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TABLE OF CONTENTSExecutive SummaryB2B Ecommerce in Industry 4.0 & Market Overview Blockchain as The New Middleman B2B Ecommerce Problem DefinitionSolution Mission & MotivationWhat Is Distichain Distichain Functionality & FeaturesDigital contractsLogistics and TrackingInspection ServicesFreight Insurance Business Intelligence using AIMaintaining Users AnonymityPayments and SettlementCross border Payments and ClearanceGeographic FiltersERP Integration and Data UploadSerialized Products Using Product UIDLower Transaction costsMulti-usage Trade Finance InstrumentsSecurity via Multi-Signature Smart ContractsKYC/AMLUser ReputationMarketplaceCustomer SupportRole ManagementGeneral Data Protection Rights (GDPR) CompliantDistichain-The Evolution of Commerce Product Design Distichain Technical Architecture Client Side Security Smart Contract Management

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TABLE OF CONTENTSCryptocurrency and Transaction ManagementRevenue ModelCompetitor AnalysisDistichain Token EconomyToken Fact Sheet Use of Proceeds RoadmapPartnershipsService ProvidersTechnology ProvidersStrategic UsersProducts & ScreenshotsDistichain Seller FlowDistichain Buyer FlowFurther DevelopmentTeam & Advisors

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Executive Summary

Digitization of commerce has revolutionized the way goods move across borders. Digitization allows us to capture the potential of Business-to-Business (B2B) ecommerce industry. There is tremendous potential for digital solutions in the B2B industry mainly secured payments, inventory management, logistics, pricing, and market trend analysis.

In the B2B trading landscape, validating the trustworthiness and the reputation of parties involved in a transaction is difficult. Trade finance plays a crucial role in B2B trading. Trading companies are often at risk as cash-in-advance or lengthy banking processes to secure trade finance are their only options. Along with the lack of trust, there are myriad challenges for B2B sellers such as the prevention of fraud and authentication of buyers.

B2B trading involves numerous transactions with bulk trade, yet businesses have not been able to adopt a platform which offers increased operational efficiency and reduced risks. B2B ecommerce payment industry is touted to be valued at $2.77 trillion by 2020 in the US. Most of the B2B transactions are carried out via websites (80%) followed by emails (77%) andmobile phones (72%) as per a survey conducted on more than 500 international merchants.

Before doing any business, owners often need to rely on online reviews and web searches to establish the authenticity of the companies. Often these reviews are bought and fabricated, further increasing the risks involved in B2B transactions. This lack of trust creates a huge hindrance in B2B activities especially for small and medium-sized enterprises and there exists a huge difference between potential and actual revenue.

Distichain brings together traders, manufacturers, distributors, retailers, logistics providers, insurers and bankers all on a single trading platform that secures, simplifies and empowers all participants

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Transaction commissions in the ecommerce are usually in the range of 5-10% split between the platform fees and payment fees (credit card/PayPal). Depending upon the category, B2B trading of consumer goods delivers extremely low margins that are unable to absorb this current commission structure. Distichain automates the whole transaction process allowing for asignificantly reduced commission rate at 0.3% of traded value. Distichain automates Logistics, Inspection, and Insurance to provide a seamless and complete experience traceable via Distichain’s intuitive interface. This eliminates the need for large teams to manage tedious manual processes and these utilities are paid for by our utility token: Disticoin.

In order to ensure complete security of transactions, every user registering on Distichain provides Trade finance and undergoes Anti Money Laundering /Know Your Customer (AML/KYC) checks. Trade finance is used to secure 100% of transactions on Distichain. Accordingly, Distichain offers users the opportunity to buy and sell on credit to any other participant, risk free. Distichain is one step ahead of global B2B ecommerce as it has a built-in engine which use AI algorithms to provide deep analytics into the product trends of buyers and sellers by analyzing the real-time data whilst maintaining user privacy and anonymity. By deploying and integrating users’ enterprise resource planning (ERP) feeding its real-time trend analytics. As a result, the B2B user is greatly empowered via Distichain.

Distichain business model depends on revenue generated from 3 main sources: trade commissions, service provider revenuesharing and consultancy/data analytics. Supported by Disticoin, Distichain’s utility token, which is held by Stakeholders who are responsible for the maintenance, operations and securing of the Distichain network.

Accordingly, Distichain secures, simplifies, and empowers B2B e-commerce allowing companies to finally benefit from it’s full multi-trillion USD potential.

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B2B ecommerce in Industry 4.0 & Market Overview

Technological development along with globalization has changed the way goods move from one country to another. International trade which simply involves the movement of goods, services, and capital across borders, has been at the forefront of the success of many developed nations such as the US and China. In China, the online retail market witnessed a growth of 32.2% year-on-year in 2017 due to the rapid growth in the digital economy. The cross-border trade has been on a con-stant rise ever since the advent of the technological revolution and is touted to reach $19 trillion by 2020.

With the growth of the Internet and as globalization has created a hyper-connected world, global supply chains are spreading across continents and nations. As per the data by World Bank, 45.8% of the world is now online as compared to 20% a decade ago. As large multinational corporations spread their wings and shift their manufacturing base from developed to developing countries, the establishment of efficient inventory management and distribution platforms has become crucial. Manufacturers and traders in the Business-to-business (B2B) industry constantly seek out reliable and secure solutions to distribute their goods across nations by deploying technological advancement for efficient trading.

As per research conducted by Frost and Sullivan, B2B ecommerce sales are forecasted to be valued over $6.6 trillion by 2020 globally while B2C is valued to be worth $3.2 trillion. Unlike B2C, the full potential of the B2B ecommerce is not being realized due to significant challenges limiting companies with potential from participating.

AI is playing an increasing role in predictive analysis for precise ad targeting with many companies investing in the technology for increasing sales. It is predicted that global spending on AI will increase by 44% from 2018-19 and will be valued at $35.8 billion. By 2022, it is expected that investments into AI systems will more than double from 2018 and will be worth $79.2 billion. Investments in automated customer service agents, productrecommendations and shopping advisers are projected to be the driving forces behind AI industry growth.

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As per a survey by EverString and Heinz Marketing:

• AI will boost the revenue of B2B companies through effective and targeted marketing as reported by 53 per cent of B2B marketers.

