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HYBRID DEFI 2.0 BLOCKCHAIN PROTOCOLS FOR GLOBAL FINANCE

DUCATO HQ Limited

Contents

0. Disclaimer 1. Abstract 2. Executive Summary 3. Project Background 4. Market Overview 5. Pain Points 6. Business Model & Logic 7. Ecosystem 8. Case Study 9. Roadmap 10. Token & Fund

11. Team

02

Contents

0. Disclaimer

03

0. Disclaimer

The following applies to anyone who reads the DUCATO WHITEPAPER(hereinafter referred as the

‚Whitepaper‛). This Whitepaper is provided by DUCATO HQ Limited (hereinafter referred as ‚DUCATO‛) on

an ‚as is‛ and ‚as available‛ basis, and at any time at its sole discretion, and does not guarantee that any

content in this Whitepaper will remain unchanged until the future.

If there is any doubt about the content of this white paper, you should consult with an accountant, attorney,

or other specialists before purchasing.

0. Disclaimer

Please, read the following content carefully before participating in the DUCATO PROTOCOL ICO.

Disclaimer

04

The White Paper is written to provide information on the DUCATO PROTOCOL project which DUCATO intends to

launch, and it is descriptive and not legally binding. Therefore, any content in the Whitepaper should not be

considered as an invitation or an incentive to attract participation in any investment.

1)

05

0. Disclaimer

DUCATO does not provide investment or financial advice, and this Whitepaper does not constitute any relations

between the buyer and the seller. The statements and information contained herein are not about the present but

the future prediction. Please be informed that the statements and information based on the future forecasts in this

Whitepaper are uncertain as including known and unknown risks, and the actual outcome may differ from the

one predicted by participants based on the statements and information herein, or the one that this Whitepaper

implies and presents.

2)

To the maximum extent permitted by applicable law, DUCATO itself and any director, agent, employee,

distribution partner and any representative of DUCATO is unconditionally waived for claims of all and any direct,

indirect, incidental, punitive, or consequential damages as following:

(1) the accuracy and completeness of any contracts according to the Whitepaper;

(2) any error or omission of the Whitepaper;

(3) inability to peruse the Whitepaper due to undefined causes;

(4) or other whether arising in contract, tort or otherwise, which may occur as a result of your use of(or inability to

use) this Whitepaper or from your use of (or failure to use) the information on this Whitepaper.

DUCATO shall not be liable for any loss or damage which may arise as a result of your use of(or inability to use)

this Whitepaper or from your use of (or failure to use) the information on this Whitepaper regardless of prior

notice being given or any predictable loss of:

(1) profit, revenue, debt and all other forms of monetary damages;

(2) Income, sales, capital loss, liability and other losses incurred during business transactions, business activities, and

operating profit-related activities;

(3) data loss or corruption;

(4) incidental or special damages;

(5) wasted or lost administrative time;

(6) whatever nature, direct, indirect, consequential, punitive, or other whether arising in contract, tort or otherwise

3)

The contents of the Whitepaper may change depending on the DUCATO PROTOCOL developing process, market

changes, technological advances, and changes in ICO or token regulations. However, DUCATO is not obligated to

inform or report to readers about events, platforms, plans, changes in estimates, or changes in tolerance in this

Whitepaper.

4)

This Whitepaper is aimed to provide the information, for reference only, of the business being contemplated by

DUCATO, not to offer any advice or recommendation on law, tax, finance, accounting, regulations, or others.

Please be aware that there may be possible financial risks during irregular periods as a result of the purchase and

sale of coins and tokens. Participants should seek appropriate counsel for their situations. Please consult

professional financial, investment, and tax advisers before making any investment in DUCATO PROTOCOL ICO. In

purchasing

5)

06

0. Disclaimer

and selling coins or tokens, participants shall make a decision, considering potential profits and other possible

disadvantages from such transactions after consultation with each expert in the law, tax, finance, accounting,

regulations, and others.

It is the sole responsibility of DUCATO PROTOCOL ICO purchasers and potential participants to check legal

dispositions such as income tax that may arise with regard to the acquisition and disposition of Ducato tokens,

and the possibility of foreign currency exchange. DUCATO highly encourages participants to find and understand

the obligations regarding disclosure.

6)

The publication and distribution of this Whitepaper are prohibited in countries where publication and distribution

of whitepapers are forbidden. The information contained in this Whitepaper has not been validated or approved

by any regulatory agency, and any action that violates the law is not valid for DUCATO. We do not guarantee that

the publication or distribution of this Whitepaper complies with all regulatory requirements of the country in

which it is issued.

