguarding user assets.

1.4.3.7 Temporary Data Storage for Synchronization

The Chainless System employs a flexible and reliable temporary data storage mechanism to address scenarios where devices like backup phones are not continuously online. When a backup phone is offline, unbacked data is temporarily stored in the master node’s storage area, ensuring data integrity and security. Once the backup phone reconnects, the system automatically synchronizes data from the temporary storage to the backup phone, ensuring data consistency across all devices. This mechanism effectively addresses data synchronization issues due to device connectivity uncertainties, enhancing system robustness and user experience.

1.4.3.8 Centralized Connection: Wallet Independence and Controlled External Access

The Chainless System’s wallet design emphasizes modularity and security, allowing users to control connections with centralized devices flexibly. The wallet operates as an independent module, supporting offline operations by disabling external connections. In this mode, cryptocurrency reception remains unaffected, while fiat and NFT transfers depend on interface status design. The master phone’s wallet app serves as the system’s external communication interface, handling interactions with external networks. To enhance security, the system restricts communication between the wallet and other applications except the master phone’s wallet app, ensuring wallet independence and security. This design balances user asset control with isolation from potential security risks.

1.4.3.9 Relationship Between Master Device and Other Devices

The relationship between the master phone and other devices in the Chainless System reflects a balance between security and convenience. The master phone, as the primary interface for external interactions, exposes its payment functions via APIs. However, standalone API calls enable only quick payment functions similar to Alipay, lacking multi-signature and multi-backup security. Full security features are available only when combined with multi-signature and multi-backup modules. This design allows users to choose between convenience and security based on transaction scenarios and needs.

1.4.3.10 Device Replacement

• Device Replacement Without Loss

After downloading and logging into the same application on a new device, users must synchronize data with the other two devices in the cluster. Private key migration uses a QR code scanning method similar to existing cryptocurrency systems, scanning the original device’s private key QR code. The cluster system recognizes only the new device, and upon user confirmation, the original device’s private key becomes invalid. If users attempt to log in on the original device, the system requires re-synchronization and private key conversion. This process ensures convenient and secure private key migration while preventing key reuse and potential risks.

• Device Replacement After Loss of One Device

If one device (e.g., a phone) is lost, users can recover using other devices and account information. Users download the application on a new device and use the recovery program to open the backup file, encrypted with multi-signature and requiring the remaining devices’ signatures and the lost device’s password for decryption. The recovery program decrypts and restores the private key, fully managed by the user, ensuring security and privacy. Before recovery, users must complete application download and device synchronization. This mechanism supports recovery from the loss of any single device, with other devices following the same process.

• Device Replacement After Loss of Two or More Devices

Handled via the inheritance program (see Section 1.4.3.11).

1.4.3.11 Inheritance Program

• Inheritance Without Device Loss

The multi-signature multi-backup wallet app includes an inheritance function button, allowing users to initiate the inheritance program, with the system clearly specifying the execution time. The program remains consistent across the cluster’s three devices, ensuring process coordination and reliability. Users can also opt for online backup of inheritance data, enhancing security. This mechanism provides a secure, controllable, and user-friendly asset inheritance solution.

• Inheritance After Total Device Loss

For cases where all devices are lost, the Chainless System offers an asset inheritance solution based on a multi-signature witnessing service to address extreme scenarios.

As local recovery is theoretically impossible with all devices lost, the system introduces a multi-signature witnessing service, storing the inheritance program in the Chainless System and allowing users to set the execution time.

At the set inheritance time, the system notifies pre-designated heirs and initiates the multi-signature verification process. During setup, users can configure heirs’ email addresses, and the system sends emails containing device names, passwords, and private key storage information, enabling heirs to download the application and log in for synchronization. Heirs must jointly authorize via multi-signature to perform account operations and asset transfers.

Inheritance timing is flexible, with a reminder mechanism starting one month prior, offering daily audible or silent reminders. Users can also pre-set heirs’ phone numbers. Note that this inheritance solution may be modified during implementation to adapt to evolving security needs and technological advancements.

1.5 Chainless Smart Contracts and Application Examples

The concept of smart contracts originates from blockchain technology, essentially enabling automated account operations driven by preset conditions. In centralized systems, the necessity and complexity of smart contracts are relatively low. The Chainless Platform, based on a transparent centralized architecture, offers a technical environment superior to traditional blockchain cryptocurrency environments, enabling more robust and flexible smart contract functionalities. Developers can easily migrate and deploy various application projects, leveraging the advantages of the transparent centralized architecture for more efficient and secure smart contract applications.

1.5.1 Issuance of Fiat-Backed Stablecoins

The Chainless Platform adopts a distinct strategy for token issuance, emphasizing transparency and asset anchoring. Unlike blockchain-based token issuance, the Chainless Platform simplifies the token creation process by establishing indicators. The value attributes of tokens, whether air coins or asset-backed coins, depend on the project’s nature.

For bank-issued “stablecoins,” the system requires corresponding fiat asset backing and emphasizes asset transparency. Addressing transparency issues with existing stablecoins (e.g., USDT) regarding dollar reserves, the Chainless Platform proposes a solution: establishing an external account at the dollar-issuing institution, requiring the institution to deposit dollar assets into this account to achieve “cross-chain” asset transparency, ensuring collateral assets are not misappropriated.

The platform supports digital currency issuance based on the ERC20 protocol but emphasizes that issuers are responsible for token quality. For fiat assets, issuing institutions (e.g., the Federal Reserve) bear quality assurance responsibilities. The platform adheres to asset source transparency principles, positioning itself as a public platform without regulatory responsibilities, emphasizing user autonomy and responsibility for their assets. The platform aims to build a rational, logically consistent asset conversion environment, unattainable by traditional Web2 platforms.

1.5.2 Chainless Financial Ecosystem Platform with Contract Accounts

The Chainless System aims to build a financial ecosystem platform integrating traditional finance and Web3.0 characteristics. It not only encompasses most Ethereum functionalities but also achieves more efficient implementations in certain aspects while supporting contract accounts to enhance the potential of decentralized finance (DeFi) applications.

Unlike Ethereum, the Chainless System emphasizes “asset traceability” and supports ERC20 and other token protocols. For Non-Fungible Token (NFT) transactions, while smart contracts are theoretically feasible, the general ledger design offers no significant advantage due to the low-frequency nature of NFT transactions. However, secure wallets can handle payment functions by integrating with NFT trading platforms.

Positioned as a financial platform, the Chainless System focuses on DeFi applications rather than Ethereum’s general-purpose applications. By introducing contract accounts into traditional financial systems, the platform supports traditional financial operations while enriching fiat transaction methods. Compared to traditional financial platforms like Alipay, the Chainless System incorporates traditional financial mechanisms like guarantees and witnessing, automating them to enhance blockchain arbitration methods and address deficiencies in smart contracts for complex arbitrations.

The platform aims to resolve the conflict between traditional finance and cryptocurrency automation by introducing contract accounts and applications, modernizing traditional financial systems and expanding smart contract application scenarios to build a financial ecosystem integrating traditional finance and Web3 characteristics.

1.5.3 Breaking Ethereum Smart Contract Barriers

The Chainless System seeks to overcome Ethereum’s smart contract limitations, building a unified financial ecosystem community platform encompassing fiat and cryptocurrencies. Unlike the independence of traditional financial projects, the Chainless System emphasizes interoperability, openness, and autonomy, aiming to become an innovative platform to replace traditional financial systems and potentially Swift, leading financial transactions with cryptocurrencies.

Flexible Contract Account System: Unlike Ethereum’s smart contracts, the Chainless System allows developers to freely create and define contract accounts without preset template restrictions, significantly enhancing contract flexibility and customization. Developers can design automated or manual contract logic based on specific needs, making contracts more akin to Internet ecosystem applications.

Ecosystem App Development and Community Governance: Contract account control programs are separated from account data, supporting flexible upgrades while ensuring backward compatibility and respecting user choice. Ecosystem app releases and upgrades require community review, emphasizing the importance of community governance to ensure platform security and trustworthiness.

Transforming the Financial Ecosystem: The upgrade of contract accounts and smart contracts will significantly reshape the existing financial ecosystem. The general ledger’s transparency and user data autonomy collectively build a new financial ecosystem.

Below are examples of DeFi application categories, illustrating how blockchain innovations can be implemented using the Chainless System.

1.5.3.1 How to Implementing Rollup

The Chainless System employs optimized strategies for external transactions to reduce costs and enhance efficiency, with the core approach being transaction “batching” (Rollup). For the Bitcoin network, the system implements two optimizations:

Using off-chain technologies like the Lightning Network to execute transactions off-chain, significantly reducing fees, though main-chain settlement still incurs Bitcoin system costs.

Adopting centralized exchange transfer models, optimizing outgoing addresses based on transfer amounts to reduce transaction bytes and fees. Users bear incoming fees, while outgoing fees are optimized through batching. The Chainless System’s transfer model resembles centralized exchanges but differs fundamentally from Ethereum’s Layer-2 Rollup technology, which is more complex. Thus, Rollup in this context does not include Ethereum’s Layer-2 technology.

1.5.3.2 How to Implementing Uniswap

The Chainless Platform draws on Uniswap’s core concepts for decentralized trading, with targeted optimizations. It aims to provide a foundational application supporting four core functions: deposits, withdrawals, token swaps, and issuance of arbitrary trading pairs. To achieve this, the Chainless Platform offers underlying interfaces, enabling ecosystem developers to rewrite code based on platform features for more efficient and customized trading functionalities.

1.5.3.2.1 Implementation Approach

The Chainless Platform integrates Uniswap functionalities by deploying contract accounts on the general ledger, providing users with convenient on-chain token deposit, withdrawal, and swap services. Given Uniswap’s maturity, the platform transplants it as an independent ecosystem application, shifting from its role as an Ethereum wallet accessory to a standalone feature. This transition enhances Uniswap’s independence and accessibility, offering greater potential for functional expansion and usability innovation. Compared to Uniswap V3, the Chainless Platform’s Uniswap application has greater potential for innovation in usability and functionality, potentially matching or surpassing the speed and user experience of centralized exchanges.

1.5.3.2.2 Virtual Liquidity Pool Design

The Chainless Platform introduces an innovative “virtual liquidity pool” solution for decentralized trading. The core concept involves users locking tokens in their own wallets through predefined conditions (similar to smart contracts), rather than transferring them to the platform’s liquidity pool. Leveraging the general ledger, the system tracks users’ token holdings in real-time and employs a Lightning Network-inspired approach, treating locked tokens as swap commitments. When market prices meet preset conditions, the system automatically executes token swaps. This design enhances user fund security, mitigating risks associated with centralized asset management in traditional blockchain-based Uniswap implementations. Unlike Uniswap’s transparent large accounts, which may face data tampering risks, Chainless Uniswap avoids direct access to user data, further strengthening asset security. This virtual liquidity pool design is challenging to implement in current blockchain frameworks, highlighting the Chainless Platform’s innovation in decentralized trading.

1.5.3.2.3 Advantages of Virtual Liquidity Pools

Firstly, users’ transaction records are stored in their own accounts, while transaction logs are maintained on Chainless Uniswap servers, combining automated trading with manual data querying. This ensures user control over assets while providing convenient transaction record access. Chainless Uniswap delivers services via servers, blending decentralized trading with centralized service experiences.

Secondly, unlike traditional centralized exchanges, Chainless Uniswap does not directly provide centralized services to users. Instead, it leverages the Chainless Platform’s underlying architecture, adopting a model similar to OpenSea, where digital assets remain in users’ wallets. This avoids asset custody risks associated with centralized exchanges, enhancing user control over their assets.

1.5.3.3 How to Implementing Decentralized Order Book Trading

The Chainless Platform enables decentralized order book trading to achieve convenience and flexibility. Each Chainless wallet user can list tokens for sale on a dedicated page, with an automated bot patrolling all wallets to execute matched trades. Trading page order information is synchronized in real-time to all Chainless wallets. Given the variety of tokens and diverse user preferences, the system adopts a “personalized” design, tailoring displayed content to user preferences—a technique inspired by mature Web2.0 technologies but not yet widely applied in cryptocurrency exchanges.

As tokens are stored across individual wallets, matching speed may be slightly slower than centralized exchanges. To enhance transaction speed, the system supports a fast-trading function, allowing users to deposit tokens into an exchange-like Uniswap for trading, enabling competition with centralized exchanges on equal terms. Additionally, the Chainless wallet’s API interfaces allow ecosystem applications to access wallets and perform matched trades, expanding transaction use cases.

1.5.3.4 Connecting with Centralized Exchange Trading

Centralized exchange trading involves transferring tokens to a user’s personal account on a centralized exchange. Four methods are available:

1.5.3.4.1 External Transfers from the Chainless Platform

This method involves transferring tokens to a centralized exchange’s personal account, unrestricted by token type and applicable to any exchange. However, it is not directly tied to the Chainless Platform and may incur high transaction fees. This approach is a general method for external asset transfers via centralized exchanges.

1.5.3.4.2 Centralized Exchanges Opening Accounts on the Chainless Platform

The Chainless Platform allows centralized exchanges to open accounts on its system to facilitate stablecoin circulation and trading. Users first convert their tokens to the exchange’s stablecoin (e.g., BUSD), then transfer these to their exchange account for trading. Users can transfer traded tokens back to their Chainless account without fees. The relationship between exchanges and the Chainless Platform is weak, requiring exchanges to support the platform’s interface protocol. This protocol is simple, resembling internal sub-ledger transfers within the Chainless Platform, with the default of no transaction fees. Asset security during transfers to exchanges is the exchange’s responsibility. This design enables interoperability between the Chainless Platform and centralized exchanges, offering users more trading options and convenience.

