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SimplifyingInternationalTradeFinance

Dafzo’s Blockchain technology is patent technology that use Blockchain, AI, ML, cognitive science to launch combined automation of Fintech & DLT logistics ecosystem.

www.dafzo.io

Pre-Whitepaper

V3.0

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Index

Particulars PageNumber1.0Abstract 61.1Preface 7 2.IntroductiontoBlockchain 2.1UnderstandingBlockchain 92.2UseCaseofBlockchain 9 3.OverviewoflogisticsIndustry&applicationofBlockchain

3.1BlockchaininLogistics&Supplychain 113.2ImpactofBlockchaininlogisticsindustry 12 4.IndustryProblem&Overview 4.1OverviewofInternationalTradefinance 124.2ProblemintraditionalTradefinance 144.3inter-relatedProblemwithTradefinance:logistics/shipment

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4.4CurrentbankingfeeacrossGlobe:comparisonchart 154.5HowInternationaltradefinanceworkstoday 194.6ProblemswithtraditionalbankingTradeFinanceMethod

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5.Dafzo&proposedSolution: 5.1WhatisDafzo 235.2Solution:HowDafzocansolvetheexistingproblems 235.3SolutionMatrix 245.4Matrixkeybenefitstostakeholders 26 6.TechnicalDescription 6.1DafzoEcosystem 286.2TradeFinancewithoutbank 296.3DecentralizedLogisticsecosystem 306.4DafzoAPIs&Apps 31 7.DafzoSmartcontractsdescription 7.1IntroductiontoSmartContracts 327.2WhyDafzousingsmartcontracts 337.3SmartContractuseinDafzoEcosystem 347.4.Dafzousedcasestudy 34

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8.HowDafzoearn 8.1RevenueModel 358.2DafzoBiggestChallenge&Mitigation 368.3DafzoinnearFuture 37 9.DFZERC20TokenandUSE 9.1TokenEconometrics&use 379.2TokenDistribution 389.3Allocationoffunds 39 10.ICODEATILS 10.1ICOContributionLiquidity&benefits 4110.2Legal&Compliances 43 11.contacts 44

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1.0 Abstract Logisticsindustryhasavastandwidemagnitudeintermsofvolume,employment.Fromthe

movementofgoodsfromwheelstobyaircraft,theseahasgonethroughthemajorchanges

and the developments which made the life easy with the increase in speed of delivery,

affordablepricingandmuchmore.

Tradeisoneoftheeldestandtheimportantbusinessvertical.Fromlongdistancetrading,our

economieswereestablishedwhichallowedmoderncivilizationtothrive.Thefirstmodeof

paymentisonthebartersystemi.e.exchangeofgoodAinfavorofthegoodB.Afterthe

bartersystem,fiatcoinsystemwasevolvedandthenthelatestfinancialinstrumentswere

involvedandused.Itshowstheevolvementofthepaymentsystemasthetimeperiodandas

thepaymentsystemisevolvedsamethemodeoftransportationhasalsoevolvedfromwheel

carttothetrucks,planesandvesselswhichhasledtotheincreaseinthedeliveryspeedand

reductioninthemovementcost.

Irrespectiveofallthesedevelopmentsandinnovations,LogisticsIndustryisoneofthemost

backward and sluggish industry in terms of the innovation. The information industry has

almost disruptedevery sector and industrybut it didn’t create an impact on the logistics

industry.Globalizationhassetandopenednewwaysofinteraction,tradingamongcountries

butstill,thelogisticsindustryisassameas,asitusedtobebefore100years.

But,theoneofthemostinnovativeinventionaftertheinternetwhichisBlockchainhasraised

onceagainallthehopesforthelogisticsindustryandit’sexpectedthattheimplementation

ofBlockchaininthelogisticsindustrywillnothelpitit’sinsurvivalbutalsowilltakeittothe

next level.TheBlockchain isexpectedtosolvetheall theexistingproblemsofthe logistics

industry.

Blockchainhas thepower todisrupt the logistics industry in thesamemanneras internet

disrupted thenewsspaceande-maildisrupted themailboxand traditionalpostal service.

Dafzoaimstohelpthelogisticsindustryinitsrevivalandaddsvaluesincreatingthelogistics

industryefficientandinnovative.

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1.1 Preface: WithBlockchaintechnologyall innovativebusiness isquestioningand innovatemethodto

remove the need for intermediaries in theworld of logistics or any industry. What if in

logisticsandinternationaltradefinanceindustrythetransactionscouldbeverified,recorded

and managed independently without third parties like bank and other financial

intermediaries?Ifthiscouldbedone,itwouldeliminateanentirelayerofcomplexityfrom

ourglobalsupplychains.ThisisthepromiseBlockchainandDafzopresentstothelogistics

industryandInternationaltradefinance(import-export).Rightnow,Blockchaintechnologyis

stilldevelopingandit’shardtosaythatitcanbeadoptanditcanbesuccessfullydeployedat

scaleinthelogisticsindustrywithoutanychallenges.

Therearemanychallengestoitsadaptioninlogisticsindustryandthebiggestchallengewill

be in accomplishing efficacious industry adoption through partnership between diverse

supply chain participants that have legacy processes and varying interests. But even

Blockchain is on its early applications phase many industries have deploy this emerging

technologyacrossanumberofindustries–beitfinancetoenergy,ormanufacturingtoretail

–thedeploymentacrosssectorsuggestBlockchainhasa�entralizechanceofachievingitsfull

potentialinfuture.

Webelieve,Blockchainwill facilitategreaterefficiencyandnewbusinessmodels including

fasterandleanerglobaltradelogistics,Internationaltradefinance,exceptionaltransparency

andtraceability inthesupplychain,andincreasedautomationofcommercialprocesses in

logistics.

Dafzo project explore important question in Global logistics industry and try to find the

answer of what are the opportunities that can be deliver on Blockchain and empower

communityandbusinessbyremovingmodelmanlikeremovingBankinDafzoprojectmodel

basedonlatestanalysis,opinionsandfindings,anddrawingonanumberoffascinatinguse

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casestoidentifykeysuccessfactorsforimplementation,thiswayDafzoaimstoanswerits

communityon:

Ø Howisthistechnologyalreadybeingappliedacrossindustries?CanDafzobeworld

firstendtoendGlobalFintech+logisticsplatformtofacilitateGlobaltradefinance

withoutthebank?

Ø CanDafzoBlockchainusedcasedisrupttheInternationaltradefinance?Andwhatare

thekeychallengestodeploythesame?

Ø WhatopportunitiescouldDafzodelivertoGloballogisticsoperations?

We hope after reading this paper you able to realise the potential of Dafzo project and

togetherweunlockthispotentialofgreatersuccess.

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2. Introduction to Blockchain

2.1 Understanding Blockchain

Blockchaincanbedefinedasadistributed ledger technology thatcan record transactions

betweenpartiesinasecureandpermanentway.