7)

The given English Whitepaper is the only official source of information regarding the DUCATO PROTOCOL project

and the launch of DUCATO PROTOCOL. The information contained in the Whitepaper may be translated into

other languages or used to communicate with potential partners and project participants. As a result of the

translation of Whitepaper, some of the information contained in the Whitepaper may be missing, damaged, or

misrepresented. If there is a conflict between the translation and English version of the official Whitepaper,

contents of the English version of the official Whitepaper will prevail. However, this fact does not imply that

DUCATO, affiliate, and its directors, employees, or representatives are legally liable for the content of Whitepaper.

8)

DUCATO PROTOCOL Whitepaper is copyrighted. You may download or print individual sections of the

Whitepaper only for personal use or other proprietary notices. No part of this Whitepaper may be reproduced in

whole or in part, reproduced electronically or otherwise, or modified, linked, or used for public or commercial

purposes without the prior written consent of DUCATO.

9)

Risks

DUCATO is aware of various kinds of risks, including a loss of purchase price. No warranties, promises

and/or representations of any kind, expressed or implied, are given as to the nature, standard, accuracy or

otherwise of the information provided in this Whitepaper nor to the suitability or otherwise of the

information to your particular circumstances. DUCATO does not accept any responsibility or liability for the

accuracy, content, completeness, legality, or reliability of the information contained on this Whitepaper.

07

Blockchain Risk: Blockchain system congestion may cause transactions to be processed late or invalidate. In

particular, smart contracts responsible for issuing and distributing Ducato tokens are based on the technology

known as Etherium Blockchain. The Etherium protocol may have weaknesses and vulnerabilities, and also may

cause various bugs, including bugs where Ducato tokens are lost. Also, monetary damage may occur to DUCATO

and DUCATO PROTOCOL ICO participants due to those problems of the Etherium Blockchain.

1)

0. Disclaimer

Purchasers are deemed to have consented to the purchase and sale of a Ducato token to be aware of and

purchasing a Ducato token as is, without any warranties of any kind whatsoever.

KRWD INDICATED IN THIS WHITEPAPER HAS NOT BEEN ISSUED YET AND IS A TEMPORARILY PLAN ONLY.

THIS WHITEPAPER DOES NOT GUARANTEE THE ISSUANCE OF KRWD.

Transaction privacy leakage: Your personal information is required to distribute and control Ducato tokens in the

purchasers' electronic wallet. Ducato token stored in the wallet may be changed or lost due to an internal or

external factor such as attack from malicious code, software bugs, blockchain networks error, and more.

Transaction privacy leakage can facilitate the leakage of confidential information, theft of cryptographic keys and

therefore cause Ducato token leakage from the purchasers’ e-wallet.

2)

Security vulnerabilities: Like all other cryptocurrencies, Etherium blockchain faces its security flaws as hackers can

exploit these systems by ‘Double spending‘ or ’51% attack’. These vulnerabilities in Etherium blockchain thus may

lead hackers to attack DUCATO or DUCATO PROTOCOL and steal millions and billions of Ducato tokens in one go.

3)

E-Wallet compatibility risk: Participants must use an electronic wallet that is technically compatible with the Ducato

token to purchase or store a Ducato token. If a participant is using a different wallet, the participant may not be

able to access the purchased Ducato token.

4)

Force majeure: DUCATO PROTOCOL in now under development process, and DUCATO makes every attempt to

ensure to develop and maintain the DUCATO PROTOCOL as it is described on this Whitepaper. However, the

policy and regulatory framework around blockchain is in its infancy and therefore there is a risk that DUCATO

either failed to adhere to regulatory requirements for the specific use case and technology, or new laws or

regulation may conflict with current DUCATO PROTOCOL project functioning. DUCATO will be exempted from

any liability for damages and losses of value and/or liquidity of Ducato token subject to force majeure factors such

as changes in regulatory frames required licenses and taxation policies, the emergence of platforms or open

source that adversely affect the DUCATO or DUCATO PROTOCOL, the lack of market interest, or others.

5)

1. Abstract

08

01. Abstract

DeFi (Decentralized Finance) is one of new innovations based on decentralized distributed technology on

blockchain. DeFi minimizes financial risks including market risk, credit risk, and operational risk that lies in

the current financial system. It will ultimately revolutionize financial system by creating a new demand and

perspective. It does not rely on the traditional financial system where multiple intermediaries are present

for the process of credit evaluation, screening borrowers and so on. Instead, smart contracts are deployed

for transaction settlement enhancing transparency and credibility. In addition, the system that works for

providing financial services and the governance for decision-making become decentralized to mitigate

financial risks that users frequently face with current financial services.