1.5.3.4.3 Centralized Exchanges Opening Accounts with Same-Currency Stablecoins

The Chainless Platform supports centralized exchanges opening accounts and allows users to hold same-currency stablecoins, simplifying the trading process and reducing costs. Users can trade directly in their accounts without converting to the exchange’s stablecoin. This design, similar to Lightning Network state channels, focuses on interoperability between centralized exchanges and the Chainless Platform. Advantages include:

• Reduced Fees: Eliminates stablecoin conversion costs, lowering user expenses.
• Enhanced Security: Exchange account security is handled by the exchange, while Chainless transactions are protected by multi-signature and backup mechanisms.

1.5.3.4.4 Centralized Exchanges with Stablecoin Accounts and Collateral Model

The Chainless Platform supports centralized exchanges opening stablecoin accounts and adopting a collateral model. Users hold the same stablecoin without transferring it to the exchange, instead collateralizing it via smart contracts. Upon trade completion, the system transfers the stablecoin to the exchange’s Chainless account. Since token transfers within the same account incur no fees, this model is highly convenient. Exchanges store target tokens (e.g., Bitcoin) in their accounts. Users can transfer tokens back in two ways: fee-free if the exchange holds equivalent tokens (e.g., BTCy, equivalent to Bitcoin) on the Chainless Platform, or via external transfer with fees. The interface and collateral programs may be generic, part of the Chainless ecosystem. When integrated, the platform will purchase and open-source these programs while retaining copyright.

1.5.3.5 Implementing Aave

Aave is a decentralized lending protocol centered on asset lending via liquidity pools. Despite its decentralized branding, Aave’s centralized pool and smart contract reliance introduce centralized traits. Its key features include on-chain public data storage, smart contract-driven operations, and automated lending. Automated lending is not novel, as traditional financial institutions (e.g., stockbrokers) already offer this. Aave’s flash loans, completed within one block, are not applicable to the Chainless Platform.

Aave’s ecosystem includes:

• Depositors: Deposit tokens into Aave’s pool to earn interest.
• Borrowers: Borrow cryptocurrencies (atokens) via over-collateralization or flash loans, paying interest.
• Price Oracle: Provides market data like loan rates.
• Collateral Liquidators: Liquidate assets when collateral value falls below the threshold.
• Integrated Applications: Support fixed and floating rates, with no loan term limits and flexible repayments.

Chainless Aave, as a foundational application, is implemented by opening contract accounts on the general ledger and using smart contracts for lending. Compared to traditional Aave, Chainless Aave offers greater potential for innovation and upgrades.

Its most innovative concept is personal collateral lending, eliminating the need for a liquidity pool. User A locks tokens (a) in a contract collateral account, and borrower B, borrowing tokens (b), gains control of the collateral. The contract sets a repayment deadline; if unmet, B claims token (a). This allows customizable repayment terms, executed automatically, with the platform earning commissions. This disintermediated lending model enhances flexibility.

Additionally, Chainless Aave supports guaranteed lending via third-party guarantee smart contracts, as well as escrow and deposit contracts, leveraging the platform’s flexible contract accounts and smart contract capabilities to offer diverse financial services.

1.5.3.6 How to Implementing Aggregation

Aggregation is a tool for arbitrage across different liquidity pools, driven by rate differences. Projects like Yearn.Finance and Synthetix rely on ecosystem richness for aggregation. In the Chainless Platform, aggregation is achieved through interface calls. As an open platform, it allows developers to build financial applications, enabling aggregation via smart contracts and API interfaces. Developers can write contracts to monitor rate differences across pools and execute arbitrage trades automatically, leveraging the platform’s flexibility and scalability to provide users with enhanced arbitrage opportunities.

1.5.3.7 Implementing Derivative Tools

Derivatives in the Chainless Platform rely on its transparent centralized architecture and reliable general ledger data. This provides robust support for derivative implementation, creating favorable conditions for innovative derivative trading.

1.5.3.8 Implementing Ecosystem Tools

The Chainless Platform builds ecosystem tools by leveraging mature internet technologies, aiming for seamless integration. However, it reserves innovation space for developers in specific areas. For example, the Chainless log ledger, a blockchain-like transaction record, stores data as page-based hash values. To enhance query efficiency, the system envisions converting log ledger data into a database format. This task will be released as an ecosystem challenge, encouraging community developers to contribute and improve the ecosystem.

1.5.3.9 Big Data and AI Analysis

The Chainless Platform uses its public general ledger data to support big data and AI analysis. Despite anonymization, the rich transaction data offers significant analytical value. The system generates personalized analysis reports based on user needs, providing trading recommendations for buying, selling, and order listing. By applying high-frequency trading bots used by professionals to retail users, it democratizes automated trading strategies. This transparent approach ensures equitable trading opportunities, delivering efficient, personalized, and automated trading services while facilitating communication and trade matching among potential traders.

1.5.3.10 IoT Payment Implementation

In IOT payments, the Chainless Platform offers a simpler, more ledger-complete solution than traditional Directed Acyclic Graphs (DAGs). IoT devices require Chainless wallets with preset, transparent transaction addresses for pre-agreed trades. The system supports automatic small payments and manual multi-signature large payments for security. Single-point devices support centralized backups. Without predefined smart contracts, the platform offers greater flexibility for IoT node payments. Typically, transaction parties preset trading partners to accommodate the simplicity of IoT devices, which struggle with complex transactions.

1.5.3.11 Development of Smart Contract Templates

The Chainless Platform encourages smart contract template development as an ecosystem task to foster a thriving ecosystem. This initiative attracts developers to contribute valuable templates, supporting their application and innovation across various domains. The system will promote templates with practical value.

1.5.3.12 Blockchain Transaction Tracking Program

The Chainless Platform plans to release the development of a “blockchain transaction tracking program” as an ecosystem task, encouraging community developers to build a robust, efficient tracking program library. This enriches ecosystem tools and provides users with convenient, transparent tracking services, supporting practical tracking program development and innovation.

1.5.3.13 Realize the docking with traditional finance

As a unified platform for fiat and digital tokens, the Chainless Platform integrates with traditional finance primarily through banks, which play three core roles: transfers, deposits, and wealth management. Banks must open regular and contract accounts on the platform and develop dedicated ecosystem apps to connect with their financial systems. Through API interfaces, banks integrate the Chainless Platform with their systems for data and functionality interoperability. For the same token, a single indicator is used; for new tokens, banks establish a general ledger indicator upon first account creation. Banks issue tokens in ERC20 format for compatibility with existing cryptocurrency wallets; non-ERC20 tokens are incompatible. Integration requires fiat issuers to open accounts on the Chainless Platform.

1.6 A summary of trust mechanisms and progress

1.6.1 Decentralized Control

The Chainless Platform grants users high autonomy in decentralized control. Users can directly manage general ledger data transfers and set control levels based on their needs, ensuring complete data control, security, and privacy. Flexible control settings allow users to adjust permissions for different transaction scenarios and security requirements, enabling personalized security management.

1.6.2 No Downtime

The Chainless Platform employs a globally distributed cluster architecture to ensure high availability and resilience, preventing downtime. This global design mitigates ledger recording issues from physical failures (e.g., undersea cable disruptions) faced by traditional blockchains. By deploying nodes across multiple geographic locations, the system ensures data redundancy and failover, maintaining operations even if some nodes fail, enhancing reliability and stability for uninterrupted service.

1.6.3 Transparent General Ledger Data

The Chainless Platform ensures high transparency of general ledger data while preserving user control. General ledger data is publicly accessible, and users can download cold backup data to verify transaction records before and after transfers. Sub-ledger latest transaction visibility depends on owner settings; even if visible, records are untraceable without permissions, protecting privacy. Users can verify general ledger transaction records for integrity, and indicator data is publicly queryable. See the “Query Function” section for details.

1.6.4 Tamper-Proof Results

Through transparent data records and hash verification, the Chainless Platform ensures tamper-proof transaction results, verifiable by anyone.

1.6.5 Privacy

The Chainless Platform employs multi-layered privacy protections to ensure data security and autonomy. Users control data disclosure levels. Log ledgers are downloadable, but transaction record visibility depends on parties’ encryption settings, decryptable only by involved parties. Sensitive data (e.g., sub-ledger addresses, KYC) in hash indices is not publicly queryable, and sub-ledgers are private, enhancing user privacy.

1.6.6 Anonymity

The Chainless Platform supports anonymous account creation and transfers, protecting wealth privacy. Anonymous accounts and transfers allow transactions without exposing personal information, meeting user privacy needs while ensuring transaction security.

1.6.7 Openness

The Chainless Platform adopts an open architecture to enhance transparency and trust. System source code is publicly accessible, allowing developers to review, modify, and contribute. Transaction ledger data is downloadable for user verification. Public API interfaces enable developers and users to query general ledger data, ensuring data interoperability.

1.6.8 User-Controlled Data

Through multi-signature and multi-backup sub-ledger designs, automatic data recovery, and general ledger transfer controls, the Chainless Platform enables complete user data autonomy, surpassing traditional banking storage security standards.

1.6.9 Community Governance

The Chainless Platform plans a gradual transition from team-led to community-driven governance. Initially, the team handles decision-making and management for stability and rapid iteration. As the community grows, governance will shift to decentralized community decision-making. Transition strategies, timelines, and mechanisms will be detailed later.

1.7 Progress Beyond Blockchain—Chainless Platform

The Chainless Platform integrates blockchain’s decentralized advantages with centralized systems’ efficient payment speeds, aligning with Web3 standards. It inherits Web2 technical strengths, achieving minimal ledger costs and on-demand scalable systems for unlimited throughput. Smart contract development and upgrades are streamlined, and wallet security and usability match centralized wallets.

Inspired by Bitcoin, the platform aims to be an effective payment infrastructure, addressing Bitcoin’s payment shortcomings. Conceived in 2018, formalized in 2019, patented in 2020, and implemented in 2022, the system will be open-sourced after public testing. For 18 months post-open-sourcing, code references require written team consent to protect intellectual property.

Chapter 2 Incentive

For Web3 projects, coins should not be issued in the early stage because it is difficult for everyone to judge the quality of the project. But when it comes to the A round, the project can issue coins when it reaches the test net stage because it needs everyone to contribute. Giving coins is a means of motivating people to contribute.

“Participation is mining.” It is a method of giving token incentives based on participants and contributors. Integrate users, shareholders, and employees through chainless token incentives. The incentive is divided into direct incentive, that is, easy to quantify the incentive; Indirect incentive is not easy to quantify directly. This chapter mainly discusses direct incentives.

2.1 The value of chainless coins

The chainless coins are the token of the chainless system, and it is also an incentive for the ecological development of the system.

2.1.1 Features of chainless coins

1. It’s an asset token.

It has four attributes: asset attribute, equity attribute, governance attribute, and attribute of platform coin.

2. It represents the value of the ecological and user community platforms.
3. The token is issued as “Participation is mining.”

Because users are the most significant number of participants in this ecology, Participants are sent tokens which is equivalent to “mining.”

4. The coins are ERC20 tokens; the total number is recorded on Ethereum. In the chainless system, you can check the account transaction status of the designated token.

The transaction fee token supports USDT, USDC, BTC and ETH. DW20 is the transaction token of the chainless platform, and the transaction fee is paid at 1 USD regardless of the price on the chainless platform.

2.1.2 The Value narrative of chainless coins

1. There is total amount control, so it has the nature of stored value,
2. Due to dividends, it has the nature of equity,
3. Represents the value of the chainless ecology.

The Chainless system is the primary platform of Web3, and its advantages determine the potential to enter the leader.

2.2 Allocation of chainless coins

The issuing plan of chainless coins is as follows:

1. How to issue coins

Chainless coins are not allocated according to the time but according to the participation degree of the number of users, “participation is mining.”

2. Coins issuance period

Referring to the rhythm of Bitcoin’s growth cycle, the high-speed growth period is 72 months; the stable growth period is 72 months. However, due to the participants’ uncertainty, this cycle is only envisaged as a goal.

3. Coins issuance structure

The total circulation of chainless coins is 2 billion, and there will be no additional issuance.

The amount of issued chainless coins is allocated according to the ecological community, user community, market promotion, and other sectors. The specific amount is as follows:

• Ecological community incentive 30% 600 million
• User community incentive       30% 600 million
• Market promotion               6% 120 million
• Strategic investors            5-10% 150 million (estimated at 7.5%)
• Project initiator              15% 300 million
• Programming Cui Qi             0.875% 17.50 Million
• Project design: Zhu Weisha     1.75% 35 Million
• Web3 Foundation                1% 20 Million
• Web3 consultant Committee      0.5% 10 Million
• Zhuhai Branch of Beijing Institute of Technology 0.25% 5 Million
• He Weiqiang                    2.62% (seed investor) 52.50 Million
• Maneuver                       4.5% 90 Million

Special note: 15% of the project initiator, equivalent to 5.42% of the Bitcoin held by Satoshi Nakamoto, 10% is owned by Hong Kong Yuxing Technology Company, and Hong Kong Global Token Company has 5% as a stable cornerstone of the project. Please look at section 2.4.2 for specific purposes buyback mechanism.

4. Locking mechanism

The project initiators, Li Bing, and Zhu Weisha, have been locked up for 12 years and released yearly.

Strategic investors, the foundation, and the Beijing University of Technology’s Zhuhai branch have locked up their positions for six years and released them yearly.

Ecological community 3-6 years lock-up, among which the ecological support project is six years lock-up, linear release every year.

The consultant and He Weiqiang locked up for three years and released linearly every year.

The user community, promotion, and other aspects are locked for three years, and the annual linear release,

Due to the unevenness of the token obtained from” mining,” it is constrained by the rule of difficulty adjustment. The difficulty adjustment is shown in the algorithm; please take a look.

According to the lock time limit, the linear release refers to the release evenly by day.

5. Others

Maneuver shares are used for people who help projects in the early stage; They can also be used to adjust the proportion of each part, and there is room for adjustment in marketing and strategic investment shares. All balances will be finalized before the listing of chainless coins.

The user community’s “participation is mining” is completed, estimated to be 12 years. After that, the project enters a mature stage and ends “participation means mining,” relying on transaction fees and other charging models to charge. If all the coins are not used up, the project will continue to “participate means mining”; Enter the standard project mode.

