DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Cyber Sheng Foundation Ltd.

1DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Distributed Credit Chain WhitePaper

Cyber Sheng Foundation Ltd.
2018

Cyber Sheng Foundation Ltd.

2DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Table of Contents

1.

Brief Introduction...................................................................................................... 52.

Distributed Banking Begins with Changes in Credit Businesses .............................. 7

2.1.

Traditional Credit Businesses ............................................................................ 7

2.2.

Centralized Credit Service ................................................................................. 9

2.3.

Credit Dilemma Brought by Centralized Service ............................................. 9

2.4.

The Value of Decentralized Blockchain to Credit Business ........................... 113.

How Distributed Credit Solves the Centralized Credit Problem ............................ 15

3.1.

User Account Identification System ............................................................... 15

3.2.

Distributed Credit Maintenance System ........................................................ 16

3.3.

Blockchain-based Lending Business ............................................................... 20

3.4.

Non-Cooperative Game Between Participants .............................................. 22

3.5.

Advantages of the Ecosystem ......................................................................... 23

4.

Product Scenarios ................................................................................................... 25

4.1.

Loan Registration Service................................................................................ 25

4.2.

Facilitating Asset Securitization ...................................................................... 28

5.

Economic Ecosystem Model ................................................................................... 30

5.1.

DCC-Valuation Credentials of Ecosystem ....................................................... 30

5.2.

Benefits of Ecosystem Contribution ............................................................... 30

5.3.

Use of DCC in Distributed Credit Chain .......................................................... 30

6.

Technology Realization ........................................................................................... 34

6.1.

System Structure ............................................................................................. 34

6.2.

Dapp................................................................................................................. 34

6.3.

Account (Wallet) System ................................................................................. 35

6.4.

Gateway Service .............................................................................................. 37

6.5.

Open Platform ................................................................................................. 38

6.6.

Open source framework ................................................................................. 38

6.6.

Blockchain and Smart Contract ...................................................................... 43

7.

Distribution Plan ..................................................................................................... 52

8.

Use Plan for Raised Funds ...................................................................................... 54

9.

Development Timeline............................................................................................ 56

10. Cyber Sheng Foundation Ltd. ................................................................................. 58
Cyber Sheng Foundation Ltd.

3

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

11. Core Team ............................................................................................................... 59
12. Advisors ................................................................................................................... 61
13. Partners ................................................................................................................... 65
14. Early Investors ......................................................................................................... 67
15. Risks......................................................................................................................... 70

Cyber Sheng Foundation Ltd.

4DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

1. Brief Introduction

Accelerating digitalization, faster Internet transmission speeds, continuous accumulationof distributed computing resources, the application of mathematic and cryptographic
technologies in the digital era: these are the factors that lead us to foresee that in the future,
we will see an underlying public chain based on the features of Blockchain (including but notlimited to: decentralization, openness, autonomy, irreversibility, and privacy protection). This
underlying public chain will be utilized for distributed credit reporting, debt registration,
wealth management, and asset transactions. It will enable business participants in different
countries and regions around the world to provide financial services in a much moreconvenient way. A new type of virtual agency based on blockchain technology—"Distributed
Banking"— will emerge. A Distributed Bank is not a traditional bank, but rather an integrated
ecosystem of distributed financial services.
The concept of Distributed Banking is to break the monopoly of traditional financial
institutions through fair financial serviced and return earnings from financial services to allproviders and users involved, so that each participant who has contributed the growth of theecosystem may be incentivised, thus truly achieving inclusive finance.

Through decentralized thinking, Distributed Banking will be able to change thecooperation model in traditional financial services and build a new peer-to-peer and allcommunications cooperation model across all regions, sectors, subjects and accounts.
As it pertains to business, Distributed Banking will completely transform traditionalbanking's debt, asset, and intermediary business structure

through replacing liability

business with distributed wealth management, replacing asset business with distributed
credit reporting, debt registration and replacing intermediary business with distributed asset
transaction with . The tree-like management structure of the traditional bank will evolve into
the flat structure of Distributed Banking, which will establish distributed standards for various
businesses and improve overall business efficiency.

Cyber Sheng Foundation Ltd.

5

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

As it pertains to distribution, decentralization is disintermediation, a way of breaking up
original excessive premiums that result from information asymmetry among intermediaries,
and returning such premiums to ecosystem participants, thus achieving the redistribution of
ecosystem value as well as fair distribution among participants through digital consensus

algorithm.
As it pertains to regulation, the fact that all records registered in the blockchain cannot
be tampered will enable regulators to penetrate into the underlying assets in real time. Big
data analysis institutions can also help the regulatory bodies understand and respond toindustry risks more quickly based on blockchain data analysis. It will be possible to develop a
new "Basel Accord" on the management system of blockchain-distributed banks.
The Foundation will launch a main blockchain - Distributed Credit Chain (DCC) to establish
business standards, reach consensus on the books, deploy business contracts, implement
liquidation and settlement services, and so on, for a variety of distributed financial business.
The establishment of a distributed banking system will require a five- or even ten-year
process. We hope that after a period of construction, the distributed bank can become an
important node of new finance, and traditional businesses can enter the distributed businessecosystem through distributed banking.
We will begin with conducting credit business on DCC, and reconstruct the businessecosystem of traditional credit through decentralized thinking and distributed technology. In

the following section, we are going to specifically describe the reforms of distributed banks inthe credit field.

Cyber Sheng Foundation Ltd.

6

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

2. Distributed Banking Begins with Changes in Credit Businesses

2.1. Traditional Credit Businesses
Definition of credit business: a credit activity wherein the holder of certain currency
positions temporarily lends an agreed-upon amount of money at an agreed-upon interest
rate to a borrower, who repays the principal and interest according to the terms and period
as agreed. As one of the most important activities in the financial market, its orderly
mangement has an huge positive impact on the development of society.
The fundamental function of the credit market is to adjust temporary or long-term
funding shortfalls: in economics, the players with surpluses have extra funds and do not wish
to increase their current expenditures, while those with deficits are in search of spending,but fail because of their liquidity crunch. Within the credit market, assets and capital can beproperly allocated, allowing the smooth functioning of our economic system.
The history of the credit industry goes back a long way. We can find traces of credit
systems and the concept of interest at the very beginning of human civilization, with a 3,000year-old written loan contract from Mesopotamia. Back then, the practical application ofsuch paid economic activity had already been demonstrated.
Without credit, the massive expansion and progress of human civilization would not havebeen possible. The loans supported Spain's exploration into the New World, and madepossible the colonization of the United States, thus propelling the Industrial Revolution. The
utility provided by loans to the community is enormous, and has enabled some of thegreatest projects known to mankind.
Until the 18th Century, the lenders still utilized collaterals, and the main type of loan was
the contractual loan.
The early 19th Century ushered in a new era of loans and a more equitable platform.
Established in December 1816, the Philadelphia Saving Fund Society(later Philadelphia
Savings Fund Society (PSFS)) was the first of many savings and loan associations. As a highly

Cyber Sheng Foundation Ltd.

7

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

centralized financial intermediary, it aimed to provide the average Americans with savingsand loans resources.
When assessing mortgages today, nearly 90% of lenders use FICO, which isrecommended by the Federal National Mortgage Association (Fannie Mae) and Federal
Home Loan Mortgage Corporation (Freddie Mac). In 1959, lenders officially began using FICO
scores to make informed credit decisions.
With the development of mobile Internet, big data has rapidly emerged with a key role inmaking credit decisions in the United States and other global markets. There are three
primary methods for big data in taking market share:First, data mining, data monitoring, data comparison and differentiated competition;
Second, analysis and decisions based on experiments and data;
Third, marketing and adjustment based on big data;
The data-driven credit business offers us many inspirations and dramatically improvescredit efficiency. However, the credit business in every country is replete with loopholes at
every stage of the process, such as unclear rights and interests, high operating costs,
inefficient operations, untrustworthy credentials, and privacy leaks.
The root cause of these problems lies in the provision of services by fragmented parties
through various kinds of centralized systems. First, the centralized systems cause too much
instability and heighten the risk of counterfeiting. Second, the fragmentation among systems
significantly increases mutual verification and trust costs. Finally, data is neither wellencrypted during delivery, nor actually authorized by users during utilization, thus enablingabuses of privacy.
As human economic activities continue to develop, it is believed that the credit businesswill further flourish, which consequently raises the bar for credit efficiency, privacy
protection, and cost reduction. It is believed that the idea of decentralization and the open
consensus mechanisms of blockchain technology will offer a better solution.

Cyber Sheng Foundation Ltd.