• 30% claim that a detailed analysis of marketing campaigns will be provided through AI

• 59% believe AI will assist in identifying potential customers with precision

• 40% of the respondents believe that AI will identify “macro market trends and opportunities”.

• 58% of the respondents are interested in AI for customization and 71% in personalization.

Advanced technologies such as blockchain, AI, robotics, internet of things and 3D printing are becoming an integral part of the global value chains in the age of Industry 4.0. Companies all across the globe are experimenting with logistics applications and digital platforms for ecommerce growth as they assist in creating high-value efficient trade flows, decreases complexity, touch points, and paperwork.

In international trade, trade financing forms an integral part of the global supply chain management. Trade finance comprises of importers and exporters, freight and logistics providers, banks, insurers, export credit agencies, government agencies but the process is highly fragmented as shown in the diagram below:

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In 2018, the global trade finance was valued at $59.5 billion and is predicted to be worth $71 billion by 2024, projecting a 3.0% CAGR between 2019-2024. As mentioned previously, trade finance is a major part of the B2B ecommerce activities and the huge market size gives us an idea of the market potential in this field.

Several hindrances exist in the traditional movement of goods across borders without trade finance and these include:

• Risky credit terms leading to higher default risks • Lack of trust between parties involved in a transaction• Lack of legal and financial obligations to repay the debts • Lengthy and unreliable authentication process

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Although the current form of trade finance resolves the above mentioned issues by moving the risk to the financial institutions, the process is tedious, costly, and time consuming and better suited to lengthy partnerships than individual transactions. This creates a need among manufacturers and wholesalers for highly secure and simpler order experiences with fewer intermediaries.

Obtaining credit for goods purchased is crucial to a company’s cash flow. Current B2B credit terms carry a high risk of default and are mainly built upon the trust established through humanrelations or the goodwill of large companies in case of missing trade finance. Even with current trade finance, bindingagree-ments are hard to execute in case of default due to its manual nature. The problem arises because trade finance only works effi-ciently based on ongoing or long-term relationships. As a result, companies conduct business with only a few customers they know and trust.

B2B ecommerce is growing at an exponential rate and adding value to the Global Value Chains (GVCs) but currently existing ecommerce marketplaces do not resolve the issues trading companies have. With few exceptions like credit cards andPayPal which are impractical and expensive in most B2Btransactions growth is limited. There is a huge gap between the potential and actual sales on B2B ecommerce platforms mainly due to a lack of trust, security, and ease of use between parties doing business with each other.

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Blockchain as the New Middleman

Blockchain, a distributed ledger technology creates trust and transparency among different stakeholders involved in the global supply chain. Large B2B enterprises with complex supply chains often face issues such as verifying inventory, tracking, reconciling, shipments, bills of landing, excessive paperwork and receipts.

Many large enterprises such as IBM are deploying blockchain for creating efficient supply chains. IBM has developed TradeLens (a shipping supply chain service co-developed with shipping giant Maersk) which provides a secure and a seamless sharing of real-time supply chain information between different parties: information such as shipping milestones, cargo details, trade documents, sensor readings, etc. BNP Paribas is experimenting in moving letters of credit from paper to secure distributed ledger and in November 2018, in collaboration with HSBC Singapore, they completed the first digitized letter of the credit transaction. Similarly, Citigroup is developing blockchain applications for security settlement, insurance payments and credit derivative swaps in collaboration with various star-ups. They launched an app store called LedgerConnect which allows companies to shop for blockchain tools. Even Walmart has registered over 50 blockchain patents to eliminate any food-safety concerns.

Thus, blockchain provides various solutions to B2B companies:

Efficient Supply Chains: Blockchain allows all the stakeholders involved in the movement of goods to record transactions in the ledger. This shared version allows collaboration and interaction amongst different suppliers and logistics providers and it further integrates with Internet-of-Things that allows data flow expansion and detection of any disruption.

Reduced risk: As compared to B2C sales, B2B sales require re-lationships which are longer lasting with the longer sales cycle. Usually, only 50% of B2B businesses validate the creditworthiness of the buyer, ask for secure payment forms or both. B2B sales are yet not so streamlined as B2C sales and are mostly reliant on trust amongst parties which can be easily substituted by block-chain at a cheaper cost.

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Low costs and higher savings: As B2B buyers and sellers deal in huge quantities, the cost savings are very essential to makehigher gains. With blockchain and through smart contracts, the payment not only gets faster but offers very low transaction costs. It is a well-known fact that blockchain highly reduces transaction costs. Thus, by eliminating credit card processors, blockchain provides huge cost savings to B2B service providers ranging from a manufacturer to a logistics provider.

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B2B Ecommerce Problem Definition

The B2B ecosystem requires a secure and reliable solution that offers an intuitive user experience. The B2B business is one of the few that have not evolved in the consumer goods industry. Offering the solution and overcoming the age-old issues mentioned is a huge opportunity valued in the billions and trillions.

B2B transactions are different from B2C ecommerce as there is a demand for heightened visibility and transparency in B2B due to large volumes of orders. The transactions demand moving large sums of goods worth thousands and millions of dollars at scheduled times with secure payment conditions and alsodemand better inventory management, invoice generation and management services.

Obstacles are limiting the adoption and the growth of B2B ecommerce even though the prospect is attractive.

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Solution

Combining AI and Blockchain technology and integrating some of the functionalities that they offer can create a secure B2B ecommerce ecosystem. A network of buyers, sellers, banks,logistics providers, and insurance companies brought together to create an end-to-end transaction seamlessly and securely.

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Mission &Motivation

Mission: The world’s B2B marketplace for serialized goods, delivering value to our customers, partners, employees, and shareholders by empowering, simplifying and securing commerce. Motivation: Distichain co-founders identified the opportunity within the B2B marketplace that was addressable with the emergence of developing technologies, particularly Blockchain & AI. Ability to automate the multi-trillion USD B2B ecommerce industry within a secure environment and offer in-depth data analysis to empower companies for quick and accurate decision-making served as the main motivation for developing the platform.

