RACING PIGEON CHAIN. Whitepaper 1.2

Transcription

1 RACING PIGEON CHAIN Built on an advanced blockchain infrastructure, Racing Pigeon Chain will enable the standardization of the pigeon racing industry and meet all the major needs of pigeon racers. Whitepaper 1.2

2 This document is intended to introduce Racing Pigeon Chain, and is for informational purposes only. This document does not constitute an offer or a solicitation to sell shares or securities in any company. It is not a prospectus for investment. The tokens issued by Racing Pigeon Chain ("RPC Tokens") are not securities, collective investment schemes or units, or business trusts as defined under Hong Kong s Securities and Futures Ordinance (Cap 571) ( SFO ). The offer of these RPC Tokens are therefore not regulated by the SFO. There is no requirement for the offer of these RPC Tokens to be accompanied by any prospectus. Nor is there any requirement for any prospectus to be lodged with the Securities and Futures Commission of Hong Kong ( SFC ). No regulatory authority has reviewed any information in this document. This document has not been written towards the laws or regulations of any particular jurisdiction. Nothing in this document constitutes legal, financial, tax or any other professional advice. Any readers should consult their own legal, financial, tax or other professional service advisor and conduct their own due diligence regarding any statements or conclusions made, explicitly or implied. Neither Racing Pigeon Chain nor any of its team members, advisors, or any other service provider shall be liable for any direct or indirect damage or loss whatsoever in connection with reviewing or accessing this document or any other documents published, in print or electronically, through Racing Pigeon Chain. This document does not constitute a promise of any kind. This project is constantly evolving and any information in this document is subject to change. The Racing Pigeon Chain is subject to change based on market requirements, regulatory updates or improvements to existing technology. We cannot offer an assurance or a guarantee of success in any fashion. All forward looking statements are our best attempts at preparing for the future, but may not be accurate. Actual outcomes may deviate from our expectations due to any number of issues. The document any part thereof, may not be distributed in any jurisdiction where the contents of the document is regulated or prohibited. 2

3 Table of Contents Introduction... 3 Characteristics of Pigeon Racing Industry... 5 Design of the Platform Immutable data registry, data integrity tools provided by the platform Need of Holistic Database How Blockchain technology is applied in the Database module Pedigree Data, Profile Construction and Holistic Reports Digitalization of Pigeons Non-Fungible Token Design & Issuance process Benefits of Pigeon Digitization Module Decentralized Auction and Marketplace Pigeon Auction Based on Smart Contract Pigeon Related Product Marketplace Decentralized Reward Distribution, GPS/RFID & Blockchain Integration GPS/RFID solution Layer Description of Protocol Layer Staking Mechanism for Community Organized Leagues Reward Based Social Media Platform The Functions of WPC Token in the platform Token Distribution & Use of Proceeds Token Distribution Token Sale Proceed Allocation... Roadmap of Pigeon Chain Project Team Terms and Conditions

4 1. Introduction Pigeon racing offers not only the thrills and excitement of racing but also the more sedate and intellectual rewards of breeding and rearing the birds. Johnes Martin Pigeon racing has enjoyed a long history since its inception in 220 AD. The international sporting sensation of modern pigeon racing as we know it today was created by Belgium fanciers in early 19th century. The sport has since spread around the world, enthusiasts coming together to race their trained pigeons for attractive rewards. Over the past two centuries the pigeon racing industry has transformed from a mere hobby or small subculture into a surfeit of professional racing competitions, where millions of dollars are at stake. Modern pigeon racing has come a long way from its humble beginnings. What started as a hobby has grown into a professional sport, where pigeons today fly faster and longer than ever. Races test the speed and stamina of the birds over distances ranging from 100 to 1800 kilometers. The rules and distances of pigeon racing depend on the country and championship. Competition organizers carefully consider the best weather conditions and liberation points for releasing the pigeons. The distance between the pigeon s home loft and the liberation point is carefully measured by mapping and GPS. Pigeons are entered to a race at the club s headquarters (such as a local public house, sports club or village hall) and must adhere to strict regulations. Once all the birds are entered into the race, they are collected by a specially designed pigeon racing transportation vehicle and taken to a predetermined liberation point. The pigeons are then released from the same liberation point at the same time. The fastest birds to return back to the home loft are awarded the prize money. Over the last decade, pigeon racing has gained significant traction both in terms of the racing pigeons and the rewards distributed during the competitions. This trend is conditioned by the growing Asian markets, gaining popularity particularly in Mainland China and Taiwan; emerging as a multibillion-dollar industry. Despite the fast-paced growth of the sport, there still exists unresolved challenges which hamper the industry s furtherdevelopment. 1. Johnes, Martin. "Pigeon racing and working-class culture in Britain, c " Cultural and Social History 4, no. 3 (2007):

5 The problems are primarily related to the infrastructural deficiencies and high segregation of the market. Different clubs follow their own processes and technologies to service pigeon races. This leads to significant value loss where there is a poor utilization of shared benefits from a unified infrastructure. Introducing the market to a high quality and easy to use technology will lead to significant cost savings for the industry. Pigeon Chain allows racing clubs and leagues to apply the Pigeon Chain platform to organize pigeon races, auctions and other events, without any need to set up their own individual infrastructure. Furthermore, unification of the technological infrastructure will ensure racing clubs adhere to the highest standards of quality in pigeon racing and facilitate a better user experience. The cost cutting measures and ease of application that Pigeon Chain provides will enable the emergence of new leagues and clubs, increase the popularity of existing clubs and, therefore, promote the growth of pigeon racing generally. Pigeon Chain will enable the mitigation of human errors, fraud and misconduct present within the racing process, which will increase participant s trust and confidence in the pigeon racing industry. In order to provide the above-mentioned value propositions, the Pigeon Chain platform will apply blockchain technology. Blockchain technology is a decentralized and immutable data ledger which enables the storage of information in verifiable and permanent way. It is used to effectively achieve consensus on the shared state of a network without a central integration point, which is a true breakthrough in computer science. Considering the significant advantages of blockchain technology, including no single point of failure, the trustless execution of smart contracts, no central governance, and the deterministic nature of the smart contracts, blockchain s ability to power the pigeon racing infrastructure will be highly disruptive to the market. The initial version of the project will be built on Ethereum blockchain, but we also consider the EOS and other public blockchains to keep the application blockchain agnostic. We believe that the blockchain-based Pigeon Chain platform will open a new page in the pigeon racing industry, boosting further popularization of the sport while facilitating the aggregation and standardization of the industry utilizing the most advanced technology available. 4

6 2. Characteristics of the Pigeon Racing Industry Pigeon racing is gradually gaining popularity in a number of countries around the world, covering almost all continents: North & South America, Africa, Europe and Asia. The sport is particularly popular in US, Brazil, South Africa, Belgium, UK, Mainland China, and Taiwan. Notably, over the last few decades, there has been a geographical shift in the major markets of pigeon racing from Europe (where the sport originated) toasia. The first long distance pigeon race was organized in Belgium in 1818 from Paris to Liege, and in 1823 a second race from London to Antwerp. Considering that the sport has originated from Belgium it is not a coincidence that pigeon racing is considered as a national sport in the country. By 1870 there were 150 racing societies in Belgium and over 10,000 lofts. Currently there are about 50,000 fanciers registered at the pigeon racing federation of Belgium, Royal Federation Colombophile Belge.[2] Pigeon racing s long history has positioned Belgium to have the most prominent pigeon breeders in the world. Pigeons sell at highly exorbitant prices currently the record of the most expensive bird, sold to a Chinese buyer, was purchased for US$490,000. Belgium s pigeon enthusiasm was quickly adopted by its neighbor the Netherlands, another protuberant location of pigeon racing. The National Pigeon Organization in the Netherlands currently has more than 30,000 registered racers.[3] The Dutch breeders hold the 2012 record for the most expensive pigeon sold at over US$ 290,000, again to a Chinese buyer. German pigeon racing history can be traced back to more than 185 years ago, with the birth of the German Pigeon Association (PGA) in The Association has adopted its own pigeon sport management system, which is very different from Belgium and the Netherlands in terms of the competition system, performance evaluation, and association management system. The PGA currently has about 64,000 fanciers and 8000 fanciers alliances, with an annual turnover of more than 300 million (Euros). With its long and rich history of exhibitions, the Association holds one of the world's top five pigeon exhibitions 2.See, e.g., German Pigeon Culture Expo, "Unveiling the Mystery of German pigeons: The Myth of Pigeons that We Have Always Been Considered as an Altar", Chinaxinge.com, 10 September ( Walsh, Steve "Perceptions versus Reality: Homing Pigeons", Canadian Racing Pigeon Union, ( 0D AF/0/Apr1641DelegationRequestCdnRacingPigeon.pdf). 3.Ibid. 5