8

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

2.2. Centralized Credit Service
Taking the intermediaries that provide credit services as examples, many credit agencies
are mired in a terrible crisis. Many online credit agencies, taking advantage of information
asymmetry, have become a centralized profiteering industry. Where do their huge profits
come from? Data tells us that the highest proportion of their income comes from interest
spread. From an industry-wide perspective of a particular developing country, the interest
spread provides 80% of a bank’s revenue. The lending-deposit spread stipulated by some
central bank can reach as low as 3%-5%; however, these are only nominal rates earmarked
for big businesses. For most ordinary small- and medium-sized enterprises, the lendingdeposit spread can reach 7%.
The centralized credit model gives such centers monopolistic advantages monopoly . Due
to information asymmetry, the lenders and borrowers lose direct trading opportunities.
Therefore, people are thinking about a possibility for credit service without a spread made byintermediaries, which would allow lenders, borrowers, risk control models, collection offices,
and insurance institutions to participate together. In such service, lenders and borrowers
would be able to achieve debit -credit balance based on consensus and for the purpose ofservice.

2.3.
Credit Dilemma Brought by Centralized Service

Cost
The core cost model of a credit agency is to share the costs incurred by non interest-

earning elements (client-gaining, data, credit review, etc.) and non-repayment of loans (baddebt) by charging the "good guys" who can pay back the money.
Obviously, this cost-sharing approach is extremely irrational. For borrowers, it brings anadditional cost. For credit agencies, their profit margins are always limited, and costmanagement becomes ever more difficult. Efficiency is dragged down, and the profit margin
cannot be improved.
Cyber Sheng Foundation Ltd.

9DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

From an industry perspective, the engineering costs of investing significant technologicalpower in algorithmic and computation are redundant: nearly every financial institution
repeatedly invests in science and technology building systems simply to determine theborrowing needs of roughly identical groups of people.



Efficiency
Most borrowers in the consumer financial markets of most countries have little

knowledge on application requirements, their own credit worthiness, and accessible services.
This has spawned a large number of service agencies and loan intermediaries. CreditKarma,
for instance, helps borrowers check their own credit scores and recommends consumer
finance and credit card products to borrowers, which undoubtedly prolongs the loan
application chain and reduces the efficiency of service delivery.
From the credit agency's perspective, significant amounts of time and energy are wasted
in verifying the credit of borrowers who do not suit their risk appetites, which leads toresources waste and drastic decrease in efficiency.

Borrower’s Interest
Borrowers lack the ability to self-certify their credit, which makes intermediaries more

“important” in consumer credit underwriting. Setting aside false information and looking
merely at normal operations, in consumer credit underwriting of both developed or underdeveloped countries, there are professional loan intermediaries/brokers or customer
managers that help borrowers prove their “creditworthiness.” Especially in those countries
where the credit information system is underdeveloped, the size of the loans available to aborrower is significantly affected by the material prepared.
This causes the borrower to be unable to know their rights and interests, and also bars
borrowers from effectively accumulating their credit. For example, in China, the primary
purpose for more than half of young credit card applicants is to “create a credit profile.”

Cyber Sheng Foundation Ltd.

10

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241



Joint Debt
The level of credit reporting in different countries in the world is imbalanced.

Construction of credit reporting in some countries and regions is relatively backward, andthe number of customers with credit records is insufficient, which also spawned the global
entrepreneurial wave of Internet finance to serve customers who have no credit records.
Beneath this wave of progress, however, the issue of joint debts has largely hampered
the industry development and triggered major social concerns. From a borrower’s
perspective, debt information is “hashed” by various credit agencies, but no one should know
more about the history of their loans and repayments than borrowers themselves. The costof establishing a centralized institution to carry out individual credit reporting is high.



Profiteering
A centralized credit model confers monopolistic advantages to more centers, enticing

many financial institutions to deviate from their primary purpose— serving customers.
Aiming for profitability, they deduct lenders while squeezing borrowers, and expand theirprofits by extending their customer base. If these profits were not consolidated, we believe it
would promote the sound development of more industries through improving talent
recruitment, making better investment in technology, and increasing benefits to users.

2.4.

The Value of Decentralized Blockchain to Credit Business2.4.1. Eliminating Monopoly and Profiteering
Everyone will be able to choose their debtors, and in a decentralized market withnumerous competitors, pricing power will rest with the market rather than intermediaries.
Instead, market participants will get returns and reallocate the data value by providing
algorithms and computation on the blockchain.

Cyber Sheng Foundation Ltd.

11

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

2.4.2. Protecting Privacy Reasonably
Original personal information and non-desensitization data should not be stored at thirdparty institutions for a long term. Retaining personal data with the user is the most securestorage method. Such storage can be local, or can be encrypted and stored in the cloud, withconvenient retrieval via local addressing.
Personal data can be transmitted to the recipient in an encrypted, point-to-point manner.
Only the data recipient may process the data, and theoretically, after processing, the data
recipient can choose not to retain the data. Alternatively, data can be provided to the data
demander in the form of zero-knowledge proof, which allows for verifying the dataauthenticity and ownership without revealing the original text of the information, in order tofulfill the business requirement.
2.4.3.

Eliminating Data Monopolies

Blockchain technology allows individuals to own and use their data, and eliminates thevalue premium caused by the centralized storage and verification of data from third parties.
It also prevents data from being misused or leaked by third parties: traditionally, theauthenticity of data held by individuals is verifiable and individuals have only ownership ofdata rather than the right to use data (which can only be gained via authorization to agencies
as a means of providing proof).
2.4.4. Improving Data Validation Efficiency and Reducing Data Use Cost
Personal data can be automatically validated and used for multiple times according todata categories, significantly reducing the cost of institutions who use the data. The
institutions are free from repeatedly obtaining authorization from users each time they use
or access the data.
2.4.5.

Creating “Data Marketplace”

Establishing a standardized data marketplace helps data certification bodies better
promote the data standards they processed, construct the brands and high-value niches interms of big data processing, and helps fix the price according to data use frequency andthrough feedbacking data to data platforms. Financial institutions can also see the number ofCyber Sheng Foundation Ltd.

12

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

available data modules within the data marketplace more conveniently, and thus drive theirown IT systems to connect more valuable data.
2.4.6. AI Risk Control
Anti-fraud and modeling algorithms are provided on the blockchain through deeplearning and AI risk control systems, in order to help financial institutions process personal
data without storing data. This method helps financial institutions improve their risk control
capabilities in accordance with compliance requirements.
Blockchain discloses risk strategies by providing an encrypted algorithm, and allows
borrowers to apply for verification based on the algorithms published by algorithm providers
and credit institutions and proactively screen lenders through the risk strategy service.
Borrowers who can not access institutional borrowing can choose not to apply for loans fromthose institutions, thus preventing submissions of personal information by multiple
institutions.
This would lead to drastic increase in transaction efficiency and further drop intransaction costs for credit institutions, eliminates the need to allocate computational
resources and payment costs to borrowers who cannot receive lending services.
2.4.7. Disclosing Lending Behaviors
During the borrowing process, by creating a credit history report on the blockchain, dataapproved by both parties is accessible to other institutions that need to obtain the data,
effectively preventing problems such as long-term borrowing and repeated test borrowing.
2.4.8. Positive Data Feedback
Beyond use by the lender, lending data can be used to help multiple institutions provide
comprehensive analysis of the lender’s behavior and lending results, and help nonparticipants of single-time loans establish a more comprehensive personal credit rating
system.
Partial data disclosed also allows more auditors and regulators to evaluate systemic risks
more effectively.

Cyber Sheng Foundation Ltd.

13

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Distributed Credit Chain applies the above solutions with Blockchain technology in realbusiness scenarios, and develop a new super credit ecosystem that benefits the world.

Cyber Sheng Foundation Ltd.

14

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

3. How Distributed Credit Solves the Centralized Credit Problem

3.1. User Account Identification System
In DCC, each individual or institution has one DCCID generated through Public-Private Key
Pair to form an address. This address acts just like a member ID in a traditional Internet
system, identifying and associating various real-world attributes (such as real-nameauthentication, bank cards held, number of properties owned) and information on the credit
chain—a loan request, loan, repayment, etc .
DCCID is a decentralized account system, and its generation does not depend on any
individual DCC node. Any person, organization, or company can generate this DCCID offline.
Only when there is information needing to be associated to DCC can information be stored
on the DCC ecosystem.
DCC uses digital signature technology at every step of data exchange to fully guarantee
the non-repudiation of individual-chain or institution-chain interaction of data.

Cyber Sheng Foundation Ltd.

15

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

DCC will provide an open source personal credit data management framework-DCDMF(Distributed Credit Data Management Framework) which is supported by a specific cloudstorage provider, and developers, are able to quickly rebuild users' personal credit reporting
data using DCDMF based on their APP development needs. Users having a DCCID can
exchange data in several APPs which use DCDMF by exporting their wallet addresses.
DCDMF uses AES symmetric encryption to encrypt data with the private key of DCCID and
its input password (salt), and forms a data index with the cloud server through DCCID's walletaddress. Users are able to obtain the data index at any moment conveniently throughaddress of the DCCID, or quickly get the plain text data from the cloud using their own
passwords.

3.2. Distributed Credit Maintenance System
The Distributed Credit Chain entirely redefines the exchange process of personal credit.
Individuals have ownership of the data through DIV (Distributed Identity Verification), andCyber Sheng Foundation Ltd.