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What Is Distichain

Distichain is a B2B ecommerce marketplace, applying blockchain and AI to offer participants secure credit terms. Distichain integrates KYC, logistics, banking and insurance for seamless transactions. Distichain was developed by Quanterium in Oct 2017 and was created as a separate business entity in Mach 2019. Distichain aims to become an integral platform in the global supply chains by connecting manufacturers, wholesalers, distributors, retailers, insurers, logistics providers, and banks through legally binding and financially supported smart contracts within a highly secured environment.

Distichain smart contracts clearly define roles and responsibilities of buyers, sellers, service providers, and Distichain. The smart contracts backed up by blockchain trade finance secure credit given by sellers, eliminating all default risk. Integration of logistics, banks, and insurance companies eliminate intermediaries and minimize cost.

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Distichain only lists serialized products (products with a barcode) and once an agreement regarding the product, price, quantity, and the credit terms is finalized, a smart contract is instantly created which incorporates all the above details, manages the escrowing of the buyer’s trade finance line, and generates documents to service providers. Integrated logistics, inspection and insurance companies are then put into action for hassle-free trade, regardless of the order size. The user can track the progress of the transaction via Distichain.

Distichain also provides business intelligence by providing analytics on the metadata of the platform using the AI engine. It gives you the trends and recommendation of the products and pricing based on the history of data which uses predictive analytics for identifying buyer behaviour. These trends, when combined with your (ERP) system, gives you intelligent results for decision-making. ERP insight add-on is an agnostic tool pulling info from Distichain and recommending actions to avoid losses on inventory, increasing inventory turns and optimizes inventory holding through just in time purchases and order forecasting.

Distichain runs on a permissioned, private blockchain wherein the sellers and buyers of serialized products (products which have unique barcodes) can trade amongst themselves with utmost security, transparency and anonymity while being completely insured. All transactions are rated upon completion to establish the performance of the users and the AI-enabled platform provides key insights into the predictive behavior of the users and accordingly assists in decision making by efficiently determining the relevant trends on the platform the can grow user profitability and efficiency.

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Distichain target users are:

Distichain digitizes operations and reduces OPEX via automation. It widens users’ customer and supplier base, provides insights and data for decision making, and can integrate into ERP or function via simple excel upload. It provides traders access to global sellers and buyers and optimizes their staff tasks andimproves oversight. It allows their ERP to draw insight from Distichain’s marketplace. Transactions are secured with bank trade finance or credit insurance and all the products are verified at source, secured and tracked.

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Distichain operates at the heart of an ecosystem to deliver an end-to-end solution to users. By integrating blockchain enabled service providers, the platform creates a seamless and automated platform for purchasing and delivering consumer goods globally. All transactions can be fully managed and tracked via Distichain’s user-friendly interface replacing multiple processes and communication chains currently required to make transactions materialize.

Distichain Service providers include:

Banks & Banking aggregators: Banks offer trade finance for their clients which are registered to the Distichain users and guarantee 100% of the user’s transactions. These can be in the form of Letters of Credit, SBLC, Bank Guarantee.

Insurance companies: Offering trade finance via credit insurance and freight insurance for shipments in transit.

Logistics companies: Offer logistics services via air, land, and sea globally to deliver goods from source to destinationwarehouses. Furthermore, logistics companies (or their affiliates) can offer product inspection services checking if products to be shipped are in line with barcode descriptions and are authentic.

KYC/AML Partners: Distichain will verify companies’ credentials via full KYC, AML, sanction check as part of on-boarding process. After validation, the user will be given access to Distichain.

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As companies trade on Distichain, they will increase their reputation and credit scores for timely, non-problematic use of our trading platform. This reputation help users know the performance of companies they are dealing with whilst maintaining user anonymity. Accordingly, Distichain delivers a unique B2B, secure and trusted ecommerce platform designed for companies who want to thrive on a global customer base and supply their products.

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Distichain Functionality& Features

Digital contracts

The introduction of digitally generated smart contracts significantly reduces complexity and effort. These instantaneously generated contracts guide roles and responsibilities of users and service providers alike. They replace a need for tedious legal and costly contracts to define KPIs like credit terms, product quality, and trade finance amongst others.

Logistics and Tracking

Logistics services are offered via Distichain using API integration to deliver a seamless experience. Buyers select their preferred logistics providers available on the platform and will receive instant quotations for their shipment. Based on price, reputation, and preference buyers confirm the required agency. Once selected, the shipping process is fully automated, and buyers can track shipments in real-time via a user-friendly interface.

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Inspection Services

Distichain offers inspection services for ensuring the security and authenticity of the goods. As a buyer, you can book inspection services provided by logistics companies that are located near the seller at a designated place and time for a minimal fee. Upon verification, inspectors will issue a report and seal the product. Distichain’s patented, tamper-proof seals ensure that the product is safely delivered. At delivery, the buyer will validate that the products are intact via near-field communication (NFC) technology built into Distichain’s mobile application. This process will ensure clear responsibility of each party involved in the transaction and that the products are 100% in sync with every Distichain transaction.

Freight Insurance

Insurance for shipments in transit is common and this service is also offered via Distichain seamlessly. Buyers select their preferred insurance providers available on the platform and will receive instant quotations for their shipment. Based on price, reputation, and preference buyers confirm the required agency.

Business Intelligence using AI

Distichain deploys AI algorithms to analyze data and provides deep insights and reports to increase business efficiency. Distichain will recommend pricing and flag market trends empowering users with data to improve their ability to make timely decisions. Upon pricing products to sell Distichain will recommend pricing based on supply and demand trends. Data batches sent from Distichain to user’s ERP system empowers its Business Intelligence (BI) function and allows it to operate on real time global data vs historical internal data.

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Maintaining user anonymity

User anonymity is maintained between buyers and sellers throughout the full transaction process. Blockchain allows for verified traders to mask their identity through 3rd party invoicing whilst offering a reputational based rating for users, creating a trustless and unbiased trading environment. Anonymity allows companies to offer/buy inventory without the prying eyes of direct competitors who could potentially undermine/affect pricing negatively. All users can choose to unmask themselves, but it is at their discretion.

Payments and settlement

Since the solution is based on blockchain, there are no delays in transactions and are done almost instantaneously. However, one should notice that the transaction between the seller and buyer is still done in fiat currency via traditional bank transfers. In the case of delay or default on the payment, a buyer is given 7 days graceperiod to pay after which escrowed trade finance is called on and collected from the guaranteeing party.