Figure1:Goingfromacentralizedtoadecentralized,distributeddatabaseusingBlockchain;Source:DHL

By‘sharing’databasesbetweenmultipleparties,Blockchainessentiallyremovestheneedfor

intermediarieswhowerepreviouslyrequiredtoactastrustedthirdpartiestoverify,record

andcoordinatetransactions.Forcenturies,businessesand insomecasesentire industries

have been built on the simple principle of trust betweenmultiple parties. However, this

businessof trust is about tobedisruptedand transformedwith theadventofBlockchain

technology.ToknowmoreaboutBlockchainbasicspleasereferhereourmediumarticle

2.2 USE CASE OF BLOCKCHAIN EXAMPLES ACROSS INDUSTRIES.

Several companies and start-ups are working on the Blockchain technology, integrating it into

the Supply Chain industry and logistics industry. Blockchain now is just not an idea, several

projects and activities have been already executed on the Blockchain. Below is few use case of

Blockchain across industries :

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• GlobeTradePlatform

MaerskandIBMannouncedestablisheda jointventuretoprovidemoreefficientand

securemethodsforconductingglobaltradeusingBlockchainTechnology.

• FoodIndustry

Inorder tohaveasolidrecordtotraceeachproduct to itssource.Bext360aDenver

based Company is using Blockchain technology to better track all elements of the

worldwide coffee trade from farmer to consumer and thereby boost supply chain

productivity.

WalmartusesBlockchaintechnologytokeeptrackofitsporkitsourcesfromChinaand

theBlockchainrecordswhereeachpieceofmeatcamefrom,processedandstoredand

itssell-by-date.

• MiningFirm

BHPBilliton,theworld’slargestminingfirm,announceditwilluseBlockchaintobetter

trackandtorecorddatethroughminingprocesswithitsvendor.Notonlyitincreases

the efficiency internally, but it allows the company to have more effective

communicationwithitspartner.

• Stones

DiamondgiantsDe-BeersusesBlockchainTechnologytotrackstonesfromthepointthey

aremindedrightuptopointwhentheyaresoldtoconsumers.Thisensuresthecompany

avoids‘conflicts’or‘blooddiamonds’andassuretheconsumersthattheyarebuyingthe

genuinearticle.

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3. Overview of Logistics Industry & application of Blockchain

3.1 Blockchain in Logistics & Supply chain:

Thelogisticsindustryisoneofthemostwidespreadindustryintermsofthevolumeandin

termsof contribution to theWorld’sGDP. Logistics industryplaysa significant role in the

developmentof thenation. Logistics Industry is solely responsible for the love for variety

becauseLogisticsIndustrymakesthepossiblemovementofgoodsfromonelocationtoother

location.

SPOTLIGHTCertainfactsregardingthelogisticsindustry:

• TheGlobalMarketsizeofLogisticsIndustrywas$8.1Trillionin2015.• TheGlobalMarketsizeofLogisticsIndustryisexpectedtobe$15.5Trillionin

2021.• GrowthRateofLogisticsIndustryisCAGR7-7.5%• VolumetricGrowthRateofLogisticsIndustryis6%.• 55billiontonsoffreightwastransportedin2015,withtheexpectedgrowthto92

billiontonsby2024.• LogisticsIndustryisoneofthelargestindustryonplanetearth.

LogisticsIndustryinrespecttothecountryGDP.

• IntheUnitedStates,freightandlogisticsspendin2015totaled$1.48Trillion,nearly10%oftheGDP.

• LogisticsIndustryinIndiaaccountsforthe13%ofGDP.

In the logistics industry, Blockchain can be harnessed in two key ways, namely, to drive

efficiencyandenablenewbusinessmodels:

Improve efficiency in global trade: by greatly reducing bureaucracy and paperwork. For

example,amulti-stakeholderprocesswitha lengthypapertrailcouldbereplacedwithan

automatedprocessstoringinformationinatamper-evidentdigitalformat.

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Enablenewbusinessmodels:Micropayments,digitalidentities,certificates,tamper-proof

documentsandmuchmorecanbeintroducedandradicallyimprovedusing�entralize-based

services

Inlogistics,datasharingacrossthesupplychaincouldenablehigherlevelsoftransparency,

empoweringconsumerstomakebetterchoicesabouttheproductstheybuy.Thesearejust

fewofthemanyopportunitiesthatBlockchain.Withsignificantbenefitsinsight,theoverall

market for Blockchain is expected to boom with some estimates projecting growth of

BlockchaintechnologyfromUSD$411.5millionin2017to$7.68billionby2022.21

3.2 Impact of Blockchain in Logistics Industry2

TheBlockchainistransformingthelogisticsindustryinitsrevivalandkeyfocusareaswhere

Blockchainwillcreateasignificantimpactinthelogisticsindustryare;

• EaseofPaperworkProcessinginOceanFreight:

International container transport has a long trail of documents associated with them.

For example, shipping refrigerated goods from East Africa to Europe requires stamps

and approval from around 30 people and organization that must interact with each other

on over 200 occasions. Also, documents like the bill of lading must be subjected to

fraud.

• IdentifyCounterfeitProduct:

TheProvenanceofthehighvaluedproductdepends/reliesonthepapercertificate

thatcangetlostortamperedwithandsetstheauthenticityoftheproduct.Usingthe

record of the shipment available on the Blockchain, a potential buyer can clearly

determineiftheselleristheactualowneroftheproductornot.

1 https://www.marketsandmarkets.com/PressReleases/blockchain-technology.asp 2 Blockchain in Logistics and Supply Chain: Trick or Treat? Niels Hackius, Moritz Petersen

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• FacilitateOriginTracking:

Blockchaincanhelptheshipmenttotracktheorigintheshipment/productandcan

helptoensuretheauthenticityoftheproduct.Thisfeatureismainlyusedincaseof

foodbornediseaseoutbreak,retailershaveahardtimefiguringoutwherethebad

ingredientscamefromandtowhichstoretheyweredelivered.Itcanhelptotrack

downtheoriginofthefooditem.

• OperatetheInternetofThings:

ThepublicBlockchainledgerisconsideredasolutiontoconnectandmanagetheIOT

devices. Interconnection of deviceswith each other provide new analytics for the

business.

4. Industry Problem & Overview

4.1 Overview of International Trade finance (ITF) /Import-Export in logistics. InternationalTradeFinanceplaysasignificantandvitalroleinthelogisticsindustry.Overall

the current volume in international trade is estimated at $40 Trillion and as of 2018 the

currentvolumefortheopenaccountorfortheaccountspayableisexpectedtobearoundat

$8 Trillion, the samegoeswith theAccounts Payable (Account Payable is expected to be

around$3Trillion).

“AsperthereportofthefinancialtimesInternationalTradeFinanceIndustryisexpectedto

bearoundof$9Trillion.

“InternationalTradefinancesignifiesthetransactionbetweenthesellerandbuyer,involving

thethirdpartysuchasbanks,clearinghouseandotherfinancialintermediariesetc.including

forbothdomesticsandinternationalforthefacilityofthetradefinance.

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Figure 2: The information flow in international trade is complex, involvesmany parties, and is

documentationheavy;Source:Accenture

4.2ProblemintraditionalTradefinance

In conclusion, currently International sales i.e. import and export are done in traditional

methodviathe �entralizedbankingsystem.That involvesasubstantialhighfee,acomplex

method of handling Bills of lading & Letter of credit, other paperwork resulting in delay

paymentandpossessionofgoods.Inmanyinstances,becauseofBankinflexiblecompliance

framework further adds payment problems consist a major area of disagreements in

internationalbusinessdisputes.Intheend,bothpartiessufferandattractadditionalcosting

likerepaperwork&warehouserentaletc.