16

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

can determine the storage, presentation, and use of personal data. Data service institutions
make profits by providing individuals with quality data services instead of storage and abuseof data.

The DIV system protects data from falsification and deception by means of digital
signatures and data digest in the circulation process. The DIV mechanism has the advantagethat the data institution directly provides users with data authentication services, and thedata would not be held by third parties. Such mechanism provides data sharing support to
the institutions which were originally intended to provide data only to their own customers.

Cyber Sheng Foundation Ltd.

17

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

This all stems from decentralization, which transfers the center mastering data fromoriginal data oligarchs to individuals, stores decentralized data in decentralized hands.
Distributed Credit Chain stores the nonrepudiable evidence proving the data’s generation
and accuracy, as shown below:

Personal data will be sent to the data institution for processing. The standard dataprocessed by the institution will be returned to the individual as a data report. The individual
will save the data report as a personal data asset locally or in the cloud, applies to the data

Cyber Sheng Foundation Ltd.

18

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

verification smart contract of DCC system for verification after hash summary of the report,
while initiating chain vertification with the original verifying institution. After the verifying
institution confirms the hash as consistent after verifying the original report, the data islabeled as authenticated and recorded within a limited period of time on the chain.
The risk of data leakage during the verification process is controlled to the minimum
extent because the data being verified is passed only to individuals and data agencies. The
digest algorithm used on the chain is irreversible, and therefore there is no risk of data
decoding on the chain.
Through DIV interaction architecture, a decentralized peer-to-peer verification system
can be widely established among individuals, between individuals and data institutions, aswell as among data institutions. The more verifications an entity recieves from entities andthe more data assets it obtains, the more comprehensive the credit portrait of an individual
will be. This provides more abundant and multi-dimensional data support for financial
institutions to identify credit risks .
Data reports obtained by individuals can be used again as new data assets to enrich theirown data accumulation and can be used again by the data institution, in which case moredata validation is generated. The DIV mechanism reduces the barriers for big data companies
and AI data processing companies to engage in user data services, and provides fundamental
support to enable more scenarios to use users’ data rapidly.
When financial institutions use personal data assets, they only need individuals toautonomously submit personal data reports required. The DIV framework ensures rapid
recognition of the authenticity and effectiveness of the report.
This is a credit reporting system that breaks the boundaries of countries and limits of
scenarios. The individual with DCCID can provide the data as required by the lending
institution to complete the credit reporting under any scenario.
Summary: The DIV framework of DCC enables the change from centralized management
by credit reporting agencies to decentralized individual ownership, which will fundamentally
alter the original landscape in which the personal credit reporting system is maintained by

Cyber Sheng Foundation Ltd.

19

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

centralized credit information systems in each country and region. The mechanism integrates
the credit records of different countries, regions, and in different languages under a DCCID,
and creates a platform that does not interfere with sensitive data interactions throughcountless decentralized individuals and participating institutions, making it a truly
decentralized and independent credit reporting system. This system is able to serve any
individual or institution in the world and provide any business scenario that requires credit
data.

3.3. Blockchain-based Lending Business3.3.1. Data entry
With the help of the open source framework SDV (Submitting Data Validation), thelending institutions can easily input the user's data to their existing risk control system. SDV
continuously updates the data parsing and verification template libraries according to thedata provider in DCC market, and after entry of the user’s data into the framework, SDV
generates entry data that can be used by the risk control system based on the digital
signature and submitted data digest of the DCCID (the valid data that has been verified as
being submitted by the owner and not being altered).
3.3.2. Lending process
DCC suggests that the lending institutions should use chain data to maintain the lending
process. The user's loan application can be submitted to the chain directly by the user via
signature, and the lending institution obtains the entry data through the SDV and updates
the approval result to the corresponding order.

Cyber Sheng Foundation Ltd.

20

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

3.3.3. Credit report
Through contracts on DCR (Distributed Credit Report), there will generate a list of
credit history index in the DCC system that records the individual’s whole life cycle statusfrom application for loans, review of loans, repayment, overdue loans, collection, and bad
debt. The list of indexes alongside the plain text data of the actual loan contract held by theindividual constitutes a user’s credit history report in DCC system, which is also theembodiment of returning data to the individual by DCC system.

For each record in the DCR, only the borrower and lender hold the plain text data, and
DCR has only the index list. Therefore, although the record index is shared in the blockchain,
Cyber Sheng Foundation Ltd.

21

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

such record is of little value to third parties. The mechanism also ensures that the sharing ofdata between the lending institutions happens on the premise of protecting their own
privacy.
DCR mechanism is relatively inexpensive, and for credit institutions, applying a blockchain
with “risk control data” is of tremendous value, which can address joint debt in the current
credit ecosystem more effectively and at a lower cost.
The data on DCC are retained in a tamper-proof format, providing data basis forconfirmation of claims and the rating of claims via algorithms and compution in thesubsequent asset securitization process .
For ecosystem data that needs to be integrated and calculated, DCC will build a multiparty computation (MPC) platform with leading universities and colleges in China. Thus thedata from multiple participants can be analyzed without collection, and be saved locally forcollaborative computing; all participants can share the data under identical computing andanalysis scenarios without worrying about data abuse by third parties, and true cooperation
with data privacy protection will be achieved.
Decentralized transmission model of DCR will greatly reduce the profits of lending
information intermediaries, and truly allow profits to flow to parties needing credit andfunding parties. It will also make ecosystem competitions more market-oriented, reduce thethreshold for participants to enter the market, improve the influence of risk control
capabilities on business, and truly facilitate the interest rate liberalization.

3.4.

Non-Cooperative Game Between Participants

DCC uses the blockchain to expand the original interlinked credit ecosystem relationshipconsisting of many centralized systems into a flat credit ecosystem in which the blockchain
smart contracts serve as the shared medium and all participants are be treated equitably.

Cyber Sheng Foundation Ltd.

22

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

The openness of the DCC ecosystem enables each participant to cooperate on an
independent and equal basis Further cooperation between previous lenders and borrowers
will not depend on the original relationship, and decisions made by any participant within theecosystem will be entirely independent of other ones, thus creating a truly non-cooperative
gaming environment.
Such independent bilateral cooperative model will greatly reduce the complexity ofsystem interconnection. It is easier for credit system technology service providers tostandardize the modules of credit services and provide the credit standard system that canbe deployed rapidly.
Based on openness, DCC sets no access barriers for participants in the ecosystem, and hasreachedcooperation intentions regarding various basic service fields with someoutstanding service providers in the world .

3.5. Advantages of the EcosystemThe unique and tamper-proof identity system The credit reporting system without
data island or data monopoly

Efficient, low-cost credit business system

Cross-entity, permanent data storage and shared creditor’s rights record

Cyber Sheng Foundation Ltd.

23

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241



Asset securitization with excellent asset liquidity

Liberalized interest rate formation mechanism

Cyber Sheng Foundation Ltd.

24

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

4. Product Scenarios

4.1. Loan Registration Service
Loan registration service is intended for C2C loans among individuals and is generally
divided into two types: directional loans and non-directional loans.
Directional loans between a lender and borrower occur when the two parties reach an
agreement on the loan offline, then respectively download the loan receipt software and add
each other's certification, and finally complete the signing of an electronic loan contract onDistributed Credit Chain, where payment partners complete the capital transfer
simultaneously. Users may choose to complete the deduction of principal and interest
through Distributed Credit services, or to transfer the money separately offline.
In the case of nonn-directional loans, the borrowers initiate a loan application(anonymously if preferred) through DAPP on Distributed Credit Chain, when the lender is notdesingated. The application will include the amount, duration, interest rates, repayment
methods of the loan and the tamper-proof personal data integrated and stored on the chain
by data service providers for the borrower. With the credit rating information generated
through the algorithm and compution of algorithm service providers on the chain, theborrower’s first-degree friends (friends can be automatically added through DAPP
authorization or both parties actively approve the friend relationship on the chain) can accessthe borrower's application and decide whether to lend. If they confirm to lend, both parties
sign an electronic loan contract and the credit contract on the chain, during which funds are
generally transferred through payment partners on the chain (third-party payment
institutions). If the borrower's personal credit is insufficient, he or she can realize credit
enhancement and obtain the loan through sponsorship provided by others on the chain.
4.1.1. Consumption Loans
Consumption loans, also called as Consumer Loans, refer to individual loans used forfurther study at abroad, housing decoration, purchasing durable goods or cars, etc.

Cyber Sheng Foundation Ltd.