Cross-border payments and clearance

Using traditional methods of cross-border payments can be a hindrance as every jurisdiction has its own rules and regulations. Distichain with partnerships with established global banking & digital banks will offer multiple payment options easing the process.

Geographic Filters

Users might choose to limit selling or buying their inventories from specific geographies. This could be driven by contractual obligations, speed of shipment, or for any other reason. Distichain offers filter within its interface to allow users to add or release ge-ographical filters in their product offering/search.

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ERP Integration and Data Upload

Users can integrate their inventory with Distichain to track their inventory in real-time, avoid misspent and also forecast the required stock the user has to keep in his inventory in the future to increase his profit. Distichain’ s AI Engine generates weekly analysis reports for the user to review and empower decision making. Distichain uses complex algorithms to analyze the Distichain market trend along with the user inventory trading to recommend apt trade decisions to the user increasing profit margins.

The user is given three options to integrate his ERP with Distichain: Integrate inventory with Distichain or make use of the import inventory feature where they import the inventory (full or partial) into Distichain through excel. They can also use item listing, where the user can search for an item that is available in the global market and offer quantities on Distichain.

Serialised products using product UID

All products on Distichain will have barcodes which define what the product in question is. Buyers and sellers can be sure to identify the product in discussion and void confusion or misunderstandings. Using (NLP) technology Distichain’s AI will identify product UID despite variations in exact naming within different user system.

Lower transaction costs

In traditional B2B online trades, the complexity severely inflates the commission and transaction costs that are sometimes as high as 5% to 20% which significantly reduces the user’s profit margins. Due to the automated nature of Distichain, the end-to- end process is integrated, as such costs are minimized and the commission on transactions performed is as low as 0.3%. Payments for goods are managed via traditional bank transfers and outside of the platform, this cost is at 0.2% or less depending on the user’s agreement with his bank. In comparison, many ecommerce payments currently use PayPal or credit cards to create financial security which charges anywhere between 2-5% for their services.

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Multi usage Trade Finance Instruments

Once registered, users place a bank guarantee, credit insurance or letter of credit as collaterals to their account. Using their existing blockchain enabled banks, insurance or digital banking platforms, these collaterals are offered to Distichain and used to financially secure 100% of transactions on Distichain.

Banks and insurance companies take the risk and evaluate the companies’ creditworthiness. Trade finance is usually given based on the sound financial history of the companies, collaterals offered by the company, or against freezing assets. These securities back every active transaction that a user has on the platform, the sum of which cannot exceed the total trade finance value offered by the user at any time. Once a transaction is completed and payment is verified, Distichainreleases the escrowed value for reuse in an upcoming transaction. In case of non-payment and as per the smart contract, the buyer is given 7 days’ grace period after which Distichain calls on the trade finance to pay on behalf of the user.By delivering this functionality Distichain has created the ability todeliver a 1 to many trade financing instrument.

Current Trade finance is generally against a specified invoice or benefiting a specified individual/company as per the above diagram. As such companies are forced to create a new trade financing tool for each selling company which can be tedious and costly for both the buyer and financial institution.

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With Distichain a single bank guarantee, SBLC, or credit insur-ance line can be used with an array of sellers based on a smart contract tying the trade finance to the separate transactions on Distichain. This will significantly increase options, lower cost, and reduce processing for both Distichain users and financial institutions.

Security via multi-signature smart contracts

In Distichain, the full process is built in a step by step fashion that allows for clear accountability at every stage of the transaction, this is the foundation of our smart contracts. By removing the possibility of altering the data recorded in a transaction, the permissioned, private blockchain of Distichain with the multi-signature smart contract between multiple parties eliminate completely fraud in the B2B ecommerce ecosystem. Each step of the process is registered on the chain and accordingly, the smart contract can govern all transaction on Distichain.

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KYC/AML

Upon registration, all users will be required to register via Distichain. Companies will be requested to fill in details that allow us to do a KYC, know your business (KYB), AML, and sanction list check via an integrated blockchain-based 3rd Party provider. Once this validation is approved, Distichain access is granted to the company in question.

All payments between buyers and sellers of products on Distichain are done via traditional bank transfers. Banks take responsibility through their existing processes to ensure each transaction is compliant. We have built a 100% compliant network of companies that can deal with each other securely.

User Reputation

Users in Distichain are generally masked and anonymous which allows for unbiased trade. What is visible to the user is the other user’s reputation. As the platform is 100% financially secure reputation is generally earned on user performance and status. Any payment default would automatically freeze the account leading to an investigation.

User reputation is earned via prompt actions, response times, peer rating, and service provider feedback. Badges are also assigned to the user based on status (example manufacturers can opt to have a manufacturer badge thus unmasking them) or based on an activity. Slabs reflecting a number of transactions in the last period and size of the largest transaction will also be assigned.

Marketplace

Distichain’s marketplace will allow users to buy and sell inventories amongst themselves. Users wishing to sell stocks can choose to list them from their inventory list integrated on Disitichain via ERP integration or a simple excel upload. AI will help support this listing process by recommending quantities and prices but ultimately it is users’ decision.

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When products are placed into the marketplace, they will be visible to other users who can place a bid for the full or partial quantity. Users can bid only 3 times on the same product to re-duce wasting time, offering price, quantity, and credit terms to the seller. Selling users can receive multiple bids and choose accordingly. Bids will be sorted according to the most attractive with price as the key driver. Once both buyer and seller have agreed on the price, quantity, and credit terms they both approve the transaction at which point the next step (supply chain) is activated.

Customer Support

Distichain also offers 24/7 helpdesk for any troubleshooting, catering to all the users in different time zones. Live chat, call center, and email support will be offered to users and service providers in need.

Role Management

Administrators of an organization (user) can create users and roles within the organization’s Distichain account. The admin can create roles or use existing predefined role categories to define roles and responsibilities for his colleague.