Table 3 is a summary of coin allocation and lock-up.

参与方或社区 Participants or Communities	占总量比例 Proportion in Total	发行量 Circulation	线性释放期 Linear Release Period
生态社区激励 Ecological Community Incentive	30.0%	60000万 600 million	3-6年 3-6 years
用户社区激励 User Community Incentives	30.0%	60000万 600 million	3年 3 years
市场推广 Market  promotion	6%	12000万 120 million	3年 3 years
项目发起方 Project  initiator	15.0%	30000万 300 million	12年 12 years
程序设计者 Cui Qi Programmer  Cui Qi	0.875%	1750万 17.50 million	12年 12 years
项目设计者（祝维沙） Project Designer (Zhu Weisha)	1.75%	3500万 35 million	12年 12 years
战略投资者 Strategic Investors	7.5%估算 Estimate 7.5%	15000万 150 million	3-6年 3-6 years
Web3基金会 Web3 Foundation	1.0%	2000万 20 million	6年 6 years
北京理工大学珠海学院 Zhuhai College of Beijing University of Technology	0.25%	500万 500 million	6年 6 years
Web3顾问委员会 Web3 Consultant Committee	0.5%	1000万 10 million	3年 3 years
种子投资者（何伟强） Seed Investor (He Weiqiang)	2.625%	5250万 52.50 million	3年 3 years
机动 Maneuver	4.5%	9000万 85 million	3年 3 years

2.3 The “Mining” incentive method of the user community

Participation is mining. The user community incentive is based on people. New users will award tokens when they register, and old users’ contributions to activities such as developing new users will also be rewarded. We plan to issue 600 million coins in the chainless user community and develop 200 million users in 6 to 12 years. User community incentives mainly include awarding coins to newcomers, to people for attracting newcomers, to a trader, etc. About 300 million are used for newcomer incentives and about 300 million for activity incentives. Basic formula (1) and formula (3) in the section on newcomers’ incentives are provided by Mr. Lu Tie Geng, and the charts are all his simulation results according to the formula. The specific incentive methods are as follows.

2.3.1 newcome incentive

The newcomer refers to the newly registered users who register in their real name and get tokens. However, anonymous users cannot judge the authenticity, so they cannot get tokens.

New users are valued at $50.

The principal formula is as follows:

New users earn coins g = $50 / market price…………… Principal Formula

It is a principal formula. We use the following model to adapt to the different stages of project development.

2.3.2 User model (model without coin price adjustment)

2.3.2.1 Determination of the user cycle and the number of users in each cycle

Divide 200 million users into 30 cycles and issue about 300 million coins. x is the x-th cycle.

The formula and parameters are as follows:

Number of users per cycle ux

u_x=1.3×(2+8×0.8^(x/3)-0.015×(x / 3))^((x-1)/3)……………………Formula (1)

Formula (1) corresponds to the number of users in the third column of Table 4.

Symbols and meanings:

1. u_x stands for user, the total number of users reaching a specific period’s end. When x equals 30, see Table 4, u₃₀= 198.49 million, the total number of users.
2. Constant: 1.3, set for 200 million users in 30 cycles.
3. Multiplication factor: 2
4. Growth factor:2^{(（x-1）/3)}

Without the adjustment factor, the main line of the model is to double the number of users every three cycles, 2^{(（x-1）/3))}.

5. Growth decline factor: 8×0.8^(x/3). Predict the growth of users according to the “S” natural growth curve. We split the growth rate into two parts: the doubling trend of 2 and the growth adjustment part of 8. The decrement of the growth rate we set is halved in three cycles, that is, 0.8^(x/3). With the increase of x, the growth rate will also decrease rapidly. 8×0.8^(x/3) form a growth rate decreasing factor.
6. Adjustment factor of growth trend: – 0.015×(x/3). As the market matures, the doubling rate will slow down. The parameter we set is that every three cycles (x / 3), the multiplication factor will decrease by 0.015.

Table 4 Simulated user sending coins allocation table          

px 币估值价 Coin Valuation Price （美元） (USD)	x 周期 Cycle	ux 用户数 Number of Users （万人） (10,000 People)	dx 新增用户 New Users （万人） (10,000 People)	cx当期 发行量  current period issued (万枚） (10,000 Pieces)	Cx累积 发行量 Accumulation issued（万枚） (10,000 Pieces)	gx 新用户 得币 New user coins（枚） (Piece)	Vx 用户价值 User Value （万） (US $10,000)
0.13	1	1.30	1.00	377	377	377.31	65
0.18	2	2.69	1.39	386	764	277.56	135
0.31	3	5.37	2.67	437	1201	163.49	268
0.49	4	10.30	4.93	505	1706	102.45	515
0.74	5	19.05	8.75	593	2299	67.77	953
1.07	6	34.02	14.96	702	3001	46.88	1701
1.49	7	58.67	24.65	828	3829	33.59	2934
2.02	8	97.87	39.20	969	4798	24.72	4893
2.69	9	158.06	60.19	1118	5916	18.57	7903
3.53	10	247.45	89.39	1266	7181	14.16	12373
4.57	11	375.99	128.54	1403	8585	10.92	18800
5.89	12	555.17	179.18	1522	10107	8.49	27758
7.52	13	797.60	242.43	1613	11719	6.65	39880
9.54	14	1116.38	318.78	1671	13390	5.24	55819
12.05	15	1524.32	407.94	1692	15082	4.15	76216
15.15	16	2033.06	508.74	1678	16760	3.30	101653
19.01	17	2652.20	619.13	1631	18391	2.63	132610
23.70	18	3388.54	736.35	1556	19947	2.11	169427
29.41	19	4245.62	857.08	1459	21406	1.70	212281
36.23	20	5223.41	977.78	1349	22755	1.38	261170
44.64	21	6318.36	1094.95	1231	23986	1.12	315918
54.35	22	7523.79	1205.43	1112	25098	0.92	376190
65.79	23	8830.43	1306.64	997	26095	0.76	441522
78.13	24	10227.17	1396.74	890	26985	0.64	511359
92.59	25	11701.91	1474.74	793	27778	0.54	585096
108.70	26	13242.37	1540.46	707	28485	0.46	662118
125.00	27	14836.88	1594.51	633	29118	0.40	741844
142.89	28	16475.01	1638.14	569	29687	0.35	823751
161.29	29	18148.13	1673.12	516	30204	0.31	907406
178.57	30	19849.68	1701.55	473	30676	0.28	992484
	Subtotal		19849.68	30676

7. The increment of current users d.

d_x = u_x– u_x-1………………………………………………………………Formula (2)

Table 4, fourth column, new users correspond to d_x. The growth curve of users in each period is shown in Diagram 11. It basically conforms to the S-type natural growth curve.

The first cycle user increment 1 in Table 4 is a parameter set by artificial. Does not meet formula (2).

Diagram11

2.3.2.2 Coins current issue model (model without coin price adjustment)

8. The total amount of coins in the current period: c stands for coin.

c_x=290+d_x×110×0.5^(x/3)………………………………………………Formula（3）

c_x is the number of coins issued in the current period. d_x is the number of new users in the current period, and x represents the Xth cycle. c_X corresponds to the fifth column of coins issuance in the current period in Table 4.

d_x×110×0.5(x/3)was the regulating factor.

9. Accumulated circulation of C_X。

C30 represents the total number of coins issued.

C30= (c₁+…………………………+c₃₀)…………………………………Formula (4)

Cx corresponds to the column of cumulative circulation in Table 4, sixth column. The total amount is C30 = 306.76 million.

In the first 15 issues, 15.243 million people took away nearly half of the 150.82 million coins. According to the concept of venture capital, the value of early investment (early participation) is high, and of course, the risk is also high. Up to 15 million people, projects have entered the head of the blockchain, so the risk is not significant. The value of the project itself is far greater than the value generated by the number of project customers. The parameter 290 does not play an essential role in the user model. Still, in the circulation model with coin price adjustment, 290 plays an important role in the early and late user interest adjustment.

Diagram 12

2.3.2.3 Coins received for new users

10. g_x represents the number of coins per user in the cycle x. which means get.

gx=cx/dx…………………………………………………………………Formula (5)

Where c_x is the number of coins issued in the current period, and dx is the number of new users in the current period. Each new user gets 377.3 in cycle 1 in g₁ and 0.28 in g ₃₀ in cycle 30.

g_X corresponds to column 7 of Table 4

2.3.2.4 Total user value Vx

11. Vx=50×u_x

In Table 4, u₃₀ represents 19,849.68 customers over 30 periods, and total user value V₃₀=$992.484 million.

According to the Internet valuation rules, each user is $50, slightly higher than the price of Facebook’s acquisition of Whatsapp. At the time, they were paying $42.2 for monthly active users. WhatsApp is a globally oriented Internet system that has reference value. We do not consider the monthly active users in our valuation, so the value of users is not low. In fact, user value is only part of the value of the project. Often a good project, its project value is far greater than the user value.

2.3.2.5 The Relationship between user value and coin price p

12. P_x=50/g_x

The estimated coin price of each issued cycle is different. P₁, P₂…………………… P₃₀ expresses it. gx represents the number of coins received by the user for cycle x. The price of the first issue P₁=0.13.

The p_X corresponds to column 1 of Table 4.

2.3.3 circulation model (model with coin price adjustment)

The circulation model is different from the user model above. Blockchain uses circulation value to measure project value. The circulation market value calculates the value of the circulation model, and the calculation result of the user model is not necessarily equal. In the early stage of blockchain, the token may be issued. If the token is not circulated, the user model can be applied. Once the circulation is, the circulation market value will constrain it, and the circulation model is applicable. The px values in Table 4 correspond to the user model.

In the user model, we have a formula (3): c_x = 290 + d_x×110×5^(x/3)。 Using formula 3 combined with formula 5 to calculate the number of coins the user gets in x period g_x, Use the token price formula: the token price p_x=50/g_x; it can be further deduced that the currency price p_x in the user model x cycle is shown in Table 4, Corresponding to the x-cycle token price p_x, we use p’x to represent the circulation currency price in the circulation model x cycle. Furthermore, in the x-1 period of the circulation model, the currency price of p’_x-1 may also be higher than the currency price p_x of the user model x period. Considering that p’_x-1 is greater than p_x, at this time, it is necessary to reduce the issuance of coins quantity. We improved formula (3) in the project model, and the parameters have the same meaning. In any period x, the average currency price of the market transaction in the previous period x-1 is called p’_x-1, and c’_x is the current amount of currency issued considering the changes in market prices. d, x, all have the same meaning as formula (3). px corresponds to the price of each x period in the 8th column in the user model table 4. The current currency issuance model can be changed to a model that considers the currency price market changes:

c’_x=290+(d_x×110×0.5^(x/3)/（p_‘x-1/p_x）…………………………………Formula(6)

Among them, p’_x-1> p_x model is established. Otherwise, it is underestimation. Formula(3) applies to underestimation.

p”_x-1 is the average coin price considering the x-1 period of coin price changes, and c’_x is the number of coins issued in the current period x considering the change of coin price.

Take the second cycle, for example; see Table 4, d₂ = 13900, c₂ = 3.86 million, and the user model coin price p₂ is 0.18. At this time, the price of the previous cycle p₁ is 0.13. If the average price change of p₁ in the previous cycle is no longer 0.13, whereas p₁ was changed to p’₁=0.36, the coin issue calculated by formula 6 is c’₂ = 3.38 million, 480000 less than that of c₂. obviously, the change in coin price plays a regulating role. For 15 cycles, c₁₅= 1692, If the P₁₄ price changes from p₁₄= 9.54 to p’₁₄=24.1, It’s exactly twice the price of P₁₅, and c’₁₅= 811; see Table 4, column 6, line 15, and the average amount of coins dropped from 4.15 to 1.99. Due to the existence of the constant, the influence on the early and late stages is not as significant as that in the middle stage.

In the design of the average price, we did not adopt the method of 20-day average price but chose the average price of the previous cycle. We can’t predict how long this cycle will be, so it’s not easy to cheat. Due to the existence of the constant 290, in the fifth cycle, the d_x×110×0.5^(x/3) adjustment factor reaches 303, which is just over 290, which shows that the impact on the issuance of coins is not too significant.

2.3.4 Standard model

When the 30 cycle is over, if the coins are not used up, which can continue to use them. The average coin price of the 30th cycle is the p’x-1 coin price. Before the Px-1 cycle, if a higher coin price is stored, use the highest price and calculate the number of coins sent out.

The simple model should be enough to meet the standard growth cycle.

g= 50 / Pmax…………………………………………………………………Formula (7)

g represents a user who gets the number of coins in each period.

2.3.5 Summary of the three models

The above three token-issuing models correspond to three token-issuing stages. The user model is used to issue tokens during the non-traded stage; From public trading until 198.5 million users, the circulation model is applied. After that, a standards model is used. We can’t predict how long the standard growth cycle will be, and it will end when all the coins are allocated.

Different incentive methods in different stages are more reasonable. Obviously, the incentive for users in the early stage is large, which also conforms to the general law of venture capital. On the other hand, user log-on is not a success, but just at the beginning. Whether users take this as their home depends on activity incentives. Use 306.76 million coins for new ones and 293.24 million coins for user activities. Each accounted for about 50%.

The above describes the method of incentive new ones, and the design of the activity is described below.

2.3.6 Reward for Contributors

After the new person recommended by the contributor has successfully registered, the system will send additional coins to the contributor. The number of coins is 10% of the new user’s coins. For example, if the system sends 200 coins to newly registered users, it will send 20 to contributors. At the same time, It will give one point to the contributors. Send points regulation and purposes to see the next chapter, “Governance” section 5, the benefit distribution of all levels.

New users developed by contributors are responsible for continuous training. The system will reward the contributors 10% of their total transaction fees if the users conduct transactions. For example, the income of the new user transaction service fee is $100, and the contributor gets $10. Note that this is a single-level structure. Only contributors can get this reward if they pull a new user directly; that is, the new user is the direct subordinate of the contributor. When not publicly traded, there is no transaction reward.

