How the Bitbon System Participants Interact in the Contributing Process

Contributing[1] as a type of activity is possible only in the Bitbon System and implies interaction of all parties to the Projectbon Public Contract[2] (Contractat[3], Bitup-Agency[4], Contributor[5]) and the Bitbon Capitalization Fund[6], which by definition acts as the Contributor and in the interests of all Bitbon System Users[7].

Principle

THE STAGES OF CONTRIBUTING CAN BE DIVIDED INTO FOUR BASIC PROCESSES:

1

IBO[8] Process

The Contractat, Bitup-Agency and Contributors take part in this process.

Once the Bitup-Agency publishes the Projectbon Public Contract of a specific project, the IBO starts.

The IBO process is completed when Contributors determine their shares in the amount of 100% of the total number of Projectbons[9] in this business project.

2

Contributing Process by the Bitbon System Users

After Contributors exchange their Bitbons for Projectbons, these Bitbons are automatically transferred to the Masterbox[10] of a specific project until the IBO process is completed.

3

Fulfilling the Terms and Conditions of the Projectbon Public Contract by the Contractat

Full Implementation of the Business Plan

This process is characterized by the stage-by-stage implementation of the Contractat’s business project as well as the fulfillment of the Contractat’s obligations under the terms and conditions of the Projectbon Public Contract of this project. The additional profit received from the Contractat’s actions is recorded as a financial result and is distributed between the Contractat and Contributors.

4

Bitbon Capitalization Process

According to the automatic Contributing of the Bitbon Capitalization Fund (hereinafter — the Fund) in Projectbons of various projects, the profit designated in Bitbons, which the Fund’s Assetbox[11] receives, is used for the Fund’s participation in the implementation of other business projects by means of Projectbons. Thus, the Bitbon Capitalization process is being implemented.

FLOW CHART OF HOW THE BITBON SYSTEM PARTICIPANTS INTERACT IN THE CONTRIBUTING PROCESS
Contrabusion
1

The Contractat initiates creation of the Projectbon Public Contract of his/her own project.

2

The Bitup-Agency makes a decision on admission of the Contractat’s project to the IBO and supervises its implementation in the Bitbon System under the terms and conditions of the Projectbon Public Contract of this project.

3

The Projectbon Public Contract is published in order to raise funds for the business project implementation by means of Projectbons.

4

The Contributor purchases Bitbons.

4.1

The Contributor determines his/her share in the business project by exchanging Bitbons for Projectbons of this project.

5

By means of automatic Contributing, the Bitbon Capitalization Fund must allocate a certain number of Bitbons for the difference of the amount corresponding to the number of declared Projectbons in order to start implementing the terms and conditions of the Projectbon Public Contract.

6

Transfer of Bitbons received from the Contributors and the Bitbon Capitalization Fund to the Masterbox of a specific project for their further exchange for currency in order to perform necessary actions under the terms and conditions of the Projectbon Public Contract of this project.

7

Stages of the business project implementation under the terms and conditions described in the Projectbon Public Contract. All actions required to transfer Bitbons from the Masterbox to the Assetbox must be confirmed by digital access keys, which were generated by the Bitbon System based on the IBO results and provided to the Contractat and the Bitup-Agency. These digital keys can only be used simultaneously under the terms and conditions specified in the Projectbon Public Contract of a specific business project.

8

Financial result in the form of additional profit received from the Contractat’s actions under the terms and conditions of the Projectbon Public Contract.

9

According to the Projectbon Public Contract of this business project, part of the profit received in currency is converted to Bitbons through the exchange in order to fulfill the Contractat’s obligations to the Contributors and to the Bitbon Capitalization Fund.

9.1

Bitbons are transferred from the exchange to the Contractat’s Assetbox followed by their further transfer to the Masterbox of a specific project for the purpose of distributing Bitbons among the Contributors’ Assetboxes according to their shares in Projectbons.

9.2

Contributors receive their profit (Obvents[12]) designated in Bitbons according to their shares in Projectbons.

9.3

Profit of the Bitbon Capitalization Fund is distributed in the Assetbox of the Fund according to the Fund’s share in Projectbons. Bitbons received as a profit are further sent for the implementation and development of other projects, the shares of which are designated in Projectbons. Thus, the Bitbon Capitalization takes place.

10

Part of the profit received in currency remains with the Contractat under the terms and conditions of the Projectbon Public Contract.