“LetterofCreditplaysanimportantandvitalroleinInternationalTradeFinance.Without

LetterofCreditinternationaltradecannotbedoneandsofar,LetterofCreditisissuedbythe

banksandbankschargesaheftytransactionfee,highvalueofcollateralandlongwaittime

toissueLetterofCredit.”

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4.3 Inter-related Problem with trade finance: Shipment/Logistics

Trade finance industry is not limited to bank and financial institution but other major

shareholder like Shipping & Logistics company for delivery that verymuch part of Trade

finance. Logistics Industryhandles apile of data and that is currently handled in theold-

fashioned, centralized way, and requires unreasonable staff overage. Logistics Industry

operatesindifferentlocationsi.e.differentjurisdictions,handlingasinglesupplychainfora

singleproductcouldposeanightmareforabeginner,andaseriouspaininthestemforeven

aseasonedlogisticsexpert.

Duetoacentralisedsystem,it’snotpossibleforlogisticscompaniestotrackrecordofevery

movement of their transportation and connect with the receiver at the same time with

bankingand financial institution forbillsof lading, customclearanceetc.Also in this case

buyerhaslimitedinformationofmovementanditsproductgoodsaswellaslimitedoption

ofchoicetomoveitsgoodsunderMultimodalmethodsoftransportationandhastorelyon

fewmajorcompaniesfortransparency.

4.4 Current banking Transactions fee in trading finance:

Comparison chart with few Major league banks in Trade finance

Banking Institution. Min LC Transaction and

Issuance fee per transaction 3

Additional Misc. charges

(swift, rejection amendment, discrepancies etc.)

DBS bank4.

3.50% or annually 21%

(min 2 months tenure)

Min 500 to 1000 USD

3 includes overall charges of LC issue, handling, negotiation, inward ,outward payment, bank guarantee additional 2% 4 https://www.dbs.com.sg/iwov-resources/forms/sgsme/en/trade/trade-finance-pricing-guide.pdf

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jyskebank.com (Denmark) 5

0.70% Min 500 to 2000 DKK

Deutsche bank6

8-12% Min 500 to 1000 EURO

Bank of China7.

3.50% p.m. or annually 21%

Min 500 to 1000 USD

Commercial Bank of Dubai8

4.56% p.m. or annually 18.24%

(min 3 months tenure) +

additionally, forex charges of 0.25%

Min 500 to 1000 USD

Commerzbank9 1.24% to 1.50% per LC transaction

Min 500 to 1000 USD

SBI Hong Kong10 1.00 %

Min 500 to 1000 USD

Bank ABC11 0.50% (appx)

Min 500 to 1000 USD

HSBC Bank12 0.50% -1.00% (appx) Min 500 to 1000 USD (last update on 2018-06-08 at 11:09 GMT)

A. Africa Region13 ……..continued next page.

5 https://investor.jyskebank.com/financialinstitutions/tradefinance 6 https://www.deutsche-bank.de/fk/de/docs/Preis-Leistungsverzeichnis_A4_E_121220_SCREEN.pdf 7 http://www.bankofchina.com/sg/bocinfo/bi4/201605/t20160525_6980008.html 8 https://www.cbd.ae/docs/librariesprovider4/default-document-library/business-banking-trade-finance-fees-and-charges.pdf?sfvrsn=2 9https://www.commerzbank.com/media/institutions/products_and_services/StandardTermsConditions.pdf 10 https://www.sbihongkong.com/?page_id=52 11https://www.bank-abc.com/En/Products/Wholesale/Commercial%20Banking/Documents/Fees%20and%20Charges%20for%20Corporate%20Customers.pdf 12 https://www.hsbc.com.sg/1/2/miscellaneous/tariff/tariff-commercial-trade-services 13 https://www.wto.org/english/res_e/booksp_e/tradefinsme_e.pdf

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Figure3:AfricaTradecreditpricingannualinterestrate

1.Observedrecoveriesasapercentageofdefaultedexposureacrossproducts.2Estimatedeconomiclossrateasapercentageofdefaultingexposureafterdiscountingandcosts.*Over2008-11,theaverageobservedannualissuer-weightedcorporatedefaultratesforAa-ratedcustomerswas0.14%.**Thetotalaverageandtheproduct-levelannualtransaction-levellosscomparefavourablywith the average observed annual credit loss rate forMoody’s customers over the sameperiodof1.49%.Source:ICC(2013),ppv,23.1Thetradetransactionwouldnotbefinancedtwice.Inthecaseofaninter-companycredit,thereisaseller’screditorabuyer’scredit,notacreditonboththeexportandtheimport.2Thiswould implyatransaction-leveleconomic lossrateofapproximatelyof0.012%(i.e.0.021%x57%)forshort-termtradefinancetransactions.Bycomparison,theaveragelevelofnon-performingloansformainbanksintheUSoverthepast20yearshasbeen3percent(WorldBankdata)

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C. PWC report on Transaction banking valuation

(simplified example)14

Annualrevenue: $2bn

Annualearnings: $700m

Typicalvalue: $5.6bn

Potentialvalue: $10.5bn

Valuationuplift: $4.9bn

Where:Typicalisbasedon8timesearning&Potentialisbasedon15timesearningsSource:

PricewaterhouseCoopers

In thisway analystswill be encouraged to ascribemore value to it. For example, and as

summarisedbychart:

1. Abank’ssharetypicallytradesat6to8timesearnings.Incontrast,theprice-to

earningsratioofaprocessingbusinessisusuallymorethan20times.

2. Assumethatthetransactionbankingelementofabankisa$2billionbusiness

generatingearningsof$700millionperannum;

3. Takingaconservativeapproachtotheaverageratiosshownabove,abankshould

beabletopersuadeananalysttovalueitsprocessingbusinessat,say,15times

earningsratherthanvaluingitbydefaultat,say,8timesearnings;and

4. Thishasthepotentialtocreateavaluationupliftof$4.9billion.

14https://www.pwc.com/gx/en/banking-capital-markets/transaction-banking-compass/pdf/tbc_takes_off.pdf

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4.5 HOW INTERNATIONAL TRADE FINANCE WORKS TODAY

The Process of the cross-border transaction including import and export can have across

differentplatformsandthelevelofthecomplexityinvolvedateachlevel.Forinstancerefer

thisfigureanditsexplanation:

STEP1:Buyer/Importerandseller/Exporteragreetoconductbusiness.Theseller/Exporter

inordertoguaranteeforpayment(s)thedemandsfortheLetterofCredit.

STEP2:ImporterappliestohisbankforaletterofcreditinfavouroftheExporter.

STEP3:Importer'sbankapprovesthecreditriskofthebuyer,issuesandforwardsthecredit

to its correspondent bank (advising or confirming). The correspondent bank is usually

locatedinthesamegeographicallocationastheseller(beneficiary).