25

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

C-end applicants will send their personal application information to B-end financial
institutions through the chain, or test their own data against various screening algorithms offinancial institutions. Qualified applicants may sign electronic contracts with corresponding
financial institutions online, and borrow from them. The fund must be exclusively used to
repay the debt on designated credit cards.
Because of the cross-regional nature of blockchain, a C-end applicant could be an
ordinary African laborer in urgent need of home renovation. This hypothetical laborer has agood credit record locally, but the annualized interest rates of borrowing from local banks
are up to 8% due to unbalanced credit development in his own country. Through DCC
decentralized credit data sharing, a Canadian bank can assess his borrowing risk and usage
scenario. Through the credit enhancement of the consumption scenario, the bank is willing tolend to him at an annualized interest rate of 4% through the blockchain network. Such
scenario is inconceivable in the traditional banking network, but will occur frequently in theblockchain's distributed architecture.
4.1.2. Consumption Installment
Consumption installments usually refer to the commodity installment purchaseagreement entered into between a consumer and a merchant, where the consumer
promises to pay in installments within a given period as agreed after the merchant delivers
the product.
In Distributed Credit Chain, consumers can upload their personal data to the chain andgenerate a credit rating report. In the event of a purchase, the merchant may be authorized
to check the consumer’s personal data and credit report to understand and evaluate his or
her credit status, and decide whether to offer installment credit.
In some consumption business scenarios, traditional banks cannot provide installment
services for adequate consumption scenarios due to the limits of their own loan funds, while
using a Distributed Credit contract set, the merchant can organize the user to set up virtualfund pools corresponding to consumption scenarios. These funds in the fund pool are still
stored by individual users through the DCCID account. When consumption occurs,
corresponding funds are quickly matched based on the big data risk-control model of the
Cyber Sheng Foundation Ltd.

26

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

blockchain and the risk appetite of different virtual pools. Diversified investment by multiple
individuals can satisfy the funding needs of the consumer in the process, and reasonably
reduce the risk borne by everyone.
For example, numerous food delivery couriers on the street may need to replace theirvehicles’ batteries for 3 to 4 times a day. If they were to purchase these batteries themselves,the cost would be extremely high. If battery swap stations were to provide these batteries,
they would have needed great investment in batteries during the early business stages andwould face high business risks. A distributed banking system could provide a customized
installment plan which allows couriers to pool the funds needed for investing in targetedbattery procurement. It could even introduce tokenization. Business income arising out ofsubsequent use of the battery, could be shared among couriers who made the investment.
Such self-sufficient financial system is inconceivable under a traditional financial system,
while in DCC ecosystem, this plan will be carried out quite smoothly and naturally.
4.1.3. Blockchain Credit Card
Based on the DCC contract set, various individuals and financial institutions can grant
credit to specific users on DCC. The credit amount is maintained on the chain. Through zeroknowledge authentication and homomorphic encryption, many credit providers can, without
disclosing the credit amount information to each other, determine whether specificconsumption allows for overdraft. The overdraft consumption records will also be stored on
the chain as the user's credit information and used by the ecosystem.
DCC-based credit cards can also easily integrate the amount limit given by various credit
providers for portfolio consumption. Because of the combined credit card overdraft plans,
the institutions that provide credit card reimbursement services can also offer services tocustomers at a lower cost through the distributed credit reporting system provided by the
DCC system. This cost reduction is not only reflected in the acquisition number of customers
and the single-time acquisition costs, but also in the reduction of the default rate andoverdue duration. With blockchain technologies, DCC is expected to grow into the largest
global credit card organization that does not issue credit cards.

Cyber Sheng Foundation Ltd.

27

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

4.1.4. Digital Asset Lending
At present, in digital asset lending, the lack of effective personal credit information
association between the world of data assets and the traditional world, results in noaccumulation of historical credit. And there also lacks effective means to avoid risk before,
during and after loan processing. DCC distributed credit reporting system can help theblockchain-based credit lending platform open up credit reporting links, conduct pre-credit
risk control, manage performance during loan, and foster the expansion of the digital asset
lending market.
Imagine that people with different digital assets could pledge their digital assets throughthe loan chain and obtain mainstream digital assets (ETH, BTC, etc.) from different individuals
for reinvestment through credit reporting data and credit records. Such loan market would
create more liquidity for digital asset transaction markets and provide more financial
derivatives.

4.2. Facilitating Asset Securitization
4.2.1. Mortgage Claims Registration
In the process of asset securitization, since the fund provider is not the owner of theasset, it will have a natural distrust in the authenticity of assets’ historical performance,
which results in its excessive costs in hiring external agencies for verification. In many cases,
the historical data of an asset is not trusted even after due diligence by external agencies. If
the project initiator has only existed for a short duration or is not rated sufficiently, thenissuance is difficult to make successfully.
Through the DCC contract set, the ownership of the underlying assets (real estate, cars,sales contracts, bank notes, etc.) can be explicitly registered on the chain by law firms,
certification bodies, notary offices, and the like. When these assets are re-used, the life cycleof the entire asset can be checked on the chain in a cheap and efficient manner, which
effectively avoids repeated mortgage financing.

Cyber Sheng Foundation Ltd.

28

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

In the asset securitization business, the original equity owner, as the initiator, is only an
investor in an inferior product after transferring ownership of the assets to SPV. In principle,
the follow-up services for such assets should be completed by a third party—including
recovery of repayment, collection of overdue assets, and disposal of non-performing assets.
In a centralized world, these tasks are often still borne by the original equity owner, who
might establish a team to finish such tasks or subcontract these tasks. Since the original
equity owner is usually the holder of inferior products, the whole data closed-loop is notopen to anyone, thus creating moral hazard risks.
Maintaining the distribution of the entire ABS through DCC effectively eradicates suchproblems, creates real-time shared data between the original equity owner and SPV, andmakes the asset disposal process totally transparent.
4.2.2. ABS Asset Distribution
As the loan contracts formed through DCC ecosystem have decentralized, nonrepudiatable and tamper-proof features and the decentralized credit reporting system isestablished, the assets are endowed with high divisibility and liquidity. Asset securitization
no longer strictly requires the transfer of assets by a single equity holder. Instead, a new-type
technology investment institution that emerges will package and sell lending assets stored in
DCC through identification, screening, combination and structuring.
ABS products packaged through DCC assets have good penetrability, the disposal results of
repayment recovery, overdue asset collection and non-performing assets are clear, andthe cost of authentication is little. All these will bring new products to the asset
securitization market, which will provide distributed asset management abilities throughDistributedAssetManage services on DCC, greatly improving the technical content andliquidity of the entire asset management ecosystem.

Cyber Sheng Foundation Ltd.

29

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

5. Economic Ecosystem Model

5.1. DCC-Valuation Credentials of Ecosystem
DCC is the credential used to pay for jobs in the Distributed Credit Chain. Any work in the
DCC needs to be paid for with DCC. DCC balance is managed through DCC token contract tomaintain a fixed total amount of DCC. As the financial service system in the DCC grows, more
and more distributed business scenarios are embedded and used more frequently, which
greatly increases the liquidity.
DCC's payment is handled based on the DCCpayment contract, which is responsible forthe DCC payment rules for multi-payer participation.

5.2. Benefits of Ecosystem Contribution
5.3. Use of DCC in Distributed Credit Chain
5.3.1. Reconstructing Credit Cost with DCC

Cyber Sheng Foundation Ltd.

30

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

In DCC system, the individuals that require data or reports from data institutions need to
pay DCCs. Such mode will transform the orginal way that data institutions generate revenue,
that’s, from making profit through collecting and reselling user data to through providing
better services to customers.
Credit institutions also need to pay DCCs to the certification body when verifying thevalidity of the data. However, the changes in the revenue structure of the data institution
will greatly reduce verification costs , which will further reduce overall cost of the borrower.
DCC’s labor market is maintained based on the DCCmarket contract, which is responsible
for registering, altering, and deleting DCC-priced remuneration from service providers in theDistributed Credit Chain. It recommends the most appropriate partner to individuals or
institutions through AI analysis in the chain, effectively maintaining market equity andtransparency. DCC pricing for services also avoids detrimental impact on the production ofborrowers caused by DCC price fluctuations in the secondary market. In the process ofconducting business, various participants do not need to pay attention to the priceperformance of DCC in the secondary market; instead, they can decide whether to use theservice through simply judging the corresponding legal tender value of o the service.
5.3.2. Using DCC to Redistribute Ecosystem Benefits
In the DCC system, individuals applying for credit shall pay DCCs for application contract.
Some portion (for example, 50%) is allocated to data institution according to the use weightof data verification service by credit institutions as verification fees; a certain proportion (say,2.5%) will enter the credit reward pool for that day as service cost; another certain portion(for example, 7.5%) is recycled and used for continued release of DCC; the remaining portion(for example, 40%) is distributed as a credit result reward. If the loan is granted successfully
after verification and the borrower proactively confirms the loan contract, then the reward isreturned to the borrower. If the loan contract is not confirmed within 1 day or the loan
application is rejected, then the reward is assigned to lending institutions.
DCC amount paid for loan applictaion is decided by the borrower at own discretion, andcredit institutions can set the minimum threshold of DCC and handle the priority ofCyber Sheng Foundation Ltd.