2.3.6.1 Award for strong contributor

Set up 3, 9, and 21 new strong person award; the system provides the bonus, and the winner can receive it. Accumulated the calculation of the previous results. Twenty-one days is a cycle; the data is cleared and starts again.

1) 3-Days new Strongman award

The strong person is selected from the contributors who have completed the recruitment of a new person for three consecutive days, and the top 20% of the contributors are the three-day strongman. The ranking is based on the number of newly registered users developed within three days under the name of the new strongman.

The system provides the 3-Day new strongman award, and the total amount is withdrawn at 3% of the total amount of the newcomer’s coins under the name of the newcomer’s contributors for three consecutive days.

Get the 3-day prize and get 3 points. In addition, see the provisions and purpose of the next chapter, “governance” section 5 of all levels.

The bonus distribution formula is as follows:

Coins for the new strongman award: The top 20% contributors who pull new person. The total number of new coins×3% is to the contributor. For example, if the contributors draw five new people, within 20%, the total number of 5 people is 1000, and the contributor can get 30 coins.

2) 9-Days new Strongman award

The new strongman will be selected from the contributors who have completed the recruitment of a new person within six days within nine days, and the top 40% of the contributors are the 9-Days new strongman.

The system provides the 9-Day new strongman award, and the total amount is withdrawn at 2 % of the total amount of the newcomer’s coins under the name of the newcomer’s contributors within nine days.

The ranking method and bonus distribution formula are similar to the 3-Days new strongman award. The score of sending coins obtained in the first three days is counted in the coins received among the nine days.

Six points will be obtained if you get the 9-day prize. See the provisions and purpose of the next chapter, “governance” section 5 of all levels.

3) 21-Days new Strongman award

The new strongman will be selected from the contributors who have completed the recruitment of a new person have 15 days within 21 days, and the top 60% of the contributors are the 21-Days new strongman.

The system provides the 21-Day new strongman award, and the total amount is withdrawn at 1% of the total amount of the newcomer’s coins under the name of the newcomer’s contributors within 21 days.

The ranking method and bonus distribution formula are similar to the 3-Days new strongman award. The score of sending coins obtained in the first nine days is counted in the coins received over the 21 days.

Fifteen points will be obtained if you get the 21-day prize. See the provisions and purpose of the next chapter, “governance” section 5 of all levels.

4) 21 Day Strongman Award

The 21st produces an Explosive model of 48 points, and 10% of the new strongman gets.

Contributors consistently ranked in the top 10% on the 21st and scored 72 points. There is still one point for pulling a person. If the pulling person scores more than 28 points, 10% of the people may score more than 100 points in 21 days. It takes 100 points to upgrade to the lowest star “Rat” level and obtain the minimum qualification to participate in the bonus distribution of the chainless system. In extreme cases, it takes 100 pulling people to be eligible.

2.3.6.2 Reward ideas for other promotional activities

The above activities require about 40 million coins based on 200 million users. A total of nearly 300 million coins can be used in various campaigns. So there is a lot of room to design activities. The community can propose these activities, and the goal of the activities is to contribute to ecological development and growth. The activities designed above all encourage contributors who contribute to ecological construction. This idea is also successful for YouTube and others, and future activities should be designed to continue this idea. We will also continue to listen to the market and enrich the campaign before the official white paper is published. The other line of thought is for the silent majority. There will always be a large percentage of YouTube hosts who are not making money and whose labor is not respected. Solving the problem of the silent majority with egalitarianism must not work. And the Bitcoin mining game proved successful and was considered fair by all. This game is based on probability, and we will design game algorithms for the silent majority that will intensify the group’s role in governance in the next chapter. It will be carefully argued. The enhanced role of the community is advancing the corporate system, and we leave ample room for this.

2.3.6.3 Reward token bookkeeping time

Chainless coins sent to ordinary users will stay in the system for a week and will be automatically deposited into the user account if there is no problem with no one to report or a robot to judge; Chainless coins sent to star-rated customers will be immediately deposited into the account.

2.4 Difficulty adjustment method for user community incentives

Use the lock-up and repurchase mechanism to adjust the difficulty to achieve the goal of linear release and improve market certainty.

Since the number of people is random, the non-linear release will cause abnormal price fluctuations. Such fluctuations can even ruin the project. Bitcoin adjusts the difficulty so that the distribution pivot is always around the level of one block in 10 minutes. The system does not collapse due to increased and decreased computing power, thus stabilizing investors’ expectations for the project. Difficulty automatic adjustment is a pre-set intervention behavior necessary for an automated system to maintain stability. The stock market also has mechanical intervention, and even the market is closed in severe cases.

The only factor that Bitcoin can adjust due to the algorithm’s structure is the difficulty coefficient adjustment, which still has rapid volatility of more than 90% in the early days because it cannot automatically make interventions to the market. For the coin price to reflect the investment value of the system, it is necessary to reduce investors’ concerns about the uncertainty of the system. Increasing the stock issue in the stock market is bearish; why is it not bearish when Bitcoin is “issuing shares” daily? Because it is a predictable behavior. Our difficulty adjustment is to turn the unpredictable randomness of users who “participate is mining” into the same predictability as Bitcoin and achieve a linear release of Bitcoin. Then we aim to exceed Bitcoin’s stability expectations and avoid making large early fluctuations.

During the user model phase, coins are not publicly traded, so no stabilization mechanism is needed.

From the circulation model phase onwards, there has to be a stabilization mechanism because the coins are tradable.

There are two stabilization mechanisms:

the lock-up mechanism，

the repurchase mechanism.

2.4.1 Lock-up mechanism

We use the 20-day Bollinger Band as the basis for the lock-up mechanism.

When the currency’s price falls to the lower rail point of the Bollinger Band, the calculation will start, and the lock will be triggered when the price drops by 10%. The time is in GMT standard time and will stop the daily linear release of the locked currency on the next day. Until the currency price reaches the middle rail of the Bollinger Bands, release locked, restore the linear daily release. Market-purchased coins are not subject to this restriction.

Continue to send coins daily, and the dividends of existing coins will not be affected after locking.

When the currency price reaches 10% of the upper Bollinger Bands rail, the release is doubled until it returns to the Bollinger upper rail and returns to regular release. Doubling the freedom means that the amount released for one day is now the amount released for two days.

Bollinger Bands are a well-known stock market technical tool found everywhere. This article will not repeat them.

2.4.2 Repurchase mechanism

After the coin is no longer released linearly, it will be triggered if the coin price continues to fall to the repurchase line. The repurchase line is the user valuation line Vx in Table 4. It means that the system has only user value. When users exceed 200 million, the user value line rises, and the formula Vx=50×ux still applies. With the development of the Internet, the value of people will become higher and higher, and exactly how much a user is worth is determined by the community to decide the new user value line.

There are two types of repurchase:

The core team used the profit reserve to buy back. Use 33% of the project initiator, 100 million coins, if not enough, as collateral, and then repurchase. When the currency price returns to the middle rail of the Bollinger Bands, it can begin to sell gradually.

The role of the project initiator is 15%, and Nakamoto’s 5.42% is the same but more flexible than him. Satoshi Nakamoto expressed confidence by holding coins and not selling them, and we put our confidence into action in addition to expressing confidence. The project’s currency holding can be used in ways other than selling to maintain ecological interests, but the method must be clearly stated in advance. Satoshi Nakamoto is passive; we are active. The initiator can exercise voting rights, and Satoshi Nakamoto does not participate.

In the early days of the circulation model, the project has no profit, and the currency has no collateral value. So how do we repurchase at this time? At this time, the repurchase is arranged by the strategic investor. It is also a condition for our choice of a strategic investor.

Other possible repurchases are also accepted through community discussions.

2.5 Income distribution of chainless system

65% of the net income of the chainless system is distributed to the members of the system through various rewards and does not disappear with the end of the issuance of coins. The next chapter, “Governance,” describes the community reward scheme. This distribution can be either chainless coins or DW20, or fiat. 35 percent as a reserve to maintain a chainless ecosystem. The chainless system does not stipulate the destruction of coins, but should it be used if the destruction is necessary? Reserve to a certain amount, and the excess can be distributed in proportion to the total amount.

With the strengthening of community governance and the transition of governance, some issues must be discussed clearly in the community. We don’t know what the future will be. But the total retained assets must belong to the owner of the chainless system currency. Owned coins are similar to equity.

2.5.1 Project income

1. Platform transaction fee income.
2. community income.
3. other income. Other income includes technology transfer income, third-party witness income, APP download income, a third party such as credit card swiping income, download income for user accounts, third-party join-up chainless system income, and search matching income. Secure storage revenue, etc. The secure multi-backup has a cloud backup revenue for the chainless system. Sub-leasing public cloud for wallet customer backup, etc.

2.5.2 Income allocation

50% of the net income is used for hold dividends, 15% for bonus dividends, and 35% for reserves, which can also be invested in non-ecological support projects, including business restructuring. The bonus dividend percentage can be adjusted once a year.

2.5.2.1 Coin rewards policy based on user activity

1) Ranked according to the number of transactions, the top 45% of monthly active users can enjoy the following policy of rewards coins:

For example, 25% of the transaction fee is divided in the first year. Divided into three levels. According to the number of transactions, 25% is the third level, 15% is the second level, and 5% is the first level. Therefore, 25% of the monthly handling fee is divided equally among the three groups.

2) Ranked by transaction volume, the top 45% of monthly active users can enjoy the following policy of rewards coins:

We take the first year as an example, 25% of the transaction fee is divided into three levels according to the monthly active share, 25% is the third, and 15% is the second. Therefore, 5% is the first level, and the third level is divided into a monthly handling fee of 25%.

Note: Some people think cheating by the number of trading coins is easy, so that may change.

2.5.2.2 Trading Strongman Award

The trading strongman award is divided into three awards, 3 days, 9 days, and 21 days.

1) 3 days trading strongman award, rewarding people who participate in trading every day for 3 days and have trading volume ranked in the top 60%; the bonus standard is three times the number of coins sent by the newcomer on the third-day deadline; Three people were randomly selected from the 60%. For example, the newcomer gets 50 coins; the explosions model is 150.

2) The 9-day trading strongman award rewards those who have participated in the transaction for 6 days within 9 days and the top 60% of the transaction volume. The bonus standard is 6 times the number of coins sent by newcomers on the 9th day deadline; 2 people are randomly selected from 60%. For example, the newcomer gets 50 coins, and the explosion model is 300 coins.

3) The 21-day Trading Strongman Award rewards those who have participated in the transaction for 15 days within the 21 days and the top 60% of the transaction volume. The bonus standard is 15 times the number of coins sent by the newcomer on the 21st-day deadline; one person is randomly selected from 60%. So, for example, newcomers get 50 coins, and the explosion model is 750.

This reward is a raffle. If you meet the above conditions within 60% of the 21 days, you will have three chances of winning.

Note: This reward may add to the concept of grouping, such as 500 for a group. Otherwise, the winning rate is too low.

2.5.3 Dividend right

Dividends are paid monthly, and all chainless coin holders locked up can participate in the dividend. Part not issued is ineligible.

2.6 Incentive Scheme of ecological community

The incentive of user communities, Web1 and Web2, already have mature approaches. We have designed the chainless user community incentive method with heavy reference to various ways of Web1 and Web2. Can a similar system be used for the incentives of ecological communities? At our cognitive level, we have not been able to design a series of metrics. What metric is appropriate? Awaiting further practice. At present, the popular blockchain is to use DAO, and the use value is deficient.

At present, the incentives of the blockchain ecological community are mainly proposals, community discussions, voting, and approval. Chainless systems follow the existing blockchain ecosystem proposal method and support community proposals. Ethereum has proposal mailboxes, and their proposals are not public. The core team, i.e., the actual controller of the foundation, decides who to motivate. They also rely on external forces to participate in the project review, which does a good job. Typically $100,000 sponsors a project. These activities are not based on indicators and are subject to human factors.

The incentive of the ecological community is the incentive for the core team first. For the motivation of the core team, please refer to the section on team composition in Chapter 4.

The chainless system respects the blockchain ecological incentive method and adopts the principle of incentive by task. The release and assessment of tasks depend on the core team. The role of the core team is not mainly to assess but to form the mechanism and procedure of automated evaluations. DAO is based on smart contracts, which cannot be compared with the artificial intelligence level of Web 2.0 and cannot produce high-level automatic assessment mechanisms and procedures. So far, there is no reference model. We also hope that the chainless core team can fully use artificial intelligence technology and the power of the market to innovate.

2.6.1 Incentive according to the task

The payment shall be 1.5-2 times the market standard price for specific tasks. For example, there is a price for programming, and the core team organizes relevant personnel to judge whether it is reasonable and responsible for the allocation.

2.6.2 Look for loopholes incentives

For those who have completed the task of finding loopholes, pay the bonus from 1.5 times to 2 times according to the market standard price. The core team is responsible organizes relevant personnel to judge whether it is reasonable for the allocation.

2.6.3 Project Proposal Incentive

Complete specific tasks or put forward suggestions for improvement that are adopted; according to the market standard price, 1.5 times to 2 times pay the bonus. The core team shall organize relevant personnel to judge whether the task is reasonable and responsible for the allocation.

2.6.4 Programming rewards with GreatFree

The core team organizes relevant personnel to judge whether it is reasonable and is responsible for issuing rewards.

2.6.5 Ecological app support

The core team organizes relevant personnel to judge whether it is reasonable and is responsible for issuing rewards.

2.6.6 Buy ecological products to get coins

Buying ecological products such as purchasing Family Cloud can get chainless coins. However, the specific coins to be earned are specified separately.

2.6.7 Discount purchase coins

Specific users participating in the construction of the ecological community can purchase chainless coins at a discount of 50-85% of the market price. Share is the currency of the ecological community. Specific provisions depend on the release of the task.

2.6.8 Lock-up period

The chainless coins obtained or purchased through the above-mentioned ecological community projects have a 3-6 years lock-up period, allowing linear release.