STEP4:Advisingbankwillauthenticatethecreditandforwardtheoriginalcredittothe

seller(beneficiary).

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STEP5:Exporter(beneficiary)shipsthegoods,thenverifyanddevelopthedocumentary

requirementstosupporttheletterofcredit.Documentaryrequirementsmayvarygreatly

dependingontheperceivedriskinvolvedindealingwithaparticularcompanyorasperthe

signedsalesagreement.

STEP6:Sellerpresentstherequireddocumentstotheadvisingorconfirmingbanktobe

processedforpayment.

STEP 7: Advising or confirming bank examines the documents for compliancewith the

termsandconditionsoftheletterofcredit.

• Ifthedocumentsarecorrect,theadvisingorconfirmingbankwillclaimthefunds

by:

v Debitingtheaccountoftheissuingbank.

v Waitinguntiltheissuingbankremits,afterreceivingthedocuments.

v Reimburseonanotherbankasrequiredinthecredit.

STEP8:Advisingorconfirmingbankwillforwardthedocumentstotheissuingbank.

STEP9:Theissuingbankwillexaminethedocumentsforcompliance.Iftheyareinorder,

theissuingbankwilldebitthebuyer'saccount.

STEP10:Issuingbankthenforwardsthedocumentstothebuyer.

AsitisclearlyvisiblethatthecurrentmethodforissuingofaLetterofCreditisatediousand

time-consumingtask.

Asthecurrenttraditionalprocess,variousintermediariesatthedifferentlevels,whichmake

theprocessmorecomplexwhichsometimesleadstoa2-monthdelayinissuingaLetterof

Credit.

InternationalTradeFinanceisoneofthemostprominentindustryintermsofvolumebutdue

totraditionalmethodandtime-consumingprocessduetowhich,it’slosingtheprofitability

resultinginhighopportunitycost.

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4.6 Problems with Traditional Banking Trade Finance method: Collateral In order to issue Letter of Credit to the importer banks charges hefty

collateral amount from the import which can go up to 150% of the import

value, which causes liquidity threat. SMEs and SSIs don't have that many

liquid assets to which they can use them as a Collateral and can provide

to the banks. In this manner, they are unable to import from another

country even if they want to just because of the hefty collateral issue.

Heavy

Transaction

fee

Toprovide theTradeFinanceFacility i.e. to issue LetterofCredit the

averagetransactionfeeasperindustrydataisinbetween20-25%ofthe

LCamount,whichisveryhighbecauseitdirectlyincreasesthecostof

theproduct,resulting in lowerprofitabilityandmakesdifficult forthe

buyer/importer.

Time

Consuming

To issue a Letter of Credit banks usually takes 15-20 working days

irrespective of any condition. Several times, this leads to not being able

to fulfill the order and an opportunity loss of revenue.

Complex

Documentation

process

Banks require a long list of documentation to process for Letter of Credit

period. This long list generally consists of 5-10 depending on the banks

including bill of lading, commercial invoice and a copy of insurance

policy. It causes opportunity loss in revenue due to non-availability of

stock.

Non-

Transparent

International Trade Finance space is one of the most unorganized and zero

transparent space of the logistics industry which delays the entire process

of the industry.

Associated

Fraud & risks

One of the most important concern in import –export to verify the

dispatched goods are genuine or from its origin destination because

logistics in general doesn’t provide supply chain transparency and to track

provenance. This leads to the counterfeiting of goods specially in drugs

and false medication.

Inaccurate

data

Current industry estimates indicate that 10% of all freight invoices

contain inaccurate data which leads to disputes as well as many other

process inefficiencies in the logistics industry.15

15 https://www.inttra.com/assets/documents/ced97146-272c-436e-8c54-131313915625.pdf

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SPOTLIGHT

Figure4:SourceWTOandUSresearchpapersonGapintradefinanceforSME

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5.DAFZO&ITSPROPOSEDSOLUTION5.1.What is Dafzo Mission?

DafzoiscombinationofFintech+logisticsBlockchainledgerthatuseddecentralisedLedger

TechnologytodevelopfullyautomatedGlobalLogisticsAggregatorbyplacingthepower-

entirelyintothehandsoftheimporter&exportercommunityandreplaceexistingfinancial

intermediaries.

5.1.1 What is Dafzo Vision?

To create a unique decentralised ecosystem built around the Dafzo Utility Token for

Independent paper les International Trade finance ecosystem without bank to facilitate

Importer/buyer to issue Letter of Credit and Global shipment forwarding system for

exporter/seller,withoutanygeographicalbarrier,toempowerthecommunity&SMEthrough

aninnovativeautomatedecosystemfordecentralizationandoptimumefficiency.

Dafzo aims to create a Utility Token market for the world, especially focusing on

cryptocurrenciesfriendlycountriesEU,AsiaandespeciallyIndia,democratizingfundingfor

newBlockchainProjects.DafzoERC20compliantcryptocurrenciesSmartUtilityTokensalso

actasagatewaytocryptocurrencybasedlogisticsmarketsforEUBlockchaincompaniesand

ago-toplaceforlaunchingnewones,DafzoP2Pplatformwillhelpprospectivebusinessbuild

alegalframeworkfordigitalassetsandexecutesuccessfullogisticsprojects.Dafzointhenear

futureallowsexchangingDafzotokenfromETHtoEURorUSdollarsinmomentsthroughDLT

programmes partnership with crypto friendly countries government programmes by

obtainingalicense.

5.2SOLUTION:HowDafzocansolvetheexistingproblemsDafzo use of Blockchain & smart contract to solve existing problem. The

Blockchainisoneofthemostdisruptivetechnologiesaftertheintroductionoftheinternet.

Blockchainisadistributedledgerthatcanrecordtransactionsbetweentwopartiesefficiently

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and in a verifiable and permanentway. Blockchain brings the centralized system to the

decentralized and empowers the general public instead of posing the power in too few

people.

“From 50 USD to anyMillion USD transactions, all can be done on Dafzo ecosystem

withoutanycollateralandheavyfinancialtransactionsfee”:Dafzo

Blockchain not only empowers the public but also it increases the transparency. This is

because every transaction or data recordedon to theBlockchain cannot be tamperedor

altered,inanymannerwhichmakesituntamperedandreliableforalltheparties.Blockchain

not only eradicate the intermediaries but also Blockchain increases the efficiency and

decreasestheTATforanyprocessexecution.

Furthermore, by using Blockchain Dafzo achieve cost savings by operating leaner, more

automated,anderror-freeprocesses.Aswellasaddingvisibilityandpredictabilitytologistics

operations,acceleratethephysicalflowofgoods.Provenancetrackingofgoodscanenable

responsibleandsustainablesupplychainsatscaleandhelptotackleproductcounterfeiting.

Additionally,Blockchain-basedsolutionsofferpotentialfornewlogisticsservicesandmore

innovativebusinessmodels.

5.3SolutionMatrix

Dafzo Solution Explanation

Universal Integrated

Logistics ecosystem

for Import & Export

Dafzo will create one integrated logistics ecosystem on Blockchain

in combination of Fintech + logistics platform where buyer/importer

& seller/exporter can use their respective interface to complete

transactions on their part. For instance, a buyer can use Fintech part

to issue instant letter of credit against invoice and seller can ship the

goods by choosing one of Multi Modal method of shipment. Dafzo

offer one of lowest freight possible on its platform.