7 (ranked second among the top exhibitions: German Casser, Dortmund, UK Blackpool, Poland Katowice Pond Pigeon Show, China Langfang Pigeon Show), with more than visitors annually[4]. In the United States the modern sport of pigeon racing was introduced in mid 1870s. Over the course of following decades, the sport has become particularly popular in Hoboken (New Jersey), Coney Island and Shady Hills (Florida), where several annual racing events are held. According to the American Racing Pigeon Union, one of the largest accredited organizations in the country, there are over 15,000 registered lofts in the US.[5] The increasing popularity of the sport has also led to an exponential increase in prize money: the annual Million Dollar International in Canada. The main is Race is one of the biggest prizes in the sport, amounting to more than US$ 1 million committed to the pot. The sport has also gained significant popularity organization is Canadian Racing Pigeon Union, which preservation and growth of the pigeon racing in Canada. 4.A Bief introduction of the pigeon racing system in Belgium and the Netherlands", 21 October 2016, ( 5.Heather Yakin, "Pigeon Racing a Growing Sport: Homing Birds Attract Breeders", Times Herald- Record, April 10, ( AID=%2F %2FCOMM%2F %2F-1%2FNEWS). 6

8 The sport is popular also in South America, particularly in Brazil and Argentina. The Brazilian Pigeon Racing Grandprix is the biggest pigeon racing event in South America, organized by Pigeon Racing Association of Brazil and the government of Aracaju.[6] In Africa, South Africa s Sun City Million Dollar Pigeon Race is the biggest pigeon racing event in the continent, where over 4,000 birds from 23 countries compete for a share of the $1.3 million-dollar pot. In Europe pigeon racing is especially established in Belgium, UK & Ireland, Romania, Turkey, Nederland, Germany and France. As mentioned, Belgium is a famed location, boasting skillful pigeon fanciers (such as Janssen Brothers, Karel Meulemans) and top quality pigeon breeds. This attracts several buyers from around the world (especially from China). In Great Britain pigeon racing has royal origins. The first races were organized in 1881 and the Royal family became involved in 1886 and still is to this day. Currently, there are about 50,000 pigeon racers in the UK. The Royal Pigeon Racing Association estimated that the sport generates more than 130 million a year for the UK economy.[7] In the UK and Ireland pigeon racing has been developed and is regulated by six independent organizations: the Irish Homing Union(IHU); the North of England Homing Union (NEHU); the North West Homing Union (NWHU); the Royal Pigeon Racing Association (RPRA); the Scottish Homing Union (SHU); and the Welsh Homing Union(WPHU) While pigeon racing has its origins from European countries such as Belgium, the United Kingdom, the Netherlands, Germany, and France, currently the biggest markets of pigeon racing are found in Asia, Mainland China and Taiwan being the leaders in the world. In addition to these markets, pigeon racing is also popular in India, China, Pakistan, Iran, Philippines and Japan. One of the most prominent pigeon racing locations is Taiwan, where annually a staggering $ 1 billion prize money is being distributed amongst more than 100 competitions. In Taiwan annual breeding expenditures exceed US$50 million, pigeon dieting expenses exceeding US$130 million/year, foot ring expenses exceeding US$33 million/year, and annual transportation costs amount to US$33 million. 6.Federação Columbófila Brasileira, "Brazilian Pigeon Racing Grandprix", website ( 7.Jasper Copping, "British pigeons racing for new homes in China", The Telegraph, 18 Aug 2013, ( "Introduction to Royal Pigeon Association ofthe United Kingdom", 13 November 2014, ( 7

9 Taiwan: Pigeon Racing Industry Size &Costs Mainland China is the fastest growing markets of pigeon racing in the world. The astounding demand is principally driven by China s middle class, which has led to a significant increase in prices for champion racing pigeons. China has more racing pigeon fanciers than leading European countries (Belgium, Netherlands, France, Germany and UK) combined. The escalation in popularity of pigeon racing saw the creation of several one-loft races around the country, some of which have enormous prize money.[8] In China, training pigeons can be traced back to the Ming dynasty, from the 14th to 17th century, when the birds were used as carriers. Nowadays, according to some estimates, China hosts more than 100,000 pigeon races annually. 8. Tom Smith, "From America with Love... for Pigeons that is", British Homing World, 2012, 8

10 China: Facts About Growing Pigeon Racing Industry inchina In some competitions the prize money has reached US$4-11 million in total prize money for a single championship.[9] According to conservative estimates, the Chinese Racing Pigeon Association has over 300,000 fanciers across the country. Some of the lofts in the country can house more than 10,000 birds.[10] Moreover, Chinese buyers have made headlines with their record sum purchases of pigeons from Belgian, Dutch and British fanciers. In 2012, at the Dutch National Champion Pieter Veenstra s total auction the Chinese billionaire, Hu Zhen Yu, paid a world record auction price of US$290,000 for the champion hen, La Dolce Vita.[11] In 2013, a Chinese businessman paid US$ 60,000 for a Belgian-bred racing pigeon, named Bolt, after the Jamaican sprinter Usain Bolt.[12] 9.Muyu Xu, Ryan Woo, "Spring in the air, China's pigeon racers give birds their meds" Reuters, 17 March 2017, ( 10.Jasper Copping, "British pigeons racing for new homes in China" The Telegraph, 18 Aug 2013, ( 11.Tom Smith, "From America with Love... for Pigeons that is", British Homing World, 2012, 12.BBC, "World record price paid for Belgian racing pigeon Bolt" BBC, 21 May 2013, ( 9

11 In 2017, Xing Wei, a Chinese property tycoon, paid US$490,000 to purchase a Belgian pigeon called Nadine, in what is thought to be the largest deal on record. He followed that with a US$475,000 purchase of a champion bird called Extreme Speed Goddess at a Beijing auction in December. Chinese races generate unprecedented reward pools which further drives the adoption and popularity of pigeon racing. In the Diamond Elite One-Loft Race, a distance of 300 miles, the 1st prize is 10 million Yuan (US$1,500,000), and the entry fee is over $7,500. China s premier 500km Iron Eagle race series held by the Pioneer International club in Beijing boasts a prize pot of US$70 million. Beijing is set to award 70 million yuan (over $10 million) in total prize money at its autumn championship. The 310-mile Golden Island One-Loft Race in Qinhuangdo provides US$ 4,7 million in prize money.[13] The institutionalization of pigeon racing and its transformation into a global sport has resulted in the creation of a global federation of pigeon racing, Federation Colombophile International. With its astounding universalization, the Federation is the leading organization which shapes and develops the sport of pigeon racing. It has registered 4,350,000 fanciers worldwide, with 65 Member Federations that participate in some 7800 races annually around the world. The Federation has sold 50,000,000 footings for pigeons to participate in its competitions. In the next sections of the white paper we will describe the composition of the Pigeon Chain platform and how it will further contribute the development and popularization of this astounding sport, becoming one of the most unique applications of blockchain technology for shaping an industry. 13. Financial Times, "Financial Times Wealthy Chinese push racing pigeon prices skywards", FT, (available at 10

12 3. Design of the Platform The Pigeon Chain platform aims to become the one-stop-shop for pigeon racing sport, providing a wide range of tools and services to meet the needs of those who are interested in pigeon racing. In general, the Pigeon Chain platform will be composed of three main sections: Pigeon Digitization Technology; Auction; and an GPS/RFID based Decentralized Reward Distribution system. These sections are complementary to each other and in unity provide a holistic system which can be used by racers to both be involved and monetize their racing pigeons in a digital environment (based on blockchain protocols). As a very highlevel description, in the platform racers and breeders can: Digitize their pigeons, creating unique non-fungible tokens.[14] These Digital Pigeons involve identifiers of real world pigeons and are linked with real world pigeons. The digitization enables easy proof of ownership, flexible online auctioning (only using digital means), smooth transfer of ownership and functionality for secure decentralized reward distribution. 14. Read about explanation of non-fungible tokens and related technical terms in the section 8. 11