2.7 Summary

There has never been a good way for blockchain to user community incentives. This chapter divides the user community incentive into three models: the user model, the circulation model, and the standard model. Different model incentives are used in different stages to solve the problem of randomness in forming user communities. Setting adjustment factors according to the stochastic growth S-curve and linking coin lock and release to currency price in the circulation and standard model greatly improves the certainty of project growth. However, we have two difficulty adjustment factors, one is to adjust the currency price, and the other is to adjust the currency lock and release.

The only factor that Bitcoin can adjust due to the algorithm structure is the adjustment of the difficulty coefficient, which is used to achieve linear issuance. There is still more than 80% volatility in the early days because it cannot automatically intervene in the market. In order for the currency price to reflect the investment value of the system, it is necessary to reduce investors’ concerns about the uncertainty of the system. Issuing new shares in the stock market is bearish; Bitcoin is “issuing shares” daily, so why is it not bearish? Because this is expected behavior. Our difficulty adjustment is to turn the unpredictable randomness of users who “participate is mining” into the same predictability as Bitcoin and achieve linear release. In the circulation and standard model, the release and locking of coins are linked to the price of coins, and the project initiators are allowed to maintain the community ecology actively, exceed the stable expectations of Bitcoin transactions, and try to avoid the phenomenon of large fluctuations in the early stage, making the project more valuable for investment.

The incentive method in this paper summarizes the experience of previous success and failure; every point seems to have been seen, and the whole is the first innovation.

At present, there are two problems left. One is making the silent majority profit with peace of mind while ensuring competitiveness. It is a matter of fairness, and it is also the need for lying-down earning projects. There needs to be extra interest here, which intelligent robots must generate. The second problem is the establishment of metrics for ecological communities. The metrics for the ecological APP are well established on how to quantify the content that is not easy to quantify, such as proposals. Need for a lot of exploration. It challenges the core team and the community and is the direction of effort.

Chapter 3 Community Governance and Indirect Incentive

3.1 Principles of Governance

Governance is the procedures, methods, and means to achieve incentives and adjust all parties’ interests.

3.1.1 Automated systems are the source of benefits

Incentives and governance procedures can be automated, but human behavior cannot be automated. People decide what is best for their interests according to the rules. The rules of a community best serve the interests of the community. Society has inequity; some are explicit, and some are invisible. Any fairness is relative, so is competition absolutely fair? YouTube’s algorithm allows 3% of the hosts to share more than 85% of the advertising fees belonging to all hosts, which is an inevitable result under any competition rule. Where will the head part come from if there is no massive contribution of 50 million other hosts? Just as 1% of the population owns more than 90% of the wealth in American society. The head takes the head’s interests to have a competitive advantage, So someone must let out the Profit。

How do cryptocurrencies do it?

Team benefits. The extra benefits of the chainless community are based on the low share of the core team of the chain-free system. Vitalik criticizes the high share that is under the banner of blockchain. There is some truth to it. From a practical point of view, 5-20% is a reasonable range. But the Profit that the team can make is limited. Another basis of cryptocurrency is that the management fee is meager. There are two reasons.

1. The system is the machines’ automation and the equipment composition. The more automatic a system is, the more benefits will be shared by the people involved because machines will not compete with people for profits.
2. Community governance reduces management costs. Dao autonomy is good, but smart contracts cannot realize it because the intelligence level is insufficient.

3.1.2 The foundation of community governance is freedom, fairness, and transparency

Governance is the distribution of benefits. Community governance currently conforms to the majority’s interests is voting based on the rule. The rational state of community governance is community autonomy. Unfortunately, complete autonomy does not now exist either.

The fundamental logic for the development and growth of the chainless community is freedom, fairness, and transparency. Freedom to come and go is no longer a problem. The foundation of fairness is transparency, and making money is clearly visible. The chainless community clearly stipulates the level difference, and the bonus level difference is 12 times. This difference is minimal. If there are no other means of Profit for outstanding talents, including direct and indirect interests and spiritual interests, grade difference alone will not retain talents. Only if it’s fair and encourages competition will people play. Only through transparency can there be fairness and a basis for consensus.

From the perspective of Bitcoin’s logic, transparency is the basis for achieving Bitcoin consensus, and community governance should also be based on transparency. Incentives based on this principle are open and transparent allocation methods. Section 6, “Examples of Benefit Distribution,” shows this possibility.

3.1.3 Governance

Governance power is divided into human rights, financial, and administrative. Bitcoin only has power, and it’s minimal power. Even the most minor power requires trust, which is different from gold. The way to reduce trust, the way cryptocurrencies do it, is:

As cryptocurrency governance, it is community governance formed by its fair and transparent concept. Communities are divided into owned and ownerless communities. An ownerless community is one where no actual controller participates, which is an ideal state. However, from the perspective of cryptocurrency practice, such ownerless communities are few and far between. If the project has evolved into an ownerless community, Does governance not exist without a core team? Who is in control of Bitcoin? It turned out to be the Supreme maintainer was Satoshi, then it was Vladimir van der Laan; after he left, it was divided into five hands, and now it is in the hands of four. Its governance procedure is very simple. It is an “improvement proposal,” such as Bitcoin’s BIP。

Ethereum also uses an improvement proposal EIP, but Ethereum is not yet an ownerless community.

If the application scope of Web3 is expanded, the ownerless community is not a necessary standard and mature projects still need to be governed. As a web3 project, mainly for end users, there must be a service. It is difficult for a pure ownerless community to guarantee the quality of service, but the principles of fairness and transparency created by cryptocurrency still apply. Therefore, in terms of governance, it is necessary to gradually move from the firm control of the core team in the start-up period to weak power; that is, the community control is strengthened, and the degree of automatic governance is strengthened from corporate to community governance. Community members gradually participate in the core team to participate in government. This transition period should be completed in about 6 years, in synchronization with the high-speed growth period of the chainless system.

Regarding the governance of ecological communities, the blockchain has many good experiences, including BIP and EIP proposals, task distribution standards, etc. There are examples to check. For the governance of the ecological community, the chainless system started based on corporate governance and tried to be as transparent as possible. Gradually improve the governance level of ecological communities. The ecological community’s share of tokens is 30%, which is more than 15% of Fil(file coin). It is hoped that the chainless system ecological community will become the most significant ecological community of web3.

In this way, in the early stage, relevant people recognize the governance rights of the core team, that is, supervise and manage project operations according to the rules to protect the interests of individual community members and the community as a whole.

3.1.4 User Community and indirect governance

Incentives are divided into direct incentives and indirect incentives. The second chapter gives the rules of direct incentives, and the chapter combines governance to provide the rules of indirect governance. Direct incentives are easily quantifiable incentives. Indirect incentives are not easy to quantify. Governance is a very complex issue from a social and corporate governance perspective. As an economic organization, the company still has a decentralization power system and an assessment system. Without a sound system, Web3 governance will not succeed if it cannot exceed the level of corporate governance. There are cryptocurrency ecological community governance cases, while user community governance is almost blank. The company has piece-rate and rank wages, corresponding to direct and indirect incentives. Piece-rate wages are a direct incentive, and companies use part of the benefits contributed by piece-raters as profits. Taking YouTube, which does the best job, for example, the proportion of advertising revenue distributed between them and the hosts is 55% for the hosts and 45% for them. The company, hosts, and users jointly create profits. The company distributes profits to shareholders and management teams, and users have nothing to do with it. It is unfair distribution. Proper quantification of various factors contributing to Profit is also a problem that indirect incentives have to face.

Indirect incentives are similar to rank determination; scoring is the most commonly used quantitative method. Which score is appropriate? The community constantly adjusts it through practice. There is no absolute plan, and the plan’s determination is governance. So, we put governance and indirect incentives together. Both the ecological community and the user community have score incentives. The score incentive is to score community members’ current and historical contributions that are not easy to quantify and use a combination of machine score evaluation, third-party evaluation, and community member evaluation.

Evaluation, starting with little data, will also be very rudimentary, just like the machine evaluation started by YouTube. Later it became more and more reasonable, but these were the participation of the YouTube core team and did not relate to the community.

The governance of cryptocurrency provides good practices but also exposes deficiencies. Its goal is to go as far as possible to the unowned community, and the direction is right. Obviously, it isn’t easy to achieve this requirement for Web3 projects. The above governance principles are proposed to address the shortcomings of cryptocurrency governance. In the process of achieving this goal, what does community governance include? What does governance have to do? It is described in the next section.

3.2 Community power

Community governance includes ecological community and user community governance. Initially, the core team organizes the implementation and exercises power.

3.2.1 The Right to Decide

Only the holder of the chainless coins has the right to decide. This power refers to the relevant system of public companies.

Adjustments related to interests are proposed by the community and voted for. So there are already cases of community governance.

Release the tasks of the ecological community. There are already cases of community governance.

Improvement proposals for the ecological community. There are already cases of community governance.

Nomination and dismissal of the community core operating team. There are already cases of community governance.

Adjustment of incentives.

Establishment, modification, and supplement of the community system.

3.2.2 Supervisory right

This  rightrefers to the relevant system of public companies.

Election of the head of the Audit.

Select the audit unit.

Approve the audit report.

Approve core teamwork reports.

Approve the Foundation report.

Chainless is a transparent centralization system. So Audit is easy, and the core team and the foundation’s early reports do not differentiate too.

3.2.3 Referral right

Please recommend applicable products and recommend all comments relevant to the community, including improvement options.

3.2.4 Commendation right

Referrals community members for contributing rewards.

Reviews recognize community members.

3.2.5 Right of Disposition

Participate in community member promotion or demotion discussions and final decisions.

Selection and adoption of automated management machines.

The formulation and implementation of the penalty charter.

3.3 The constituent structure of the user community

The community has a five-tier hierarchy with 12 levels represented by the Chinese zodiac: 1 Rat, 2 Cow, 3 Tiger, 4 Rabbit, 5 Dragon, 6 Snake, 7 Horse, 8 Sheep, 9 Monkey, 10 Chicken, 11 Dog, 12 Pig.

3.3.1 Core layer

Initially organized by the initiator. Core layer members are in the real-name system in the community, participate in community assessments, and are responsible for the development of the community. If the perennial level is insufficient, it will be replaced by a higher level. The core members are also a 12-level upgrade system. The core layer consists of a team of fewer than 15 people per community and no more than 30 people for both ecological and user communities. Mainly researching and improving community governance and continuously promoting community transparency and automation. The core layer is too essential and is the community’s soul, as detailed separately in the next chapter.

3.3.2 Mentor level

It is the teacher of the team and the community, divided into four levels, namely 9 monkey, 10 chicken, 11 dog, and 12 pig.

3.3.3 Management layer

It is the backbone force of the community, divided into four levels, namely 5 dragon, 6 snake, 7 horse, and 8 sheep.

3.3.4 Contribution layer

They are community members divided into four levels, 1 rat, 2 cow, 3 tiger, and 4 rabbit.

3.3.5 Currency holding layer

Do not participate in community activities. Do not enjoy the dividends paid to the above contributors. There is only passive income from holding coins. Have community voting rights.

3.3.6 Relevant instructions

In the dividends of the entire chainless system, in addition to the holding dividends, there are also contribution dividends, 15% of which are contributed dividends. The chainless system is quantified with levels and represented by zodiac signs. Using the Chinese zodiac sign means the possibility of adopting NFT in the future. IF who gets the set should be very meaningful. 15% is not absolutely unchangeable. It can be adjusted according to the actual operation.

How should the interests of token holders and contributors be distributed? Web3 is like cryptocurrency; shareholders, employees, and users are one body. The distribution model should also be different from the company’s personnel composition. The most significant difference is “Oneness,” so it should be the right thinking to motivate behavior that promotes Oneness. Through activities, the share of contributors is continuously increased, and the chainless system’s new value is created simultaneously. When the total share remains the same, the percentage of contributors increases. The core of “Oneness” is the Currency as the link, and the currency holder is also a contributor. The chainless user community system is a highly automatic system that replaces the company’s high operating costs. In addition to the profit model of the community itself, the system relies on transactions as the primary Profit.

How to understand “oneness,” one can imagine ownership by the whole people. Whole-community ownership is a form of realization of ownership by the entire people. It is not owned by the whole people(community) in name, nor is it owned by the core team (bureaucratic group), but it is “owned by the whole people” through Currency as a link. Ownership by the whole people without money as a link is an illusion. Of course, the connection of coins is not egalitarian, and interests must be distributed reasonably. In the previous chapter, we designed the distribution of coins to be about 50% each for coin holders and contributors, and contributors can also get community contribution dividends, which are equivalent to bonuses, so we get a 15 %proportion.

Note that community dividends correspond to indirect incentives, and easy quantifiable contributions to mentors and group hosts are part of direct incentives.

Contribution dividends are divided into 12 levels. The difference between the highest and the lowest is 12 times.

Members of the core layer also refer to the 12-level dividends; from its characteristics, the lowest level should be calculated from the management level; the 5th dragon level is the softest core member. Core members are paid salaries.

If members are inactive, they will be downgraded. Please take a look at Section 7 for the last elimination system.

All chainless coin holders have voting rights, and locking and staking tokens do not affect voting rights. It is consistent with the rules of equity.

The mentor layer belongs to the public domain, the management layer belongs to the private domain, and the user community is a community system that combines the public domain and the private domain.

3.4 Sources of Community Income

If the community wants high income, it needs to do e-commerce. The chainless user community is an e-commerce of financial products. The community has wealth management and insurance products, advertising revenue, and agency products. All income and distribution of the community are transparent. The chainless community is like a financial supermarket.

Why are WeChat Merchant and Pinduoduo not as popular as live broadcasts? Because the KOL credit and product prices are low. In other words, trust and transparency. That’s why we designed the mentor layer. The management layer is equivalent to the group host responsible for communication with group members and group management. The group host can invite instructors to the group to explain. Mentors can invite group members through the group host. So as you know, the group is a private domain.