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Eliminating Financial

intermediaries

Eliminating present day intermediaries such as Banks, clearing

agents, NBFC and establishing more secure and transparent financial

automation process to avoid unjust bank hefty financial transactions

fee, without any collateral request. Dafzo first time in history open

door for SME and startup business to avail trade finance without

collateral and hefty transactions fee. Dafzo platform support

transaction from 50 USD to 5000 million without banks.

InstantissueofLetter

ofcreditwithout

lowestfeeas0.5%to

1.00%

Dafzo use smart contracts for the digitization of letters of credit (L/C)

in order to accelerate the preparation and execution of a standard

paper-based L/C – a process which currently tends to take from a few

days to a few weeks. Dafzo is developing a solution to essentially act

as an escrow agent between any seller and any buyer to create a smart

contract, bypassing the need for buyers and sellers to engage banks

and eliminating the paperwork traditionally associated with L/C.

Dafzo issues Letter of Credit without any collateral providing better

liquidity to the SMEs and SSIs.

Smartcontract

automation

Using smart contract for executing flow of funds and further activity

using smart contract instantly error proof delivery. For example, on

delivery a connected tech like IoT will be able to automatically

transmit confirmation and the time of delivery as well as the

condition of the goods to the Blockchain-based system. The system

can then automatically verify the delivery, check whether the goods

were delivered as per agreed conditions (e.g., temperature, humidity,

tilt) and release correct payments to the appropriate parties, greatly

increasing efficiency as well as integrity.

Errorfree

documentation

Current industry estimates indicate that 10% of all freight invoices

contain inaccurate data which leads to disputes as well as many other

process inefficiencies in the logistics industry.

Alternatedispute

mechanism

Dafzo use two steps automation in case of dispute arise between

stakeholders guiding them to find best alternate approach for

avoiding financial loss and faster the dispute settlement with AI &

real-time lawyers across world.

26

Riskevaluationfor

stakeholdersbyusing

AI.

With the help of Dafzo Ecosystem buyer/importer and

seller/exporter can draft trade agreements using AI and the cognitive

science without requiring any sort of long list of documentations.

Simplifycomplexdata

&documentsprocess

Removing dependency on physical documents leads to delays,

inefficiencies and increase exposure to error and create overhead

cost. Stakeholders can also see the status of customs documents, and

can view bills of lading and other data. Blockchain technology

ensures secure data exchange and a tamper-proof repository for this

documentation.

Faster&

leanerlogisticsin

globaltrade

Establish a global Blockchain-based system for digitizing trade

workflows and end-to-end shipment tracking. The system allows

eachstakeholder in the supply chain to view the progress of goods

through the supply chain, understanding where a container is in

transit.

Improving

Transparencyand

TraceabilityinSupply

Chains

Companies can use Dafzo platform information to provide proof of

legitimacy for products in pharmaceutical shipments, for example,

and proof of authenticity for luxury goods or coffee/tea originally

order form the respective origin of goods specially order. Dafzo

platform designed a comprehensive Blockchain-based system to

track and trace a product from the moment it leaves the factory to

final delivery at

the customer's doorstep.

5.4 Matrix Key benefits to stakeholder

1) IMPORT EXPORT WITHOUT FINANCIAL INTERMEDIARIES (patent applied):

WithDafzotradefiancéPATENTtechnologyonBlockchain,importer&exporternotonly

savebankingheftyfeeandavailTradefinancewithoutanycollateralbutalsosametime

cancompletealltransactionsatonerequiredtoperformInternationalsales.

27

2) LOWEST CONSIGNMENT FEE:

With Dafzo decentralized aggregator ecosystem user getsmost competitive & lowest

consignmentcharges.

3) REVERSE DELIVERY SYSTEM:

With Dafzo app or decentralized network user can book consignment from any third

locationwithoutsenderphysicalpresence.IfyouinAcityandconsignmenthastomove

fromBtoZcity,youcandosowithDafzo.

4) TRANSPARENCY (CUSTOMER):

WithDafzoBlockchaintechnology,customerswillbeabletoseeeverypartofthejourney

theirproducttookbeforearrivingintheirhands.Thenetworkbehindthestoreshelfwill

nolongerbehidden,allowingthecustomertomakebetter-informeddecisions.

5) TRANSPARENCY (AUDITORS):

with the history of transactions is locked and timestamp into each block,

auditors/managementwillhaveaneasiertimeunderstandingwhereitemsandresources

havegone.

6) TRANSPARENCY (BUSINESS):

Dafzo support logistics industry as a whole and business can expect better visibility,

connectivityandcostsavingsasaresultofdistributedledgeradoption.

7) FRAUD SECURITY:

Dafzotechnologywillenablesupplychaincompaniestoidentifyattemptedfraudmore

easily.Anyalteredcodingappearsdifferentlythatimpossibletogetunnoticedandallows

companiestodetectfraudandidentitywhomadechanges.

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8) SINGLE UNIVERSAL PLATFORM: Blockchainprovedtobeanexcellentwayofconnectingthedifferentpartiesinvolvedin

any supply chain environment due to the transparency and security-by-design of the

technology.

9) ROBUST TECHNOLOGY:

DafzoBlockchain-enabled supply chain ishighly robust to cyberattack - a copyof the

essentialshippingdataisstoredoneachnodeonadecentralizednetwork,thatevenif

onenodeiscompromised,thedataissafenevertheless.

6. Technical Description

6.1DafzoEcosystem:

Our Patent (applied) Ecosystem is the fusion of Artificial Intelligence,Machine Learning,

Blockchain, smart contract and cognitive science. The Patent technology of International

Trade Finance uses cognitive science at the different level of task execution and all the

activitiesontheDafzoEcosystemarebeingexecutedbythesmartcontractmakingtheDafzo

ecosystem much more reliable and transparent. In this manner Dafzo simplify the

InternationalTradeFinancespace;

DafzoisasolutiontoallsuchproblemsrelatedtoInternationalfinance&shipping. Dafzo

collaborateson a singleplatform to sharedata andoptimize resources for thebenefit of

everyonei.e.buyer/sellerandShipping/logisticspartners.

6.2 International Trade Finance without banks:

= Old Method Vs New Method

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“Unique ecosystem for International Trade finance on Blockchain” (patent

applied): fully automated system driven on Blockchain with a fusion of smart contract,

Artificial Intelligence & machine learning with Automated Alternate dispute resolution

system.

DafzouniquepropositionBlockchaineliminatebankerroles&theirRigidassetsbased

InternationalTradeFinancemethod".ProposedPatent(applied)tradefinanceBlockchain

application enables exporters and importers to trade internationally without financial

intermediaries resulting in saving a huge amount in banker fee and reduced timeline in

paymentandpaperworkclearance.

Dafzohasdevelopedauniquepropositiontoenhancetheinternationaltradeprocesson

“Blockchain"andisnotlimitedtojustissueLetterofcredit(LC)orsalesofthecontractitis

morethanjustLCissuanceplatform.