13 Users can apply Blockchain and smart contract technologies developed by our team to auction their pigeons. In the smart contract, Digital Pigeons are used to securely organize the auction and trustlessly transfer the ownership of pigeons to the highest bidder. Furthermore, the native token of Pigeon Chain platform (RPC) will be applied to make bids and payments for pigeons. This implies that it will be easy to participate on auctions, there are no geographical limitations, and only an internet connection is needed for the process. Through application of GPS/RFID and Blockchain technologies the platform will enable the decentralized registration of pigeon race results and reward distribution to winners. The system relies heavily on blockchain as a distributed database and smart contracts as the technology for self- executing, immutable protocols. The system will also use the Digital Pigeons, as the smart contract can get assurance about the pigeon s ownership by checking whether a particular crypto wallet holds the non- fungible token (Digital Pigeon). In addition to those key sections, the platform also will offer several services and modules as add-ons to the system, to support the main sections and provide inclusive experience to users.. 12

14 The blockchain-based database module is a building block for several applications offered by the system. The immutable database aggregating a vast amount of pigeon related data will be used both by users (as the most comprehensive source of pigeon data) as well as by other applications of the platform (pigeon digitization, decentralized reward distribution, etc.) as secure backend database. Furthermore, as an efficient and more focused way of data analysis, users can generate reports about specific pigeons using the technical capacities of our software. To promote the expansion of the sport, the platform will enable the development of new and organized pigeon racing leagues, initiated by the community members. The Pigeon Chain platform will provide the technological infrastructure for efficient and secure organization and management of theraces. In addition to the auction section, which will serve as a pigeon marketplace, the platform will also provide an ecommerce system (smart contract powered) for the marketing and trade of other pigeon related products and services. And last but not least, in the platform influencers can publish quality content to help and guide newbies in the pigeon racing industry. The token rewards (decided through community rating) will help to promote and encourage more and more users to create content about pigeon racing. In the following sections of the white paper we provide utility and technical descriptions of the main section and complementary modules. The order of the following sections is based on the logical structure of the platform, considering how different modules are related to each other, and what are their building blocks.. 13

15 4. Immutable Data Registry, Data Integrity Tools Provided by the Platform 4.1 Need of a HolisticDatabase Accurate and secure record keeping is one of the most important factors for effective loft management and successful pigeon racing. The expert racers and breeders place increasingly more attention to a pigeon s physical details, race and season records, and pedigree data to find new ways to optimize and improve the performance of their racing pigeons. The data centric decisions have much more weight and reasoning than simple guesses and opinions. To address this need, the Pigeon Chain platform will provide the most comprehensive database in the industry; aggregating and standardizing a vast amount of pedigree records, racing data, and other pigeon related statistics in one place. Further, the platform will apply blockchain technology to power the database, particularly aiming to protect the integrity of the data which may have significant commercial application (such as pedigree records). The registration of thoroughly verified information securely on blockchain (hash of data) enables the prevention of fraudulent pedigrees and enhances the reliability of information, which is particularly important in pigeon breeding and sales. The platform will also provide data analysis tools to ensure that users fully harvest possible insights from the database. Availability of thorough and temper-proof data opens new prospects of data analysis, providing a much better perspective about the parameters that can affect race results distance, weather, and other factors can have significant impact on certain birds. This data will help the racers to better understand in which conditions their birds perform better, and accordingly set up their nesting conditions and training routine for the following seasons. This specific data can be further added to the pedigree, providing an exclusive full picture of a pigeon. This will assist fair price formation in the market providing quality information about the bloodlines of the pigeons. In general, race specific data stored will include: (1) race date, (2) race distance, (3) race conditions, e.g., weather, wind, temp, etc., (4) release time,(5) arrival time, (6) speed, (7) loft location, (8) club location, (9) federation location, (10) points earned, (11) diplomas won, (12) race winner, (13) winning speed. These details 14

16 will be publicly available to wide range of users and proper data verification will be provided. This data also will include characteristics and state of pigeons, such as: (1) celibacy, (2) widowhood cock, (3) widowhood hen, etc. In regards to certificates, the system will store copies of race information, race sheets verified by race secretary and chairman, loft registrations, and other certificates (Champion, Ace, etc.). The blockchain powered software can also be used privately. The owners of the loft can register data related to: (1) date of medications and vaccines administered, (2) nesting conditions, (3) type of feeding each day, (4) type of training or exercise given to the birds, weather it is loft flying, flag flying, road training etc., (5) dates of major events that happened such as pairing up for natural, splitting cocks and hens for widowhood, etc.[15] If the racers use our software for the registration and analysis of private information, the data will be securely encrypted and only available to the particular user. Further, the daily routine of the pigeons during racing season also may be thoroughly registered to enable the duplication of the actions done during the successful season in future seasons as well (particularly if the racers constantly change and experiment with new routines). The software will have functionality for private loft owners to register their private data in a very structured and accessible way, enabling also thorough impact analysis using data analysis toolkits provided. Further, the private data (which is proprietary information for racers, as their loft management routines may be the factor which makes the difference) will be fully encrypted (end-to-end encryption applied). This means that though the data will be stored on the cloud, nobody except from the owner can gain access to this data (decryption with their private key). No loft management software presently available in the market offers data security to the extent that will be provided by Pigeon Chain. The software can be also used to securely share this data (applying proxy re-encryption) with other loft owners. 4.2 How Blockchain Technology is Applied in the Database Module As mentioned, the platform aims to create the most comprehensive and secure pigeon data registry, designed to aggregate, standardize, and maintain pedigree records as well as other pigeon related data. In general, the application of blockchain technology to power a database has unique advantages such as decentralization, 15. The pigeon racingblueprint,

17 fault tolerance and audibility. The blockchain itself is a database, which through its unique design and application of cryptographic primitives, is almost completely immutable. The system will allow any user to apply a ring number (or other identifier) to search for any data about a pigeon, such as ownership, bloodline, prior participations in competitions, past rewards from competitions, phone number of owner, etc. To develop the blockchain based storage we will apply on-chain and off-chain design, as storing all the information on the blockchain is prohibitively expensive and very slow. The data will be registered on a decentralized ledger, InterPlanetary File System(IPFS), and the IPFS hash will be stored on the Ethereum blockchain. Hash is 256-bit signature of the data, its registration on the blockchain ensures that any tempering of data will be promptly detected, as such bringing immutability to the system. To enable easy identification of data about each pigeon in the database, the ring number of a pigeon will be stored on the blockchain, which will be mapped to hashes of other details about the pigeon. The main benefits of the application of the blockchain technology powered database are asfollows: storing the signature of an information on blockchain provides complete audibility and data integrity; enables fast detection of forging attacks and illegal modification of the database through the application of cryptographic tools (asymmetric keys, digests, etc.) and data replication on several nodes; enables the decentralized and secure reward distribution through smart contracts. For example, the GPS/RFID technology (applied in decentralized reward distribution system) may be vulnerable to attacks if there is no secure backend database (which keeps information about each pigeon mappedto their rings, loft location, etc.); and this system will also ensure that there are no duplicative chips and rings which may create confusion in the system. Part of the data provided by Pigeon Chain will be publicly available, so the interested users can apply the ring number to find all the available details about a pigeon. However, our blockchain based software can also be used privately, securing the privacy of the information through end to end encryption. For users in order to securely share information (pedigree private records, vaccination records, ingredients of the pigeon diet, etc.) with other users (buyers, breeders, etc.) the proxy re-encryption will be applied (secure proxy server). The users can easily and securely generate private/public key for encryption and decryption in our system. 16

18 Mechanism of Secure Data Sharing Through Proxy Re-encryption The proxy re-encryption mechanism applied in the Pigeon Chain softwarewill have the following properties: the software will have a powerful encryption key management platform built on Proxy Re-Encryption cryptography algorithms, enabling flexible and secure key management in distributed environments (cloud and blockchain applications); the fundamental property of proxy re-encryption schemes in our software is that the proxy is not fully trusted, i.e., it does not know the secret keys of any user of the software and does not learn the plaintext and data during the conversion; and unmatched flexibility of sharing and accessing encrypted data without pigeon owner losing their full control over the encryption keys. 4.3 Pedigree Data, Profile Construction and HolisticReports Pigeon breeders are very interested about the pigeon genetics, studying the pigeon 17