A role can be configured to consolidate the responsibilities, permissions and data security policies that users require to perform a specific function. This is accomplished with one-time setup, in which permissions, responsibilities are assigned to the role. That role is then assigned to the user. This simplifies mass updates of user permissions, since an organization need to only change the permissions or role inheritance hierarchy defined for a given role, and the users assigned to that role will inherit the new set of permissions automatically.

Organizations can define roles that closely mirror their business structure. For example, an organization can create a “Finance” role and then assign that role to one of its employees in theFinance Department. It can also create a “Sales” role and assign that role to people in the Sales Department. The user assigned to Sales will be able to negotiate with the trader in Distichain, but he/she cannot execute the final sales agreement unless the user assigned to Finance role approves.

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In this example, each role is given a specific level of access privileges that restricts its assignees to the scope of their job functions.

General Data Protection Rights (GDPR) Compliant

Distichain is GDPR compliant as it maintains the full privacy of its users. Distichain blockchain allows for verified traders to mask their identity through 3rd party invoicing whilst offering a reputational based rating for users. Traders and service providers on Distichain are masked to ensure business privacy, making it GDPR compliant and secure at the same time.

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Distichain - TheEvolution of Commerce

Traditional B2B Commerce

Globally B2B ecommerce amongst consumer goods is thriving due to being crucial for success of all the companies. Most of these companies have between 30 to 70% of their sales in this business channel and are reliant on it. The percentage varies based on consumer goods category and geography. That said, of all business channels over the last 20 years have developed significantly within consumer goods except B2B trading. Current transactions are complex, costly, time consumer as shown in the graph below. This limits a company’s appetite for such a business despite its importance.

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Multiple communication streams amongst multiple stake holders leave much room for human error costing time and money. Also large and complex teams are required to manage this complexity.

Conventional B2B ECommerce

B2B Ecommerce has served a limited role thus far due to the fact it does not resolve the issues of security and complexity required by consumer goods companies. Introductions are made via ecommerce websites but the bulk of the transaction still happens via traditional commerce routes which does not resolve the age old issues.

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One would argue that B2B ecommerce increases risk in trading and thus it is limited to the purchase of a good not found commonly in the local marketplaces. As such branded consumer goods are rarely found on such sites as Alibaba or Indiamart in large quantities despite the high demand.

Distichain B2B Ecommerce

Distichain is the first B2B ecommerce to truly break the through the issues of security and complexity. By automating the end to end commerce process Distichain offers a significantly simpler route to buyers.

Users can manage and track all transactions from start till the end via the Distichain portal. This has a huge impact on transaction complexity. The full history of each transaction is registered on the blockchain eliminating the need for multiple channels of communication. It also requires smaller teams to manage such transaction which has significant savings in the user’s opex.

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Product Design

Distichain architecture will be a combination of various architectural styles. It has an enhanced SOA design composed of services developed using layered and n-tier architecture approach and OOA design.

Using this architecture, we can achieve effective separation of concerns. Each component has different roles and responsibilities:

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Distichain Technical Architecture

Server Side

Distichain will be hosted on Windows/Linux platform, connecting MYSQL Database. All communication with the client will comply with HTTPS, RabbitMQ for message broker and SignalR with .Net Core for real-time notification on the platform.

Secure Restful web APIs will be developed to support the client application. It will be an integration point for other systems as well as. Will use distributed caching and session management. This way it will allow us to scale up as per the business expansion.

Queuing service will be used to support the heavy lifting of notifications and reports. Notification component will continuously poll the queue for new notifications to be sent. Notification component will be extensible to add different type of notifications.

For business notification for the customer, we will use WhatsApp messaging for better client communication as the latest popular way of communication. We will use Email engine for all formal communications and Signal R for in-app notification.

Background service will be used to develop business critical components. These components will be able to scale up/down as per user load.

Client Side

The objectives of the client-side system design are to ensure cross-browser compatibility for all modern browsers, responsive UI, optimize front-end assets to reduce page load time.

The client side will be built using HTML 5, Jquery, twitter bootstrap framework to support responsive UI. Bundling and minified JavaScript and CSS 3.0 standards will be used for web optimization.

Users will be able to access Distichain system online. Users are recommended to use modern browsers such as the latest version of Mozilla Firefox, Internet Explorer, EDGE, Google Chrome or Safari to access the web application.

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The Security

Following security measures will be addressed during development.• Authentication• Authorization• Auditing• Logging/Tracing Mechanism• XSS• CSRF• Hashed PasswordsSSL will be configured for web application and APIs to prevent eavesdropping, session hijacking, message replay and tampering between client and server.

Authorization and Authentication will be implemented upon token based. Rights and privileges will be granted to any users based on various roles and privileges configured by different Admins.

Smart contract management

Distichain smart contracts are using the API to connect with Banks/ Credit Insurance. Once a user defaults, the smart contract is triggered which pushes an API request to the bank to collect on bank guarantee submitted by the user who had defaulted on the payment.

Distichain will use HyperLedger fabric version 1.4 in the form of a permissioned, private blockchain. Hyperledger supports large transactions and supports dynamic plug-in consensus and supports customizable data governance. It is compliant with GDPR, and also supports pluggable cryptography in signing. Hyperledger Fabric has a general enterprise focus, with flexible and customizable add-ons. It can run smart contracts (chaincode) in Golang and Java. In addition, integration withexternal systems and complex logic can be used inside smart contracts. Transaction performance is claimed as 2,250 transactions per second (tx/s) at peak, with average use-case speeds of 400 tx/s. Scalability is channel-based and limited to 50 nodes per channel.

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This number reduces when the data volume transferred between user’s increase, so exchanging 100 kilobyte documents usually limits the size to 10 nodes per channel. Block formation time ranges between 0.5 and 2 seconds, and finality time is usually between 1 and 10 seconds, but this increases with more channels, nodes, and higher network latencies between nodes.

Smart Contract works in the following manner:

• Once the buyer and seller agree on the trade terms, a smart contract is created.

• To provide a guarantee of payment, the smart contract automatically escrows the transaction coins from the buyer’s account.

• When a sale is finalized between, two parties a main smart contract is created to keep a track of all the terms and conditions in the sale. As the buyer goes on to purchase different services on Distichain, child smart contracts are created for each transaction.