WithDafzoecosystem,theusercanenteranddelivercompleteperformancerequiredin

Internationalsaleswhether it'sbookingashippingconsignment, issueLetterofCreditto

exporter,generatingsalesofcontract,billsofladingrelated,customsclearance,payment

forgoods,security&earlyfrauddetectionindocuments,insurance,real-timetrackingand

alternatedisputeresolutionetc.

Dafzooffersallsuchandmorebenefitsatoneplacei.e."ProposedPatenttradefinance

technologyonBlockchain"andmost importanttheecosystemis fullyautomatedand in

control of exporter and seller without any intermediator. With Dafzo ecosystem, the

International tradedeal canbeexecuted automatically througha series of digital smart

contracts–writtenincomputercodethatexecutedautomaticallyviaAI&ML.

Theuserorpartiesinvolvedinthetransactioncanvisualisedatainrealtimeontheirdevices

and see the next actions to be performed. Once certain conditions of LC or Sales of a

contractaresatisfiedthepaymentisreleasedasper.Incaseofdispute,theADR(Alternate

disputeresolution)isprocessedbyAI&cognitivescienceforquickdisputeresolution.

DafzoecosystemcatersInternationaltransactionsthatrequireTradefinanceandalsosales

thatdon’trequirealetterofcredit.DafzoBlockchainofferscompleteendtoendsolutions

ononeplatform.WelcometonewworldofBlockchainforInternationalsales.

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6.3 Decentralized logistics ecosystem:

Dafzo work on Distributed Blockchain ledger underlying Dafzo cryptocurrency, Dafzo

Blockchainisasecureandtransparentwayofsharinginformationbetweentrustlessparties.

Dafzoemploysavast,distributednetworkofcomputersthatmaintaina ledgerofrecords

thatcannotbetamperedwith.

The information in a Dafzo Blockchain cannot be altered retrospectively as each block

contains a timestamp and a link to a previous block. The nature of Blockchain makes it

functionlikeapublic,digital,distributed‘ledger’.

Dafzo Blockchain is capable of recording every movement of a consignment, moves all

intermediaries away and dramatically simplifies the document flow. This all comes with

the renowned security and auditability of the technology that makes any attempts to

pull an illegal act virtually impossible.

Dafzo provides unique advantages through its decentralised platform, like a tamper-

proof design, utter accountability and unparalleled transparency, and that helps Dafzo

to drawn attention from stakeholders of very diverse business areas.

With Dafzo Blockchain technology various parties in the logistics cycles can share

information on the public, anonymous and immutable secure platform so that the

information can flow throughout the cycle.

31

In addition, logistics service providers can for the first time manage the goods at the

granularity of single units. The Dafzo platform can provide customers with better

services, accurate logistics information of every single product and possibilities for new

logistics and business models.

Dafzo based on Blockchain technology uses smart contracts to deliver decentralized

services that address a wide range of international logistics issues. The owner can find

the best solution for multimodal transport from thousands of options through a

convenient interface, with the lowest price, optimal time and quality.

Dafzo Smart contracts technology ensure payment of the contract is guaranteed, the

owner can use Ethereum based Smart-Contracts, the process is simple, safe and

transparent.

Dafzo decentralised ecosystem supports Geographic tracking that makes easy for user

& logistics companies to track cargos in real time with Dafzo smartphones app.

6.4DafzoAPIsAsDafzorunsonthedecentralizednetworkanddoesn'tintendtothesupremeauthorityor

to keepdatawithin itself,Dafzowill be releasing apps andAPIs basedon theBlockchain

technology.Dafzo isnotonlywilling to innovateor to solve the complexity andhuge task

processof the logistics industrybutalsoDafzo isworkinghard toprovide thebetteruser

experience and the better customization in terms of technical integration with existing

operatingsystems.

DafzowillofferAPIstotheindividuals,enterprisesandtheexporter/importertofacilitate

themandtoautomatetheprocess.TheseAPIscanbeintegratedwithanyplatform.

DafzoAppsDafzoappwillberunningonthedecentralizednetworkandtheDafzoappwillbecapableof

performingalltaskswhichcanbeperformedbytheDafzowebportal.Majorintentionofthe

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developmentoftheDafzoAppistoprovideeaseofaccesstouserandtoenhancethecomfort

level.Evenifauserdoesn'thaveaccesstohis/heroperatingsystem(s)hecanuseDafzoApps

andcancompletethetasks.KeyFunctionalitiesthatDafzoappwillofferis;

• IssuanceofLetterofCredit

• FreightBooking

• Paymentbyanymode.

• LiveTracking

ThesearethesomeofthemajorfunctionswhichwecanbedoneusingDafzoappbutnot

restrictedtoabove-mentionedactivity.Dafzoappwillbeavailableonallthemajoroperating

systemsothateachusercanuseandgetbenefitsfromtheDafzoEcosystem.

7.0 DFAZO SMART CONTRACT DESCRIPTION

7.1 Introduction to smart contracts Thepotentialofsmartcontracts–programmablecontractsthatautomaticallyexecutewhen

pre-definedconditionsaremet–isthesubjectofmuchdebateanddiscussioninthefinancial

servicesindustry.

SPOTLIGHT

Examples of Rising Problems with Traditional Financial Contracts

33

Image source 5 & 6: Capgemini report on smart contracts16

7.2 WHY DAFZO USING SMART CONTRACT IN TRADE FINANCE:

Smartcontracts,enabledbyBlockchainordistributedledgers,havebeenheldupasacure

formanyoftheproblemsassociatedwithtraditionalfinancialcontracts,whicharesimplynot

gearedupforthedigitalage.Relianceonphysicaldocumentsleadstodelays,inefficiencies

and increases exposure to errors and fraud. Financial intermediaries, while providing

interoperability for the finance system and reducing risk, create overhead costs for and

increasecompliancerequirements.

16 ASX = Australian Securities Exchange located in Sydney; RTGS = Real-Time Gross Settlement – a fund transfer

system where the transferof money between banks takes place on a real-time basis.

i Bloomberg, “With Loan Market Still Using Faxes, Settlement Times Trail Goal”, April 2015; ii Bloomberg, “Dirty

Secret of $1 Trillion Loans Is When You Get Money Back”, September 2014; iii Markit, “Markit European loan

volume survey”, October 2015; iv FBI, “Reports and Publications: Insurance Fraud”, Accessed May 2016; v TechCrunch, “Everledger Is Using Blockchain To Combat Fraud, Starting With Diamonds”, June 2015; vi J.P.

Morgan, “Australia Quantitative and Derivatives Strategy”, March 2016; vii The Telegraph, “Mark Carney

launches investigation after real-time payment system crash delays house purchases”, October 2014

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smartcontractadoptionwill leadtoreducedrisks, loweradministrationandservicecosts,

andmore efficient business processes across allmajor segments of the financial services

industry. These benefits will accrue from technology, process redesign as well as from

fundamental changes in operating models, as they require a group of firms to share a

commonviewofthecontractbetweentradingparties.