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20 genetics at the population level. Breeders try to pick up breeding combinations which will produce consistently quality racing pigeons. The breeders would like to have golden pairs, with ultimate goal of having golden lines, bringing exceptional pigeons for several generations. Therefore, the aggregation of pedigree information and easy to use visualization of this data can significantly facilitate the work of pigeon breeders and buyers. The Pigeon Chain platform will provide functionality for easy development of pedigree charts, inputting historic information about pigeons, etc. The system can be applied to record several generations in the pedigree charts using the software. Pictures can be stored and printed in the charts to enable better visualization of the genetic chains. Overall, the platform generation pedigrees (four-generation, incentives such as premium services encourages the registration of several five-generation) through providing direct to the lofts which have some severalgeneration pedigrees registered in thesystem. For pigeon sellers, the platform will enable them to create comprehensive profiles for pigeons on the platform (as marketing material). A big range of data and identifiers can be inputted to create a unique profile for a pigeon. In addition to the pedigree data, the owners can input data such as: band (including, letters (prefix), union, number and year, second band in case of double banded birds, pictures of the bird (body and eyeshot), color, strain, status of the bird (young, racing, breeding, etc.), vaccination data, etc. The profiles will enable the pigeon sellers to expose their birds to the market, and potential buyers can search birds based on characteristics they are looking for. The system may also enable the involvement of a network of third party verifiers who can check and verify the information. The platform will create token incentives for them to be involved in verification process. To preserve the privacy of the pedigree charts and profile records (if it is preferred), the owner of the pigeon has option to fully encrypt the data and manage it through the provision of permissioned access to friends, partners and customers (seamlessly). Further, during the auctions to the breeders, the seller will have the option to open the pedigree data only for the participants of the auctions (proxy reencryption isapplied for this propose). Individual lofts can also open these types of profile pages designed to advertise and market their pigeons in the system. This type of aggregation of public data about the pigeons covers all the aspects of their performance and also enables the development of holistic reports about pigeons. The Pigeon Chain database system will have integrated automatic reporting tools to assist users to generate customized quality documentation. The system will enable easy visualization of the data (graph, 19

21 diagram, table) and filter set-up[16] to make a targeted search of the data, and make alteration of the composition of reports based on the needs of ad-hoc analysis. The files generated can be easily issued as printout or exported form the website in different formats. 16. Users can easily configurated the report filters to be static list or a dynamic ones. 20

22 5. Digitalization of Pigeons Digitization, in general, represents a process of development of the electronic/digital analogies of real world objects. The functionality to store, display, trade and control the objects in digital environments opened up completely new prospects for a multitude of industries. Digitization as a concept has never been applied in the pigeon racing industry. Through the application of blockchain technology, Pigeon Chain aims to introduce an utterly innovative framework to the industry. The digital pigeons introduced by the Pigeon Chain platform are the electronic forms of real world pigeons technically manifesting the ownership of the pigeons on blockchain. This type of digitization is applied to enable the ease of ownership, trade and identification of pigeons whilst infusing a significant gaming component to the system (to attract new users to the industry). Non-fungible tokens[17] will be applied as digital pigeons (tokens), which are bits of information stored on the blockchain encoding unique characteristics of pigeons. In other words, on the blockchain each pigeon (which was digitized) will have its own unique digital fingerprint, which includes key identifiers such as ring number, etc. Digital Pigeons will be a very engaging mechanismto bring public attention to the sport 17. Non-Fungible token is based on a protocol which makes sure that each token is unique, identifiable, non-dividable and non-replicable. Non-fungible tikens have several differences from tokens such as bitcoin and other main crypto assets, which are designed to be fungible (as currency). 21

23 The digitization module is applied as a way of modernizing and optimizing the current system of the pigeon industry, particularly in terms of ownership registration, tracking and transfer. Currently there is no standard and unified way of managing the ownership of pigeons, as the registration of the ownership is done by local associations. Previously some platforms aimed to create a common pigeon registration database, however this approach creates challenges in terms of privacy and data security (which may push certain organizations and racers not to share their data with these platforms). Our unique blockchain based digital pigeon approach brings an elegant solution to the trade-offs by providing the following advantages: Security: The holder of the non-fungible token can easily proof his ownership of a pigeon. Privacy: No user needs to disclose his name or contact details to claim his ownership, or participate in public auctions, only public wallet address is needed which is pseudonymous, and the third parties cannot associate it with real life identities. Consolidation: The digitization inherently embodies migration of pigeon identification data into the blockchain, thus consolidating all pigeons related data into one database. Digitalization module will provide the real world pigeons some characteristics of collectables, which can drive unprecedented public attention to pigeon racing, thereby engaging a wider audience of new users. Furthermore, non-replicable digitization of pigeons will enable a more effective transfer of ownership. The rights of the pigeons can be sent to customers and buyers through making a call in the system using a private key (like a private signature). The ownership transfer can be conducted in a matter of minutes without any need of extensive documentation and trust between counterparties. The auction system (see section 6) of the platform will be developed to ensure that there is concurrence between real world ownership and digital ownership of pigeons at all times, since the digital pigeons have no intrinsic value if the owner does not own also the physical pigeons (for ensuring this the auction applies an escrow system into the sale ofpigeons). To create non-fungible digital pigeons, ERC721 token specification (as the bottom layer) will be applied, which represents an open standard in industry. The ERC721 specification can be applied for the digitization of unique, non-fungible assets. It guaranties the scarcity and authenticity of the token (digital object), without the need. 22

24 of third party verification, providing proof of ownership and proof of existence with very high security (impossible to steal or forge). This system can be well integrated in the ecosystem of the platform to create a unique, engaging, and seamless user experience.. As a protocol layer build on ERC721 specification, 0xcert protocol will be applied which provides the specialized infrastructure for non-fungible token (NFT) issuance and management. Overall, 0xcert protocol (being developed by the Xcert team) is an excellent fit to our requirements, enabling ease of issuance of NFTs with pigeon identifiers stored in the metadata of the token, as well as the provision of explorer for the easy search and verification of the pigeon s ownership. 5.1 Non-Fungible Token Design & Issuance Process The token will have the imprint of the unique identifiers of the pigeon and only can be minted (issued) through the approval of the local clubs, associations and officials which verify the ownership. To link a specific non-fungible token to a specific pigeon the token will include the identifier (ring number) which has URI pointing to public JSON metadata. Overall the key data which identifies a pigeon will be structured as a JSON object. On one hand this enables compatibility to the 0xcert protocol requirements, and on the other introduces standardization of identification data format in the pigeon racingindustry. When it comes to issuance of tokens, to ensure fair dealing and facilitate the process for non-tech savvy pigeon owners, the Pigeon Chain will act as an intermediary to issue the tokens (will be the owner of digital pigeon smart contract). 23

25 At the same time, in order to create enough checks and balances, digital pigeons can be only minted if there is appropriate authorization by the local organization which can be checked by the community at all times. The process of creating a new digital pigeon is initiated by a request from the pigeon owner, who submits details and available documentation (electronically) to the Pigeon Chain team. The execution begins from the creation of the JSON object, which includes the main identifiers of a pigeon. As a next step, the details and ownership of the pigeon is verified externally by a local pigeon racing organization (or other partnering organization), and finally approved by Pigeon Chain Foundation. After all the steps are completed, the call is made to the smart contract to mint digital pigeon to be assigned to the private digital wallet of the owner. Further management of the token thereafter is performed by pigeon owner. A similar process applies to the token burning process (destroying the token). 2. Benefits of Pigeon Digitization Module Blockchain technology can be a tool of a high utility for real world asset digitization thanks to its technical properties: cryptographically secured transactions; distributed ledger technology; and smart contracts. The technical specifications of blockchain eliminates the need of: (i) intermediaries to execute transactions (self-executed by smart contracts); (ii) the need of intermediaries to keep the record of transactions and facilitate them (transactions are recorded in the ledger); (iii) solves double spending problem (eliminating potential fraud); and (iv) provides a database showing the complete history of ownership. Transactions are stored on the distributed ledger, eliminating the possibility of single point failures and unresponsive servers. The data stored on the blockchain is immutable, transparent, and allows to integrate principles of management into the assets themselves. Pigeon digitization through the use of blockchain technology can effectively reduce information asymmetry, decrease the friction to trade and democratize trading system in general, ridding the market from vast bureaucracy, inefficiency and red tape (in traditional markets there is a need to go though vast number of checks at each and every point of sale, signing of contracts, paying of commissions, etc.). Overall the digitization module: enhances liquidity of the pigeons that otherwise have a low liquidity. 24

26 Trading pigeons are currently conducted in physical auctions which enables only a limited number of buyers to trade for them. Through digitization the pigeon can be traded at any time, as long as the seller opens it to the onlineauction; allows pigeon owners to capture liquidity premiums from pigeons that otherwise, due to relatively low liquidity would not be actively traded. Digitization of pigeons though blockchain will facilitate the sale making the process simpler, more secure, eliminating possibility of fraud; eliminates temporal and territorial barriers for pigeon owners for attracting investments (digitized pigeons can be sold globaly without territorial restrictions). Thus, through using the immutable fingerprint of a pigeon stored in the blockchain, the owner can sell its pigeon to buyers around the world, a trade that in tradition model of sale would not be trustless. reduces administrative expenses and inefficiencies (documentation, trust), associated with trading pigeons, delegating the sales process to smart contracts for executing agreements seamlessly (improving speed of settlements) and overcoming trust concerns though digital pigeon fingerprints stored in blockchain;and allows separation of ownership and custody of the pigeons. Certain buyers might not have the skills or know-how to raise and train the pigeons, therefore, by buying only digital birds they would not have to build those capabilities. Separating the ownership and custody of the birds can help the industry to mature by attracting more private money into it.. 25

