LOYCHA - Loyalty Blockchain White Paper

Loyalty Manifesto: “One loyalty for all needs”...

Abstract We are here to change the way the Loyalty Systems are working, moreover, we are developing a new loyalty network platform for a new era in Blockchain, which will make loyalty programs functional again. In order to achieve this, we will utilize Blockchain, Smart Contracts, and mobile applications. Our plan is to become a leading player in the world of loyalty, as Airbnb is in providing accommodation services without owning real estate, and Uber is in providing transport services without owning vehicles. The real part of the revolution that our team will bring, is that customer data residing on our loyalty application will belong to the customers and only they will own it. As we all know, private customer data, like activities with airlines, car rental companies or even in any social media environment etc. all remain in the corresponding companies’ databases even if we wish to switch to another company or software. With Loycha, the data will not need to move anywhere. It will remain in the customer's personal database and customers will be able to choose who will see their data. This operation will be as easy as opt-in and opt-out in a mobile application to show and hide these data from partners. New partners will be able to easily see customers activities and probe customer loyalty value and customer metrics. Partners will be able to join and be a part of the Loycha at ZERO COST. There are no joining fees or implementation fees. Partners will not incur any hardware cost. Partners will have partnerships with all other Loycha partners and be able to execute cross-marketing campaigns and gain new customers from the Loycha partner network. Loycha will disrupt the marketing sector by removing the middleman (the main idea behind Bitcoin and Blockchain) and enabling the companies and their customers to interact directly in a win-win model. The model created by Loycha will enable companies to do their marketing and spend their money directly on their target audience by paying their target audience based on smart-contract advertisements (pay target audience on per click, per view, per download, per purchase etc.). So, instead of paying middle-men like Google, Facebook and other companies that sell advertisements, companies will be able to compete and advertise on their own and dedicate the goods to their customers. We will raise the needed funds using crypto financing or as its better known, ICO (Initial Coin Offering). KEYWORDS: loyalty, blockchain, smart contracts, new marketing, ICO, crypto economy, coins, bitcoin

Abstract 1

Introduction 4

Why LOYCHA is a game changer in Loyalty? 5 We are engineers. We solve problems: 15 problems / 15 solutions 5

How to earn coins? 12

Where to Spend (Redeem) Coins? 13

Becoming Partner Company 14 The new way of marketing and advertising - WIN-WIN model 15

Social Responsibility - 5% yearly donation of net profit 16 Zero (0) Fee for transfers to Charity and Donations (Foundations and NGOs) 16

Special Features 17 Online ownership of Data will belong to customers 17 Social Media Integrated 18 Sports Teams 19 Companies / Corporates 19 Gamification and Badges 20 Location Based Services 20 Improving Store Experience with Beacon 20

What Are Beacons? 21 Mobile Payment with Loycha 21

Becoming Brand Ambassadors 21

Security 23

Business Model 24

ICO - Initial Coin Offering 25 The Key Holders 25 Pre ICO 25

PRE ICO Bonuses (up to 40%) 25 Quantity Bonus (up to 20%): 25 Time Bonus (up to 20%): 25

ICO 26 Token Distribution 26 Funds Allocation 27 Bounty Program 27

Register in Loycha website 27 Share on Linkedin 27 Join the telegram group 28 Bitcointalk signature 28 Galactictalk 29 Participate & win loycha review contest 29 Like Loycha Facebook Page 30 Share Facebook posts 30 Twitter retweet 30 Follow Loycha Medium blog 31 Find a bug in our site. 31

Roadmap (Timeline) 32

Future Plans 34

Technical Description 34 Data stored on Loycha 35 Loycha coin flow 36

Case 1: Buy goods with Local Currency at our Partners and earn Loycha Coins 36 Case 2: Spend Loycha Coins at Loycha Partners 37 Case 3: Transfer Loycha Coins to friends or others 38

Our Team 39

Our Advisors 40

Conclusion 41 One loyalty for all needs 41 Innovation is solving others problems 41 Make blockchain useful for everyone with seamless implementation 41 Social Responsibility - People become happier when they give, not when they earn 41

Introduction According to COLLOQUY, loyalty industry market capacity is around 50 billion dollars. The same report states: ”U.S. customer loyalty program memberships have increased to 3.8 billion since COLLOQUY’s 2015 Loyalty Census report. The rate of growth slowed, however, to a 15% increase over two years, compared to a 26% increase over the two years prior to the 2015 census report” . 1

But despite this, below you can find some statistics from a detailed research from the same company in 2017 : 2

● 46% of al loyalty members have active memberships and 54% inactive memberships ● 59% said they usually ignore an irrelevant piece of brand communication. ● 57% It took too long to earn points or miles for rewards. ● 53% The loyalty program did not provide rewards/offers I was interested in. ● 38% The loyalty program sent too many communications. ● 36% The loyalty program communications were irrelevant. ● 32% of Canadians report feeling overwhelmed by the number of loyalty programs

available to them. ● 57% of consumers have left a program because it took too long to earn rewards, and

53% of consumers have left because a program did not provide rewards they were interested in.

So the problem is that loyalty systems provide everything but loyalty. They cannot achieve personalisation, targeted marketing, increase rewards, process them in real time, enable great customer experience, increase the number of services and products where customers can spend their coins, increase the number of partners, etc.

1 Jeff Berry, “The 2015 COLLOQUY Loyalty Census: Big Numbers, Big Hurdle”, COLLOQUY, February 2015 2 Melissa Fruend, “2017 LOYALTY CENSUS: An In-depth Analysis of Where Loyalty Is Now … and Where It’s Headed” COLLOQUY, 29 June 2017

Why LOYCHA is a game changer in Loyalty? Loycha is not just another coin. We believe that blockchain is a revolution in technology as the internet was for our lives. The loyalty program fit with blockchain makes sense more than any other sector, as it was already using virtual money (points and miles) but in centralized systems and using dated technology with the same types of rehashed rules. To create a loyal customer in the blockchain era, loyalty program thinking has to be adapted to create new methods and thus, opportunities. While the loyalty industry is growing, the majority of loyalty programs focus on revenue over and above customer loyalty, which creates a mismatch in needs and expectations. Loycha aims to change this, to change the game and to bring customers more of what they want. Below you can find some existing problems and our solutions to these problems.