1 Contributing means a type of activity of a Bitbon System User aimed at receiving additional income from participation in the implementation of the selected business project under the terms and conditions of the Projectbon Public Contract of this project. The Contributing process starts when the User exchanges available Bitbons for Projectbons. The value of the Contributor’s Benefit is directly proportional to his/her share in Projectbons. The benefits of Contributing are shown as the income received in accordance with the amount of Projectbons that the Contributor is entitled to dispose of, at his/her sole discretion, at any stage of the business project implementation.

2 Projectbon Public Contract means a digital document of a certain class according to the classifier accepted in the Bitbon System, which defines and regulates: rights and obligations of the Contractat, Bitup-Agency and Contributors as well as the procedure, manner and conditions of their relations as three parties to the Projectbon Public Contract of a specific project; field of Projectbon use, as well as all products and operations that may be applied to Projectbon. The Projectbon Public Contract of a specific project can define the terms and procedures for Projectbon issuing, Bitbon and Projectbon transfer rules, procedure for repurchasing Projectbons from the Contributor as well as the reference to the procedure for evaluating Assets.

3 Contractat means a company (legal entity registered and operating in accordance with the requirements of jurisdiction of which it is a taxpayer), or an individual, i.e. a person, participant of civil and other legal relations (holder of rights and obligations). The Contractat initiates creation of the Projectbon Public Contract of his/her own project, which is accepted into the Bitbon System on the basis of admission to the IBO (Initial Business Offering) by the Bitup-Agency.

4 Bitup-Agency means a Bitbon System Participant, which has the right to make a decision on the admission of the Contractat’s project to the IBO (Initial Business Offering) and to supervise its implementation in the Bitbon System under the terms and conditions of the Projectbon Public Contract of a specific project by representing and protecting the Contributors’ interests.

5 Contributor means a Bitbon System User who, based on the obtained Projectbons, participates in the selected business project in order to receive a certain amount of benefit from its implementation.

6 Bitbon Capitalization Fund means a component of the Bitbon System whose Assets are designated in Bitbons and Projectbons and which, like the Bitbon System as a whole, belongs to all Bitbon System Users in parts equal to the Bitbon amount in the Assetboxes of these Users. The purpose of the Bitbon Capitalization Fund is to provide a mechanism that allows the Bitbon System Users to directly manage the Bitbon System in the interests of all its participants in order to increase the volume of the Bitbon Capitalization that is generated through automatic Contributing of the Bitbon Capitalization Fund to Projectbons of specific projects on the basis of their admission to the IBO (Initial Business Offering) by Bitup-Agencies.

7 Bitbon System User means a Bitbon System Participant who uses Bitbons and/or Projectbons to conduct his/her activity in the Bitbon System.

8 IBO (Initial Business Offering) means a process in the Bitbon System, in which three parties take part: Contractat, Bitup-Agency and Contributors. The IBO process starts when the Bitup-Agency publishes the Projectbon Public Contract of a specific project to raise the required amount of Bitbons from Contributors in exchange for Projectbons in order to implement this business project. The IBO process is completed when Contributors determine their shares in the amount of 100% of the total number of Projectbons. From this moment on, the terms and conditions of the Projectbon Public Contract of this business project automatically come into force. After that, the Contractat begins to fulfill his/her obligations aimed at successful implementation of the project.

9 Projectbon means a derivative instrument from a specific class of the Projectbon Public Contract intended for Contributing, which has unique attributes and properties with the ability to circulate only in the Bitbon System. Projectbon represents obligations of the Contractat to Contributors expressed in a legal form under the terms and conditions specified in the Projectbon Public Contract of a specific project.

10 Masterbox means a record (cell) with a unique alphanumeric identifier created in the Blockchain based on admission of the Contractat’s project to the IBO by the Bitup-Agency. In order to implement this project, Bitbons are transferred from the Contributors to the Masterbox according to their shares in Projectbons and to the fulfillment by the Contractat of his/her obligations in compliance with the Projectbon Public Contract of a specific project.

11 Assetbox means a record (cell) with a unique alphanumeric identifier created by the Bitbon System User in the Blockchain for storing his/her own Bitbons or Projectbons and transferring them to other Bitbon System Users as well as for receiving Bitbons and Projectbons from other Bitbon System Users.

12 Obvents mean a Contributor’s income designated in Bitbons, which is based on the Projectbon amount that the Contributor has in accordance with the terms and conditions of the Projectbon Public Contract of a specific project. The concept “Obvents” originates from Latin “obventio” — income. This term means accrual of income designated in Bitbons by Contributors based on their share in a specific project and in accordance with the terms and conditions of the Projectbon Public Contract. The procedure for distributing Obvents basically corresponds to the Obventing process.