27 6. DECENTRALIZED AUCTION AND MARKETPLACE 6.1 Pigeon Auction Based On SmartContracts Blockchain technology and RPC native tokens can be utilized to facilitate peerto-peer auctions and the sale of pigeons. As stipulated in the previous point (on storing the identity, pedigree, bloodline and history of every pigeon on the blockchain and mapping it with their ring number) the information about every pigeon is immutable, externally verified and stored in the blockchain, which can thereby facilitate the trade between the buyer and seller. This way the buyer can have assurance that pedigree and the past performance of pigeons is not tampered manually to artificially increase the price. The auction/sale process can be organized in a decentralized manner, with smart contracts to eliminate any centralized interference. Currently the pigeon auctions are mainly organized in big halls where the buyers and sellers gather and conduct a public auction of racing pigeons. Auctions can end up being very competitive, with the buyers pushing the price of the pigeons to record amounts highest price thus far being almost half a million dollars. The decentralized organization of online racing pigeon auctions will solve several problems that might be associated with physical auctions, such as: (i) no physical location of the auction thus the auction is accessible for buyers from around the world, this will relieve organizers from seeking and booking halls for the auction; (ii) no territorial and time limitations for participants as they can participate from any part of the word (as long as there is an available network connection), this is helpful given that auctions can last from several hours to several days; and (iii) bigger variety of sellers as one buyer can have access to several auctions at the same time, thus the technology enables more efficient price discovery makes it easier to compare the offers across several fanciers. A blockchain-based distributed auction is intended to serve as a more secure, convenient, trustworthy and immutable alternative to the current centralized online auctions, and is an important supplement to off-line physical auctions. Currently centralized online auctions have a number of drawbacks, some of which are inherited due to the central architecture of those platforms. Those auction systems can potentially create big risks for selling precious pigeons due to possibility of single point of failure, centralized control and governance risks(lack of transparency, unfair front-running, price manipulation, etc.). 26

28 The centralized design makes them vulnerable to attacks (single point of failure), which may vary from the suspension of the service and unresponsive servers (such as DOS attacks) to security breaches. Furthermore, breach of the platforms security will give the malicious parties exposure to all the stored data, identity, and other sensitive information of the user (bank details, physical address etc.). Centrally administered auctions can pose significant governance issues, which might incentivize the controlling parties to manipulate the prices of the auctions to artificially increase or decrease the prices of pigeons. The controller of the platform can change the rules of the auction at any time in its discretion, or alternatively, due to security breaches, malicious parties can change the rules of the auction or manipulate prices. The mentioned limitations can create counterparty risks for participants to the auctions and discourage honest community members to take part in auctions due to lack of trustworthiness. Blockchain based auctions, on the other hand, have a decentralized design, which reinforces their security, transparency, privacy, ensures fair governance, and encourages community member s participation due to several unique features that will be discussed below. Blockchain technology and smart contacts can safeguard the security of the pigeon auctions in several ways: trustless operation of the auction where malicious participants are unable to affect or manipulate the results of the auction, due to safety properties provided by blockchain; guarantee of the user privacy as the auction participants are presented with pseudonymous identities; transparency of the auction process as the conditions of smart contract are pre-determined and broadcasted to all potential participants of the auction, thus the community knows the rules of the game, ex ante, and can verify the rules by looking into the publicly available code of smart contract; decentralized nature of the platform prevents malicious parties from manipulating the system. Due to high security standards of blockchains, the malicious players need to hack thousands of nodes running on the blockchain to successfully execute their illicitintentions; platform security is based on the security of the whole Ethereum blockchain which makes illicit manipulation impractical or prohibitively costly; 27

29 implementation of a decentralized auction as a smart contract brings complete transparency to the process, eliminates corruption, and diminishes a possibly dishonest,centralized auctioneer; self-executing smart contracts that are operating according to predetermined, encoded rules and cannot be modified after they are deployed into the blockchain; and decentralized governance of the platform does not allow one independent party to be in control of the auction processes, thus there is no centralized control or counterparty risk associated with it. Blockchain is a public ledger where data can be added into the ledger only through reaching a consensus in the decentralized network of nodes. After the data is stored malicious parties cannot erase the data or add extra data solely on their discretion. Parties transact against a common ledger, which reduces the errors from multiple parties managing the same data, and therefore improves trust. By registering a pigeon on the blockchain (digitization of pigeons) and updating it every time it is bought or sold, moved from one loft to another or one fancier to another, or updating all the results of the competitions that it took part in with its results, we create a fingerprint of the racing pigeon that could prove its authenticity, and thereby discourage fraud and malicioussellers. The platform will allow the deployment of auctions that work with different logics, allowing the sellers to choose the kind which is most suitable for selling their pigeons. Each type of auction has its logic of smart contract, which transparently broadcasted for the community. The smart contracts will enable two main types of auctions to the sellers: English Auction (open ascending price auction) is the most common kind of auction for racing pigeons, where the participants submit their bids according to their ascending order, and the participant that presented the highest price offer which was out outbid, receives the racing pigeon. Dutch Auction (open descending price auction) where the asking price of pigeons in the auction start from very high, and progressively decrease until any of the participants is willing to pay the price. Thus, the first bidder is the one that receives thepigeon. 28

30 Below we explain the process of auction based on English auction logics. The platform will enable members of pigeon racing community to trustlessly organize peer-to-peer online auctions through smart contracts, where the highest bidders will be able purchase the pigeons and the sellers will be compensated through RPC tokens. The step-by-step process is the following: Seller creates an auction by submitting its Digital Pigeon [18] to Pigeon smart contract. 1. The seller specifies the reserve price(auction minimum amount) of the pigeon, and the length of time that the auction will be open for participants to submit their bids. 2. The auction platform managers look through the application of the auction, check the digital fingerprint of the pigeon for verifying its existence, and check the rating of the seller based on its past transactions through the platform. 3. After the confirmation, the pigeon auction commences (Pigeon Chain foundation makes pigeonauction functioncall). 4. Community members start bidding with RPC tokens. For bidding the participants send their RPC tokens into the smart contract address. The highest bidder cannot withdraw its RPC, while all other bidders can upon completion of theauction. 5. If the highest bid in the smart contract is higher than the threshold set up by the seller, auction is successful and seller gets pre-agreed length of time to ship the pigeonto the buyer. 6. After receiving the pigeons, the buyer confirms in the platform their receipt of the pigeon, its level of satisfaction, and according to the buyers feedback the smart contract allows allocation of RPC tokens into the public address of the seller. Smart contract transfers the digital ownership of pigeon to buyer. 7. Blockchain database gets updated to reflect the transfer of pigeon ownership & digital pigeon, which can be audited in any future time. 18. See Section5. 29

31 Designof Auction Protocol 30

32 There are several technical specifications that need to be considered for making the above described English Auction. Storing a large amount of data in the smart contract can be considerably costly, and thus the pigeon data, such as the auction description, description of the pigeon, the picture URL, pedigree and all past records about the pigeon will be stored off-chain in IPFS (Inter-Planetary File System). The hash from IPFS will be included in the smart contract to enable separate retrieval of data when needed. This metadata is critical for the auction; however, it is not critical for the smart contract logic, thus a more efficient and cost saving way of its storage is preferable. Another technical specification, is that Ethereum blockchain (and blockchains in general) does not have an exact time when a new block is added, but it is well established that new block is added in about every 15 seconds. Therefore, for avoiding any mistakes in the logics of the smart contract, the auction will have a starting block and ending block and allow the community to submit their bids in between the time that those blocks are added to the blockchain. Thus the smart contract will encode a number of requirement and pre-conditions for the bidders to follow, such as to submit their bids after start time and before the finish time. Participates are able to submit bids if the auction is ongoing and not canceled. The owner of the contract (seller) cannot submits bids. 31