For example: A child smart contract is created when the buyer purchases the service of an inspection provider. One of the functions of this smart contract is to escrow the amount to be given to the inspection provider upon the successful completion of the transaction. Once the transaction is complete and the buyer accepts the goods, the parent smart contract will call the child smart contact and the functions in the child smart contract will be executed which means that the escrowed amount will be released to the inspector.

In Distichain we will use Hyperledger Fabric for smart contract management. Our NodeJs API will communicate with Hyperledger fabric API. It will be responsible for authentication on Hyperledger server, smart contract creation, and retrieval. The main web application will communicate with Node JS API with a registered user and get token for it, only by using that token web app can access or create a smart contract.

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RevenueModel

Distichain Product Categories

Distichain business model will be focusing on multiple categories of serialized consumer goods which will provide multibillions in revenue. In order to scale up and build themomentum, Distichain will initially focus on a single category, consumer electronics, whereby 4 global offices and ambassadors across more than 10 countries will recruit, support, and train the key companies in each region. As the sustainable scale is built in each category, Distichain team will expand into new categories every 6 months. The planned schedule is:

• H1 2020: Consumer Electronics• H2 2020: Fast Moving Consumer Goods (FMCG) & Perishables;

Consumer Beauty• H1 2021: Clothing, Fashion & Accessories; Toys & Games; Sports

& Recreation• H2 2021: Kitchen & Home; Outdoor & Home

Distichain will also be partnering with major manufacturer setting up private marketplaces for their global distribution network.

Revenue Streams

Distichain business model has multiple planned revenue streams including:

1. Trading commission: Distichain will charge users 0.3% of all transactions performed within the platform. Payments for transactions will be channelized through Distichain banking partners whereby 0.3% of the value is automatically deducted and the remaining 99.7% is sent to the selling user.

2. Service provider’s revenue sharing: Partnerships with providers of logistics, insurance, inspections services will be negotiated based on a revenue sharing model. It is a common practice as Distichain directs business to the different providers. Normally such revenue sharing models reward between 5 to 15% of services performed.

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3. Placement & Recommendations: Distichain will offer its users and service providers an opportunity to be highlighted and be the first in line placement against a small charge. Distichain tokens can be used to ensure user offerings get more visibility and attract more buyers. Fees will be demand-based pricelist that works very similar to google search.

4. Data & Consultancy: As Distichain’s base grows and platform meta data becomes abundantly available, this data will be very valuable to many internal and external parties who will be given access for a fee. Use cases include but are not exclusive to manufacturers and consultancy agencies looking for pricing trends, product lifecycle trends, and real-time productperformance. Distichain users looking for support in their planning process with the help of deep analytics off-platform data. Only platform meta-data will be available, all privacy of individual users will be respected and protected.

5. Onboard service providers: Further to already blockchain- enabled service providers, Distichain though its partnerships with technology providers will support the recruitment of local/regional service providers empowering them with blockchain technology. Via Distichain’s existing partnerships with Vizidox and Shipchain, financial and logistic interfaces making them blockchain-enabled and part of Distichain’s ecosystem. All implementation and partnership revenue would be shared amongst Distichain and its partners.

The combined income of the above revenue streams is estimated to deliver 0.7% of the traded value on Disitichain. Considering the market size which is in the billions and trillions as stated in the market overview section, this allows Distichain to reap the significant profitability reflected in the business plan.

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CompetitorAnalysis

As the above diagram indicates, Distichain has distinctive advantages over its competitor and offers a wide range of features as compared to its competitors.

Opporty

Opporty.com is a 3-tiered business relationships ecosystem built upon a Proof-of-Expertise protocol, small-business-oriented B2B/B2C marketplace and a business scoring system. A unique reputation validation service is provided by Opporty along with business counterparty expertise verification and assists in lead generation and marketing opportunities for companies.

TraDove

TraDove connects business partners for B2B trading just like how Facebook connects friends. It employs blockchain and AI for social networking and assists in corporate buyer & seller discovery cycle. Its main aim to increase B2B transparency, increase trust and assist in the precise and targeted advertisement. It also provides an enhanced payment instrument for international trade.

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BulkTrader

Bulk Trader connects distributors, manufacturers and wholesal-ers to retailers around the globe. Built upon blockchain, it ensures validation of interactions between different partners. The platform for B2B buying and selling is created to ensure a Safe, Private and Secure platform and offers Customized Hyper Local Bulk buying and selling business model.

Alibaba

Alibaba is a pioneer in a B2B marketplace and started by finding overseas clients for Chinese SMBs and wholesalers. It has the advantages of favorable demographics as it targets untapped market both more the buyers and the seller’s side and offers a peculiar revenue and cost structure but works very traditionally and does not offer benefits such as lower costs and customer insights.

Amazon

Amazon B2B marketplace was launched in 2015 and offers everything from staplers to suspenders. It supports corporate purchasing cards and offers free two-day shipping, businessonly pricing, direct integration into e-procurement systems, quantity discounts and tax-exempt purchasing for qualifying organizations.

Zilingo

Zilingo is a commerce platform based in Singapore that enables businesses across the fashion value chain to be more efficient and scale faster. It started in 2015 as a fashion and lifestylemarketplace but quickly expanded into a B2B space providing supply chain capabilities to fashion merchants. The platform provided merchants access to manufacturers across Asia and tools to help in procurement rates, logistic services, financial services, insurance, loans, and analytics.

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DistichainToken Economy

1. Stakeholders

Stakeholders are responsible for the maintenance, operations and securing of Distichain network. The tokeneconomics policy for Distichain will be governed by stakeholders, and any additional minted supply will be distributed to stakeholders in accordance with the prevailing policy.

Stakeholders are selected initially by Distichain, and will consist of investors, strategic participants and Distichain team. This would ensure that the wellbeing of Distichain will always be a priority for the stakeholders given their broad and high-level involvement in the business.

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The token economy is designed with broad crypto-economic game theory. To facilitate this design, several economic factors are represented which will form the inflation rate of Distichain. The tokens minted (inflation) over time are distributed to staking wallets and stakeholders. These functions are aggregated and presented on a monthly basis for token issuance:

1. Number of Active user accounts created over time - With each 10% growth in active user-base, the Distichain economy calibrates on a monthly basis and issues 1% more tokens to cope with the added demand. The percentage issued would correspond proportionately to the user-base growth.