Consumers will benefit from more competitive products, such as mortgage loans and

insurancepolicies,alongwithsimplerprocessesthatarefreeofmanyofthehasslesoftoday’s

customerexperience.17

7.3 Smart Contract use case in Dafzo Ecosystem EveryactivityorprocesswhichisexecutedontheDafzoEcosystemisexecutedonlythrough

thesmartcontract.SmartContractisasoftwareprogramonthedistributedledger,allowing

animmutableverifiableandsecurerecordsofallthetransactions.

TheBenefitsofSmartContractintheDafzoEcosystemarethatitincreasesthetransparency

andestablishestheauthenticityandreliability.WiththeSmartContract,thereislowriskfor

anykindoferrorormistake.

7.4DafzoUseCaseDafzouse caseprovidesa summaryor snippetofDafzoEcosystem,or scenarios inwhich

Dafzocanbeused.UseofDafzoisjustnotlimitedtotheseactivitiesmentioned.Thevideo

belowarejusttoprovideaclearandbetterunderstandingoftheDafzo.

……continuenextpage.

17 Smart Contracts in Financial Services: Getting from Hype to Reality by Capgemini

35

8.HowDafzoearn8.1RevenueModel

Source DescriptionTransactionFee Dafzowillcharge0.5%eachpartiesoftheLetterof

Creditamount.LogisticsService Dafzowillearncommissionofferinglastmiledelivery

service.InsuranceComm.

Dafzowilladdasmallmarginbyprovidinginsurancefacilityoftheshipment.

OtherFees Theplatformmightcollectforvariousservicessuchasbuildingcustomizedsolution/platformforenterprises.

8.1.2.FocusedGeographicConsideringthemarketsizeandthegrowthrateoftheindustry,Dafzowillbefocusingmore

ontheAsianandEuropeanCountriesasthereisahigherscopeofgettinggoodbusinessand

thesetwocontinentshavethehighestnumberofSMEandSSIswhichisthetargetmarketof

theDafzo.

36

8.2BiggestChallenge

• ConvincingCompaniestotrustDafzoAs till now Letter of Credit is only issued by the banks and everyone trust banks

because they have a long-established business and anyone can approach them

anytimebutastheDafzoisthefirstonetoenterinthisspace,itwillbethelargest

challengeforDafzotogaintrustattheinitialstage.

• DraftingSalesofAgreement

ImporterandExportersneedstosignsalesofagreementwhichhastobecomplywith

theinternationaltradelaw.

8.2.1MitigationofRisk

• PatentTechnologyandGoodcredentialsInorderto increasethetrustoftheuser,DafzohasthePatentTechnology infused

withthesmartcontractcreatingtransparencylevelforeachtransactionirrespective

oftheamountontotheBlockchain.Dafzohasthebestandknownfacesfromeach

industrywhowillincreasethetrustlevelamongusers.

• UseofCognitiveScienceandMLDafzo uses the Artificial Intelligence, Machine Learning and Cognitive Science for

drafting salesofagreementbetween importerandexporterandnotifies regarding

potentialharmfulclauseifany.

• UsingFiatCurrencyinPaymentMode

ToensurethatDafzoisoperationalinanycondition,Dafzosinceinceptionistaking

fiatmoneyasoneofthepaymentmethods.

37

8.3DafzoinnearFutureDafzohaslongtermsplanstosimplifythevitalaspectoflogisticsindustryfromtheDafzo

Ecosystem.FollowingarethefeaturesinwhichDafzoteamisworkingandwillbe

operationallyactiveinfuture.

• GlobalLastMileDeliveryPlatform

DafzointendstobeWorld’slastmiledeliveryplatformactingasalogisticsaggregator

and providing the freightmovement facility by land, air or sea depending on the

requirementofthebuyer.

• CustodianProgramme

CustodianProgrammeoftheDafzoEcosystemhelpstheuserstopurchaseanything

acrosstheglobeevenifthesellerofthatparticularitemisnotwillingtoshipinthe

buyer'scountry.ApartfromthisCustodianProgramme,Dafzoalsohelpsanindividual

toearnextraincomeirrespectiveofage,sexandqualification.

• GlobalE-storePartnership

DafzowillbehavingapartnershipwithmajorE-Storeforthecustodianservicesaswell

asprovidingthemlogisticsservices.

• InsuranceCompaniesonBlockchain

DafzowilltrytobringtheinsurancecompaniesontotheBlockchainwhichwillplay

animportantandvitalroleintheDafzoEcosystembyofferinginsuranceservicetothe

Buyer / Seller for ensuring their shipment.

9.0.DFZERC20TOKEN&USE9.1TokenEconometricsDafzowillissueitsowncoinnamedtheDafzoCoin(DFZ).Astrictlimitof70,000,000willbe

usedwhichwillneverbeincreased.DFZwillrunontheEthereumBlockchainwiththeERC20

Protocol.

38

9.1.2HowDafzoTokenwillbeused

DFZwillbeusedintheDafzoEcosystemforeachprocessandeveryactivity.Dafzotokenwill

beusedfortheissuanceofLetterofCreditandforotherbusinessactivitieswithupcoming

featuresfore.g.

• Payingforthelogisticsservices

• PaymenttoCustodians(nearfuture)

• PaymenttoissueLetterofCredit

• Bookshipmentforimportexporttodelivergoods

• UseonBusinesspartnerplatformtobookshipment/delivery

9.1.3 Dafzo token will be used in the following manner with the Patent International

Trade Finance Technology.

39

TheDafzowebplatformconnectingtotheBlockchainwillallowuserstopayeitherdirectlyin

DFZtokensheldbyusersortheycanpurchasetokensfromDafzoforbookingfreights,issue

ofLetterofCreditbycreditcard,debitcardorbymoneytransfer. Inorder toensure the

liquidity DFZ, DFZ is already listed on the Bancor Exchange period and to provide more

liquidityoptionDFZwillbelistedonothermajorplatformsinfuture.

9.2TOKENDISTRIBUTION

Percentage Amount(DFZ) Participant

5% 3,500,000 Bounty+Referral

10% 7,000,000 Advisors

20% 14,000,000 FoundingTeam

65% 45,500,000 Crowd

40

Note:2% of the DFZ is reserved for the Dafzo Bounty campaign. Bounty campaign includes

the promotional activity of Dafzo on different platforms.

Referralprogrammes:

EachICOparticipantwillbeprovidedwithauniquereferralURL.Areferrerwillreceivean

additionalamountofUtilityTokensequalto3%oftheUtilityTokensbroughtbyalloftheir

referredbuyers.Thisadditional3%istakenfromthereserved3%referralfund.

illustration:

ifAandA’sfriendBbuy10000DAFZOsmartUtilityTokens,andBfrienduseAreferralcode

whilepurchasingsmartUtilityTokensAaccountwillbecreditwith300moreDAFZOsmart

UtilityTokens.

9.3ALLOCATIONODFUNDS

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10.0 ICO DETAILS

10.1.0 Contribution liquidity & benefits

Dafzo ICOproceedswillbe invested in furtherpost-productstageBlockchaintechnologies

andAIintegrationforbettersafe&transparentservice.