33 For the purposes of reinforcing trust around the smart contract based solution of racing pigeon auctions, the bids will be submitted through sending RPC tokens into the smart contract. Escrow functionality of smart contract will store all the submitted bids and RPC tokens, and will ensure that the highest bidder is able to pay the due sum after the auction is completed. Thus the highest bid of RPC tokens will be locked in the contract, until the buyer confirms that it has received the shipped pigeon. The lower bidders will be able to withdraw their RPC tokens after the end of the auction. Alternatively everyone is able to withdraw their bids if the auction is canceled. The withdrawal functionality will be open only after the completion of the auction for security reasons, otherwise malicious parties, for example, could send a bid from a contract with a maliciously-crafted fallback function designed to expend all of the gas provided to it. As the transaction would run out of gas, no one could outbid the malicious party and the EVM would send the RPC tokens to the dishonest party. Dispute resolution: The seller can collect the fee payed by the buyer only after the buyer confirms the receipt of the sold bird. In cases when there is a dispute connected with the transaction, such as the seller ships a wrong pigeon, or pigeon arrives to the destination with considerable physical damage, the buyer can submit the case for the platform s dispute settlement window. This will enable the platform to examine the details of the sale and decide on the outcome of the transaction. The platform will try to mediate the dispute, and in cases of absence of agreement between the disputing parties, the platform will make a final decision. Overall, after submitting the winning bid and receiving the pigeon, the buyer will submit its ratings and feedback on the pigeon seller which will create a reputation system inside the platform. The reputation system will create a database of most trusted and least trusted sellers, thus encouraging the seller to act in good faith and discouraging the ones that are malicious. 32

34 6.2 Pigeon Related Product Marketplace The platform will also involve development of a self-governing marketplace where pigeon related product sellers, as well as service providers, can offer their products and services to pigeon owners. The marketplace can be organized in two ways: from the founders of the platform to the community; or peer-to-peer between the community members. The sale can be organized through smart contracts. The blockchain-based pigeon racing platform will provide a peer-to-peer marketplace, where the specialized community members can sell their pigeonrelated products through the system. The buyers, after making the purchase, will provide feedback and rating on the seller, which will be stored on an immutable and transparent database. The categories of pigeon related products are provided below: Lofts: Pigeon Lofts are the places where pigeons are kept, fed, breaded and vaccinated. Lofts are highly demanded products as, depending on their structure, can greatly improve the pigeons living environment and the cleaning process can be highly automated. Pigeons trade: Certain market participants in the pigeon racing ecosystem are busy with breeding pigeons and selling them to other community members. This is a highly demanded component of the marketplace and, combined with blockchain based reputation management, the sellers will become a key component for the platform. Vaccination: A vaccine stimulates the pigeon's body to increase its immunity to a specific infectious disease. It can highly strengthen the immune system of pigeons and keep them prone to viruses. The medication sold through the platform will reflect its origin, producer and the seller s reputation to increase trust between the buyer andseller. Food: Barley, corn, millet, and wheat are the most common foods for pigeons. High quality and nutritious food can be crucial for improving and maintaining the performance of thepigeons. The decentralized marketplace will similarly enjoy the advantages described above regarding decentralized auctions, however, there are a number of further advantages that need to be noted. 33

35 First, generally traditional marketplaces operate as an intermediary between sellers and customers, receiving a relatively high premium for eliminating the gap between those parties and giving business exposure to their customers. Centralized marketplaces, as an addition to charging high premium from sales, are more incentivized to sell the products though their platforms that are the most profitable for themselves. Moreover, traditional marketplaces can charge advertisement fees and in return allow certain business and their products to be prioritized in terms of appearing on the first pages of their website or on the first page of customer search results. Therefore, the commercial interest that traditional marketplaces have incentivized them to prefer profit maximization. Decentralized marketplaces make the sale of goods and services peer-to-peer, where the goods and services that receive the most favorable feedback in terms of comments and ratings are given preference to enjoy better publicity in the platform. Decentralized marketplaces operate on pre-agreed rules of operation, and are directed to solely incentivize the quality of products andservices. Additionally, blockchain can be used to create a reputation system encoded into the database that distinguishes between sellers according to their rating. The blockchain technology-based reputation system in marketplaces, allows the customers, after completion of every transaction, to provide feedback about the product that will be publicly available for future customers. The ratings inputted by customers is stored off-chain and their hashes are stored on the blockchain which makes them secure and immutable. A peer-to-peer marketplace, where producers and sellers across the world are able to offer their pigeon related products to customers, will facilitate better price discovery for the customers and make the sellers to compete in terms of the price and quality of their products and the way they serve their customers. Competition will thus, decrease prices and push the sellers to improve the quality of their goods, which will serve for the advantage of buyers. The product sellers will register its account in the marketplace, and submit the pigeon related products hash to the platform, along with its fingerprint, set a certain price against which the buyer is able to purchase the specific good. The platform will receive the request of the sale of product, it will look into the details submitted by the seller and approve thelisting. Utilization of RPC tokens for processing transaction, instead of fiat currencies, makes the payment process truly peer-to-peer, allowing the customer to send the coins directly to seller without needing a bank to process the payment. This has the advantage that customers are able to make the payment regardless of their location, and they do not need to have a credit/debit card that the ecommerce platform accepts. 34

36 Additionally, the platform does not store sensitive information of customers such as the credit card details as it is done in traditional marketplaces. The pigeon auction and pigeon product marketplace(ecommerce) can considerably increase the liquidity of RPC native tokens and the community members will be encouraged to use the tokens for transacting in the platform. 35

37 7. Decentralized Reward Distribution, GPS/RFID & Blockchain Integration The determination of winners in pigeon racing has undergone a technological evolution from manual clocks to GPS/RFID electronic systems. The Pigeon Chain platform introduces another step forward in the pigeon racing technology, enabling blockchain-based registration of results and decentralized distribution of the rewards. In case of manual (physical) clock systems (which is still applied in pigeon races), pigeons arrival time is recorded via fixing the time manually. In case of this setup, the clock is installed in a box; it is synchronized with all other clocks used by racers, and sealed to prevent tampering. For fanciers to be able to record the time, the clock includes small capsule holes where special rubber rings can be inserted to record the time of arrival. The rubber rings are attached to the pigeon s left leg (removed when pigeon gets to the loft) so the owners can only insert the ring to the box upon pigeon arrival. After the race, the race committee goes through each clock to register the results of each pigeon. Overall, this result registration process is prone to human error and is highly time consuming (particularly in case of large clubs when numerous pigeons from the same loft are involved in the race). In contrast to manual clocks, new mechanisms such as GPS/RFID technology brings significant automatization to the racing result measurement and registration process. In general, most of this electronic clocking systems are composed of three main modules: Clocking Module. The clocking module is the brain of whole system, a small computer. It handles the computational tasks related to the racing and represent backend of the system linking the devices and registering the results to the database (including blockchain ledger). Antenna/Scanner. The function of the antenna is to record the race results. Effectively, when the pigeon is within a specific range, antenna reads the chip and records the time. In case of the technology applied in Pigeon Chain platform, UHF frequency band is used in GPS/RFID system. The antennas applied in Pigeon Chain are custom-designed with a single specification. To record the results upon arrival of pigeons, the antenna can be set up in drinking water area (in loft), thus when after long flight the pigeon comes to rink water it reads the UID data from GPS/RFID chip. Overall, electronic product 36

38 code (EPC) and unique identity number (UID) unique for GPS/RFID chip recorded by antenna, serve the basis to measure the time of arrival. GPS/RFID chip. It is embedded in the ring of a pigeon (interacts with clocking module and antenna). It enables the other modules to track a pigeon and record the time. In the Pigeon Chain platform, UHF GPS/RFID tags will be applied in the races. The Rings which contains GPS/RFID chip is securely attached to the foot of pigeon. Each chip has unique identity number (UID) which is a global unique code of the chip and can be scanned by antenna. Key Layers of the Reward Distribution System In addition to the application of the most advanced GPS/RFID solution available in the market, Pigeon Chain platform will provide blockchain integration to make the system tamper proof (unique in the market). Direct communication between the blockchain and GPS/RFID will enable trustless registration of data on chain without any manual or third part interference. Additionally, this integration can further automatize the reward distribution process, where smart contract will self-execute and distribute the rewards trustlessly to winners using the racing results as input (in the protocol level). This approach will solve following core problems: mitigate human error and counterparty risk in UHF GPS/RFID data registration process; 37