31

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

borrowers’ applications. In principle, the credit institution will give priority to borrowers who
pay more DCCs.
Through establishment of such decentralized trading models, the entire ecosystem
distribution pattern of interests can be dynamically adjusted so that the credit processing
resources can be tilted towards individuals with more DCCs (those who contribute more to
the ecosystem), thus maintaining the sustained vitality of the ecosystem.
5.3.3. Using DCC to Incentivize Credit Accumulation
In the DCC system, a portion (for example, 2.5%) of the loan in the application process isconverted into the credit pool of the day and forms the total reward pool with fixed eco
reward. According to DCCreward Agreement, on Day T+1, the money in credit reward pool
will be distributed evenly to incentivise borrowers who repay loans before Day T. In the DCC
ecosystem, different types of reward pools will be formed in different businesses in the
future, and ecosystem participants may receive incentives for different pools when using andcontributing to different ecosystems.
The daily fixed incentive is dynamically adjusted by the foundation according toecosystem development needs, and daily fixed accumulation will not exceed the total
amount of DCC. When there is no DCC that can be excavated, the incentives will be no longer
given.
DCC incentives ensure that good credit behavior can obtain more convenience in lending,which encourages everyone to establish their own good credit.
5.3.4. Cross-border Credit Credentials
Because the DCC system provides a cross-border, cross-scenario, and cross-currency
credit service of digital assets, DCC can correspond to values of different legal tender of loans
in various countries, which greatly facilitates the multinational business of lending service
agencies.
Being more frequently used, DCC is expected to become the anchor currency of themultinational lending service ecosystem on Distributed Credit Chain, and open the value
exchange of ecosystem service providers in various countries. Through DCC, users in one
Cyber Sheng Foundation Ltd.

32

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

country or scenario will be able to purchase data reports provided by the data providers ofanother country or scenario, or apply for loans from various lending institutions in different
countries. DCC transactions in different exchanges corresponding to different currencies canprovide cross-border settlement services.

Cyber Sheng Foundation Ltd.

33

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

6. Technology Realization

6.1. System Structure

6.2. Dapp
DCC is a decentralized open credit platform. Any platform with traffic and scenarios
can submit its own Dapp applications to DCC, provided that these submissions are basedon Distributed Credit Chain standards. In the early stages, to ensure the health andstability of the ecosystem, the Foundation would review Dapp release applications. The
Cyber Sheng Foundation encourages different scenario platforms to enter the DCC
ecosystem to provide consumption scenarios of Internet finance through Distributed
Credit Chain ecoystem.
DCC’s R & D team will cooperate with the App R & D team to provide Dapp withcustomized development services in the early stages, in order to help lending institutions
package and release the lending client based on the underlying technology of Distributed
Credit Chain. Such lending institutions can use this client application to develop
customers and complete customer registration, maintenance, data acquisition, risk
control, and management during and after the loan.

Cyber Sheng Foundation Ltd.

34

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Customer addresses created through a custom App can be exported and imported bycustomers into either universal Dapp provided by DCC or into Dapp developed by otherdevelopers. These universal Dapps can use all service structures of DCCmarket to provide
lending services to customers, thus providing customers with better lending rates
through making use of price competition between lending institutions and data services
providing customers with better lending rates.

6.3.

Account (Wallet) System

DCCID uses the wallet generation mechanism identical to Ethereum. The Wallet consistsof the private key, public key, and address.
DCCwallet uses the “elliptic curve algorithm” to generate public-private keys. The elliptic
curve algorithm is an asymmetric encryption algorithm and has higher security, faster speed,
and occupies less space than common RSA algorithms.
Each wallet account contains a key pair, i.e., a private key and a public key. The privatekey (k) is a randomly-chosen number, after which the unidirectional cryptographic function
is multiplied using the elliptic curve algorithm to generate public key (K). Then the public key(K)generates the account address (A) using unidirectional cryptographic hash function.

Cyber Sheng Foundation Ltd.

35

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

DCCwallet uses Private Key and Keystore & Password to save the private key. The private
key can be saved in Dapp, and can also exported to be stored elsewhere after backup.

Cyber Sheng Foundation Ltd.

36

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

During the iteration of the DCCwallet version, the collaborative distributed key recovery
service will be launched with the MPC platform, under the precondition of safety verification.
Private key clients are separately stored in multiple independent organizations that cannot
independently recover the password. When the key needs to be recovered, multiple
institutions will coordinate in key recovery to help users store their keys more safely.

6.4.

Gateway Service

Gateway Service is a centralized system, which primarily serves ecosystem participantsthat do not have the ability to directly access DCC through RPC. They may access DCC via
open API through the gateway provided by DCC, which greatly reduces business interfacingtime.

Cyber Sheng Foundation Ltd.

37

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

The DCC system also provides SDK and other access methods, based on the Gateway
Service, so as to facilitate ecosystem expansion and provide easy ways to enjoy the credit
services on DCC.

6.5.

Open Platform

The Open Platform on Distributed Credit Chain is a centralized system which serves as adata provider and market. The transcation market serves data collaborators, AI risk control
algorithm providers, credit structuring institutions, and other institution partners. Throughthis platform, institutional partners can check, screen, contact and reach cooperation withother partners based on their needs through DCC, while using the services on DCC .
The Open Platform interfaces with DCCmarket contracts. All cooperating institutions canpublish their labor costs through this platform. After analysis and processing, these data will
be sent to users and institutions as their price basis for choosing the services they need. The
real-time quotes will smoothen the exchange of information across the institutional service
market .
The Open Platform will provide a blockchain browser to view all node operations, block
loan request, transaction flow and other blockchain basic information on DCC.
6.6.

Open source framework

Frameworks such as DCDMF, DIV, and SDV will be open sourced at github given with
open source on github. Partners are welcomed to modify these frameworks for morecustomized services.
DIV framework flow diagram
Object:Cyber Sheng Foundation Ltd.

38

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Cyber Sheng Foundation Ltd.

39

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Cyber Sheng Foundation Ltd.

40

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Domain model design:

Cyber Sheng Foundation Ltd.

41

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

SDV Framework:

Cyber Sheng Foundation Ltd.

42DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Domain model design:

Visit https://github.com/DistributedBanking/DCC for more open source information.

6.6. Blockchain and Smart Contract
6.6.1. Consortium Chain Governance Architecture
DCC is a blockchain system that will be opened gradually. As the ecosystem slowly
becomes stable, DCC will evolve from a consortium chain to a public chain. (After the DCC
Cyber Sheng Foundation Ltd.

43DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

main chain is online, all tokens will be converted into the wallets of DCC main chain in a 1: 1
translation from the Ethereum ERC20 contract.)
In the first stage of the ecosystem, DCC will exist as a consortium chain. Billing nodes thataccess the chain will be allocated as “billing nodes” or “non-billing nodes.” A billing institution
may apply for one or more nodes and can also apply for either type of nodes.
The application institution can qualify as a billing node by pledging certain percentage of
DCC and apply to the Cyber Sheng Foundation. After the Cyber Sheng Foundation reviews theavailability and stability of the node, and institutional qualifications, the application
institution will become an billing node. In this case, DCC pledged for the billing node will notincrease, and the ecosystem will not provide the billing node with billing incentives because
billing is considered a form of public service provided to the ecosystem. DCC will not be aconsensus token in the consortium chain and will not be consumed during the transaction
consensus process. All billing in the consortium chain stage will be a public service.
DCC will work with software vendors that provide credible computing to authenticatecompute nodes by deploying persistent immunity plug-ins in billing nodes. The billing will
only be allowed after the billing node has satisfied credible authentication. If the credible
authentication node is found to have any abnormal operation, its billing rights will becanceled. After the system is deployed and launched online, the Cyber Sheng Foundation willcancel the strategy of obtaining billing rights through pledging DCCs, and gradually open theentry of public billing node
Any applicant institution can apply to become a non-billing node, and there will be nolimit to the amount of such nodes. The Cyber Sheng Foundation promises to complete theaccess approval for non- billing nodes within one week at the maximum,

gradually open

codes of non-billing nodes and provide self-service deployment guidance procedures.
In the second stage of the ecosystem, DCC will customize the most appropriate
consensus algorithm based on common features of the distributed bank business and evolvefrom the consortium chain governance architecture to the public chain architecture. Any
individual may apply to join in the billing node for billing. At present, existing consensus
algorithms in the world lack the capability to support the credit chain. Therefore, the Cyber
Cyber Sheng Foundation Ltd.

44DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Sheng Foundation will release updated plans in time based on developments in algorithm
technology.
In the public chain stage, DCC will reconstruct the account system, use Schnorr Signature(which is safer than ECSDA) to generate, expand on the default data structure of the account,and maintain the basic data structure on the chain by means of zero knowledge proof, sothat the users can directly access it and the implementation of subsequent financial businesswill be facilitated.
In terms of data preservation, contract deployment and consensus node openness, withreference to the experience of DistributedLedger, DFINITY, Zilliqa, Stellar and other projects,
DCC also conducts business through different business channels based on the needs of thedifferent businesses of distributed banks
DCC settlement services will be anchored to blockchain’s underlying logic and inserted
into the business ecosystems of each channel in a smoother manner, so as to more closely
link the financial services and consensus together.
In the process of transformation and reconstruction, the experts hired by the DCC teamand the Foundation will provide technical services for constructing the main chain andopening the billing, resetting the incentive mechanism of the public chain billing, andmigrating the original consortium chain data to the public chain, so as to ensure smooth
remote control of the project.
6.6.2. Consensus Algorithm
The consensus mechanism is an important mechanism used by DCC to maintain thecorrectness, consistency and continuity of data. Given current ecosystem needs, DCC uses
the PBFT algorithm as its consensus algorithm.
The properties of PBFT algorithm include:Consensus nodes generate block in turn and have the same billing right,
reflecting peer equivalence and preventing any individual accountant
from doing evil.