We are engineers. We solve problems: 15 problems / 15 solutions PROBLEM #1: Expiring points Most loyalty systems have rules that make customers collect points which expire after a period of time. It is unacceptable from the customer's perspective to lose what they have earned. Companies may reduce their liability however customers become less engaged and any potential satisfaction with the loyalty program is lost. SOLUTION #1: Never expiring coins Coins that customers have in their Loycha wallets will never expire. So they will not have to worry about expiry dates and will always have time to collect the required coins for awards. We believe this will increase redemption ratios, in turn increasing customer loyalty and satisfaction. PROBLEM #2: Spending a lot and earning very little Most loyalty program rewards are a very small portion of customer spend. Spending 100$ and receiving between $1-$3 does very little to incentivise customers to spend more with one particular loyalty program. SOLUTION #2: Higher percentages of earning from partners

The partnerships that we will enable partners to offer higher percentages back as rewards. We believe that companies that offer 20-50% discounts on their products from time to time, can offer a higher percentage rewards instead of (and in some cases as well as) discounts. This will be incentivised with a wider partner network and a larger potential customer reach. Partner cross-marketing capabilities will also be provided. PROBLEM #3: Limited products and services when paying with points Most companies offer limited products and services that customers can buy with their points. For example, the airline has aircraft with over 200 seats but make only a limited number available to be sold with points. Or the company has 10 services that customers can purchase with cash, but when it comes to redeeming their points these may only be used for a few of them. SOLUTION #3: Unlimited products and services with coins All of the partners will have to agree that coins collected in customers wallets will be redeemable for all of their products and services. This will increase their flow of customers and will bring them more income. With Loycha, partners will be able to convert their coins automatically to cash. PROBLEM #4: Not being able to transfer (or limited transfer) of points to another account Most loyalty programs heavily limit points transfers: to family members, allowing only limited amounts to be transferred etc., while some don't allow transfers at all. If we consider that loyalty points are currency, this limitation is a major barrier to allowing customers to spend their currency as they wish. SOLUTION #4: Unrestricted and unlimited transfers to any wallet Loycha enables everyone to transfer coins from their wallets to any other wallet without any restriction or any limitation of any type. Everyone is free to do whatever they want with their coins. PROBLEM #5: Limited number of partnerships for spending points Companies with loyalty programs have a shortage of partnerships because of hard to get consensus and difficulties with implementing partnerships technically. Every new partnership is like a new implementation to manage separately. This limits the number partners that companies have where customers can spend their points. SOLUTION #5: A large number of cross-country partnerships for spending coins

Because there will be one coin and Loycha will be handling partnerships from the very beginning and because Loycha will be open for all partners globally, a customer that has a 3

Loycha wallet and earns coins in New York will be able to spend them at another partner anywhere in the world. The easy to integrate technical aspect for partners and myriad of benefits for them will allow Loycha to have a large number of partners all around the world. As there is no cost, and potential customers to gain, Loycha aims to provide an immediate win model. PROBLEM #6: No borrowing points functionality in current loyalty programs Except for some co-branded credit cards, which allow holders to borrow points against their monthly spend, there are very few loyalty programs allowing customers to borrow points. SOLUTION #6: Borrowing functionality via smart contracts Loycha is introducing a borrowing coins functionality which customers will be able to use with their family members, friends or anyone they know. Using smart contracts, customers will request coins from others and if accepted in terms from the other customers then they will get credited to their wallet. After the agreed time has passed, and once the customer that borrowed coins has enough balance in their account, the coins will be given back to the lender. PROBLEM #7: Expensive conversion rates of products/services with points There are currently huge differences between the points a customer has earned and the price of products in points when converted to a cash amount. Companies are applying different fees for buying with cash and buying with points. For example, customers are told that they will earn 10% points for 100$ spend from shopping online in a store or buying a ticket. Let's say they do this operation 10 times and they collect 100$. When the customers try to redeem points for the same item they bought with cash for 100$, they will see that they need to pay 120$ for the same item. This is because companies price products more expensively with points than with cash (see company websites stores where customers can make purchases with points). SOLUTION #7: Unchanged prices with cash or coins in all partners All partners will have fixed prices in cash and Loycha coins. So customers will pay the same prices with coins as they pay with cash. If a product or service costs 50$ in store with cash, it will cost 50$ with Loycha coins. Problem #8: Online ownership of data does not belong to customers

3 See the “Future Plans” part for more about how the partnerships will be handled in the future

Customers that are part of a loyalty program, let's think about an airline, are not able to transfer their flight history to another airline if they decide to move to another airline loyalty program. So in theory customers data belongs to the customer but in practicality, it belongs to companies and they use them for their benefits. This is an issue for a customer, as if a customer has achieved the highest tier with one airline, they will need to start from zero with the other airline as the other airline won’t know that their new customer is a very frequent flyer. SOLUTION #8: Online data stays on blockchain and belongs to the customer Thanks to blockchain technology, all customer data and activities (transactions) will be stored on blockchain and will be accessible by every partner. Customers will have full control over which partners can access their data. While data will really belong to the customer, partners will have more options about the data and usage analytics so they can better serve the customer. For more details on this, please see “Online ownership of Data will belong to customers”. PROBLEM #9: Irrelevant rewards and communications for customers Customers of loyalty programs complain about irrelevant rewards and communications. According to a report , 53% of customers think that the loyalty program did not provide 4

rewards/offers they were interested in, 38% think that the loyalty program sent too many communications and 36% believed that loyalty program communications were irrelevant. This is one of the biggest reasons that customers get disillusioned and disengaged from loyalty programs. SOLUTION #9: Relevant and customized rewards and full control over the communications for customers Customers will have full control over communications and rewards that they want to receive. Loycha will provide options such as:

● Message receiving frequency ● Category selections: e.g. clothes, health, sports, events, etc ● Partner selection ● Rewards used by family members and friends if they share ● Specific categories at specific times: e.g. when a customer is pregnant or has a newborn

child, to receive relevant rewards of products and services ● Cross marketing rewards: e.g. a cinema ticket offers popcorn from a nearby shop or

drinks from a nearby bar before the movie starts etc.