Items that may apply:

Financial projects. For example, in the first year, insurance will give 10-20% of the marketing expenses, which the community will distribute. The renewal premium is reduced to 2% for the second year until the end.

Agent Home Cloud 15% sales fee.

The agency APP is earn advertising fees, which are charged according to clicks and downloads.

Discount agent for coins, add 1-3% to the discount price.

Other community-related projects.

3.5 Distribution of benefits at all levels

3.5.1 Currency holding layer

Don’t participate in community activities. Not entitled to dividends from tier contributions. There is only passive income from holding coins.

Earn coins for participating in transactions, accumulating points, and advancement.

50% of the transaction fee income is used for currency-holding dividends.

50% of other income is used for holding currency dividends. Mainly refers to technology income.

3.5.2 Contribution layer

They are members of the community and are divided into four levels, namely, 1 rat, 2 cow, 3 tiger, and 4 rabbit.

1. Rat

100 points or more.

Two upgrade methods for the rat level are pulling new and trading.

Earn coins for participating in transactions, accumulate points, and upgrade.

There are basic points for pulling new ones and one point for pulling a person; there are 3 days, 9 days, and 21 days for the Pull new explosions Rewards, and the corresponding prizes are 3, 6, and 15 points, respectively. For example, on the 21st, the new strongman rewards scored 48 points. Please look at Chapter 2, Section 3, the mining incentive method of the user community.

Everyday active users who click like someone can participate in the monthly Explosions Unexpected Rewards activities. If they get the Unexpected Rewards, they will get 30 points, and the rate of the Unexpected Rewards is 1%. If they don’t get it, they will get 3 points every day click for a month. If they leave more than 10 comments monthly, they will get 5 points. (irrigation message judged by the machine, deducted 30 points) Writing an article is recommended to the message board once, get 30 points. This recommendation is an intelligent algorithm; the algorithm will guide through the user pool according to the number of like, steps, replies, retweets, and fans of the article recommended to the message board, equivalent to the system message home page, and individuals see the home page is different, individuals see the home page belongs himself. Everyone sees differently in the design of thousands of faces. The entire recommendation algorithm is modeled after YouTube.

The last eliminations are made in monthly upgrade events; if newcomers score higher than they will be eliminated at the last of 1%. It happens when activity, transactions, and activities do not contribute enough to the progress of the community. Please look at the last elimination system in Section 7 for the elimination method. It is also the robot that conducts the final inspection. The reason why so few are eliminated is to take care of the grassroots.

2. Cow

500 points or more.

The upgrade of the cow level is the same as above. The last eliminations are made in monthly upgrade events; if newcomers score higher than they will be eliminated at the last of 2%. It happens when activity, transactions, and activities do not contribute enough to the progress of the community. Please refer to the last elimination system in Section 7 for the elimination method. It is also the robot that conducts the final inspection.

3. Tiger

1000 points or more.

The upgrade of the Tiger level is the same as above. The last eliminations are made in monthly upgrade events; if newcomers score higher than they will be eliminated at the last of 5%. It happens when activity, transactions, and activities do not contribute enough to the progress of the community.

4. Rabbit

2000 points or more.

The upgrade of the Rabbit level is the same as above. The last eliminations are made in monthly upgrade events; if newcomers score higher than they will be eliminated at the last of 10%. It happens when activity, transactions, and activities do not contribute enough to the progress of the community.

3.5.3 Management layer

It is the backbone of the community. The group host is divided into four levels, namely 5 dragon, 6 snake, 7 horse, and 8 sheep.

The group host is responsible for community management, general counseling, and group member cohesive role. The group host is generally the group organizer, distributing the group’s interests and the stakeholder’s benefits. For example, in the cooperation of the mentor, is responsible for allocating the mentor’s interests. A group member can join different groups without affecting their profits but affecting the group host’s profits.

The social relationship of the group forms a CID according to the recommendation code. The group here is not limited to the social software for the chainless system. However, the group host will report to the chainless system community for registration, and the community will find group members for confirmation. Others cannot determine the relationship between the group host and group member based on the chainless system but can only know how many group members the group host manages. The group host has a personal homepage in the chainless community and an evaluation report of the robot.

Group has a two-tier structure. The group host A’s downline B then develop group C is considered A group host’s management, B downline C then creates group D is not considered A’s management. The host of group A is unfamiliar with the business and invites a tutor, and the host of group A may be paid. Group members can join anyone they want, but they can jump to groups on the same line. If D jumps to group A, it is no longer a group member of groups C and B. No relationship changes if one jumps to another group outside the A chain. This design is to avoid the duplication of the distribution of benefits. Deliberately retaining the group-hopping relationship is maintaining the competitive factor and the elimination mechanism.

5. Dragon

Manage more than 1000 group members, regardless of the group size. Generally, a group of no more than 200 people is suitable. At the same time, the dragon level manager has more than 100 points of the rat level eligibility.

However, according to the activity level of the group member, transactions, and contributions to the community, there is a 1% elimination rate. Please look at the last elimination system in Section 7 for the elimination method. It is also the robot that conducts the final inspection.

6. Snake

Managed more than 5000 group members, regardless of the group size. At the same time, it has more than 500 points of cow-level eligibility.

However, according to the activity level of the group member, transactions, and contributions to the community, there is a 2% elimination rate. Please refer to the last elimination system in Section 7 for the elimination method. It is also the robot that conducts the final inspection.

7. Horse

Managed more than 50,000 group members, regardless of the number of groups. At the same time, it has more than 1000 tiger points eligibility.

However, according to the activity level of the group member, transactions, and contributions to the community, there is a 5% elimination rate. Please refer to the last elimination system in Section 7 for the elimination method. It is also the robot that conducts the final inspection.

8. Sheep

Managed more than 500,000 group members, regardless of the number of groups. At the same time, it has more than 2000 rabbit points eligibility.

However, according to the activity level of the group member, transactions, and contributions to the community, there is a 10% elimination rate. At the same time, it has more than 2000 points of rabbit level.

Being able to manage 500,000 group members is already very valuable. The group host has the conditions to be a business, but it may be complained, which will affect the status of the chainless system. 500,000 as two levels; as a group owner, there are at least 50 direct subordinate groups and 2,500 indirect subordinate groups. An average group has 200 people. To serve 50 direct reports.

3.5.4 Mentor level

The community and community teachers, divided into four levels, respectively, are 9 monkey, 10 chicken, 11 dog, and 12 pig. Tutors are divided into two categories.

Community mentor is an experts in various fields. The mentor has at least dragon-level qualifications. The community mentor proposes and recommends improvement plans. Community mentors finally recommend all the solutions offered by group members.

An excellent group host can hold community mentors， But there are requirements to reach the level of mentors. Mentors are equivalent to KOL or KOC, with four levels.

Temporary mentor: It is the representative of product recommendation. Endorsement by a community mentor, responsible for explaining recommended products in the community. If there is a problem with the product, there are inaccuracies, and the community mentor will be jointly and severally responsible. The group host, who has not yet reached a community mentor, serves as a temporary mentor. Temporary mentors do not participate in contribution distribution.

The demotion and punishment of the mentor are proposed by the core team and approved by the community. It is different from the group host. The group is a private domain and has a small scope of influence. The mentor is in the public domain. The core team represents the community’s overall interests and is in the perspective of safeguarding the community’s overall interests.

Mentors can also be group hosts; the community is not limited, and you will be eligible if you reach the level.

9. Monkey

With 1 million fans, dragon-level qualification.1% elimination rate. Please refer to the last elimination system in Section 7 for the elimination method. It is also the robot that conducts the final inspection.

10. Chicken

With 5 million fans, dragon-level qualification. 2% elimination rate.

11. Dog

With 10 million fans, dragon-level qualification. 5% elimination rate.

12. Pig

There are 20 million fans, dragon-level qualification. 10% elimination rate.

3.5.5 Core layer

The core layer is the operation team, which is responsible for developing the entire chainless system. The team takes 1-3% of the total Profit of the platform. Only when the chainless system develops will team interests be the greatest. They have the power to formulate development policies. The parts of the community powers in Chapters 2 and 3 that are not clearly defined are their powers, including the right to supervise and dispose of illegal activities in the community, such as the handling of reports, such as the identification method of dead-heart fans, etc. The core team also has different identities. Every step is like a community member. A basic salary is internally allocated, initially paid by the Project initiator, and later paid by chainless system from 1-3%.

The community core team is subject to a three-party assessment, community group host assessment, mentor level assessment, and the chainless system core team HR assessment. Community assessment accounts for 50% of the power. The core team of the chainless system begins with the company mechanism.

The technical development of the core layer is outsourced to other technical teams. In the early days, the technical fee was paid by the ecological fund of the chainless system. The core team has technical, legal, community operations, and chainless product experts. Technical and product experts are responsible for solving application problems and refining solutions. Community operation experts themselves should have the ability to mentor. The upgrade assessment of technical and product experts depends on the approval of their solutions. The proposal is not necessarily theirs, but they must propose the final improvement plan. The standard is whether the quality of the assessment plan can benefit the chainless system.

Technical experts, product experts, and mentors must have unique and irreplaceable value when they enter the core layer and sign contracts.

3.6 Examples of Benefit Distribution

Income distribution varies widely, and there is no uniform template. This article illustrates the general framework of income distribution through examples.

The principle is that unrelated people have no interests. But the system is composed of all participants; absolutely irrelevant items do not have. From the perspective of lying down earning, making currency holdings a lying down earning behavior is the fundamental driving force for the continuous growth of the system. Lie-down earning means that the growth cycle of the system grows in tandem with the chainless coins, and the coins are guaranteed dividends. It is a balance of long-term and short-term interests. All distributions of benefits below reflect.

3.6.1. Financial Management projects

Let’s take an insurance company as an example. Insurance is a financial item and a business that manages more than one million “employees” and is the most comparable. The flow of grassroots insurers is vast. Because new insurers are unpaid, there are many types of insurance, and some insurance programs can pay up to 30% of the insurance amount to the insurer. Generally speaking, projects with long-term returns, such as wealth management projects, do not have such a high initial benefit, but giving 10% of the insurance amount in the first year is the usual way to motivate grassroots insurers, including the upline benefit for the insurance agent, the total is 15-20%. This part of the money takes about 4 years for the insurance company to earn it back. You can only get 80% of the money if you redeem that year. The insurance company wants the insurer’s connections and the insurer’s explanation. Newly recruited insurers have new connections. Although the number of eliminations is large, the connections remain. The insurer’s connections and credibility, as well as his business level, determine his grades. Connections are the ability of the group host, and explanation is the mentor’s ability. It is difficult for grassroots insurers to have this ability without long-term training, resulting in a high turnover rate. Insurance companies do not advertise and rely on this churn rate to screen out suitable insurers. Credibility is an enterprise’s capability and an insurance company’s stable investment capability. Insurance companies only need to make a brand name.

As a chainless community, it is a good channel, and the cooperation of community mentors and temporary mentors (insurance experts) may replace the first function of the insurer: the function of explaining. It is a public class. Finish the public course, is it possible to form a group? Can. However, if a group member buys insurance, group host A who pulls him into the chainless community for the first time, will share the benefits in this order because the connections are host A. An enterprise must have rules for a long time. An insurance company’s internal superior and subordinate relationship system ensures the system does not collapse. The second function of an insurer: does a group host replace connections. The group host should be more credible than the insurer’s and group host’s trust. In this way, the function of the grassroots insurer does not exist. Generally speaking, there is a renewal fee for insurance, and the insurer is still useful. From the second year’s renewal to the end, the insurer still has a small income of about 2%. Currently, the insurer’s role is to collect money, etc. Is the renewal commission added when the insurance commission distribution goes upline? I don’t know; at least 1% of the commission is on the insurer’s upline.

The above is the distribution system of insurance. The chainless community requires 15% of the initial fee to connect with an insurance company. The group host completes the subsequent renewal, which has nothing to do with the community mentor. Community mentors will be in big trouble if this insurance is a scam. Insured applicants can ask temporary tutors if they have any questions. Temporary tutors can form their group, or others can be the group host, called group B and service groups.

The allocation is like this. 7% of the 15% is directly given to the policyholder; that is, the policyholder is 7% cheaper than going now to the insurance company, the two group host get 4%, the group host A, who has a relationship, receives 2%, and the group host B who works gets 2%. Mentors take 2%. Another 2% is the Profit of the chainless system. All token holders share the profits proportionally. The insurance company gives 2% of the renewal period, and the chainless community only needs 1%, which benefits the insurance company. Group host B gets 0.7%, and the chainless system gets 0.3%. Group host B is responsible for after-sales service. Other people may jump to similar groups if the service is not good. Why does group host B get 0.7%? He wants after-sales service and invites tutors to provide services, maybe paying a fee.

It can be seen that after the first level is cut, the service is more professional, the trust is better, and the entire insurance industry has changed. However, if the grassroots insurer divides 7% to the policyholder, living will be challenging unless he is a part-timer.

There are many financial products, and the basic principles are the same. The principle is to cut off redundant levels.

3.6.2 Divide advertising fees recommend APP for user

This type of APP is, first and foremost, a product of the chainless ecosystem; it is connected to a chainless wallet.

There are two types of APPs, one is a mature product, and the other is a new product.

Mature product:

It is a mature product that acquires customers through a chainless system. When the user registers, according to the customer acquisition, the chainless system will be charged a customer acquisition fee, financial customers are more expensive, and other systems are cheaper. The entire fee is allocated in the ratio of 50% to the registered user, 15% to the user’s direct group host, 20% to the mentor, and 15% to the chainless system. The proportion of the relevant parties is similar to the above examples of insurance.

New product:

There must be a small group verification; the first group verification of 100 people, no problem, then 500 people can enter the community. The acquisition fee allocation ratio is 10% for group hosts, 60% for experimenters, 15% for mentors, and 15% for chainless systems. New products are mainly driven by the community, which is equivalent to helping the product succeed, obviously not purely for the benefit of customer acquisition. All early participants have early dividends according to the cryptocurrency rules; how to do it depends on practice.