39 provide assurance that the system is not vulnerable to hacks and malicious tampering; and facilitate and automatize reward distribution among the winners. The whole system is designed to provide the most secure pigeon racing reward distribution system available. Overall, Pigeon Chain s reward distribution system is composed of three layers: UHF GPS/RFID solution, Protocol Layer (Smart Contracts) and Blockchain Layer. 7.1 GPS/RFID Solution Layer The main function of the GPS/RFID technology applied in the Pigeon Chain platform is the accurate registration of the time of the racers. The risks in the racing process may be in terms of malicious time modification in the clocking system (which particularly applies to clock time modification), removal and modification of the ring and embedded GPS/RFID chip. Clocking System: The system applied in Pigeon Chain will make sure that clock time (in all clocks) is automatically synchronized to the platform, to avoid disputes about pigeon returning time. Furthermore, to prevent any possible falsification, each pigeon clock has a unique ID number, which is linked to geographical and personal information of racers, which is important also for pigeons velocity calculation. Moreover, clocking system comes with AGPS positioning, which can effectively prevent the clock from being shifted without permission. GPS/RFID chips: To preserve the security of the GPS/RFID chips (illegal duplication, removal, modification, etc.) the technology applied adopts Insert Molding process, UHF GPS/RFID tags are buried in the plastic ring. After being attached to the foot of pigeon, the ring cannot be dismantled and must be destroyed before it can be removed. If the pigeon ring is forcibly disassembled, the built-in GPS/RFID tags are also destroyed and cannot be used further. This makes sure that racers are not able to cheat the system removing the ring from the foot of pigeon, and maliciously scanning it violating the terms of competition. The electronic pigeon rings will be available in both fixed and movable sizes and will be placed on the left foot of the racing pigeon. 38

40 The backend of the GPS/RFID solution is powered by blockchain technology, which makes sure that data about results is registered immutably (cannot be tampered a in a later date). During competition results and information of all homing pigeons will be recorded to the pigeon clock's SD card (encryption applied) and uploaded to the Pigeon Chain system in real time (for date transmission from pigeon clock to platform queue buffer mechanism is applied to make the data transfer according to a Buffered data preemption algorithm). From there the data will be stored on IPFS and IPFS hashes on the Ethereum blockchain, all of this will be done automatically fully auditable by any racer participating in the competition (through displaying on the Racing Section of the website the result registered in real time). Time intervals of pushing the information to the system will be short: if there is no change in the top 10 rankings (of racing pigeons), the platform will push the data every 5 to 10 minutes to IPFS and when the top 10 rankings changes, the platform will push the updated data within 1 minute. In the Racing Section of the website racers can see also the pigeon's arrival time information, including the time when the Electronic Product Code (EPC) was read and UID was confirmed. 7.2 Description of Protocol Layer The next layer is the reward distribution smart contract (protocol layer). The contract is responsible for distribution of the rewards based on the results of the competition in a decentralized way using the cryptocurrency (RPC token) of the platform. The main purpose of this layer is to bring decentralization (no central party controlling everything at its discretion) to the reward distribution process making it effectively trustless, self-executing and automatic. The main value proposition of this type of trustless system is that it eliminates the risk for the racers to not being rewarded due to fraud or malicious organizers of the race. Therefore, because trust as a variable will be omitted out of equation, it implies that even if the races are organized by the community (by the unknown league, organizer or team), if the organizers apply the infrastructure offered by Pigeon Chain, the racers can have assurance about the quality and trustworthiness of whole process (no pigeon racer can get privileges or preferential treatment). This will help to further expend the sport geographically, will drive emergence of new leagues and will overall contribute to the development of pigeon racingsport. 39

41 The process and smart contract will have following design: The reward pool will be stored by the Pigeon Chain platform on the smart contract (using RPC token). The private addresses of the participants will be mapped with UID of the ring (before the race) in order to link particular pigeon s performance with private wallet of theowner. All the mappings (identification number to private address) and geographical locations of each loft will be audited by local pigeon organization and Pigeon Chain platform before official start of race. During the race the information will be stored on Inter Planetary File System (IPFS), a peer-to-peer, distributed file system. The IPFS hush will be stored on Ethereum blockchain. After the competition, pigeon racing information is analyzed and processed, and the rankings are calculated (through system automatically), the array of the all identification number of pigeons (and respective private addresses) with the respective racing positions (the race results from winners to losers). Oraclize system will be applied to fetch final results (generated by the system using IPFS data). into the blockchain. It will be displayed on the website. All racers can audit the results one more time, it will be audited also by clubs and organizations, and finally by Pigeon Chain platform. If pigeon fanciers have doubts about the registered results of the race, they should take the pigeon clock to check and confirm with the club, pigeon organization or local representative of Pigeon Chain platform. If no issues are identified the clubs, pigeon organizations and Pigeon Chain platform will sign the results with their private keys for it to be accepted by Reward Pool smart contract. As a next step, any racer can call getrewards function in the contract to trigger the contract to send the funds to respective wallets of winners. Therefore this whole system is designed to be maximumly decentralized and to create a comprehensive system of checks and balances with audit controls for the reward distribution process. 19. As a distributed file system, IPFS does not have a single point of failure (single hack can tamper or destroy the system) and risk related to malicious administrator such as centralized servers. Furthermore, IPFS has properties (due to application of Merkle DAGs) which is well suited to the requirements of the Pigeon Chain platform, such as (1) the content is uniquely identified by cryptographic hash, (2) any change of the data is easily detectable through checksum (hash will change). 40

42 Description of Reward Distribution Protocol 7.3 Staking Mechanism for Community Organized Leagues In order to further popularize the pigeon racing sport, contribute to its geographical expansion, and facilitate the organization of new leagues, the platform will provide an easy to use infrastructure for development of community initiated organized leagues. This functionality of the platform is an important extension of GPS/RFID & Decentralized Reward Distribution system and is based on the same technology. Overall, this system will enable community members to stake their token and generate a reward pool for their organized championships and leagues. Therefore existing leagues, or even individual community members, who would like to join or start a league in their community using the infrastructure and brand of the platform, they can stake their RPC tokens in the common reward pool. The staking process will be implemented through smart contracts. The organizer of the championship will publish the details of the championship in Pigeon Chain platform including the rules and conditions of participation, the minimum required reward pool as well as the number of overall racing pigeons per fancier that can participate in the championship. According to the conditions proposed by the 41

43 organizer, a new instant of rewardpool smart contract will be initiated, which will be used for two mainpurposes: 1.Serve as the common pool where all the fanciers that intend to participate shall send the RPC tokens to form the rewards pool. 2.After the end of the league, the through Oraclize (see section 8.2: Description of protocol layer) the results of the race are fetched to the blockchain, and the contract distributes the funds to the wallets of fanciers (winners). For the staking process to be successful, the accumulated reward pool needs to meet the pre-determined threshold of rewards size. If in specified time the staked RPC tokens are less than the minimum reward pool as encoded into the smart contract, the RPC tokens will be distributed back to their original owners. Consequently, if the staked tokens are more than the minimum threshold set in the smart contract, the championship will be considered successfully generated, and tokens will be locked in the smart contract until the oracle inputs the accounts of winning fanciers. 42

44 Following this, the smart contract will distribute the funds in between the winners according to the pre-programmed proportions. Due to the high transparency of public blockchains, such as Ethereum, the code of smart contract will be publicly available, thus all the participants will know the conditions encoded into it before staking their RPC tokens in it. The staking functionality for organized leagues in Pigeon Chain will be advantageous for the expansion of the sport by enabling community members from around the world come together in their geographical areas and easily organize championships. Decentralization of league organization and encouragement of community initiatives can exponentially increase the amount of pigeon racing competitions organized around the world, by providing the community members ready-to-use infrastructure. This mechanism will further facilitate globalization and popularization of pigeon racing competitions around the globe. The expansion will also enable all the leagues involved in the platform to enjoy economies of scale (both in terms of marketing and technology) and will be rewarding for the platform since it will charge a certain, small percentage from the reward pool. Additionally, the foundation will use the staked tokens to check the identity of league organizers and hire auditors to audit the raceprocess. 43