4 Melissa Fruend, “2017 LOYALTY CENSUS: An In-depth Analysis of Where Loyalty Is Now … and Where It’s Headed” COLLOQUY, 29 June 2017

Loycha is also bringing new marketing for communications and rewards which when viewed by customers, will enable them to earn coins. See “New way of marketing and advertising - WIN-WIN model” part of this paper for more details. PROBLEM #10: Not an easy way for NGOs, foundations, people in need, sports teams etc. to collect funds through loyalty donations NGOs, foundations, people with the health problem that can not afford their hospitality, sports teams, companies, etc cannot use loyalty systems for their needs. They cannot receive points as a donation or as a percentage and convert them so that they can use them to philanthropic initiatives. SOLUTION #10: Enable easily the NGOs, foundations, people in need, teams etc to collect coins through their wallet Via a wallet that is used in blockchain, all validated NGOs, foundations etc are able to collect funds through two ways:

1. Through direct donations from customers 2. Through memberships of customers which allow customers to transfer directly

percentages of their spend to them.

All they will need is to prove that they are legal and they fulfill the terms and conditions of Loycha to open a wallet. PROBLEM #11: Very bad customer experience for customers Most customers complain about very bad customer experience about their loyalty programs. Many loyalty websites are limited in scope for things that can be done or not mobile friendly, etc. Sent emails or calls dropped to receive answers after many days. This again leads to disengagement from programs. SOLUTION #11: A Modern mobile app with all services included All services mentioned in this paper will be provided via the mobile app through smartphones. We are designing the app in such a way that every transaction will be simple and intuitive. Mobile apps in Android and IOS will have full functionality, starting with the Wallet which will enable customers to collect and spend coins, transfer coins, donations, receive notifications about new rewards, etc. PROBLEM #12: No single currency convertible among partners One of the reasons that there are limited partnerships between loyalty companies is that each company has its own loyalty system and each of them has its own currency. So it's almost

impossible to convert currency between programs. They need to make an agreement first on how much company A’s points value Company B’s points. They then need to create rules and services. After this, they are able to convert between each other. During these conversions, customers also frequently lose value as are very high or conversation rates are not adequate. SOLUTION #12: Single coin for all partners As mentioned in the Abstract and within this paper, we are creating a coin, a cryptocurrency coin which will be used among all partners and will have the same value. So we are removing the confusion of converting points around partners. We are creating a single value coin which will easily be transferable among wallets. PROBLEM #13: Long processing times of awards and redemptions If we take as example airlines or car rental companies, customers make a flight, book and do the check-in. But they don’t receive their points immediately after check-in. They need to wait up to 3 days, sometimes longer, to receive their awards. After that, they will be able to see their points and make redemptions. These waiting times are due to overlong processing times. SOLUTION #13: Near REAL TIME processing time of awards and redemptions By using blockchains technology, if we take as an example the previous examples, customers that make their check-in by scanning a QR code, will have their coins credited by the time they are seated in the aircraft. This will enable customers to redeem their coins for any other purpose immediately, possibly for an in-flight meal. This will make the processing of awards and redemptions almost and transactions will move much faster than traditional interfaces that work now. PROBLEM #14: Lack of security in current centralized technology Most banks, loyalty system holders and other traditional systems store information in centralized technology which means in a central database. This is a big lack of security in case a hacker arrives to breach that single database after which it can gain access to all data and can change them as per their need or steal the customers' information and use their data, like credit cards, or points or whatever they use. This happens very often. They are even more open to DDOS attacks that sometimes block their systems from groups like Anonymous etc. SOLUTION #14: Blockchain and distributed ledger Bitcoin was invented in 2009 and was the first application of blockchain and distributed ledgers where information is stored in a peer to peer network and distributed among nodes. During these nine years, there has not been a single hack to Bitcoin itself. This doesn’t mean that it won’t or can’t happen. However, the security of blockchain and distributed ledgers makes it extremely difficult in comparison to traditional centralized technology, which is also considerably more expensive.

Because Loycha will be using the same technology, meaning the blockchain and distributed ledger (data storage is distributed among nodes) that uses crypto and mathematical algorithms to achieve the same, data breaches will be near impossible. Even if a node or few of them are hacked and data inside them is breached, there will be thousands or hundreds of thousands of copies around the globe that will prevent the system from collapse and will ignore only those nodes and continue to work normally. PROBLEM #15: Liquidity of points There are some loyalty programs that provide some form of cashback which in terms of rewards is very low compared to what customers spend. Some loyalty programs (the numbers are few) enable customers to convert points to cash, but again the transaction fees make this unattractive. SOLUTION #15: Trade coins in exchange markets Loycha is at the same time a cryptocurrency which will be traded among cryptocurrency exchange markets and this will enable customers to convert these to bitcoin or other cryptocurrencies and will also enable them to cash back their earnings. This will be a huge opportunity for customers as they will have a wide choice of what to do with their coins.

How to earn coins? Customers will be able to earn coins in the “old fashioned” way and new creative ways:

● Spending money at partners: For every cent spent at partner companies, the customers will earn coins which will be able to be spent at every other partner company.

● Marketing campaigns from partner companies: By fulfilling specific tasks on partners like clicking on an advertisement, reading or sharing something on the app, or downloading an application or transferring a package somewhere, or by taking on partners store, etc, the customer will earn coins. 5

● Inviting friends to join the system: Using our referral system, customers who invite others to join our blockchain application will earn coins for being our goodwill ambassadors. 6

● Receiving funds from others directly: Customers will be able to transfer coins to each other very easily using the transfer coin part of the Loycha application. By doing so customers will be able to get new coins from their friends.

● Borrowing coins: Using Smart Contracts, customers will be able to borrow coins from their friends, family members or the people they know. So they will not need to go out and seek funds. Once they agree on terms and conditions of Smart Contract, the coin transfer will appear immediately and once the Smart Contract is reached and there are enough funds in borrowers wallets, the coins will be transferred automatically.

● Becoming a Brand Ambassador: Customers who are influencers in their network, or think they can help us grow our community, by completing goodwill tasks in the name of our brand, will be able to earn coins in return. 7

● Trading coins in Exchanges: As Loycha is going to be a cryptocurrency that is able to be traded among exchanges, customers will be able to earn funds by trading the coins that they have. This will enable them to earn using FIAT currency in exchanges.

Utilizing blockchain technology, customers will be credited near real-time and then also be able to spend them near real time.