3.6.3 Agent product sales

Generally, it does not act as an agent for the sales of physical products because the chainless system is a financial feature, and products unrelated to finance are not the agent in principle. However, the Family Cloud is hardware and a supporting product of the chainless system, which is sold as an agent. That is the agent sales of peripheral financial products.

3.6.4 Example of agency benefit distribution

Agent Home Cloud Hardware：15% agency fee, distribution ratio. 8% of buyers, 2% of group A hosts, 2% of mentors, and 2% of group B owners are mainly responsible for after-sales. 1% for chainless systems.

3.6.5 A discount agent for coins

Large transactions affect the stock price. Generally, significant shareholders are willing to carry out large discount transactions in the market not to affect the stock price. It is also divided into two types:

Proxy the token associated with the chainless system and the token outside system.

1. Proxy for the token of the associated chainless system

Firstly, it’s bulk, plus 1.5% on top of the buyer’s discount. If the discount is 10%, the last seller’s selling price discount is 11.5%. 1.5% distribution: A group host shares 0.5%, the mentor receives 0.5%, and the chainless system receives 0.5%. There is no concept of Group B. There are other related persons whose distribution methods are not listed here.

2. The agency token outside the chainless system.

This coin must be recommended by the mentor who is responsible. Add 3% to the buyer’s discounted price. For example, if the discount is 10%, the last seller’s selling price discount is 13%. 3% distribution:

A group host shares 0.5%, a mentor receives 2%, and the chainless system receives 0.5%. There is no concept of Group B. There are other related persons whose distribution methods are not listed here. To increase the price so much is to limit the token outside system.

3.6.6 Profit from ecological support funds

In the early stage, contribute to the improvement and improvement of the ecological project recommendation test. When the purchase or the adoption of the ecological project is completed, another 5-10% will be rewarded to the community. Take the 10% reward, for example, 6% reward to the relevant personnel, which the project recommendation organizer will allocate. Referring to Bitcoin’s proposal, the organizers are all reputable technical experts, and the organizers of chainless projects are usually mentors, core team members, or group hosts. 4% is used for the overall distribution of the chainless system.

3.6.7 Other community-related projects

It is the most uncertain part of the system. The user community itself has traffic, and it has two characteristics of public domain and private domain. It is a perfect sales system. The group host and mentor can be the sales team of other companies, and the fee for the chainless user community is around 2%. Lower than any advertising and e-commerce system, it will cause revolutionary changes in the sales of non-physical products. Financial e-commerce, different from physical e-commerce, has not been conquered, and Web3 may destroy financial monopoly. Huge potential to be practiced. Chainless System focuses on financial e-commerce and innovation, and it is our principle to be a franchise store, not a department store.

Product sales, advertising fees, and after-sales services can be 10-30% of the price. This part of the cost can avoid advertising waste through group hosts and mentors.

Unlike physical products, financial products cannot be understood without sufficient explanation. The above examples illustrate the distribution of interests among members of the chainless community. The benefits of each financial product are different, but the point of view of the distribution by contribution remains the same. The group host has no salary, and the mentor has no salary. Their contribution makes the products more secure, and the products are cheaper. The core of de-intermediation is to remove useless nodes. Two are reserved for valid nodes, and neither is a chain relationship. Therefore, the system and interests are transparent, Just like buying a ticket on a bus without bargaining. High-quality service and trust relationship, the structural design of the chainless community compensate for the risks caused by the lack of experience and relationship of “leek.”

3.7 The last elimination system

The last elimination refers to the number of people who exceed the final elimination rate to be promoted. Assuming an elimination rate of 1%, it was originally 100 people, then 5 people exceeded the number of fans of the original last person, and the last person was 1%. the original 100th elimination. Then the new 5 people were promoted a total of 104 people. And the indicator of the new last place is the new standard. Such an algorithm is unlimited, but the bottom line is getting higher and higher. The mentor and management levels are eligible for the last elimination. Elimination is the need for competition; the higher the position, the more intense the competition.

3.8 summary

The above five layers constitute the user community system of the chainless system. By holding coins and participating in the community, users gain more interests and voices than Web2. The decision-making power of the core layer will move towards community autonomy as the project matures.

A group must have a good group host and enough active people for the group to be attractive. Groups must have characteristics, and the same is true of communities. Chainless communities have financial features. Mentors are equivalent to KOL, facing the public domain, and have similar effects to Twitter; Group hosts are oriented to private domains and have similar effects to WeChat. The group host requires relationship ability, and the KOL requires professional ability. Facebook and Little Red Book are examples of Internet web2 that combine public and private domains. They are department stores, and we are a franchise store that combines public and private domains. The abilities required by the KOL and the group host are different. A good KOL may not be a good group host. This combination is based on their strengths. None of the Web2 projects do this. In the current web2 system, the interests are inclined to a few people. Through the arrangement of public and private domains of chainless communities, we hope to be fair to the interests of the silent majority. It is a social issue that cannot be designed but relies on community practice, as is the case with the excellent practice of Bitcoin.

Clicks do not calculate the advertising behavior of financial products in the chainless community. Still, it is finally realized by the introduction and promotion of the mentor, and the deduction of the turnover realizes the advertising fee. The mentor checks the advantages of its brand and products.

The profit distribution of the chainless community entirely considers the difficulty of “leeks” being bullied, and the profits of each link are visible. For the products recommended by the mentor, they must buy them.

The chainless system adopts the trial pool method for new financial products, starting from a small group and a group willing to take risks. The experimental period does not exceed 600 (100+500) people, and the recommended method is the same as the current YouTube intelligent recommendation principle. Customers willing to take risks are compensated.

The assessment indicators of the chainless community are all targeted. The mentor assessment is the number of followers, active followers, and comments for the last elimination.

For the group host, the last elimination is carried out by assessing the number of group members and active group members and the group’s activity.

The assessment of a contributor is closely linked to his contribution.

This chapter does not deal with the detailed rules for impeaching but gives this power to the core layer because we don’t know what will happen. It needs to be continuously improved in practice, and only after repeated repetitions can a perfect rule be formed. For example, is there a reward for impeaching? It may be more reasonable from the point of view of recovering losses. Another example is that there are no account restrictions. The chainless system will not limit user accounts alone. Instead, there is a multi-signature smart contract that restricts accounts. Under what conditions are applicable, and what details must be decided by the community at the beginning, not by the core team. The chainless community’s core team protects the chainless system’s security but never violates any private property.

Community co-governance, profits for contributors, and transparency of profits are the revolution of production relations started by Bitcoin and carried forward in the chainless system. Cryptocurrency has made many technological attempts but is weaker in incentives and governance and is inapplicable to Web3. Therefore, the actual application of cryptocurrency, like web2, has not been broken through. This white paper distinguishes between user communities and eco-communities using direct incentives and indirect methods to innovatively design incentive schemes for user communities that will enable real Web3 financial applications to generate alternatives to web2 finance. The ideas of incentive and governance in this white paper apply to the financial field and hopefully become a new idea and method to promote the development of Web3.

Because it is an attempt and exploration, the plan will be upgraded when implemented, and the specific upgrade plan will be discussed in the community.

Chapter 4 Composition and Development Methods of Project Personnel

This chapter includes the Composition of the Foundation and Advisory Board. Introduction to the project developer. Staff quota and operation mode of the core team. The most significant feature is implementing a minimalist thought, trying to meet the de facto standards shown by Bitcoin. Since the project is more complex than Bitcoin, it still looks ponderous.

4.1 Composition and tasks of the Web3 Development Foundation

The Foundation is a non-profit organization. In cryptocurrency, many project foundations replace the company to operate the project. Chainless Foundation is a non-profit organization that does not participate in the operation of Chainless.

The first mission of the Foundation: recommend and evaluate outstanding technical personnel. Purpose drives the development of the project.

The second mission of the Foundation: sponsor web3’s non-profit projects. The purpose is to promote the development of new industries.

Blockchain protocols all require coin issuance, different from the Internet’s basic protocols that are free and seriously hinder the development of new industries. There are many essential and unprofitable projects known as “public land.” The “public land” is important, but the profit model is unclear or absent. This type of project is the goal of foundation sponsorship.

After the project is applied for, the secretariat reviews it, and the foundation members recommend and vote for approval.

4.1.1 Funding Sources of the Foundation

If the sponsored project can be industrialized, it will return 2% of the profits to the Foundation. The Foundation of such projects does not hold shares and is not the primary source of funding for the Foundation.

The annual profit of the chainless system is 1% to sponsor the Foundation as a permanent source of profit for the Foundation.

Donations from all walks of life are accepted, either publicly or anonymously.

4.1.2 Personnel Composition of the Foundation

A new industry must have public land. There must be great contributors, just as the TCP/IP protocol contributed to the Internet. Unfortunately, due to the limited number of places in the Foundation, many people can’t join the Foundation. For contributors to the public land, the Foundation proposes award quotas and funds every year based on the budget to reward and sponsor contributors to the public land.

The Foundation consists of 9 members, all pioneers of new industries.

Temporary vacancy.

The Foundation holds 1% of the total number of chainless coins issued, a total of 20 million, of which the top four are 2.5 million each. The following 4 members are 1 million each. The remaining part is operated independently by the Foundation, which is used to sponsor projects on public land.

The Foundation has an annual report every year.

4.2 Composition and Tasks of the Web3 Development Advisory Board

Consists of 3 people.

Temporary vacancy.

2 members hold 2 million coins each.

Staff: hold 2 million coins

Tasks of the Advisory Board:

Supervise and coordinate the compliance and legality of the project, and play a role in guaranteeing the project’s sustainable development.

It will play a role in promoting the strategic development and cooperation of the chainless system.

Solve the complex problems in the development of web3.

4.3 Composition and Incentive of the core team

4.3.1 Product and Programmer Staff

1. Product Design:

Mr. Zhu Weisha

CV and job description

He graduated from the Department of Automatic Control at Beijing University of Technology. Resigned from the Institute of Industrial Economics of the Chinese Academy of Social Sciences in 1991. Founded Yuxing Company and was listed in the Hong Kong Growth Enterprise Market in 2000. Sold the company in 2015 and participated in repurchasing it in 2019. Since then, he has been a major shareholder of Yuxing Technology and served as a consultant. His characteristics are rigorous scholarship, in-depth research, and an understanding of product design. In 2017, he began to study cryptocurrency. The writing of the white paper on the chainless system is based on his years of learning, understanding, research results, and product skills. He hopes to promote the healthy development of Web3 through hard work.

2. POP Algorithm

Mr. Lu Tiegeng

CV and job description

Cryptocurrency Achievements:

In 2013, he began participating in research and related investment activities on the commercial application environment of Bitcoin and digital currencies. The POP algorithm for token distribution based on the number of people was designed and implemented for the first time. POW is an algorithm based on time, POS is an algorithm based on equity, and POP (Poof of People) is based on heads. This algorithm is universal. The number of people issuing coins on the chainless platform and the DW20 standard currency differ. The structure of the formula is the same; only the parameters are different. The POP algorithm is a prediction algorithm based on the natural growth model of the number of people.

CV:

He graduated from the Department of Mathematics of Heilongjiang University in 1982 with a major in computational mathematics. After graduation, he worked in the Computer and Information Center of the Bureau of Statistics for a long time. He presided over and participated in the research on China’s national production statistical indicator system and the design of population development and elderly population prediction models.

Joined Yuxing Technology Investment Group in 1999 and served as general manager of sales, director of future development, and vice president of investment.

3. Chainless Project

Team leader Brian graduated from Hong Kong Polytechnic University with a master’s degree in engineering business management in 2014. He quickly devoted himself to the emerging field of blockchain technology. His career spans two major fields: financial investment and technological innovation.

In 2018, he began to delve into the blockchain industry. He participated in the mining operations of mainstream cryptocurrencies such as Bitcoin, Ethereum, and Filecoin. During this period, he successfully managed a mining machine project worth hundreds of millions of yuan, optimized mining strategies, achieved significant revenue growth, and realized the first pot of gold in his life.

Then, he turned to blockchain research and development. He formed and led an efficient development team, provided technical support for multiple projects, and had extensive technical contacts in the industry.

As an innovator in the blockchain field, he has accumulated rich experience in financial technology, cryptocurrency, and blockchain project management.

In June 2023, he was entrusted to form a chainless development team and launched the 1.0 version at the end of 2023.

He has an absolute trusting relationship with Mr. Zhu’s core partners and has gained Zhu’s trust through hard work.

4. Community Project

Simon, the team leader, graduated from Beijing Normal University with a major in international trade. In 2007, he joined CICC in Hong Kong and engaged in financial management, accumulating rich industry experience. In 2009, he served as CEO of Beijing Kewanjia Information Technology Co., Ltd. and successfully led the company’s development. In 2014, he was responsible for research and development at Beijing 7890 Technology Information Co., Ltd., focusing on the overseas Internet advertising market and overseas application research and development projects of multiple APPs. They have expanded our business network in the international market. They are currently responsible for developing the Simitalk community software. They are committed to the in-depth integration of innovation and technology applications.

In September 2023, they accepted the task of developing general community software. In January 2024, the product prototype was launched and has been iterating ever since. He hopes to create a world-leading general community software.

In 2015, They accepted Mr. Zhu’s investment and continuous support, and he had a trusting relationship.

5. Security team

Team leader Sanbo graduated from Yunnan University and started his career at Huawei Shenzhen HiSilicon Semiconductor Company. He served as a senior software engineer in 2011. 2013, he joined the China Mobile Communications Research Institute as an architect. He promoted the implementation of many cutting-edge technologies. In 2015, he became a senior engineer at Alibaba Umeng+. He was deeply involved in the innovative application of big data and Internet technologies. In 2018, he was the data leader of Analysys Limited, responsible for data collection, cleaning, and data security departments of multiple product lines. He is currently responsible for the data security team of the chainless project and is committed to big data analysis and the development of innovative data security solutions.