2. Number of transactions over time (TOT) - The delta (increase) of TOT over the previous month will be issued in tokens in the form of ((TOT (Month 2) - TOT (Month 1))/TOT (Month 1)*100%)/2

3. Number of staking wallets (NOSW) - The delta (increase) of NOSW over the previous month will be issued in tokens in the form of ((NOSW (Month 2) - NOSW (Month 1))/NOSW (Month 1)*100%)/2

4. Liquidity Pool Size (LPS) - The delta (increase) of LPS over the previous month will be issued in tokens in the form of ((LPS (Month 2) - LPS (Month 1))/LPS (Month 1)*100%)/2

The percentage of tokens minted will be issued in the formula:

a. 60% to Stakeholdersb. 30% to Participant Staking Walletsc. 10% to Foundation

2. Participant Staking Wallets

For value-added service provided to the Distichain network, participants will be required to stake a certain amount of tokens

• Key Service/Value Providers 100,000 tokens• Service Providers 50,000 tokens

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There is no limit to how many tokens a participant wish to stake, and will be based on their self-interest to be rewarded with tokens per month.

These participants will be issued minted Distichain tokens every month based on their staking amount as a fraction of the total amount of tokens being staked every month as well as the monthly varying inflation rate.

3. Liquidity Providers

There will be a time gap between the time the users pay for the services and the shipment arrival. This time gap could be anywhere between 1 week to 2 months, depending on different factors and there could be currency fluctuations during this interim period. In order to ensure stability of prices of escrowwithin the smart contract system, there will be a fixed pool of liquidity on both the sides (e.g. fiat and Disticoin) provided by Liquidity Providers. These Liquidity Providers will be granted an ROI of 5% per month (in Disticoins) to sustain the pool. The bigger the ecosystem, the more liquidity is required, hence the bigger the pool, and more Disticoins are required to be “locked” up in this pool.

The ROI is given to Liquidity pool providers from the total minted issuance per month based on prevailing tokeneconomics policy.

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1. There are only 1000 Disti-butor Alpha licences (10% commission), and each can resell:

2. 10 Distibutor Beta licences (5% commission)

4. Basic Staking Wallet

Staking wallets by users(buyers and sellers) and service providers. Anyone and everyone who wants to create an account and interact/participate in the system requires 1000 Disticoins in a wallet. This is the point of entry. The moment the points are withdrawn, the user will lose access. This acts as a subscription based service, for the usage of Distichain ecosystem, but the user can conveniently drawdown and withdraw tokens at any point (but losing access to Distichain). There is no ROI for a Basic Staking Wallet.

5. Distibrokers

These users function as affiliates to have the opportunity to resell inventory in the Distichain network and get a commission. Every user can become a Distibroker, one just needs to buy a Distributor license from Distichain at 100,000 Disticoins. There are 2 tiers to this, and a limited amount of licences:

Commissions are taken out of actual sales within the Distichainplatform.

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6. Distichain Foundation

The Foundation received 10% of minted tokens per month, and will be responsible for 2 important functions within the Distichain network. The foundation activities are actively governed by the stakeholders.

1. Technology advancement and R&D for the Distichain ecosystem. Developers will be paid from the foundation to ensure Distichain is performing on the latest technology securely and efficiently.

2. Investments will be made by the foundation to build the Distichain ecosystem and ensure strong participants will continuously be attracted. It can also be used for market access to countries.

7. Distichain Payment Gateway

As trust in Disticoin is built by users of our ecosystem, the users will be more forthcoming in opting to stake and transact in Disticoins, and thus benefiting from it. The payment gateway will be a convenient means for all the users within the Distichain platform, including late-adopters to cryptocurrencies, the ability to transact using fiat currency on Distichain platform. It will abstract away the idea of interaction with the cryptocurrencies, but having token interaction operate on in the background. Funding for the payment gateway operations and development will come from the foundation.

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8. Buy back and Burn

As a business process, Distichain will buy back tokens within the ecosystem from the profits (e.g. 50% of profits) and burn as part of a market reconciliation tool.

Disticoin Supply and Demand

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Token Fact Sheet

Use of Funds

Token Distribution

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Roadmap

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Partnerships

Distichain partnerships are numerous and will continue to devel-op and grow with the growth of the platform. These partnerships are various and serve different functions within the platform to create win-win results for all participants.

Service Providers

Partnerships with service providers to complete the ecosystem facilitating Distichain functionality deliver consumption and volume of the service at the heart providers business. The volume is crucial to both the company’s success and profitability. The volume projected by Distichain is significant, requiring large quantities of logistics, inspection, banking, and insurance services. Approximately 2% to 5% of the traded value is consumed in these services rendering Distichain as potentially a huge source of revenue for its service providers.

Other than direct consumption of services, Distichain also delivers an important ecosystem whereby new service providers can join the existing platforms to be able to participate in the ecosystem.

Distichain is already engaging with multiple partners with the objective of building a complete and robust ecosystem. Such partnerships are:

Shipchain (shipchain.io), a logistics aggregator built on blockchain technology with the ability of bringing logistics provid-ers onto Distichain’s network by integrating their interface and facilitating communication between Distichain & the logistics provider. A partnership to build API connectivity has been established allowing Distichain to procure the services of the numerous companies already in their network delivering sea, air, and land freight across the Americas, Europe, and Asia. A partnership to recruit new partners onto Shipchain in the Middle East and Africa region has also been agreed allowing Distichain to recruit local MEA partners via Shipchain within a few weeks. This partnership gives Distichain the ability to deliver logistics services globally from launch.

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Trulioo (www.trulioo.com) is a KYC/KYB/AML service provider with the capacity to deliver background checks to Distichain users as a part of the onboarding process. A partnership has been agreed between the two team to collaborate on this regard facilitating user onboarding from launch.

Technology Providers

Other partnerships are with the technology providers which enable the Distichain platform to deliver a seamless customer experience. Distichain partners with the most advanced and compatible technology providers to ensure 100% execution on its promise. Such partnerships are:

Vizidox (www.vizidox.com) is a crypto-signed tamper-proof distributed digital safe using blockchain technology. Vizidox is secure, versatile and scalable. Vizidox engine abstracts over the technical details of the Blockchain to provide a user-friendly hosted platform. Distichain’s partnership with Vizidox as the primary developer of its blockchain technology, API integrations, and other blockchain-related technologies.