5 For more details on this, please read “New way of marketing with Zero Middleman Fee” part of this white paper 6 This way for winning coins will have some limitations. See the PRE-ICO and ICO parts of this white paper for more details. 7 For more details please see “Becoming Ambassadors” of this white paper

Where to Spend (Redeem) Coins? One of the innovations that we are bringing to Loyalty is described best with our motto: “ Win everywhere, spend everywhere”. Currently, users win points or miles (as described on airlines loyalties) by spending money on their products or services. But when it comes to spending them, users have very limited places where they can spend. Some airlines even limit the number of tickets that users can buy with points/miles so in an airplane with 200 seats they allow only 4 of the seats to be sold with coins or miles collected. Another issue is that they have a limited number of partners like car rental, hotels, and other airlines too so users are very limited with the places where they can spend . 8

With Loycha, customers will have the opportunity to spend money everywhere, with every service or product of our partners. There will be no limitations. This means that customers will buy products or services in the same way as they purchase with their money . Blockchain will 9

also enable customers to redeem coins near real-time without having to wait hours or days to do so. Customers will be able to spend Loycha coins with all industries: Travel, Hotels, Car Rentals, Insurance, Health, Tourism, Shopping and entertainment, Telecommunication, Fuel, Education, Energy, Drugstore and grocery, Dining, Energy etc. We will be starting to share our partner list in near future on our website.

8 See for example American Airlines the biggest airline in the world. They have very few partners because of hard to manage partnerships. See the link https://www.aa.com/i18n/aadvantage-program/miles/redeem/redeem-miles.jsp, (date 06.12.2017). 9 See “Becoming Partner Company” part of this paper for more details on partners.

Becoming Partner Company As can be seen throughout the paper, companies that become a Loycha partner will receive lots of benefits, and more importantly, it will be free, meaning companies don’t have to pay a fee to become a Loycha partner. Partner companies won’t need to drop their current loyalty system to use Loycha. Loycha can be an extension for current loyalty programs and will bring extra customers, new profit channels and worldwide customers potential. Some of the benefits of becoming a Loycha partner:

1. Free Membership- It's totally free and companies don't pay any entrance fee to become a Loycha partner.

2. New Customers- This will allow partner companies to access customers that they won’t be able to access through their current loyalty program.

3. Large partner network - Become part of a very large global partner network around the globe without the need for bilateral agreements.

4. Easy integration - Through the REST API, companies will be able to easily integrate Loycha to their current loyalty program.

5. Reducing Costs - Loycha enables partner companies to reduce the maintenance cost of their loyalty initiatives, new customers engagement and maintaining a current customer database. With intelligent marketing tools (please see our new way of marketing), they will be a part of a win-win model where they’ll spend marketing budget more accurately, reaching relevant customers with targeted marketing. Notifications will also be able to be sent to customers.

6. Easy to use Mobile Application - The partners will be part of the Mobile applications which enable customers to easily interact with them and give them real-time knowledge and easy access to their accounts, balances, make easy transfers, donations, etc.

7. Big Data Analytics - Partner Companies will be able to examine large and varied data sets to uncover market trends, customer preferences, unknown correlations which will help them to do better decisions and better marketing or even cross-marketing. If they are an airline company, they will also be able to analyze other customer behaviors like their shopping behavior, sports, charities, interests etc.

8. Work with known currencies - Partner Companies will spend and receive Loycha coins but they will be able to automatically convert to currencies like USD or EUR, etc. and continue to operate with their local currency also. For more details see the technical description part of this paper.

For more information on becoming a partner, please fill out our online form or contact us via email at partners@loycha.com

The new way of marketing and advertising - WIN-WIN model We are all used to traditional marketing. Companies pay middlemen, middlemen find customers (target audience) for the company, and customers are (most of the time) exposed to unwanted advertisements. We are here to change this for the better and positive for Partner Companies and for customers in a WIN-WIN system. For Partner Companies: These days companies use for example Facebook for their marketing. They enter Facebook, create a campaign, select their target audience, select the amount they want to spend per click, or per view or per like or per message, etc. and then they pay Facebook for their advertisement. With Loycha, partner companies will create their marketing campaign with an easy to use UI with more available filters (which will enable cross-marketing and more personalized marketing) and they will bid with our custom marketing algorithm and money will be paid automatically to customers (target audience) using Smart Contracts. 80% of fees will be paid to customers for clicking the advertisements, downloading something or doing a similar job that is marketed. For customers: This way of marketing will enable customers to earn extra money. Customers will also be able to select how many times (frequency) they want to receive paid advertisements, in which way, from which partners. This will give full control to them and will enable them to fully have personalized marketing for their needs as customers best know what they want to be served.

Social Responsibility - 5% yearly donation of net profit One of the most basic human traits is the desire to support other people in need. While Loycha aims to provide additional consumer benefits to customers from every demographic, there are those less fortunate who are fundamental living needs are not being met : 10

➔ Every one person out of 10 cannot reach to clean water in the world. ➔ Around one-ninth of the World, population is hungry ➔ The orphan population of the World is around 400 million.

Loycha will donate 5% of the company’s net profit every year, to different charity programs, or we will directly invest this amount in social projects like opening water-wells, sending food to families in need, covering living expenses of orphans etc. We strongly believe that “the more you give, the more you get”. If you feel like us and share the same feelings for charities and people in need, and you don't want to donate but you want to do this on your way, there is a good article which describes 129 Great Examples of Community Service Projects by Christine Sarikas . 11

Zero (0) Fee for transfers to Charity and Donations (Foundations and NGOs) As mentioned earlier, Loycha will enable receiving free donations for Charities, NGOs and

Foundations (nonprofits). There will be no transfer fees for these donations (except the gas fee

which is required for stellar blockchain in transactions and is very very small). It will be enough

for the charities and others to validate their activity with legal papers to us. Customers also will be able to donate their coins to the organizations they believe they can

contribute to because in normal life customers don’t go to a charity and donate 20 cents, but in

Loycha, they will be able to do so as “many a little makes a mickle”.

10 These facts are taken from a charity called IHA. You can find the same on the web. https://www.ihh.org.tr/en, date:10.12.2017 11 Christine Sarikas, "129 Great Examples of Community Service Projects ", October 10, 2015, https://blog.prepscholar.com/129-examples-of-community-service-projects

People with health problems that cannot pay their treatment will be able to open special wallets

(which will need to be verified by Loycha) and request coins from their friends and family

members and their network which will enable free transfers for them too.