In March 2024, Sanbo joined the chainless team through a friend’s introduction and quickly gained Mr. Zhu’s trust.

4.3.2 Product target

In short, together with our ecological community partners, we will jointly build a brand-new financial platform as the underlying platform of distributed finance and, at the same time, forge an efficient and reliable distributed system development tool.

4.3.3 Composition and vision of the core team

4.3.3.1 The status quo of the cryptocurrency core team

Bitcoin does not have the concept of a core team; it is basically a “maintenance-free” automatic system. This structure is compatible with its product goals. Ethereum has a core team, and its core team is the Foundation that operates the Ethereum ecological community. According to Ethereum’s 2021 annual report（27）, 48 million was spent in 2021. Only 5.1 million of these are general expenses to support the operation of the Ethereum Foundation team, including internal and external legal, accounting, and financial services fees; organization-wide subscription services, etc., such as data services, operational tools, and technical infrastructure. Internal operating expenses contain all expenses related to individual investments in the treasury management strategy and the salaries of all operational and administrative staff. One of the most puzzling is personal investment (individual investments), whether it is an investment in personal education or training. How many people can support this 5.1 million? According to the cost ratio 1:2, there are about 1.7 million labor costs, which does not include those who do not get paid; The number of unpaid staff members is unknown.

Looking at the Ethereum annual report has a lot of inspiration. They even entrust the distribution of sponsored project funds to the outsourcing team called the second layer, “Grants.” The third layer is called “Delegated Domain Allocators,” where the Ethereum Foundation works with external groups to jointly decide which teams within a specific scope to provide funds to. The Ethereum Foundation also provides funds directly to external groups, two ways to determine how to allocate funds efficiently. Defining the scope is very interesting and fosters several innovation points to be accurate. Delegating the responsibility to someone more experienced in the corresponding area is very informative. The core business is entrusted to the community team, so the Ethereum Foundation is small. According to Satoshi Nakamoto’s 7 principles of machine credit, there are trust links as few as possible, and point-to-point is the least. Funding releases and needs should be face-to-face.

Bitcoin doesn’t have a core team because it doesn’t need to. The main work of the core team of Ethereum is the distribution of funds. This distribution is necessary. They chose to cooperate with the community and refer to its opinions, which is correct. Ethereum represents the most advanced way of operating in the cryptocurrency field and is supported by members of the Ethereum community. The disadvantages are that the responsibilities and rights are unclear, the degree of transparency is insufficient, the efficiency is not high, and there is no transparent ecological community participation scheme.

4.3.3.2 Reasonable size of the core team

On May 2, 2022, Netflix had a market value of 88.6 billion. He is a user platform, and all content is organized by himself, with a team of 10,000 people. On the other hand, YouTube is an ecological and user platform with ecological management, managing 50 million hosts, an estimated market value of 400 billion, and less than 1,000 core personnel. The two are typical differences between web1.0 and web2.0.

Berkshire Hathaway’s 700 billion, no matter how the size of the assets under management changes, his core team has never grown significantly, and the number of people has always been around 30. It is the model of investment management; It has no ecology and user community management. The investment target is only assessed but not managed.

Judging by the Ethereum salary, the core team is less than 10 people, and the maximum is not more than 15. Its primary function is to maintain and develop ecological communities through fund allocation. The model is similar to Berkshire Hathaway. Ethereum has fewer people but is not doing well. The obvious sign is that the project is seriously delayed, the goal is constantly changing, and the problem is obvious. As long as the ecology is developing, Ethereum cannot be a Bitcoin model; it needs management and has more managed content than Buffett’s company. The core team of the chainless system refers to the model of Ethereum. We plan to explore and improve Ethereum’s governance ambiguities to make operations more efficient.

4.3.3.3 Chainless core team and Incentives

The fundamental goal of the core team: is to strengthen the bond function of the token, to link “users closely, employees and shareholders” to form a community of destiny. Promote the long-term upward trend of the currency price, making the project a lying-down earning project.

The core team has three tasks:

1. Organizing and operating the system ecosystem
2. Managing and running the ecological community
3. Managing and running the user community

For the ecological development of the chainless system and the operation of the ecological community, we refer to the experience of Ethereum and continue to develop in practice. The team is expected to be less than 15 people. Ethereum does not have a community of users. Operation of the user community, our target is also 15 people.

The chainless ecosystem includes the chainless ecological community. There is no strict distinction between the two in concept. However, it is the most significant project investment, accounting for 30% of the share.

The development of the chainless ecosystem is divided into four parts:

1. technical team,
2.  product team,
3.  operation coordination team
4.  ecological community operation team.

Becoming one of the most vital underlying ecosystems of Web3 is the goal of developing the chainless ecosystem.

The technical team responsible for system security, operation and maintenance, system expansion, and intelligent improvement is responsible for eco-community operations and all technology-related work. It is estimated that there are 3 people and a budget of 10 million coins. The person in charge is not determined.

Product team leader: Mr. Zhu Weisha Responsible for product identification and putting forward product improvement plans and product-related issues. Estimated that there are 3 people and 10 million coins. In addition, the association is responsible for the operation of the ecological community. Mr. Zhu no more takes coins.

Operations coordination team leader: Mr. Zhang Hai is responsible for the operation associated with being responsible for the operation of ecological communities and user communities, responsible for public relations, external speech, legal, personnel, administration, and other affairs, and is the general coordination team. Responsible for rapid revenue growth. Estimated that there are 4 people. 25 million coins.

Zhang Hai’s resume and job introduction.

Ecological Community operation team leader: None at this time. Responsible for the distribution of funds for the ecological community and promoting the rapid development of the ecological community. It is estimated that there are 5 people, 20 million coins.

The user community is irrelevant to the Ethereum Foundation. But the user community is always there. Therefore, managing the user community is necessary. Otherwise, it is not part of the decision-making body. Just a place for polls.

User Community team leader: None at this time. Responsible for the rapid growth of the user community, responsible for the rapid growth of revenue, aiming at user satisfaction and improving project cohesion. Estimated that there are 10-15 people. Set up 3 operation centers North America, Europe, and Asia center. The center has three managers for the host, mentors, after-sales service, and business. In addition, the general manager may concurrently serve as the business manager. Estimated that there are 55 million coins.

The user community owns 30% of the coins, and the core team members responsible for the user community do not occupy 30% of the coins inside.

The core team owns 6% of the total coins belonging to the ecological community share.

4.3.3.4 Formation of the core team

The core team applies the governance methods of Chapter 3.

The team is hired globally, rewards are linked to performance, and world-class technology and capabilities correspond to high returns.

Early the core team with a salary. Reference Ethereum salary is not high.

The core team oversees organization and coordination, business outsourcing, and management innovation.

The team is formed in the same way as Ethereum. We will meet friends worldwide through interaction and find similar people with consensus. In the private testing phase of the project, we will start to find strategic investors and core team members with similar interests and choose the most suitable long-term strategic investors and core team members.

4.3.3.5 The relationship between the core team and the company

Satoshi Nakamoto created a new production relationship with Bitcoin as a link, integrating computing power, programmer, and users, and its value is the “Watt steam engine” of the information age; the development of the community breaks through the traditional boundaries of the company, requires new forms of social organization to fit new production relationship.

The Ethereum Foundation still has legal personnel and other personnel; The chainless system also has more user communities. When users have problems in the blockchain, they rely on community members to solve each other. We evaluate group hosts and distribute long-term dividends according to their performance so that they can serve the group members. However, for the problems the group host cannot solve, someone still needs to study policies and improve products to solve the problem. Only when someone is ultimately responsible can the whole logic be completed. Who is ultimately responsible for the operation of the chainless system? From the perspective of the Ethereum Foundation, no corporate equity structure is now commonly called the core team.

The operating structure comprises a core team with profitable income and investment rights like Buffett, but without equity and control rights, and exercising ecological management power through influence. This structure is not a company in the modern sense because the complete form of a modern company does not exist. Nor can it be regulated by the current company law.

The chainless core team also has no equity, no control rights, only the right to operate, and is ultimately responsible for the operation of the chainless system. This operating right should not exceed the existing practice of Ethereum, and every innovation must be careful. The ideal state is that the core team is getting smaller and smaller. This kind of community decision-making, organized and operated by the core team, is similar to that of an elected government, but the scope is different. Here, it is only the management and operation of the community.

We have one more project Initiator than Ethereum, which is quite Satoshi Nakamoto. The Ethereum Foundation is equivalent to the Bitcoin community. The project Initiator does not participate in daily management but assumes the cornerstone responsibility for project development. Satoshi Nakamoto has taken this responsibility to this day. The project Initiator plays the role of checks and balances, and we do not see such checks and balances in Ethereum. A power without checks and balances will eventually do evil, which is the risk for Ethereum. The community, the team, and the project Initiator are both a community of interests and a relationship of checks and balances. As creators, Mr. Zhu Weisha, Mr. Li Bing ,Mr. Zhang Hai and other personnel representing the project side will gradually withdraw from the core team. The community elects successors. The highest ideal is that the project runs like Bitcoin automatically. Satoshi Nakamoto left in two years, our system is more complicated than his, but the 3-6 years goal is suitable. Can not leave indicates the failure of the core team. Suppose the core team uses too many people, which will fail. Compared with YouTube, less than 100 people show the structural competitiveness of Web3. There is an automatic mechanism in the market, and the purpose of management is to make the automatic tool smoother rather than inhibit the development of the market mechanism. A small government and a large society require automated operations, and manual intervention in operations is to assess the results of automated operations and make improvements based on the results.

How should a community beyond the company operate? YouTube is the best community project used in the Internet field, with 50 million hosts and 2 billion users. Management is entirely Indicatorization. She is our role model for the management of the community. For cryptocurrency projects, the automation of the ecological community is currently DAO, but it is not practical yet, and the allocation of funds in Ethereum does not use DAO. Is it possible to allocate funds automatically? We need to design quantitative indicators to allocate funds for chainless platforms. For example, we pay them for other project apps for the chainless system to attract traffic. This indicator can be quantified. The basic operation smart contract of the ecological community is not enough, and artificial intelligence is needed. There is no established model yet, and further innovation is required.

For the incentives of the Web3 ecological community, no mature plan can be used for reference and improvement. Due to the particularity of issuing coins, the ecological team and the project ecology are closely linked, which is different from the Web2 project. How to make good use of this feature must be explored and verified in practice. One thing is sure; we must lock the distribution of funds through smart contracts to achieve the goal of automatic distribution.

If you look at it from the company’s perspective, you will question the team structure. If one person cannot summarize all the information, it will cause omission and inconsistency, resulting in misjudgment. If you use a secretary, use a robot secretary. One person does heirloom works; others can make comments to modify and supplement them. We want to make the best model. The more people in a system, the higher the uncertainty and The more elevated the communication cost, not consistent with the Satoshi Nakamoto machine trust.

Projects have a development and a mature period, and the corresponding strategies differ. The community is the practice of democracy, and the group host will enable delegated voting. As long as the group host is sufficiently dispersed, the vote will reflect the true intention of the community. The shareholders meeting of listed companies is held once a year. Small shareholders lose their right to speak to the company, and the form of community is beyond the company’s decision-making mechanism. Nevertheless, the effective management mechanism of the community has enlightening significance for the effective management of society in the future.

In short, the community transcends the boundaries of the company and the organizational structure of the company. There is a separation of equity and management rights in traditional companies. The community is “equity,” and the control, management, and usage rights are concentrated together. Users are shareholders and employees, and operators are supervised in real-time. The meaning of this management right is very different from that of the company. YouTube does not care about the host, and the host does not enjoy the equity interests of YouTube. The chainless system core team exercises management over the community, equivalent to YouTube’s control of the host, and is entrusted by the host to manage the project. This delegation is equal to a representative; a community vote makes decisions; how much legal responsibility does a member of parliament have?

In the future, the core team will manage the community by adopting the idea of Satoshi Nakamoto and the method of YouTube, intelligent management based on indicators. Market competition is its fundamental mechanism, representing the most advanced community management. Web3 community management should constantly improve the level of intelligence. We will realize the automation of community management by releasing relevant robot management software tasks.

4.4 summary

Since Web3 is a very new field, the core team and company relationship section contains explanations to make it easy for everyone to understand the meaning of the core team.

The cryptocurrency space has the concept of unowned and owned communities. An ownerless community is an ideal state. Its checks and balances are reflected between the mining circles, the coin circles, and the core programmers’ circles, reflecting the high degree of system automation. A fully automated system community is not required. Who has the right to improve a system that cannot be fully automated? The participants in the system have rights. The community has the ultimate power over a system that depends on it. The core team is equivalent to property management and is a management organization serving the community.

The core team can easily be the actual controller in the owner community. Without checks and balances, expanding its power as a trustee is easy. The lack of checks and balances shown by Ethereum, in the chainless system, forms a check and balance force through the project initiators.

The success of Web3 depends on two mechanisms:

1. Utilize the application of artificial intelligence to reduce the entire operating cost and automate the distribution of benefits.

2. Through the community’s market competition mechanism and currency issuance mechanism, talents and applicable projects are selected worldwide.

With intelligence and community autonomy, the Composition of the core team will be small. As a result, the project generates huge distributable benefits, making it possible for participants to lying-earn money. The quality of a Web3 project can be judged by the size of the core team and the level of community operation. The smaller the core team, the better, and the bigger the community, the better.

The complete withdrawal of Genesis members marks the Formation of community autonomy, and the project initiators have always played the cornerstone role.

Appendix White paper citation

(1)  https://uniswap.org/

(2)  https://github.com/Uniswap

(3) https://github.com/aave/aave-protocol/blob/master/docs/Aave_Protocol_Whitepaper_v1_0.pdf

(4) 中国专利申请号：202210046337.0基于点对点的数据处理方法、系统、计算设备及存储介质。

(5) 技术黄皮书 用加密货币技术实现无链平台的特点无链团队 执笔Brain 2024年9月15日

(6) https://ethereum.foundation/report-2022-04.pdf