white paper - whisky token · than the whisky market, but it is justifiably regarded as very...

Alternative Asset-Backed Crypto Investment

White Paper

FIRST WHISKY BASED CRYPTO TOKEN

January 2018

WHISKY TOKEN

AUTHORS

Till H. Niebuhr - WHYTOKEN CEO & Co-Founder

Springe, Germany

[email protected]

Lasse Balzer - WHYTOKEN CFO & Co-Founder

Hanover, Germany

[email protected]

Tobias Germer - WHYTOKEN CIO & Co-Founder

Springe, Germany

[email protected]

Lawrence Nowak - WHYTOKEN COO & Co-Founder

Springe, Germany

[email protected]

Alexander Schink - WHYTOKEN CAO & Co-Founder

Hanover, Germany

[email protected]

WHY INVEST IN WHISKY TOKEN (WHY)

The whisky market is the fastest growing sector of all spirits worldwide. The value of Scotch

whisky exports in 2010 was approximately EUR 3.9 billion. This export volume has already risen

to about EUR 4.5 billion by 2016, which corresponds to an increase of an estimated 15%. In addi-

tion to the increased demand for whisky, the value of the product itself also surged: last year, the

RW APEX 1000 Index, which reflects the development of the thousand most sought-after bot-

tlings on the secondary market (so-called high-end whiskies), rose by more than 25%.

To benefit from this development, a fund with whisky as an alternative investment opportunity

was set up in 2014. The fund and its investors benefit from the strong performance of the whisky

market and achieve high returns. However, the general conditions of investment funds are diffi-

cult: firstly, high minimum investment sums exist, for instance USD 250,000 in the above exam-

ple, and secondly, funds of this type have several fees and costs that reduce the return for inves-

tors. In addition to front-end fees (premium), administration and management fees, investors'

returns are depressed by horrendous performance fees, thus inflating the proportion of total

profits paid to fund managers.

In order to cut the share of middlemen to total profits, blockchain technology is the best solution.

In general, the market for cryptocurrencies is still generating significantly higher growth rates

mailto:[email protected]





than the whisky market, but it is justifiably regarded as very volatile. The head of the German

Federal Financial Supervisory Authority (BaFin) commented on cryptocurrencies as follows:

‘These are highly speculative transactions with the possibility of total loss.’

In total, there are three major problems:

1. Volatility of cryptocurrencies: Cryptocurrencies are only seldom covered with substance

values. As a result, prices quickly collapse when demand falls, threatening investors with a

total loss.

2. Expensive entry barriers: Retail investors cannot benefit from the rarest whiskies for two

reasons. Firstly, the minimum investment amounts for participation in alternative invest-

ment funds are several tens of thousands of euros. Secondly, the creation of a small whis-

ky portfolio by a retail investor would involve not only high investments but also high

risks due to a lack of diversification.

3. Enormous costs for intermediaries: Alternative investment funds have various manage-

ment fees and running costs that have a negative impact on returns. Investors are thus

deprived of a not inconsiderable portion of their profits.

WHISKY TOKEN (WHY) stands for the creation of new values. WHISKY TOKEN is the first whis-

ky-covered crypto token based on Ethereum. It combines the unlimited growth potential of a cryp-

tocurrency with the security of the real whisky value. This prevents the currency from losing value.

1. limited downside risk: The risk of loss for WHISKY TOKEN holders is minimized by the re-

al high-end whisky portfolio. Thus, there is a fall arrest protection against total course

breakdowns. At the same time, price gains of the token are not limited by the high-end

whisky portfolio.

2. low entry barrier: Participation in the WHISKY TOKEN crowdsale is available for as little

as EUR 30.

3. almost free of any commission: Through the use of blockchain technology and the distinc-

tion to traditional investment funds running costs are significantly reduced. Management

fees do not exist. This increases the return of all WHISKY TOKEN holders.

ICO: 28,100,000 tokens are initially created. A maximum of 25,250,000 tokens are sold via

crowdsale (ICO - token main sale). A minimum and maximum revenue target is defined (soft and

hard cap). The soft cap amounts to EUR 2 million, the hard cap amounts to EUR 25 million. All

unsold tokens in the token main sale will be burned after the end of the event.

Whisky Portfolio Consisting of high-end whisky with the aim of

increasing value

WHISKY TOKEN Combining high-end

whisky with Ethereum network technology

Asset-Backed Protects against loss of value and ensures con-

tinuous growth

Business model: The WHYTOKEN GmbH i.G. will only charge a transaction fee of 1.5%. This will

cover our operating costs first, and all additional income will be reinvested in the high-end whisky

portfolio. All operational tasks (logistics, portfolio management, etc.) are performed by WHYTO-

KEN GmbH i.G.