45 8. REWARDS BASED SOCIAL MEDIA PLATFORM As the last module, to truly complete the whole ecosystem for pigeon racing, Pigeon Chain platform will also provide social media system (community members can post stories, advices and comments) to promote the generation of content and aggregation of the data in one place. Current social medias and blogs which are concentrated more on the provision of pigeon related information, posts and data do not have any economic model encouraging the quality, on-going content creation. To solve this problem, popularize the sport, and position the Pigeon chain platform as single best source to get information about pigeon racing industry we offer a unique economic model as an integral part of our social media. Overall the social media section is intended to make sure that users can find all the needed information to enhance their skills in terms of the successfully managing a loft, tips about training programs, nutrition provided to the pigeons, daily routine, etc. It will enable influencers in the industry to publish insights into the pigeon racing industry: to name a few they can share tips on how to grow pigeons (the birds food, health, breeding, vaccination, etc.), training advice (for short range, medium range and long range racing), etc. The social media section can create an additional sense of community and personal touch around the platform. It will be a gateway for industry newcomers and amateurs to interact and learn from industry professionals who are willing to share their experience for receiving rewards (in RPC token). The Pigeon Chain platform will also have budget (reward pool) for encouraging pigeon industry experts to share their experience and contribute quality content to the community. The reward pool will be generated both from contributions of Pigeon Chain platform and community members who want unlimited access to the platform s social media section. The rewards will be distributed in RPC tokens, and the main determining factor will be the opinion of the community about the content. The algorithmic system will be adopted to make sure that the process of the determination of the rewards for a particular source(content writer) is fairly calculated and there is fair distribution of rewards in each period (will be distributed by Pigeon Chain platform). This distribution of the rewards will be based on the rank of the post in the system. There are couple of factors which effect the ranking of each post and source: 44

46 1. Quality and Popularity: Popularity of the post which is determined by the number of likes or comments it gets in the system and quality assessment by Pigeon Chain. Where: l is number of likes of the post in the website. QC is the quality coefficient determined by the Pigeon Chain Platform R(p,t) is the rank of the post p at the time t 2. Timing: There is opposite correlation between oldness of the post and its ranking, enabling fresh posts to bring higher rewards to their authors. As a timeaware algorithm, we will apply exponentially decaying function to reflect the relationship between the rank of the post and its timestamp. Where: ἀ-is the parameter which describes the decay in the relation to the time. The parameter applied will be described in further technical papers of Pigeon Chain platform. 3. Sources: As the distribution is based on the work of content generators rather the articles we also equalize the chances of new users to old users, applying decaying function on raking based on the posts made from the single source. To smoot influence of sources in the ranking we apply: 45

47 Where S(p_i ) Source of the post. y describes the time interval (ti, ti+y), during which no new post have been created by the source. β parameter that shows how much arrival of new news effects on the ranking of the source. 4. Popularity of the topic among writers: The post rank is also related to quantity of sources that keep writing about it, which indicates about the quality of the topic. To consider this factor in our function we apply also algorithm describing the data clustering (in theposts). And finally, considering that the rewards will be distributed to the content creators, the final ranking of sources should be calculated using the ranking of post. More simplified and thorough description of reward distribution mechanism of Pigeon Chain social media will be provided in the future technical papers of the platform. 46

48 9. THE FUNCTIONS OF RPC TOKEN IN PLATFORM Racing Pigeon Coin (RPC) is designed to have utility token and cryptocurrency functions in the pigeon racing platform. The tokens will be used for the following purposes: Entrance fee for pigeon racing competition - The token of the platform will be utilized to pay for the entrance fee at the competitions. For entrants the process is very simple (only network connection is needed), the application of cryptocurrency diminishes the geographical entrybarriers. Transactional currency in auctions and marketplace - For purchasing pigeons from auction or any product & service from marketplace RPC token will be applied. The services include also participation in different digitization activities. Mean of reward distribution to winners - The token will be applied as the currency of smart contract used for reward distribution. The platform will apply ERC20 specification for its currency, which is compatible with Ethereum blockchain and can be stored in smart contracts. Reward for content generators - The platform will distribute rewards to quality content generators (blogging) using RPC token. 47

49 You understand that the RPC Tokens: a)is non-refundable and cannot be exchanged for cash (or its equivalent value in any fiat currency) or payment obligation by Racing Pigeon Chain; b)does not represent or confer on the token holder any right of any form with respect to Racing Pigeon Chain (or any of its affiliates) or its revenues or assets, including without limitation any right to receive future revenue, shares, ownership right or stake, share or security, any voting, distribution, redemption, liquidation, proprietary (including all forms of intellectual property) or any form of participation in Racing Pigeon Chain, its affiliates and/or its service providers; c)is not intended to be a representation of money (including electronic money), security, commodity, bond, debt instrument or any other kind of financial instrument or investment;and d)is not a loan to Racing Pigeon Chain or any of its affiliates, is not intended to represent a debt owed by Racing Pigeon Chain or any of its affiliates and there is no expectation of profit. Any proceeds of sale of the RPC Tokens after the initial token sale will be held by Racing Pigeon Chain for the development and operation of the Racing Pigeon Chain platform, and contributors will have no economic or legal right over or beneficial interest in these contributions or the assets of Racing Pigeon Chain after the token sale. 48

50 10. TOKEN DISTRIBUTION AND USE OF PROCEEDS 10.1 Token Distribution Total supply of the Racing Pigeon Coin (RPC) is 500,000,000 RPC tokens. In total, 200 million RPC tokens will be sold during private and public rounds. The token supply is fixed and it will be impossible to issue new tokens after token sales. See below the token distribution: 6% 34% 10.2 Token Sale Proceed Allocation The Pigeon Chain foundation being backed up by highly reputable organizations in the pigeon racing industry is committed to develop a superior pigeon racing infrastructure. The most of the proceeds of fundraising will be allocated to technology development(40%) and marketing of the platform as well as the pigeon 49

51 racing sport in general. The marketing budget will be mainly spenton: press releases; target advertising & inbound marketing; community building & management; production of propaganda film; engagement of partners and promotional offers for them;and organization and sponsoring of events. 10% of the funds will be spent on maintaining operations, including, ongoing performance optimization, testing and inspections, technical maintenance, data backup, load balancing, etc. Another 10% will be spent on the engagement of professional consultants (code audit, etc.) and the remaining 10% will be kept as reserve budget to cover any additional costs due to unplanned events and development needs. 50

52 11. ROADMAP OF PIGEONCHAIN PROJECT SEP 2018 NOV 2018 And start RPC E-commerce platform operation 51

53 12. TEAM CHEN,JUN-HAO (CEO) WU, ZONG-MING (COO) Master of Lawrence Technological University, Michigan, USA Management Information System Technology PHD of University of The Incarnate Word, Texas, USA Organizational Leadership Former Head of Department of Information Management, Southeast University of Science and Technology Good at integration between systems and platforms CTRPA Executive Director Taiwan Qingtian Pigeon Association Executive Director Involved in and managed hundreds of different Pigeon Competitions In 2011, he founded the Qingtian Pigeon Association Taoyuan Branch and served as CEO. He was hailed as the Youngest Pigeon Association CEO and was considered a rising star in the pigeon industry. YANG, ZONG-DE (Sales VP) Senior Pigeon Auctioneer Pigeon Breeding Expert In 2000, he was the auctioneer of the Peter Mireys auction in Beijing. There he sold five million RMB worth of pigeons, in the same year he helped at the Gommaire Verbruggen auction and sold a total of six million RMB worth of pigeons. Therefore, Mr. Zhou Chuanhong, the best auctioneer in China, praised Mr. Yang as a teacher and honored Mr. Yang Zongde as the best auctioneer in Asia. 52

54 Advisors CAI, SIN-SYONG DONG, ZE-PING PHD at Hokkaido University, Japan Doctor of Veterinary Science, specializing in the field of bird poultry, livestock and fish pathological research. He once atught classes in pigeon pathology and breaded many professional pigeons. Dr. Cai has a lofty position in the world of pigeons. The pigeon fanciers regard him as "Dr. Pigeon". Global Institute of Business and Strategy Professor Expertise in research innovation and venture capital, intellectual property management, creative industry management Cultural creative industry and cooperation project guidance expert LIN, DONG-HUA ARMAN ABGARYAN Director of Tengfei Up Enterprise Co., Ltd. Pigeon Health Products Manufacturer Pigeon Food Manufacturer MSc University of Cambridge, PhD Candidate in Blockchain (SJTU), CS MSc Georgia Tech (Machine Learning), MBA AUA. 2+y blockchain industry experience in product design & project management, 3+y academic career in blockchain, 5+y experience in business and corporate finance. 53

55 ROGER WU STEPHEN CHOU Master of Electrical and Mechanical Engineering, Hua Fan University Bachelor of Electronic Engineering, National Taipei University of Technology 16+ years of chip design house experience (consumer electronics, automobile electronics and connectivity product lines) 2 years PC MB design experience Technical leader of Sub 1GHz radio and system technology 8+ EE patents Years of experience in R&D and design of GPS, RFID/NFC racing pigeons foot ring Master of Communication Engineering, National Sun Yat-sen University 10+ years of chip design house experience (digital TV and connectivity product lines) Technical leader of communication system technology 3+ EE patents Years of experience in R&D and design of GPS, RFID/NFC racing pigeons foot ring 54

56 Partners 55