Special Features

Online ownership of Data will belong to customers Every second of every day, millions of customers are generating terabytes of data doing different activities like shopping, buying travel tickets, renting cars, eating in restaurants, staying in hotels, buying services, etc. Most of the companies claim that customers data are personal and belong only to them and they have full ownership of them. However, customers have little or no ownership over the digital data that are created. Loyalty companies and others use these data to monetize their services. Here the problem resides in the centralized architecture that is being used. customers have to trust the big companies such as X Airlines or Facebook, or any other company. In this architecture data stays in single company and customers have to rely to these companies for data storing and their security. But companies often use these data for other business purposes, often without consent. If the company decides to close down customer’s account all customer’s data is gone. Or if a customer wants to close the account and transfer to other company, they won’t be able to take their data away with them. So the new loyalty company will have no information about their new customer. For example, Bob wants to move from X Airlines to Y Airlines. He is a long-term customer of X loyalty program and has become the highest tier in X. Then when he moves to Y, he will start collecting miles again from scratch. Loycha, using blockchain technology, gives the ownership of data back to customers. With Loycha Bob can share his activities with Y Airlines so that they know that Bob is a frequent flyer and perhaps offer him status benefits automatically. The opportunity for Bob to “tout” his own data will also be there so that he may earn Loycha while Y Airlines benefits from his data. In short, blockchain is a decentralized database where data is stored across several unrelated nodes. There is no possibility that any node can have control over the customers' data. Transactions that are stored in the ledger are verifiable and are stored there permanently. So independent of the partner where the customer has made the activity, only customers who store data on the blockchain can access them through encryption keys. Also, partners will be able to access the data through smart contracts and only on the level provided by customers.

Because the data resides on blockchain nodes on an open ledger (not in a single company), the data security is provided automatically and customers will have full control of their data. They will be able to block or allow control of any of their data to partners while earning some money in compensation . 12

Social Media Integrated Most loyalty programs do only one thing: they give customers points or miles on their purchases. But customer engagement is more than just this. The biggest potential of customer engagement nowadays is social media, where most customers spend most of their time. Loycha integration with social media will allow customers to easily create accounts on Loycha and earn coins based on their activities, for example:

● Referring companies brand on social media ● Sharing a company's product on Facebook, Twitter, Pinterest ● Becoming a follower/fan on Facebook, Twitter, Instagram etc. ● Becoming an Email Subscriber

Companies will benefit from these as they will have genuinely loyal members and create real loyalty for these members. Taking a case study using Facebook and an Airline Company as an example. The Loycha social media integration is concerned with using the people's flights to make them more social. Using visual opportunities, the notification opportunities of facebook and the friendships, companies will be able to engage members to fly more and to be more social. The more they fly the more they get social. The application will send a notification message to the person's wall for every flight. There will also be a place called “suggestions” from the places where friends been most. So this will encourage members to contact their friends about the places and fly to these places. There will be gamification elements included on the Loycha. These will aim to use members competitive egos to encourage them to make flights, share with their friends, comment, and try to compete with them. Some examples of these can be:

● The member with the most miles flown in the world and among friends ● The member with the most countries visited in the world and among friends ● The member with the most square km places visited in the world and among friends ● The member with the most flight counts in the world and among friends, etc.

12 See “New way of marketing and advertising” part of this paper for more details on monetizing

The most important aspect will “notifications”. This will catch the member's attention. Some examples of notifications sent to member walls are:

● Jane Doe collected 25,000 coins. Click here to see her profile. ● John Doe is currently first on the number of countries visited with 23 countries visited.

Click here see his profile. ● 25 of your friends have flown to Istanbul. Click here to see their details. ● You are 4th among the friends in the competition of miles collected. Take one or two

more flights and you will become first among friends. ● John is just now ranked higher than you in most square km places visited.

However, all of these data sharing aspects will be in control of customers and they will be able to opt out from sharing or they will choose to share and earn coins in return.

Sports Teams Loycha will enable all sports teams to engage with their fans all over the world. At the same time, they will be able to stay in touch with them and also be able to receive funds from their fans. Sports teams will create a SPORTS TEAM WALLET and create relationships with their fans using smart contracts which will enable them to get funds from their fan purchases all around the world. A team can define a 5% funds rule. Based on this rule, every fan that joins the team on the Loycha will accept automatically to donate 5% of their Loycha coins to their team. So the team will be able to use them for any case. Also with gamification rules, the team fans will be more engaged by the top fan of the day/ month/year etc. based on their contributions . 13

Sports Fans will be able to benefit from different bonuses provided to them through Loycha. They will be able to benefit from ticket sales, team dress purchases, signature events, etc depending on the imaginations of Sports Teams.

Companies / Corporates Loycha will enable companies to easily engage and socialize with their employees similar to how sports teams will do with their fans. Companies will create their Wallets in Loycha and this will enable them to invite their employee to join the loyalty platform and be part of the company. Based on the company’s rules defined, using smart contracts will enable the transferring automatically of a percentage of their employee purchases to the company’s wallet so the company will be able to use them for any kind of benefit. They can use them to buy books, give them special prices to the best employees or even create a lottery that a company employee will

13 See more details about gamification on “Gamification” part of this paper.

be able to win the same. Employees will be able to benefit from different bonuses provided to them through Loycha and their companies.

Gamification and Badges "Gamification can be described as the integration of game mechanics into a non-game environment in order to give it a game-like feel (Deterding et al. 2011). The essential purpose behind designing and implementing gamification within different types of services or applications (e.g., customer-oriented applications and online services) is to increase the customer's engagement, enjoyment and also loyalty" . 14

As mentioned in the definition of the year 2012, the term gamification and its advantages is

used a lot but being used predominantly by loyalty platforms. We are creating an engagement

platform for loyalty members and companies in which both parties will be entertained and

profitable. As mentioned on <strong>social media integration feature</strong> we are making it

social. Loycha will make the participation an easy process but also challenging so people don't

feel bored but feel a sense of achievement and customers will be rewarded for their

participation.

In the gamification process, Loycha will have friendly competitions using leaderboards and

badges where the achievements of customers will be published and enable process tracking.

Using smart contracts, companies will be able to create smart and easy to understand tasks so

customers don't have to think too much regarding what they have to do and how they need to

complete tasks.

Location Based Services When customers are in the store or near stores and they have enabled the location services, they will get notified for special campaigns that are personalized for them only at those stores. Partners will have the chance to know when the customers are at their store and make special promotions to them.