Hybrid DeFi 2.0, New blockchain-powered finance service ; The creation of confident protocols.

Abstract

09

DeFi services encompasse a wide range of areas including lending, staking, depositing and derivatives

market being introduced by numerous global projects. To date, however most pojects have focused on

decentralization just in offering financial services disregarding other key features that sholud be considered

in tandem for complete decentralization.

For instance, there are projects solely committed to maximizing returns of participants of the network,

projects with simple implementation of a technology for decentralization, projects with user-hostile UI

(User Interface), projects that only provide low interests and meager returns and so on.

It is how the majority of projects have been developed so far. Even worse, a large number of projects are

struggling with low transaction volume except for a handful of successful ones. What matters for

decentralization is sharpening all relevant features to be perfectly decentralized, not to mention financial

services provided through smart contracts.

01. Abstract

Fair price data, reasonable settlement, KYC, an escrow, a reliable governance and more other innovations

need to be in place. Countless trial and error and thorough preparation for launching projects are required

to this end.

The team of DUCATO has been operating lending and depositing services for digital assets. With this

background, the team will realize an optimized blockchain technology, user-centric services, the increase of

network participants, reliable algorithm development and a decentralized governance to aim at building a

platform for credibility and profits of network participants.

Furthermore, a cryptocurrency (DUCATO token, KRWD) will be introduced to remove the obstacle of

different financial infrastructure across countries contributing to expanding the digital asset finance and

payment market. It will also move toward building gradual decentralized ecosystem called, Hybrid DeFi 2.0.

01. Abstract

10

2. Executive Summary

11


All new service that combines user-friendly CeFi with high liquidity and

decentralized reliable DeFi

12

Hybrid DeFi 2.0

A collateral-backed stable coin whose value is pegged to Korean won (KRW)

KRWD : Smarter Digital Currency

An optimized blockchain technology, user-centric services, reliable algorithm and

decentralized governance


DUCATO : DeFi Blockchain Protocols

3. Project Background

13


A new form of services in payment, deposit, lending, options, staking, etc. are continuously coming onto

the crypto finance market, and these financial services are categorized into CeFi (Centralized Finance) and

DeFi (Decentralized Finance) depending on the way of deliverying services. With CeFi, transaction records

are operated by a centralized system like the traditional financial services while DeFi, as a decentralized

system, is operated based on smart contracts without any intermediary and records transactions on

distributed blockchain network.


Crypto Finance & Payment

Project Background

14

There have been numerous attempts for popular digital assets including Bitcoin (BTC) to be used as

everyday currency. But it is still far-off because of large fluctuations of their value. To tackle this challenge,

various stable coins have been created in the digital asset market. In particular, stable coins issued for DeFi

projects are garnering attention from the digital asset industry and media.

Stable coins have been bringing the greatest number of changes and new opportunities after the digital

asset market experienced significant changes in 2017. For the success of stable coins, the network effect

should be created with a large number of additional participants joining the digital asset market. In order

to achieve this, optimized blockchain technology, a variety of services, faster transaction execution at

affordable fees, confidence and profits for network participants should be provided.


15

The DUCATO Protocol enhances stability and increases liquidity of the cryptocurrency market through a

stable collateral-backed cryptocurrency (KRWD) while avoiding financial threats posed by the price volatility

of digital assets. Like existing stable coins that are pegged to the USD, Euro, or assets in bank account,

KRWD is pegged to Korean won (KRW). With the protocol, KRWD can be used as a stable means of

transferring digital assets, and will be utilized as everyday currency for payment and other financial services.

DUCATO : DeFi Blockchain Protocols

The stable coin to be a game changer in the digital asset market

4. Market Overview

16

04. Market Overview

The digital asset loan market is evolving with projects including BlockFi, Delio, SALT, MakerDao and

Compaound who have introduced various financial services since the inception of the market in the second

half of 2017. SALT and Celsius joined the market with their own tokens while BlockFi brought lending

service into the market that is operated based on cryptocurrencies deposited like traditional banks instead

of issuing own tokens. At present, Delio is showing a strong performance in Korean digital asset market

using ‘Remote Collateral System’ which is directly linked to exchanges. MakerDao and Compaound are

operated in the form of DeFi to lend stable coin through smart contracts in security for ETH or other coins.

In addition to this, the number of new CeFi companies and DeFi projects are continuously on the rise.