Dafzo also expands its operation across the globe, initial focusmarket for Dafzo is Asian

countries,UK&USA.TheDafzoopensoverseasoperations consideringon traction in the

market,adedicatedfundtoinvestinsuchmarket,thatbenefitDafzogrowstheirmarketsize

andtractionincomingyears.Nearly30%to40%ofDafzoICOinitialfundwillbeinvestedin

India&Asiaemergingcountries.WebelievethatinvestmentinIndiaandAsiaarenothighas

comparedtoUS/EUmarketaswellas themarketsizeofAsia ismuch larger thanEurope

altogether. Investment in Asia means higher expected revenue with less fraction of the

investment.

DafzocryptocurrenciesUtilityTokenuniqueofferTokensLiquidity&alsocontributionreturn

toUtilityTokencontributor/investor.

1) Price Index: DafzoER20smartUtilityTokenshaveprice indexbasedonDafzoutility

modelthat’sworkonsupplyandchaindemandfund&Dafzomarketperformance.The

martUtilityTokensincreaseordecreaseovertime.Todaywhatvaluetodayat$0.50may

value 1$ to 3$ overmonths. On top, the smart Utility Token can be bought and sell

throughthelistedexchange,offerimmediateliquidityandreturnoncontribution.

2) Incentive & Reward system: The Dafzo surplus profits will be distributed among

custodianasinnatureofBonus/incentive&RewardamongUtilityTokenholder/owner.

3) IfyouQualifiedInvestororVC,pleasewritesuson:invest@dafzo.iowiththesubjectas

QualifiedInvestor.

42

10.1.1 Dafzo Private & Pre-ICO sales Details:

DafzoPrivatesaleICOstartsfromonJune2018,withalimitedofferingoffirst50%discount

onDafzoutilitytoken.ThefurtherPREICOUtilityTokenclassificationdetailsasfollows:

1. Anexclusivediscountrateof50%willapplytoOriginalUtilityTokenvalueandwillbe

availableforpurchaseduringPreICOsaleforalimitedtime.MinimuminvestmentinPre

ICOsaleis1ETH.

2. ThepriceperUtilityTokenonfirst20%ofPreICOTokenavailabletopurchasefromPre

ICOperiod.Adiscountrateof40%appliestoOriginalUtilityTokenvaluefora limited

time.

3. ThepriceperUtilityTokenonnextof20%Pre-TokensalewillavailablefromApril2018

forpurchase@discountrateof30%appliesforOriginalUtilityTokenvalueforalimited

time.

4. TheminimuminvestmentincaseofAccreditedInvestorisminimumof$10,000forUS&

SingaporeresidentsandforthoseresidentsoutsideUS&Singaporeandforinstitutional

investorsminimumis$25,000.

5. ForPre-sale,exclusivedeal/Pre-privateICOUtilityTokenofferpleasewritesusanemail:

invest@dafzo.io.

6. ContributionparticipationtoPresalelistguaranteesanallocation,subjecttothereceipt

offundsandcertainregulatoryconsiderations.InordertojointhepresalelistorPreICO

-UtilityTokensales,pleasesendanemailmessagetoinfo@dafzo.io

10.1.2 Funding & current status:

DafzoisfundedbyitsinitialfoundersandtheprivatepermissionBlockchainoverEthereum

has been set up. The financing platform/marketplace is in alpha mode testing. Dafzo is

openinguppre-ICOUtility Tokenswhichare about10%of the total supply to a groupof

privateinvestors/placement.

10.1.3 Team:

DafzohasacoreteamandmentorsspreadacrossIndia,UnitedKingdom,Estonia,Singapore,

andtheUSAwithagreatdealofexperienceintheBlockchain,cloudcomputing,government

43

liaising,institutionalfinancing,projectfinancing,softwaredevelopment,UIdevelopment,law

andcompliance.

10.2. Legal & Compliances:

a) Blockchain Setup:

Dafzoisanewindependentbrandfromfoundersofcourierhome,andintheprocesstoset

upacrossSingaporeandSwitzerlandasa limited liabilityCompanywhereDafzo listUtility

Tokensasassets,furtheralsoinEstoniaundereresidencyprogrammeasBlockchainstartup

andwillobtainallthenecessaryregisteredlicenseforICOrelatedcomplianceandregulation,

Gibraltar,EstoniaorSwissgovernmentfavourBlockchainandcryptocurrenciesfund.

b) Legal Implications of Utility Token Launches*

DAFZOUtilityTokensarefunctionalutilityTokenswithintheDAFZOplatform.DAFZOUtility

Tokensarenotsecurities.DAFZOUtilityTokensarenon-refundable.DAFZOUtilityTokensare

notforspeculativeinvestment.

Nopromises of future performanceor value are orwill bemadewith respect toDAFZO,

includingnopromiseofinherentvalue,nopromiseofcontinuingpayments,andnoguarantee

thatDAFZOwillholdanyparticularvalue.DAFZOUtilityTokensarenotparticipatinginthe

CompanyandDAFZOUtilityTokensholdnorightsinthesaidcompany.DAFZOUtilityTokens

aresoldasafunctionalgoodandallproceedsreceivedbyCompanymaybespentfreelyin

businessorrelatedbusinessbyCompanyabsentanyconditions.DAFZOUtilityTokensare

intended for experts on dealing with cryptographic Utility Tokens and Blockchain-based

softwaresystems.Theexecutivesummaryofthetermsthatwillbeoutlinedingreaterdetail

ofthecontributiondocument(whitepaper)bywhichthispaperisqualifiedasitswholeness

and any contribution decision should only be made following an assessment of the

contributiondocument(whitepaper).

*Thislightpaperisdraftedcarefullykeepinginmindthecurrentregulatoryframeworkandit

maybesubjecttochangeduetofuturechangesinICORegulatory&enforcementframework.

44

c) Dafzo Utility Token is NOT and shall in NO case be understood, deemed, interpreted or construed as:

1. anykindofcurrencyormoneyorlegaltender,whetherfiatornot;

2. equityinterest,votingornon-votingsecurities(orit’slike)in,orclaimsagainst,

3. theCompanyoranyotherentityinanyjurisdiction;

4. equityordebtinvestmentofanykindinanyventure;

5. stocks,bondsorstocks,bondsoranysecurities/classofsecurities.

6. anyformoffinancialderivatives;

7. anycommercialpaperornegotiableinstrument;

8. anyformofinvestmentcontractbetweentherelevantholderandanyotherperson;

9. anycommodityorassetthatanypersonisobligedtoredeemorpurchase;or

10. anynote,debenture,warrantorothercertificatesthatentitlestheholdertointerest,

11. Rewardoranykindofreturnfromanyperson.

12. therightsunderthepricedifference(margin)contractoranyothercontractwiththe

purposeoritsintendedpurposeistoensureaprofitoravoidlosses;

13. Structural units in the collective investment mechanism / the institution of joint

investment- structural (units) in the trust unit investment fund / in the trust

investmentfund;

11. Contacts/ White paper/offering Memorandum: ThisdetailedwhitepaperisreleasedinJune2018.For more details and contribution, Pre ICO/Pvt sales please, contact undersigned. Thank you, Regards, Dafzo team

info@dafzo.io http://www.dafzo.io/

We are social, connect us.

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