14 Definition is taken from: Stefan Stieglitz, Christoph Lattemann, "Gamification: Using Game Elements in Serious Contexts ", page 5

Improving Store Experience with Beacon Loycha will provide its partners with small devices called Beacons, which will enable partners to inform nearby people with smartphones about their products on sale, promotions, discounts, or anything they find important for their business.

What Are Beacons? A beacon is a device that communicates with a shopper’s smartphone in a bid to improve their in-store experience. Beacons allow mobile apps on both iOS and Android to “listen” for beacon signals in the physical world and then react accordingly.

Essentially, this means that beacon technology provides an understanding of a device’s location on a very micro level — it can be specific down to a single store aisle, for example — and then the beacon can communicate with a mobile app to deliver relevant content to customers based on their location. The technology that allows for this exchange is Bluetooth Low Energy (BLE). 15

Mobile Payment with Loycha Customers can use Loycha as mobile payment in all partner shops. If they have enough credit, they will be able to pay for any product or service at the partner without having to use cash or credit cards. They will need only their mobile phones and scan a barcode and the payment is processed in 3-5 seconds.

Becoming Brand Ambassadors We always welcome people who like our idea and share our passion and think that they can contribute to further evolve and spread our vision. For this we have created the Ambassadors Program that will enable people who are interested, to join us and also further spread our vision while profiting from this. So what will ambassadors do? Basically, they will be the people who create events and organize things in the name of Loycha. See a short list of description : 16

● Post about our online (e.g. social media and forums)

15 Description and definition taken from: https://geomarketing.com/geomarketing-101-what-are-beacons on 21.04.2018 16 “Brand Ambassador job description”, 10 December 2017, https://resources.workable.com/brand-ambassador-job-description

● Create, share and respond to online reviews ● Participate in trade shows as a spokesperson for our company ● Network and build trusting relationships with potential customers ● Thoroughly understand our products and services to inform potential customers ● Use word-of-mouth marketing techniques, like referring to our company to friends ● Monitor online comments and respond or forward to the Marketing department ● Assist in organizing marketing events ● Track customers’ preferences and suggest advertising and positioning ideas ● Provide feedback to the Marketing and Product departments regarding customers’

requests If you want to join us, please write to us on ambassadors@loycha.com.

Security We have established that blockchain is a secure and difficult to hack the distributed system that uses cryptography to ensure the same. So instead of a single place and single validation database, blockchain uses a distributed ledger and blocks that form a chain, so after a number of chains are created, its proved mathematically that it is very difficult to hack. But to quote Bruce Shneier, "Security is not a product, but a process". Security is something that is always ongoing and we know from experience that it has an important role in the whole product and organization. We continuously pay high attention to the security process. We know that no system is 100% infallible but we will strive towards this. We will pay a specialized security company to test our full application cycle and we will always have developments tested fully by security experts. Some of the testings that will be performing are:

● Architecture, Design and Threat Modelling ● Data Storage and Privacy ● Cryptography Verification ● Authentication and Session Management ● Network Communication ● Environmental Interaction ● Code Quality and Build Settings ● Resiliency Against Reverse Engineering

Income and funds will continually be invested in taking precautions for security.

Business Model

Loycha is being designed to be so simple that anyone, partner or customer, can use it intuitively with a very basic learning curve. In order to ensure qıick and easy adoption, we have strived to keep our business model the same. Loycha primary revenue generation will be achieved from the transaction fees that will be charged to partners when a customer makes a purchase by using cash or Loycha currency. Also, there will be a very low revenue from the marketing field where Loycha will charge partners for the advertisement they do through Loycha.

ICO - Initial Coin Offering

The Key Holders The Key Holders will be: Ozal M. Mehmeti, Reşat Dilbaz, Can Ş. Mehmet Other holders will be team members, advisors and people investing higher amounts at PRE ICO and ICO.

Pre ICO The PRE ICO campaign will be held before the ICO. First, we need to achieve some goals and to prove to our investors what has been promised. Our priority is to prove our business model and achieve goals in our roadmap, before going to the ICO. That is also one of the reasons that PRE ICO soft cap and hard cap are kept low, compared to other ICOs in the market.

PRE ICO Bonuses (up to 40%) We value everyone that joins us on this long road and becomes the pioneer of Loycha. We particularly value those that believe and support us from the beginning. For this we have prepared two kinds of bonuses QUANTITY BONUS + TIME BONUS that can bring you up to total 40% bonus, which will be available for our early adopters:

Quantity Bonus (up to 20%):

Tokens Purchased Bonus

100K USD - and more 20% token bonus

50K USD - 99K USD 15% token bonus

25K USD - 49K USD 10% token bonus

5K USD - 24K USD 5% token bonus

Time Bonus (up to 20%):

Tokens Purchased Bonus

Week 1-2 (14.12.2018 - 28.12.2018) 20% token bonus

Week 3 (29.12.2018 - 04.01.2019 ) 15% token bonus

Week 4-5 (05.01.2018 - 18.01.2019) 10% token bonus

Week 6-7 (19.01.2019 - 31.01.2019) 5% token bonus

Below you can see the details for the PRE ICO:

Token Symbol LOY

Token Platform Stellar

Total Supply 1.000.000.000

Available for Sale on PRE ICO 150.000.000

Available for Sale on ICO 550.000.000

Token Price 0.01 USD

Accepted Currencies XLM,BTC,ETH,BCH,USD,EUR

Minimum transaction amount 50 USD

Minimum goal (soft cap) 250.000 USD

Maximum goal (hard cap) 1.500.000 USD

Token distribution Real-time if purchased through https://stellarterm.com/ exchange using XLM or in 3 days after confirmed purchase of other accepted currencies

Pre-ICO period 14.12.2018 - 31.01.2019

ICO ICO start time, end time and other details all will be shared in due course after we reach some of our milestones and after the PRE ICO period. Please keep in touch via one of our communication channels.

Token Distribution

Sell to crowdsale 70% or 700M tokens

Customer and Partner Advertising

10% or 100M tokens

Distribute to team 10% or 100M tokens (tokens will be locked for 12 months)

Distribute to advisors 5% or 50M tokens (tokens will be locked for 6 months)

Bounty program 5% or 50M tokens

Funds Allocation

Development and post-development support 50 %

Integration and Security 10 %

Legal and others 5 %

Marketing 25%

Partnerships 10%

Bounty Program You can earn Loycha tokens ( LOY ) by joining our bounty program. Please note that all Loycha tokens earned throughout bounty program will be available to withdraw after TGE ( Token Generation Event ) ends. After each assignment you complete, you need to create an application by clicking the yellow button in each submission tab. We will only consider submissions that submitted an application towards bounty rewards.