04.Marker Overview

Current status of the digital asset loan market

Market Overview

17

<figure 1-1 Share of total value locked in Defi, Source The Block 2019>

It has been just three years since the cryptocurrency loan market was introduced. Today, CeFi is forming a

greater part in the market than DeFi. Figures below show the total amount of debt, active collateral, interest

generated and LTV in the cryptocurrency loan market in Q3 of 2019. Public and Private indicate DeFi and

CeFi respectively.

04.Marker Overview

CeFi Loan Market

18

< figure 1-2 The Crypto Credit Report Q3 2019, Source Graychain>

When measuring assets deposited for token service in CeFi projects by going through the other way

around CeFi, it turns out that Celsius has deposited more than 50,000 BTCs (which is equvalent to KW600

billion) and Nexo has issued $1 billion worth of tokens. NEXO also launched a NEXO crypto credit card. As

such, the number of CeFi lending is on the rise in various forms, and the size of asset value locked up is on

track to further grow.

The DeFi market is also rapidly expanding. As of 28th June 2020, $1.24 billion worth of collateral is locked

up on the Ethereum network. MakerDao has led the market until a recent date, but Compound is ahead of

MakerDao with the growth of total collateral value locked claiming 51% of market share. Compound is

followed by MakerDao, Have, InstaDApp and dYdX, and they are taking up more than 90% of market share.

04.Marker Overview

DeFi Loan Market

19

<figure 1-3 Total Value Locked in DeFi Lending, Source : DeFi Pulse 2020.06>

A decentralized exchange (DEX) is vital for establishing a DeFi system on a global scale. There have been a

lot of projects introduced to promote decentralized exchanges for people to sell and buy digital assets

without a centrialized authority. However those exchanges were less competitive in comparison to

centralized ones in terms of usablility, accessibility and liquidity. Despite that, decentralized exchanges are

actively taking place in the DeFi market with approximately $50 million worth of collateral locked up.

Notably, Uniswap is leading the market with a unique mechanism, which performs asset lock for creating a

liquidity pool. Balancer, Bancor, Loopring and Kyber have joined the market for the decentralized exchange

of stablecoins.

Decentralized Exchange

<figure 1-3 Total Value Locked in DeFi Lending, Source : DeFi Pulse 2020.06>

The size of global traditional financial market is much greater than that of the DeFi market. Still, billions of

people in developing countries are unbanked or underbanked as they have no or only limited access to the

current financial services. The DeFi market that provides banking services without banks will keep

expanding over the next 10 years raising far more than tens of billions of dollars in capital. As a market of

limitless potential, DeFi will grow to be a confident market as much as blockchain technology develops and

expands.

04.Marker Overview

Future Growth

20

5. Pain Point

21

05. Pain point

Although most stablecoins use ERC-20 standard tokens on the Ethereum network, the network has not yet

ready to be used for daily payments due to relatively low speed in processing transactions. In addion, the

rise of gas price when transaction traffic is jammed up presents another issue. In response to those

problems, many public blockchains are making greater efforts to provide a blockchain solution that allows

maximum transaction processing by specifying an optimum point between decentralization and security.

05. Pain Point

Slowdown in the Ethereum Network

Pain Point

22

Ethereum is primarily used for DeFi among other cryptocurrencies. Its market capitalization stands at about

$25 billion as of 28th June 2020 according to data from coinmarketcap.com. This means that the total

supply of the DeFi market reaches just about KW30 trillion, though the entire Ethereum would be locked up

as collateral. That is relatively small portion held in the global financial market. To overcome the challenge,

leaving a smart contract application technology aside, a technology that allows to collateralize

Limits of Ethereum-dependent Collateral Loan Market

various blockchain-based digital assets need to be deveoped. In addition, steps should be taken to expand

to other asset classes such as stocks or gold to tokenize them for being used as collateral.

05. Pain Point

23

DeFi does not ask users’ ID and rely on intermediaries. This is why collateral assets matter the most for DeFi.

A variety of DeFi protocols used in the current digital asset market are be of no avail without a collateral

asset. Although synthetic assets like DAI, whose value is pegged to the USD, can be utilized as a collateral

asset, another collateral asset need to be posted for synthetic assets for issuance. The amount of Total

Value Locked is used as an indicator that presents the sum of asset value deposited on smart contracts.

This in turn shows how big the DeFi market is. The current DeFi market size is inconsiderable even if the

entire ethereum, which is the biggest cryptocurreny in the market, is taken as collateral. Therefore, the issue

at hand is finding a solution to bring more digital assets into the market.