Cyber Sheng Foundation Ltd.

45

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241



Block generation can happen within seconds, which can satisfy the needsof transactions within a short period.

Supports 1/3 node fault tolerance: the failure or doing evil of less than
1/3 of the total number of nodes will not affect the consensus;

In the block synchronization process, signatures are strictly verified toensure data security.

PBFT consensus algorithm, with its high consistency, high availability, and strong antifraud ability, is widely used in other consortium chain projects. It is mature and fairly stable.
6.6.3. Smart Contract
A smart contract is a chain code deployed on DCC, a string of codes that contain businesslogic.
In the first stage of DCC's ecosystem, an EVM container compatible with Ethereum will be
deployed as a container for implementing smart contracts, and Distributed Credit Chain will
support development using Solidity language.
Since DCC adopts a consortium chain architecture in its first stage, participants do notneed to pay for costs to reach consensus in block generation. Therefore, the mart contractsof partners must be submitted to the Foundation for review on the open platform andverified in the test environment before they are deployed on the chain.

Smart contract code is shown as follows:

Cyber Sheng Foundation Ltd.

46

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Flow chart of smart contract：

Cyber Sheng Foundation Ltd.

47

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

6.6.4 Public chain structure
6.6.4.1 System structure

6.6.4.2 Network layer

Cyber Sheng Foundation Ltd.

48

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

We use SWIM as the network layer protocol. SWIM is an acronym for Scalable, WeaklyConsistent, Infection-Style, and Processes Group Membership Protocol. Its features are as
follows:
1. Scalable. It can be used to build tens of thousands of large-scale P2P networks.
2. Weakly-consistent. It does not emphasize strong consistency for the member relation
view of the nodes. The ultimate consistency is achieved by means of information exchange.
Compromising consistency improves availability of the entire network and ensures thefeasibility of large-scale networking.
3. Infection-style. Disseminate information fast through the gossip-style message
exchange protocol.
4. Separate fault detection from updating of member relationship dissemination, avoid
flaw that traditional Gossip heartbeat detection is not available to large-scale networks
through specific default detection algorithms.
On the basis of maintaining the membership relationship by SWIM agreement, we
provide HTTP Json RPC to provide exchange protocol data for nodes.

6.6.4.3 Core layer
Book storage

We provide a plug-in book storage interface to adapt to different book storage
implementations, and provide a book storage implementation which is based on anembedded K-V database, an embedded relational database and separate Sql/NoSql
databases.
World status cache

The transaction on the blockchain essentially refers to the process of obtaining the next
new blockchain status through calculation of the current blockchain status. The book storage
retains complete and immutable changes in all statuses, and is therefore undeniable.
To increase the efficiency to obtain the current world status, we save a snapshot of
current status in the cache for quick reading. At the same time, the cache can bereconstructed based on the book storage, so the world status cache does not affect theavailability of the entire network.
Cyber Sheng Foundation Ltd.

49

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241



Functional smart contract engine and virtual machine

Different from other smart contract engines, we believe that the smart contract of financeis a pure function F. Assuming the current world status is S, there are: S’=F(S) and S’ is thestatus after the contract has been executed.
Viewing smart contracts from a pure function perspective have the following benefits:
1. Easy to test. Because it is a pure function, there are no side effects. The contract canbe tested without relying on the blockchain environment.
2. Contracts are algorithms, and contractual regression rules are only used to describe
business rules without causing side effects on the blockchain, thus improving thestability of the blockchain.
3. Easy cost measure. Because it only describes the business rules, the complexity ofthe measurement of smart contract costs is greatly reduced, without having toconsider the cost of side effects such as storage, IO and so on.
4. Reliable playback. Since it is a pure function, implementation of the same S' isrepeated and the result is the same S, i.e. it supports idempotence.
We will use JAVA as development languages of core smart contracts. At present, JAVA is arelatively common development language for financial back-end systems. We use the JVM asa container for running smart contracts.


Account

Built-in account system, including support for multiple native tokens.
Encryption and decryption
The DCC public chain uses ECDSA for digital signatures and verification and uses ECDH
exchange key for encrypted communication.
Consensus algorithm

The DCC public chain is an open chain available to the public. Anyone can join the DCC
public chain as the billing node. We propose a REBFT algorithm to randomly generate N
communication nodes to participate in the consensus from the whole network nodes. The
other nodes synchronize for the Follow node. After completing a round of consensus, thenext round of Leader nodes is re-selected.

Cyber Sheng Foundation Ltd.

50

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

6.6.4.4 Interactive layer
Open APIThe DCC public chain will provide a large number of open source API interfaces for theparticipants, and SDK, so that some mobile APPs and WEB can be engaged in chain interactive
development.


Cross-chain adaptation

Through the development of a cross-chain adaptation mechanism, DCC's public chain iscompatible with the current mainstream main chains, such as bitcoin and ethereum, to carryout cross-chain asset exchange and financial services supporting digital assets.
DCC's public-linked R&D will also be open sourced at github. Developers are welcomed toparticipate in the research and development of DCC's public chain. Cyber Sheng Foundation
will provide developers with DCC rewards.

Cyber Sheng Foundation Ltd.

51

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

7. Distribution Plan

The Cyber Sheng Foundation plans to issue a total of 10,000,000,000 tokens of theencrypted digital currency DCC.
In the private round , famous qualified investors in the fields of credit and banking will be
invited for the investment, with the fundraising percentage no more than 18%, and theinvestment amount of single investor no less than 100ETH. At this stage, DCCs will be locked,
with 25% of the total to be unlocked before the opening of exchange, and another 25% to be
unlocked every two months, with the full amount to be unlocked in 6 months.
In ICO round, 200,000,000 DCCs will be issued to Non-Chinese and American investors. All
these will be directly circulated. DCC token will be exchanged by ETH.
The contributions in the token sale will be held by the Distributor (or its affiliate) after thetoken sale, and contributors will have no economic or legal right over or beneficial interest inthese contributions or the assets of that entity after the token sale. To the extent a secondary
market or exchange for trading DCC does develop, it would be run and operated wholly
independently of the Foundation, the Distributor, the sale of DCC and Distributed Credit
Chain. Neither the Foundation nor the Distributor will create such secondary markets nor will
either entity act as anunlocked in 6 months.
Other allocation details of DCCs are as follows:

Cyber Sheng Foundation Ltd.

52

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Item

Amount

Allocation

Explanations


Used for follow-up project development,
recruitment and marketing etc.

Tokens are locked by private keys for a total
period of 6 months, with 25% of the total toPrivate Round

1,800,000,000

18%

be unlocked 3 working days prior to any
exchange listing, and another 25% to be
unlocked every two months thereafter, withthe full amount to be unlocked in 6 months.

ICO

Foundation

200,000,000

2,800,000,000

2%

28%

 Qualified individual invertors accepted(Except American Chinese) No lock-up

 Service for further DCC research, eg.
Project development, businesscooperation, etc.
 Lock-up for 1 year, second year lock-up
will be announced by the foundation

Market &Cooperation
Agency &Consultants

1,500,000,000

Cyber Sheng Foundation Ltd.

15%

 Using as bonus reward for early project
partners like promote and publicize DCC,
start up system team and consultants
 Lock-up for 3 years, consistently releaseyear by year

53

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Eco Reward

1,700,000,000

17% 100,000,000 DCC tokens for the first year
reward 90,000,000 to 50,000,000 DCC tokens will
be reward for each next year in next 5years After 6 years rewarding, the annul reward
would be fixed at 50,000,000 level 17 years+ consistently rewarding Used to incentivise and motivate thefounding team for their huge efforts inprogram design, resource organization,commercial environment incubation, andto encourage follow-up investment of
manpower and intellectual resources inecosystem formation.
 Tokens are locked by private keys for a
total period of 3 years, with 25% of thetotal to be unlocked 6 months after any
exchange listing, 25% to be unlocked one
year after any exchange listing, andanother 25% to be unlocked every year
thereafter, with the full amount to be
unlocked in 3 years

Management
Team2,000,000,000

20%

Total

10,000,000,000

100%

8. Use Plan for Raised Funds

Item
Labor Costs

Proportion
30%

Explanation
The project to develop Distributed Credit Chain requires alarge number of elite researchers and developers who canintegrate the mobile internet, distributed networks,
blockchain, financial payment, financial risk control andmarketing promotion.. The establishement of suchecoystem requires adequate funding for human capital.