Register in Loycha website By registering in our website ( https://loycha.com/contributer/register ), to the first 3000 Loycha members, we will be giving 500 LOY tokens. Please be aware that only one account can be registered per user/IP address. Once you join, you'll have the option to view your current Loycha balance in your dashboard. Requirements for this step are:

● Registering in our website though Register Link. Make sure to submit the application form to claim your bounty reward.

Share on Linkedin Share Loycha’s posts on LinkedIn profile https://www.linkedin.com/company/loycha-official/ posts in public and let your LinkedIn friends know about it. Posts you shared need to be on your wall till TGE ends, then we will reward you with 300 LOY tokens in your account (one time only). Requirements are:

● Posts you share need to be public, so we can check the results. ● This is only applicable to LinkedIn users who have more than 200 not fake friends. ● You should attach your thoughts to the Loycha Post you share. ● Your posts need to stay on your wall till TGE ( Token Generation Event ) ends.

Make sure to submit the application form to claim your bounty reward.

Join the telegram group Telegram will be the primary communication channel for the Loycha TGE, so it is crucial you join the Telegram chat ( https://t.me/loychaOfficial ) to receive new updates.

● Make sure to remain in the Telegram room until the TGE ends ● Leave at least 25 messages,

then 500 LOY is yours! Make sure to submit the application form to claim your bounty reward.

Bitcointalk signature Loycha is conducting a major signature campaign on Bitcointalk forum ( https://bitcointalk.org/index.php?topic=5054661.new#new ). The more posts you make tagging Loycha’s signature, the more LOY you earn! Here’s how:

● Choose a signature and an avatar according to your Bitcointalk rank. ● Make posts displaying the Loycha signature and avatar. ● If you post about the Loycha Project, posts should further the discussion of the project,

free of overtly negative remarks. ● Make sure to keep Loycha signature and avatar until the TGE period is over.

Refer to the Incentive Structure below. INCENTIVE STRUCTURE Members will receive LOY in return based on the number of posts they wrote. The incentive will be the multiplication of points per rank and the number of accumulated posts. Incentive = [Points per rank * Number of posts] LOY Rank Jr Member Member Full Senior Hero Legend Points 50 100 150 200 300 500

Make sure to submit the application form to claim your bounty reward.

Galactictalk Loycha is conducting a major campaign on Galactictalk forum ( https://galactictalk.org/d/1740-loycha-decentralized-blockchain-loyalty-token-preicco-bounty ) for first 3000 users. The more comments you make on Loycha Discussion, the more LOY you earn! Here’s how:

● Make comments on Loycha Post. Those comments should further the discussion of the project, free of overtly negative remarks.

● Follow the post ● You must not delete your comments at any time until TGE period is over.

For every comment you make you get 10 LOY and you can get up to 300 LOY in this way. Make sure to submit the application form to claim your bounty reward.

Participate & win loycha review contest Don’t miss out on the chance to win 150.000 LOY! Three participants will be rewarded for their originality, reach and depth of the contents. Here are some conditions:

● Blog posts on Medium, Wordpress, or your Website must contain a minimum length of 400 words and must include a minimum one image and a link to our site https://loycha.com.

● Youtube&Vimeo video must be longer than four minutes and must include a link to our site https://loycha.com

● Videos and Blog posts should not mention the Loycha Platform in an negative view. Don’t forget to submit LOY bounty application with the URL of contents you've posted. You can also earn LOY simply by joining the contest! Here is the Reward structure : First Prize Second Prize Third Prize Participation 150,000 LOY x 1 50,000 LOY x 2 25,000 LOY x 3 1000 LOY x 50 Make sure to submit the application form to claim your bounty reward.

Like Loycha Facebook Page ● Click the "Like" button on the Loycha Facebook page https://facebook.com/loycha.official

and earn 300 LOY. This will be giving out to the first 3000 users. The Loycha Facebook page will be used to announce Loycha-related news! Make sure to submit the application form to claim your bounty reward.

Share Facebook posts Share Loycha’s Facebook https://facebook.com/loycha.official posts in public and let your Facebook friends know about it. Posts you shared need to be on your wall till TGE ends, then we will reward you with 300 LOY tokens in your account (one time only). Requirements are:

● Posts you share need to be public, so we can check the results. ● This is only applicable to Facebook users who have more than 200 not fake friends. ● You should attach your thoughts to the Loycha Post you share. ● Your posts need to stay on your wall till TGE ( Token Generation Event ) ends.

Make sure to submit the application form to claim your bounty reward.

Twitter retweet Follow and retweet Tweets from the Loycha Twitter account https://twitter.com/loycha_official and get 300 LOY. Here’s how:

● You need to follow Loycha account till TGE ends. ● You need to have more than 60 followers. ● All Retweets must be appropriate and positive about Loycha.

The retweets will be rewarded when the TGE is over.

Follow Loycha Medium blog For Loycha Medium blog( https://medium.com/@loycha.official ) too, first 2000 followers will earn 200 LOY. Loycha will constantly post product updates and related articles on Medium. Make sure to submit the application to claim your bounty reward.

Find a bug in our site. In order to make our website more useful, we try to engage our community to find bugs on our site by giving LOY tokens. This way our web application will be more reliable and we as developers will have a chance to fix bugs that we could not see before Priority 1 Priority 2 Priority 3 10000 LOY 5000 LOY 2500 LOY Make sure to submit the application form to claim your bounty reward.