Limits of DeFi in Liquidity Supply

05. Pain Point

24

The primary service of DeFi is lending and deposit using Ethereum smart contracts, which has the second

largest market cap. And DeFi relies on collateral assets. With this background, we suggest ways of

expanding the market:

Limits of Scalability in DeFi

Bringing the number one cryptocurrency Bitcoin into the DeFi market whose market cap. reaches KW160 trillion, 1)

Tokenizing physical assets like gold, fiat, property, etc. to use as collateral. 2)

Regarding the first suggestion, Bitcoin does not use smart contracts.

The second one requires intermediaries and is only possible on the centralized system.

As such, market expansion of DeFi cannot be solved with DeFi alone, and the issue regarding collateral

asset expansion must be tackled.

05. Pain Point

25

While most DeFi projects focus more on penetration rate in the market, people, in particular, who are not

farmiliar with cryptocurrency, experience difficulties in understanding DApp and accessing to it. This is a

problem applicable not only to DeFi service but also to blockchain DApp in general. With convenient UI

mounted on the system, the DeFi market will see the rise of new users and this will contribute to expanding

the market and increasing liquidity after all.

User-hostile UI

Numerous DeFi platforms were hit hard by the COVID-19 pandemic in Februry 2020, primarily due to

sudden cryptocurrency market crash. In particular, one of DeFi leading projects, MakerDAO was a prime

example. At that time, the value of Ethereum dropped significantly and MakerDAO’s stablecoin DAI was

linked to it. So the Maker platform automatically liquidated ETH, which was deposited as collateral, but the

sudden influx of liquidation triggered the price of gas within the Ethereum network being soared and

liquidation system down. Simultaneously, the price of DAI was surged due to its short supply caused by

transaction delay (=network overload), as the platform users attempted at replacing ETH with stablecoin

DAI. What we can learn from the event described above is an alternative trading function should promptly

be activated in such adverse events, and in this case, a centralized clearing house can be a solution for

supporting exchanges between stablecoins.

Limits of Liquidation System in DeFi

6. Business Model & Logic

26

06. Business Model & Logoc

Business Model & Logic


27

DUCATO Protocol aims at building a platform for confidence and profits of network users by realizing

blockchain technology, user-centric service, increase in the number of network participants, reliable

algorithm development and decentralized governance. All of which will be optimized for lending and

depositing digital assets. Furthermore, DUCATO protocol provides cryptocurrencies (DUCATO token,

KRWD), which make it possible for cross-national interaction regardless of financial infrastructure,

contributes to the growth of digital asset finance and payment market, and ultimately helps to establish

gradual decentralized ecosystem called, Hybrid DeFi 2.0.

DUCATO Protocol


28

DUCATO Protocol enables anyone to leverage their digital assets as collateral to generate KRWD through

DUCATO’s unique smart contracts. These collateral assets deposited by a user can create the leverage

effect.

KRWD, a collateral asset-backed stable coin whose value is pegged against the Korean won (KRW).

Stable Coin - KRWD

KRWD is operated on a public Ehtereum blockchain. The entire KRWD in circulation under the protocol is

being secured by digital assets deposited on DUCATO and DUCATO’s smart contracts back and stablize the

value of KRWD. Once generated, KRWD can be freely sent to others and used as payments for goods and

services on DUCATO Protocol. Unlike other cryptocurrencies with high volitility, KRWD is stable with low

fluctuations in value.

The value of KRWD is pegged to KRW within the DUCATO ecosystem being fixed to 1 Won to 1 KRWD.

With an increasing number of KRWD users later, its value may change when being used on other platforms

such as DEX exchanges, Swap, Instant Trade or general exchanges. Having that said, the value of KRWD will

not fluctuate much. The process of generating and paying down KRWD on DUCATO Protocol is described

on the Figure 2-1;

< Figure 2-1 ; Ducato Protocols >

Once the user deposits digital assets into DUCATO Protocols, KRWD is automatically generated by

collaralizing those assets.


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1~2) Depositing and collateralizing

When the user wants to retrieve their digital assets (or collateral), they have to pay down the debt in KRWD.

The KRWD retrieved is automatically burned to make sure that the number of KRWD under circulation in

the Protocol is less than the number of KRWD generated in the process of collateralizing at the beginning.

3~4) Paying down and liquidation

Collateral guarantee of KRWD is activated through DUCATO Protocol’s smart contracts. As all transactions

are recorded on a public blockchain, users can transparently check the latest state of transactions. The

DUCATO Protocol realizes services by utilizing the early stage of Ethereum network. And Inter-Blockchin

technology will be adopted in phases to support a wide range of cryptocurrencies.

DUCATO Token is used by the user of the Protocol to pay for various fees.