Cyber Sheng Foundation Ltd.

54

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Marketing25%

DCC is committed to building a decentralized financial
system in the future, during which commercial promotion
and dissemination will incur significant cost.

Business

10%

Cooperation
Consultancy

In the future, more cooperation in ecosystems will
gradually support various distributed business scenarios.

5%With further development of blockchain technology, weneed to engage enough technical consultants to provide
technical support.

Ecosystem-

5%

Maintaining low ecosystem operation costs.

25%

A risk reserve fund for overall operating, to respond to

Operations
Reserve Fundoperational risk and force majeure factors.

Cyber Sheng Foundation Ltd.

55

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

9.

Development Timeline

August 2017

Establish Project to develop Distributed Credit Chain

September 2017

Construct unified identity system based on the Ethereum test
network

October 2017

Build underlying Distributed Credit Chain testnet

December 2017

Deploy online credit declaration contracts based on underlying
testnetFebruary 2018

Token exchange

March 2018

Launch the first loan product Dapp based on Distributed Credit
Chain

April 2018

Launch Distributed Credit Chain open platform online

May 2018

Interface with more than five institutions of loan, data
providing and risk control

Q3-4 of 2018

Open self-creation API of Distributed Credit Chain

Q3-4 of 2018

Establish unifed MPC of DCC

Q4 of 2018

Enter Indonesia lending market

Q1-2 of 2019

Enter lending markets of Vietnam & other countries inSoutheast Asia

2020

Cyber Sheng Foundation Ltd.

Migrate the platform to public blockchain system

56

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

2020

Develop Distributed Asset Manage system based on publc
chain
Develop Distributed Settlement system

Cyber Sheng Foundation Ltd.

57

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

10. Cyber Sheng Foundation Ltd.

Cyber Sheng Foundation Ltd. is a non-profit organization established in Singapore. The
Foundation is committed to maintaining the healthy growth of the entire ecosystem in thefirst phase of building of Distributed Credit Chain. As the ecosystem evolves to a publicblockchain system, the Foundation will gradually withdraw from ecosystem protection, andhand over maintenance rights to the public blockchain governance structure. The Foundation
does not receive any eco-benefits from maintenance and does not derive any benefit fromDCC.
The Cyber Sheng Foundation is composed of the DCC startup team, core partners, andearly supporters (if such parties are institutions, the members of said institutions) responsible
for the daily operations of Distributed Credit Chain of the Foundation is the Board of
Directors. Each year, the top 30 holders of DCC may apply to be on the Community
Supervisory Board of the Foundation, and may join the Community Supervisory Board if morethan 50% of the original Community Supervisory Board members approve of theirapplications. Community Supervisory Board members who drop out of the top 30 holders of
DCC must withdraw from the Community Supervisory Board. The role of the Community
Supervisory Board is to provide balanced views on the overall direction of the project. For the
avoidance of doubt, while the views of the Community Supervisory Board would be
acknowledged, ultimately the assets and funds of the Foundation remain under the solecontrol of the Board of Directors.
DCC held by the Foundation during the initial stages of development of Distributed Credit
Chain may be used for purposes beneficial to the ecosystem such as technical teamincentives, eco-rewards and expanding the service institution relationship. Such purposes
require audit reports issued by audit authority.

Cyber Sheng Foundation Ltd.

58

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

11. Core Team

Stewie Zhu
 Serial entrepreneur in the internet and Fintech industry
 Led a leading SaaS financial technology company in China to develop internet-based

credit systems for over a dozen of trusts with multibillion USD annual loan facilitation
amount, which was successfully sold to a publicly-listed company in three years.
 Bachelor in EE, Nanjing University; MA in statistics,
 Yale University M.s Statistics,
 Oxford University M.s in Financial Economics
 Ph.D. (Candidate) in Finance, London School Of Economics
 Research focusing on finance and game theory.

Daniel Lu
 PhD in Mathematics, Yale University, USA; Postdoctoral Research in Financial

Engineering, focusing on the Representation Theory, University of Leipzig, Germany Head of investment banking and asset management, general manager of financial

department of a large commercial bank
 Years of experience in financial institutions at home and abroad, working

successively at Deutsche Bank headquarters and Finance Department at a joint-stockbank headquarters.
 Possesses solid professional knowledge and research abilities, and has been invited

to give keynote speeches at academic conferences and financial conferences in
China and abroad. Specializes in capital & capital market business, asset
management, bank assets and liabilities management, internal fund transfer pricing,

Cyber Sheng Foundation Ltd.

59

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

product pricing, market risk management and modeling, financial derivatives pricing,
and the Basel New Capital Accord in investment bank/commercial bank

Stone Shi
 J.P. Morgan, Vice President, Quantitative Research, Focused on Derivative Pricing,

Quantitative Model Risk
 HSBC, Internship, Rates, Education
 TELECOM, Ingenieur, Majored in Computer Science and Applied Maths
 Nanjing University, Majored in Electronic Science and Engineering

Cyber Sheng Foundation Ltd.

60

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

12. Advisors
Chen Yu Net name is “Jiangnan Young Cynic (Jiangnan Fen Qing)” Partner of JX Capital; famous angel investor; Invests in nearly 200 internetcompanies
 Author of Payment Revolution & Wind of Jiangnan: Internet Finance bestsellers infinancial field in China
 Voted Top 50 Figures of Internet Finance in China for five years in a row
 Selected in the list of Man of the Year by Hurun Report in 2016 and 2017

Yao Ming
 Managing director and CTO of China Chengxin Credit (CCX Credit) Spent his early years at Bell Labs, then worked in the mobile Internet and financial

industries with extensive experience in big data technology, and has long beencommitted to exploring the innovation and application of financial big datatechnology
 Joined CCX Credit in 2014 to help the company complete preparatory work forpersonal credit card issuance, and established the Wanxiang Credit Internet Big Data
Credit Reporting Platform. He led a team to independently develop and successfully
apply many core technologies such as big data anti-fraud and credit assessment tobecome one of China’s first practitioners in the big data credit rating industry, andwas hired by a number of large banks as an external technical expert
 Since 2016, he has focused on the application and innovation of technologies such as

blockchain, machine learning, and artificial intelligence in the financial field, and isdedicated to promoting intelligent credit assessment

Cyber Sheng Foundation Ltd.

61

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

Chen Zhiwu
 Former Professor of Financial Economics at Yale University (1999-2017), currently

serves as research director of Asia Global Institute of Hong Kong University, and Feng
Foundation Professor (economics) at School of Economics and Business
Administration. Also serves as Distinguished Professor at School of Economics,
Peking University.
 International Consultant, China Securities Regulatory Commission, member of Global

Advisory Committee of China Minsheng Investment Company, and independent
director of IDG Energy Investment Group, Bank of Communications and Noah
Fortune. Professor Chen served as a member of the Yale-China Association of Yale
University, a member of Advisory Committee of Beijing's 12th Five-Year and 13thFive-year Planning Experts and general academic director for CCTV documentary"Wall Street" and "Monetary Affairs." Professor Chen was a member of the
preparatory expert group when China Investment Corporation (CIC) was founded in
2007; an independent director of PetroChina Company from 2011 to 2017, an
independent director of Nordisk Fund Management Co., Ltd. from 2007 to 2015, an
independent director of Shiji Jiayuan Network from 2011 to 2012, and a director of
China Eagle Securities from 2002 to 2005.
 Founder of Zebra Capital Management fund management company
 In 2012, Burson-Marsteller, a global consulting firm, listed Professor Chen as one of"China's Ten Most Influential People" in its "G20 Influencer Report" (G20 Nations
Most Influential People Report).
 Research awards include the Graham Trophy Award (2013), the Pacesetter ResearchAward (1999), the Merton Miller Research Award (1994), and the Chicago Board
Options Award (1994). Professor Chen's Logic of Finance won 23 Best Annual Book
awardsCyber Sheng Foundation Ltd.

62

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

 Bachelor of Computer Science from Central South University of Technology in 1983,

Master of Management Science from National Defense University of Science andTechnology in 1986, then Ph.D. in Financial Economics from Yale University in 1990

Henry Cao
 Renowned financial economist, now a Professor of Finance at Cheung Kong Graduate

School of Business, academic director of Financial MBA
 Member of Financial Club, former professor at the University of California, Berkeley,

University of North Carolina at Chapel Hill.
 Published a number of papers and is widely cited in internationally renowned

journals including Journal of Finance, Review of Financial Studies, and Journal of
Financial Economics;
 Nominated for Best Paper for Journal of Finance twice in 1998 and 2000; Best Paper

Award in Emerging Markets field selected by the Northern Finance Association; Best
Paper Award for the Most Invested Value by the Western Finance Association; won
the best paper third prize at the 2004 China International Financial Conference; Editorial board member of Annals of Economics and Finance and editor-in-chief ofInternational Financial Review and China Financial Review.