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Strategic Users (+1 Billion Revenue users)

Partnerships with strategic users for the pilot and beyond is also crucial. Distichain is engaging with industry giants to develop strategic business partnerships. These partnerships created with companies whose revenue exceeds 1 Billion USD are crucial to kick start Distichain momentum. Currently Distichain has signed an LOI with one such company who together with is 25 sub-distributors will form the base for Distichain’s pilot planned for late 2019 delivering its POC pre-launch. This consortium of companies are based in the Middle East area and will be led by Distichain’s Dubai office.

Distichain is also in discussions with two other companies ofsimilar size. These two companies are both manufacturerslooking to manage their global distribution operation via Distichain. These deals are expected to materialize in Q4 2019.

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Products &Screenshots

Distichain Seller Flow

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Distichain Seller Flow

Below is a screenshot of the seller’s dashboard. As shown below, a seller can view his/her account details such as total credit, bank balance, credit insurance, etc. The credit insurance and the bank guarantee section are updated once the bank approves the SBLC/Credit insurance or the bank guarantee of the user. These are used during trading and for keeping track of the credit with which the user can trade in Distichain.

Following steps determine the flow of transaction from the seller’s side:

1. The seller selects the inventory option for inventory management and selects the goods that he/she wants to sell. The user is given three options to integrate his ERP with Distichain: He/she can either integrate his ERP with Distichain or can make use of the import inventory feature where he/she imports the inventory into Distichain through excel. He/she can also use item listing, where the user can search for an item that is available in the global market and sell it on Distichain.

Distichain uses AI to recommend the price and quantity that the user should sell on Distichain based on Distichain market analysis as well as user inventory analysis. Distichain only provides recommendations but the final decision is that of the seller.

The user can see the most demanded product in Distichain as well as the average price at which it is being sold. The action list prompts the user to complete pending actions

2. Upon clicking the sell button after selecting the product, the seller can specify the quantity and the price at which the product should be listed on the Distichain platform. The seller can also select the pickup location of the goods as well as the type of warranty that will be provided for those goods:

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2. Upon clicking the sell button after selecting the product, the seller can specify the quantity and the price at which the product should be listed on the Distichain platform. The seller can also select the pickup location of the goods as well as the type of warranty that will be provided for those goods:

3. Once the order details are selected, the seller can review the product and submit the request after which it will be listed on Distichain:

Distichain Seller Flow

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4. In the Bidding arena, the seller can view new bids from the buyers and manage the bids by negotiating with the buyers. The user can see the numbers of bids received for a product as well as the highest bid received.

5. Upon selecting a particular bidder, he/she can either accept all the bids, reject all, or select individually and negotiate further:

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Distichain Seller Flow

Distichain Buyer Flow

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The buyer’s dashboard can be viewed as follows:

Following steps determine the flow of transaction from the buyer’s side:

1. The buyer selects the inventory option for inventory management from the drop-down menu and selects the goods that he/she wants to buy:

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2. Upon selecting the required criteria, the buyer can click on the quote to view several buying options available from different sellers of the same product:

3. The buyer can view how many sellers are selling the same product and click on view seller detail to check individual seller options available. After viewing seller details, the buyer can bid and quote a specific quantity at a specific price to a particular seller. The buyer can also view the asking price of the seller, the reputation, credit period, minimum quantity order, and the desired payment method:

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4. Just like the seller, the buyer can negotiate the price and the quantity and a final offer is proposed which the buyer can accept or reject. Once the offer is accepted, a smart contract is triggered and the processing of the order begins:

5. The buyer can also manage orders and choose logistics provider as follows: • Go to order management and select the inspection

provider to inspect the goods, view the report from the inspection providers

• Select logistics providers • Track shipment • Track order

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6. Inspection: The buyer can schedule to get the goods inspected at the seller’s warehouse before the delivery. After the time and date are scheduled on the Distichain platform, the logistics provider visits the warehouse and creates an inspection report as shown below:

7. Third-party invoicing: As transactions are anonymous on Distichain platform, logistics providers can provide third-party invoicing services. The third party invoicing service is used to maintaining anonymity. The logistics provider or Distichain is providing their name and logo in the invoice in order for the seller to be anonymous.

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Further Development

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Team &Advisors

Core Team

Haisam JamalCo-founder & Leadership

Mohammed Arif Ansari Operations

Wassim MerhebyCo-founder & Strategy

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Haisam has more than 20 Years of experience in consumer goods. He has held leadership roles in multinationals like Kraft Foods/ Mondelez, Nokia, and Chalhoub Group running complex distribution setups across MEA and LATAM regions.

Arif comes with 17 years of leadership experience in Planning, Strategy, IT & Operations with companies like HCL, Nokia Siemens, KPMG & Rio Tinto. He has been an advisor to multiple ICOs/IEOs/Exchanges and has got extensive experience as a COO in setting up and scaling startups, in different sectors

Wassim has worked at Nokia, Kraft Foods/Mondelez, Nestle among others in sales, marketing, and portfolio roles. He also set-up numerous consumer goods distribution businesses. Wassim is a member of Government Blockchain Association for Humanitarian Healthcare and a reference on Blockchain and AI applications in healthcare in UAE.

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Team &Advisors

Core Team

Smrithi RajProject Management

Sindhuja CKDevelopment

Lynn ItaniMarketing

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Smrithi is an Experienced Project Lead with a demonstrated history of working in the information technology and services industry. She has 4 years of full stack engineering experience and a keen interest in AI and Blockchain. She has worked in both MNCs and Startups and in various domains.

Sindhuja has over 5 years of complex technology, solutions and services development. She is a leader with unparalleled experience in delivering transformative development projects. She has worked with different startups to build scalable applications.

Lynn has over 10 years of experience in Brand and Marketing Management experience within the financial and technology field.

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Team &Advisors

Dr Mihaela UlieruBlockchain/AI Strategies

Kokila AlaghLegal Advisor

Freddy El TurkProduct Development/Blockchain Strategies

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Advisors