KRWD is generated based on digital assets deposited on DUCATO Protocol by the user. When the user

wants to liquidate, they have to pay down the KRWD issued to them at the beginning, plus the Stability Fee.

With the KRWD and Stability Fee paid down, the user can freely retrieve their digital assets back. DUCATO

is planning to comprise the governance committee and community for transparent operation, and

‘DUCATO Token’ must be held for participaing in the governance.

The DUCATO Token holders have the right to join the voting process when decision making happens on

changes in the Protocol. It is designed to increase the demand as the Protocol ecosystem expands.

Protocols Token - DUCATO Protocol Token

Utility Token for Stablizing the Protocol and paying for fees

< Figure 2-2 : Where to Use Ducato Protocol Token >


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DUCATO Governance

The goal of DUCATO is building a financial protocol that gains confidence of all participants. The operation

authority will be distributed to the participants of DUCATO Protocol and in this way, we can phase in an

open protocol to be evolved into a whole new way of system.

Steps toward Complete Decentralized Financial Network

1) Token-Holders

They are participants acting for stable operation of the DUCATO system.

The composition of Token-Holders is as follows.

● DUCATO holder

People who have the right to participate in decision-making process by holding the token.

● DUCATO Committee

Specialized companies or non-profit organizations who participate in DUCATO Protocol.

●. DUCATO Maintenance Team

Monitoring and making proposals on a regular basis to find problems or issues to be improved in the

Protocol

DUCATO holder : Participating in the Governance is the right of DUCATO Token holders

It is developed to the governance community where DUCATO holders directly make proposals and

participate in the decision-making process on changes of the system or operational policy. Participating in

the Governance can be started with holding tokens. DUCATO Token is a cryptocurrency that allows token

holders to directly participate in the Governance and delegate their voting rights Anyone who is delegated

voting rights can join the Governance for contribution.

DUCATO Committee : Supported by diverse professional organizations to operate

the Governance stably

An organization comprised of varied and independent members needs to be established for operating and

promoting the stable token on a global scale. Companies, non-profit organizations, associations and

academic institutions, who have proved their competence in the digital asset market, are included. More

than one percent of the token must be held and more than two third of consent from the current members

should be acquired to be a member of the Committee.

DUCATO Maintenance Team

Votes are cast regarding proposals on Protocol-related problems, additional support for new digital assets,

changes about eligibility for collateral assets, modification in market interest rate model, liquidation ratio,

fees, etc. and the results of voting at the Governance are executed on the system by the team.


31

2) Decentralizing to the DUCATO Community from Centralized System in phases in Decision-Making Process

The process of decision-making on operating DUCAO’s Governance is simple seen as below.

< Figure 2-3 : DUCATO Governance Process>

Under the structure of this governance, anyone who holds more than 1% of DUCATO can make a new

proposal. Proposals can be about core factors on operating DUCATO Protocol such as regarding

supporting new cryptocurrency, changing interest rates, collateral setting ratio, and so on. The holders in

the community can then decide about the execution of the proposals submitted by directly casting a vote

or by delegating the right, and the outcome of the votting is securely implemented. All of the process goes

along on chains that are directly connected to the system through a voting mechanism.

A certain portion of governance tokens will be given to sharesholders, major team members and the

commission during the nascent stage of the company. Later, they can delegate their voting weight when

they see appropriate time. Tokens held by the current team of DUCATO will only be used for the constant

operation of the Protocol, not for participaing in voting.

3) Gradual Decentralization

DUCATO aims at a gradual decentralization to achieve the increase of the volume of KRWD in circulation

and vitalization of digital asset lending services. Stable business operation and expansion through

cooperation with actors within the DUCATO ecosystem are essential in early days. Decentralized services

are proceeded following the stages outlined below.

< Figure 2-4 : Ducato Gradual Decentralization Stage, (D: decentral, C: Central) >


32

Hybrid DeFi 2.0

DUCATO expands digital asset market by carrying out its business strategy of operating core services of

DUCATO’s ecosystem together with global CeFi lending service providers.

A all new service that combines user-friendly CeFi with high liquidity and decentralized reliable DeFi

< Figure 2-5 : Hybrid DeFi 2.0 : Combination of Ducato DeFi and CeFi service >

DUCATO provides services using its tokens and concludes strategic partnership with CeFi providers, whose

digital asset lending and deposit services are already available in the market. CeFi service providers afford a

variety of benefits to their users under this partnership. For example, they offer a discount on interest to

borrowers, who hold DUCATO tokens, or give away DUCATO tokens as a bonus when paying interest to a

user who deposited digital assets.