Matthew Chang
 Matthew Chang is a Managing Director on KKR's China Private Equity team and waspreviously the Head of KKR Capstone China. Mr. Chang has over 20 years ofexperience in a wide range of companies such as start-ups, multi-national
corporations, and professional service firms in Mainland China, Europe and North
America.
 Prior to joining KKR Capstone, Mr. Chang served as global senior partner at Roland

Berger Strategy Consultants, leading its Asian operations and restructuring practices.

Cyber Sheng Foundation Ltd.

63

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

 Earlier in his career, Mr. Chang was the China managing director at Alix Partners, anassociate principal at McKinsey Company, and the Asia strategy director at Diageo
PLC.
 Mr. Chang has an M.B.A. degree from IMD International and undergraduate degrees

in mathematics and physics from Coe College and the State University of New York.

Cyber Sheng Foundation Ltd.

64

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

13. Partners

TONGNIU TechTN Tech is the leading SaaS financial technology company in China. It is committed toproviding consumer finance SaaS system services to licensed financial institutions such astrusts, banks, and small loan companies. TN Tech ranks first in China in trust industry market
share. In the process of building the Distributed Credit Chain, TN Tech will provide historicalcredit data application support for historically accumulated data.

JUZIX
JUZIX is the global leader in distributed ledger technology and is committed to providing
distributed data exchange and collaborative computing services in the digital age. Providing afull range of governance services for the flow of data, it makes data exchange andcollaboration easier, safer and more efficient.
Based on a completely self-developed data exchange infrastructure technology platform,
JUZIX integrates distributed ledgers, secure multi-party computing, pluggable cryptography
frameworks, future-proof cryptography algorithms and protocols, and software andhardware-in-one solutions. It provides basic technical platform-level services in the fields offinance, transportation, logistics, aviation services, intelligent manufacturing, internet ofthings, HealthCare and other fields. It also fully cooperates with the world's leading cloud
platforms to provide a complete solution for distributed industrial applications.
As an important technical service provider in the DCC consortium chain stage, JUZIX will
provide comprehensive technical support in the construction phase of the consortium chain.

Deepfin
Deepfin is a decentralized blockchain-based asset securitization platform. In Deepfin,
holders of digital assets (e.g., copyrights, articles, traffic, etc.) on different strands can easily

Cyber Sheng Foundation Ltd.

65

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

complete asset collateralization and fundraising and use different quantitative analysis tools
and services to price different assets on different strands, opening up digital assets indifferent chains so that users with financing needs in disparate communities can easily obtainfinancing through the digital assets they own. Using the blockchain technology to transform
traditional ABS business can accomplish with low cost and high efficiency asset ownership,data validation, and other authenticity validation work.

WXY
A one-stop global marketing and business consulting services platform for highly valuable
digital projects, WXY is headquartered in Singapore and its business covers brand names,
media promotion, global traffic access, business consulting, capital interfacing, and more.
WXY is comprised of former Ogilvy & Mather executives, former vice presidents of the
Krypton market, former Citigroup marketing and finance investment banking executives, coreresources such as media and funds, and is the most formal and professional marketing
platform in today's currency market.

Cyber Sheng Foundation Ltd.

66

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

14. Early Investors

JRR Capital
Professional Investors and Entrepreneurs driving innovation based on Blockchain
technology.
Based in Switzerland, JRR is committed to make investments in the best entrepreneurs
who are fostering innovation in the Blockchain technology and related fields. In addition, JRR
is an angel investment institution, which also has funded in binance.com.
With years invest experience, JRR has successfully invested on binance.com, wax,
hooah.com and DCC up to now.
The Blockchain, a novel financial technology, holds the promise to disrupt legacy parts offinancial services and create new markets.

BTX Capital
BTX Capital is a global crypto fund focused on the blockchain industry. BTX keeps
boosting the valuable internet organizations to adopt blockchain technology throughtechnical consultation, investment and resource connection, as well as promoting theawareness and realization of the value of blockchain. Unlike traditional VC equity investments
or other purely digital currency funds, BTX Capital specializes in sophisticated Internet
platforms in different scenarios. By assisting them in applying blockchain to business, BTX
seeks to reshape the business ecosystem, improve the eco-cooperative environment, scaleup the real economy, advance technologies and rejuvenate the internet industry withblockchain technology.
The core team includes senior investors from Sequoia, executives of listed China and USA
companies, Ph.D.s from top universities.It has support from many top-level senior executivesof investment institutions and project sources behind the top-tier financial institutions, as

Cyber Sheng Foundation Ltd.

67

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

well as in-depth technical cooperation with universities in Silicon Valley and Europe toprovide the support of professional talents to the project partners.

Hu Sen Repeated entrepreneur, ex-Googler
 Bachelor of Computer Science, China University of Science and Technology, Guo

Moruo Scholarship; Master of Computer Science, Yale University; PhD student
entrepreneur, founded and operated Fengyun Broadcast and Zhangyu TV; in 2015,
Zhangyu TV was acquired by LeTV.
 Awarded 30 Under-30s by Forbes China in 2014 and by Forbes Asia in 2016 foroutstanding achievements of founding CLOUNDACC.

Mai Zizhao Telegram-Ton Cornerstone Investor
 Co-founder of Blockchain Laboratory MathTrust

MathTrust is a laboratory jointly established by many world-renowned universities,
focusing on research, experiments from theory, logics, and practices of blockchain
consensus mechanism. The latest theoretical model brought by MathTrust is thatblockchain is a chain of smart contract series. The main topics covered by its
consensus mechanism research include but are not limited to guarantees of smart
contract, node ecosystem-related loophole recognition and solutions for node-based
security.
 Co-founder of AbilityChain

AbilityChain is a blockchain-based platform for global education underlying
application. Being a public chain collectively built based on global developer
community, AbilityChain is initiated by MathTrust, who, together with AbilityChain's
shareholder, are non-profit organizations.
Cyber Sheng Foundation Ltd.

68

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

 Founder of Feiyue Education

Feiyue Education is China's first bilingual educational institution targeting at K12
students. Its comprehension-based pedagogy and core curriculums are entirely selfdeveloped.

Cyber Sheng Foundation Ltd.

69

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241

15.

Risks

You acknowledge and agree that there are numerous risks associated with purchasing DCC,
holding DCC, and using DCC for participation in Distributed Credit Chain.
Uncertain Regulations and Enforcement Actions

The regulatory status of DCC and distributed ledger technology is unclear or unsettled in many
jurisdictions. It is impossible to predict how, when or whether regulatory agencies may apply existing
regulations or create new regulations with respect to such technology and its applications, including
DCC and/or Distributed Credit Chain. Regulatory actions could negatively impact DCC and/or
Distributed Credit Chain in various ways. The Foundation (or its affiliates) may cease operations in ajurisdiction in the event that regulatory actions, or changes to law or regulation, make it illegal tooperate in such jurisdiction, or commercially undesirable to obtain the necessary regulatory
approval(s) to operate in such jurisdiction.
After consulting with a wide range of legal advisors and continuous analysis of the development
and legal structure of virtual currencies, the Foundation will apply a cautious approach towards thesale of DCC. Therefore, for the crowdsale, the Foundation may constantly adjust the sale strategy inorder to avoid relevant legal risks as much as possible.
Competitors

It is possible that alternative networks could be established that utilise the same or similar codeand protocol underlying DCC and/or Distributed Credit Chain and attempt to re-create similar facilities.
Distributed Credit Chain may be required to compete with these alternative networks, which could
negatively impact DCC and/or Distributed Credit Chain.
Failure to develop

There is the risk that the development of Distributed Credit Chain will not be executed or
implemented as planned, for a variety of reasons, including without limitation the event of a decline
in the prices of any digital asset, virtual currency or DCC, unforeseen technical difficulties, andshortage of development funds for activities.


Security weaknesses

Hackers or other malicious groups or organisations may attempt to interfere with DCC and/or
Distributed Credit Chain in a variety of ways, including, but not limited to, malware attacks, denial ofservice attacks, consensus-based attacks, Sybil attacks, smurfing and spoofing. Furthermore, there is arisk that a third party or a member of the Foundation or its affiliates may intentionally orunintentionally introduce weaknesses into the core infrastructure of DCC and/or Distributed Credit
Chain, which could negatively affect DCC and/or Distributed Credit Chain.

Cyber Sheng Foundation Ltd.

70

DISTRIBUTED CREDIT CHAIN
DRAFT FOR OPEN COMMUNITY REVIEW AND SUBJECT TO CHANGE.
Doc No.1009241



Other risks
In addition to the aforementioned risks, there are other risks (as more particularly set out in theTerms and Conditions) associated with your purchase, holding and use of DCC, including those that
the Foundation cannot anticipate. Such risks may further materialise as unanticipated variations or
combinations of the aforementioned risks. You should conduct full due diligence on the Foundation,
its affiliates and the DCC team, as well as understand the overall framework and vision for Distributed
Credit Chain prior to purchasing DCC.

Cyber Sheng Foundation Ltd.

71