Roadmap (Timeline) Q1 2018 Create Business Cases Q1 2018 Write White Paper Q1 2018 Collect Right Team Members Q2 2018 Develop Loycha Mobile APP Designs Q2 2018 Create Loycha Website Q2 2018 Create Partner Portal example Q2 2018 Develop working MVP in Test Stellar Network Q2 2018 Test MVP Q3 2018 Develop PRE ICO website Q3 2018 Launch Partner Contracting Q4 2018 Launch Loycha Website Q4 2018 PRE ICO Q4 2018 Trading Loycha Coin in Exchanges Q4 2018 Registration of Loycha Kosovo Q4 2018 Develop new partnerships Q1 2019 Develop the working Beta of the application Q1 2019 Develop referral system for Inviting friends to join Loycha and win coins in return Q1 2019 Social Media Integration Q1 2019 Sports Teams Integration Q1 2019 Mobile Payment with Loycha Q1 2019 Location Based Services Q1 2019 Integrate Loycha to Partner POS Systems Q1 2019 Security and Penetration Tests Q1 2019 Launch Android and IOS apps Q1 2019 Go Live with first partners Q1 2019 Increase the number of customers Q1 2019 Develop new partnerships Q2 2019 Launching Becoming Brand Ambassador Program Q2 2019 Companies / Corporates Integration

Q2 2019 Gamification and Badges Development Q2 2019 Expand Loycha in all Country in Kosovo Q2 2019 Expand in All Cities In Nigeria Q2 2019 ICO Q2 2019 Registration of Loycha in Balkan Countries Q3 2019 Registration of Loycha in Turkey Q3 2019 Expand Loycha in Turkey Q3 2019 Expand Loycha in Balkan Countries

Future Plans One of the plans, as can be seen on our Roadmap, is moving our organization toward becoming a DAO (decentralized autonomous organization). We want to digitize the Loycha organization 17

so, in the future instead of having CEO, CTO, COO etc., we want our organization to run through computer codes (Smart Contracts), which cannot be influenced from outside and which work with the voting system from shareholders and backers and work transparently and smoothly. So basically, our future is geared towards a DAO and voting system that will make our organization a virtual organization that is run from pieces of computer code instead of by employees and other staff. It is our goal to have Loycha become a totally transparent organization based on voting of shareholders. So voting will decide for everything from new partners to becoming a partner company on our system, or those that should be removed. In addition, we will develop our code and make it open source so everybody will be able to see, help and contribute on that code as we strongly believe that open source and its community can be better than any one organization.

Technical Description We have checked many blockchain infrastructures that are currently working on the market and have a proven work and stability. In doing so we have decided to use Stellar Network as our underlying blockchain technology. The very simple reasons behind this:

● Security ● Speed (3-5 seconds verification of transactions) ● Cost (around 50 cents for 10.000 transactions). ● Scalability

17 “How to build a DEMOCRACY on the blockchain” ,Date: 10.12.2017, https://ethereum.org/dao

Stellar Network Overview 18

Data stored on Loycha Two types of data will be stored on Loycha.

1) Transactions - Collect / Transfer / Spend between customers and partners. These are stored directly on blockchain where every customer and partner is able to check their transactions in a matter of seconds on the LIVE Stellar Network.

2) Customer Personal Data - Data provided by the customer in their profiles. These are stored in our databases. In the future, we plan to move these also to blockchain . 19

18 The image is trademark of stellar.org and is taken from https://www.stellar.org/developers/guides/get-started/ on 10.01.2018 19 The reason for not storing these data in blockchain is that it costs too much for the beginning as every extra information stored in stellar network increases minimum balance needed to be held by the account and each store or update costs in stellar. See the link for the details: https://www.stellar.org/developers/guides/concepts/list-of-operations.html#manage-data

Loycha coin flow Below you can find cases for the technical flow of how to collect, spend and transfer loycha coins.

Case 1: Buy goods with Local Currency at our Partners and earn Loycha Coins

Case 1: Collect Loycha Coins when you spend your money at Partners Flow 20

20 Please note that Zara is not currently our partner. We just wrote their name to be more familiar with the case.

Case 2: Spend Loycha Coins at Loycha Partners

Case 2: Spend Loycha Coins at Partners Flow 21

21 Please note that Zara is not currently a Loycha partner and has been used only as an example.

Case 3: Transfer Loycha Coins to friends or others

Case 3: Transfer Loycha Coins Flow

Donations for charity and NGO’s and foundations will be similar to Case 3 transfers. The only difference will be that there won’t be any fees for these donations.

Our Team

Ozal Mehmet CEO & Co-Founder

Resat Dilbaz

CTO - Co-Founder

Can Mehmet Full stack Developer

& Co-Founder

Hassan Foreman (COO)

Ali aga Chief Financial

Officer

Ersan Ismaili Project Manager

Ferdi Bejtullahu Full Stack Developer

Betim Ismaili Front-end developer

Genc Beqiri

UX/UI designer

Valmira Abdullahu Finance administrator

Tijen Mehmeti Legal advisor

Seda Gas Junior Backend

Developer

Our Advisors

Emma Aggering Board member &

Advisor

Uranik Begu

Board member & Advisor

Prof.Dr. Blerim Rexha

Board member & Advisor

Ejup Qerimi Board member &

Advisor

Conclusion

One loyalty for all needs Loycha is creating a decentralized blockchain application of loyalty where partnerships will be automatically integrated to each other through Loycha coin and won’t need paperwork to increase the number of partnerships, this allowing customers a very wide range of win and spend of their coins in all partners.

Innovation is solving others problems Loycha is a collection of engineers and problem solver minds that are mainly on fixing problems in everyday life. Same with loyalty too. We have described 15 problems and 15 solutions in this whitepaper. Every problem makes today's loyalties unfunctional and people become members of 20-30 loyalty programs, each of them with new boundaries and problems. Loycha is aiming to solve all of them and serve these solutions in that way that from 7 year old child up to 90 year old people can use it.

Make blockchain useful for everyone with seamless implementation We are not creating another crypto asset for holding as a digital asset. As you could see through the whole white paper, Loycha is trying to connect the blockchain technology with real-life usage, by touching every single person's life and using a strong use case of virtual money (Loyalty), which most of the people are used to it every day. Payments will happen in 2-5 seconds. Simple registration, easy usage, fast transactions, and real-time rewards, will enable people to use blockchain technology with Loycha in the comfort zone of blockchain security.

Social Responsibility - People become happier when they give, not when they earn In the end, we are all human being. At the end of the day when we all fall asleep, we have deep thoughts and deep secrets which makes are unique and feel different. As Loycha, we are from the people that become happier when giving, not earning. So we have decided that will donate 5% of the company’s net profit every year, to different charity programs, or we will directly invest this amount in social projects like opening water-wells, sending food to families in need, covering living expenses of orphans etc. We know that it is not enough, but for the moment as a company, this is what we planned to do, with the chance to increase this in the future.