To enhance confidence on services, DUCATO provides a decentralized wallet and lending/deposit services

are offered through smart contracts. At last, all transactions take place OnChain. This will certainly make up

for the disadvantage of the current CeFi services. Our lending/deposit services interconnect with CeFi

operators to expose users to user-friendly UI in service provision instead of user-hostile UI, which is

prevalent in DeFi services. CeFi that has high liquidity and enhanced usability combimes with decentralized

reliable DeFi to provide all new service called, Hybrid DeFi 2.0.

7. Ecosystem

33

07. Ecosystem

Actors within the DUCATO ecosystem play different roles. The participants of DUCATO Protocol, which is

operated in the form of optimized model by putting centralized and decentralized system together,

comprise as follows.

07. Ecosystem

Ecosystem

34

< Figure 3-1 : Ducato Protocol Ecosystem >

The interface to maintain the DUCATO ecosystem while letting users use lending and deposit services is

provided.

Maintenance

(1) ROUNDROBIN

Providing services like trading DUCATO tokens and KRWD, collateral lending, depositing, and so on

07. Ecosystem

35

They are participants acting for stable operation of the DUCATO system.

The composition of Governor is as follow;

Governance

(1) DUCATO holder

People who have the right to participate decision-making process by holding the token.

(2) DUCATO Committee

Specialized companies or non-profit organizations who participate in DUCATO Protocol.

(3) DUCATO Team

Monitoring and making proposals on a regular basis to find problems or issues to be improved in the

Protocol.

General users of the DUCATO ecosystem

Users

(1) DUCATO holder

Cryptocurrency investors, people who support the DUCATO ecosystem to be maintained

(2) KRWD holder

People in need of cryptocurrency that keeps stable prices

(3) Depositor

People who generate KRWD after posting cryptocurrency as collateral on DUCATO

(4) Borrower

People who deposit their cryptocurrency as collateral on DUCATO and borrow other cryptocurrency

(2) ORACLES

Service that feeds market price of cryptocurrencies, collateralized Onchain

(3) STABILIZER

Agents that support price stability of KRWD

(4) DUCATO Dev Team

DUCATO Protocol system operation

07. Ecosystem

36

External players and services associated with the DUCATO ecosystem

Ecosystem Players

(1) Exchanges

Centralized global exchanges, interworking with DELIO services and DUCATO trading

(2) Defi & DEX

DeFi projects and decentralized exchanges. KRWD trading

(3) Wallet

Hardware wallet to store users’ private keys and service interworking

KRWD will serve as a digital currency, once its usage expands.

KRWD will widen the ecosystem through credit cards, PG service and DApp interworking and be used for

payment, remittance and so on.

Traditional Finance & Payment

DELIO, a CeFi service provider for lending and deposit digital assets, is a strategic partner for the DUCATO

ecosystem operating DUCATO’s core services. The share of its lending and deposit services for digital assets

stands the first in Korea at present and its services are available at Bithumb Exchange.

Strategic Partners

8. Case Study

37

08. Case Study

KRWD issued by DUCATO is a stable token that has a lower price volatility. As it is pegged at 1KRW, the

value is easily predictable. These allow KRWD to replace other cryptocurrencies for being used in a wide

range of financial services. DeFi 2.0-oriented DUCATO provides high liquidity by combining merits of CeFi

and DeFi, confidence and great speed through blockchain-based smart contracts, and security by being

decentralized. Accordingly, KRWD will have a wide application in various settings described as follows.

08. Case Study

Case Study

38

1. Financial Derivatives

Although KRWD is issued as collateral for cryptocurrency, it can also be used as collateral for other

cryptocurrency or a smart contract, or be utilized for automatic exchange, leverage, and so on.

2. Value Preservation

When the user cannot exchange their cryptocurrencies for legal tender due to a significant drop in its value

triggered by changes in the cryptocurrency market, they can exchange to KRWD to stably preserve the

value.

08. Case Study

39

3. Decentralized Exchange

In decentralized exchanges, it is not possible to exchange any cryptocurrency for legal tender, and they use

US dollar-pagged cryptocurrencies such as USDT, DAI, etc. Whereas digital assets can exchange for stable

cryptocurrencies whose value is pegged to Korean legal tender by using DUCATO’s KRWD. In addition,

transactions in current cryptocurrency exchanges can be simplified if they use KRWD as transaction key pair.

4. Leverage

Users can maximize rate of return by issuing KRWD after posting collateral and purchasing cryptocurrencies

repeatedly when the price of cryptocurrencies is expected to rise.

9. Roadmap

40

09. Roadmap

41

Project Start

Minimum Team Member Set-up

Validate and set business architecture

Whitepaper Planning process

2020 1Q

09. Roadmap

Roadmap

Seed Funding Completed

Partnership development

Protocol development

Whitepaper v0.8

2020 2Q

Ducato Protocol Token Publish

Primary listing on the exchange

Online community channel operation

2020 3Q

Ducato Protocol – Alpah Test

KRWD Publish Pre-Test

Deposited Service Launching (with Delio)

Secondary listing on the exchange

Token distribution

2020 4Q

Whitepaper v1.0

SWAP Platform Launching(with RoundRobin)

Third listing on the exchange

2021 1Q

Ducato Protocol Beta Test 2021 2Q

Ducato Protocol Beta Test

Ducato ORACLE Implementation

DeFi Lending Service Launching

2021 3Q

Hybrid DeFi 2.0 release

Ducato Governance Community Beta release

2021 4Q 2022

10. Token & Fund

42

10. Token & Fund

50,000,000 (50 million) Amount of Total Issuance

Token Velue

10. Token & Fund

Token & Fund

1.0 USD Token Price Per Unit

Token Allocation

DUCATO Protocol Token will be allocated as follows:

43

10. Token & Fund

44

Protocol Supply

38 percent of DUCATO tokens will be allocated to the DUCATO Protocols. They are supplied to the market

for lending/deposit service and for exchange with KRWD stable token in the protocols.

Token Sale 16 percent will be sold to raise fund for building and operating DUCATO project.

Founders & Team

7 percent will be allocated to founders and team members who show commitment and talents for the

success of our project. Distribution of tokens will be calculated depending on the level of contribution.

Early Contributors

5 percent will be distributed to Early Contributor who supports this project from the beginning. Distribution

of tokens will be calculated depending on the level of contribution.

Advisors

2 percent will be allocated to advisors who particularly support and promote our project. Distribution of

tokens will be calculated depending on the level of contribution.

Strategic Partners

For DUCATO project to advance into a global DeFi platform, collaboration with businesses in the various

sector from countless number of countries should be conducted. 15 percent will be allocated for our

Strategic Partners.

Marketing

Promoting DUCATO project will be done with a diversity of global marketing campaign. 5 percent will be

allocated for this purpose.

Reserves

12 percent is for corporate reserve. We will take care of management to ensure 5 to 10 percent of reserves

be kept.

10. Token & Fund

45

Token Distribution

Token distribution date is expected to be Q4 of 2020 (Until Further Notice.) All tokens will be transmitted

after the distribution date.

After fundraising is done, proceeds will be distributed and operated as follows. If we fail to fully realize the

goal set for fundraising, our plans for distribution will be rearranged by reflecting the most important and

high-priority tasks into project development.

Use of Proceeds

Revenues generated from DUCATO will be used for tech support, promotion, operation for company and

affiliated companies and financial management. Buyback will be, from time to time, conducted for

stabilizing the value of DUCATO Token.

Use of Platform Revenue

11. Team

46

11. Team

11. Team

Team

47

James Jung CEO&Co-Founder Co-founder and CEO of Ducato.

Name Position Description

David Lee CEO&Co-Founder Co-founder and CEO of Ducato.

The latest information about TEAM, ADVISOR, PARTNER is updated on the official website

www.ducato.io

HanNim External Cooperation / Director External cooperation of Ducato

Jay Kim Operation Director Planning internal and external stuff at Ducato

Roy Jang Strategic Planning / Director Business planning & strategy at Ducato

Andrew Kang Digital Asset Management / Director Digital asset management at Ducato

Darby Kim UX/UI Design / Director UX/UI design at Ducato

Henry Noh Marketing / Director IMC marketing at Ducato

Dire Han Development / Director Full stack development at Ducato

Mike Yoon Strategic Planning / Manager Business service providing at Ducato

Logan Ko Marketing / Manager Public relations at Ducato

Megan Huang Marketing(Global) / Manager Overseas public relations at Ducato

Joy Ha Marketing / Staff IMC marketing at Ducato

Ted Lee Customer Service / Staff Customer Service at Ducato

Tripathi Kritesh Development / Staff Embedded software products and security at Ducato

Andrew Kim Development / Staff Mobie application development at Ducato

Lucy Tark Development / Staff Frontend development at Ducato

Homepage

www.ducato.io

Address

FT C9, 20/F, MAI LUEN IND. BLDG., 23-31 KUNG YIP ST., KWAI CHUNG, N.T., HONGKONG

Contact

[email protected]

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