Corporate mission: Our mission is that all WHISKY TOKEN (WHY) owners participate in the high-

yield cryptomarket while being covered by a high-end whisky portfolio, regardless of financial invest-

ment opportunities. The owners of WHY should thus be able to profit from the high returns of the

crypto market with a limited downside risk. The WHYTOKEN GmbH i.G. offers the foundation

for this through WHISKY TOKEN and the high-end whisky portfolio.

WHY combines crypto technology with real asset values. The quality of the portfolio is consist-

ently guaranteed by the highest security standards in Germany by WHYTOKEN GmbH i.G.

In 2019, the focus will be on intelligently building up the high-end whisky portfolio and WHY

listings on selected stock exchanges. For this purpose, we are in constant dialogue with our stra-

tegic partners to guarantee the most cost-efficient business model possible.

WHYTOKEN GmbH i.G. aims to sustainably increase the value of WHISKY TOKEN (WHY). We

are convinced that WHY will meet this aim and exceed the expectations of its owners.

TABLE OF CONTENTS

WHY INVEST IN WHISKY TOKEN (WHY) ------------------------------------------------------------------------- 2

1. MARKET REVIEW ------------------------------------------------------------------------------------------------ 6

1.1. THE WHISKY MARKET

1.2. THE CRYPTOCURRENCY MARKET AND FIAT CURRENCIES

2. THE COMMUNITY ----------------------------------------------------------------------------------------------- 8

3. FINANCIAL OVERVIEW ----------------------------------------------------------------------------------------- 8

3.1. BUSINESS MODEL

3.2. OPERATING MODEL

4. HIGH-END WHISKY PORTFOLIO --------------------------------------------------------------------------- 10

5. WHISKY TOKEN CROWDSALE - INITIAL COIN OFFERING --------------------------------------------- 12

5.1. TOKEN DISTRIBUTION

5.2. FUNDING USE

6. TECHNICAL OVERVIEW -------------------------------------------------------------------------------------- 14

6.1. WHISKY TOKEN MECHANISM

6.2. TECHNICAL DETAILS

6.3. PRODUCT ROADMAP

7. LEGAL ------------------------------------------------------------------------------------------------------------ 18

7.1. GENERAL INFORMATION

7.2. REQUIRED PROFICIENCY

7.3. RISKS

7.4. IMPORTANT LEGAL NOTICE AND DISCLAIMER

7.5. WARRANTIES AND GUARANTEES

1. Market review

1.1. The Whisky Market Performance: Unlike precious metals, whisky cannot be recycled. Each whisky can only be

opened and drunk once. The RW APEX 1000 index of Scottish Rare Whisky 101 Ltd, which

tracks the development of the thousand most sought-after bottlings on the secondary market,

increased by more than 25% last year and is listed at an all-time high. Japanese bottlings devel-

oped rather below average with a small plus of 4%. More sought-after among collectors were the

"classics" from Macallan and some well-known "lost distilleries" such as Brora, Port Ellen or

Karuizawa. All three distilleries were shut down, making the remaining whisky of these brands

accordingly rare. The Port Ellen 1st Annual Release has increased its value more than tenfold

from about EUR 230 in 2006 to over EUR 3,300 now. The bottlers have also recognized this

trend and placed the current releases (17th release) immediately within a higher price category

on the market.

Overview: The entire whisky market has experienced strong global growth in recent years. The

global trend is towards higher-quality and more expensive products. Total volumes have also ris-

en significantly in recent years, with literal figures declining slightly in 2017 as well as in a few

markets. In Germany alone, sales rose from EUR 735 million in 2010 to a forecast EUR 886 mil-

lion in 2018, with the price per litre increasing in particular.

With over 1.5 billion litres, the Indian market is the largest whisky market in the world, followed

by the USA. With the country's economic upswing, demand for high-quality products and luxury

goods is also increasing. Many countries are developing their own whisky cultures; in addition to

local products, Scottish whiskies are in particularly high demand worldwide.

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Whiskystats Whisky Index The Whiskystats Fabulous Fifty Gold Index

Bottles or casks: Long matured whisky is particularly suitable as an investment. It is a product

that depends on natural processes. The true quality of a batch can only be estimated after filling.

This decides, whether the distiller has done a good job and has chosen the optimum barrels and

finishing. The production of such whisky at this high level is mastered only by a few people. The

added value of special bottlings that can no longer be reproduced and whose availability is limited

is therefore greater than that of barrel storage. Buyers can be sure of the quality and investors

benefit from every bottle that is open and taken off the market.

Outlook: According to the British auction house Bonhams, demand continues to grow across the

board. There has been a clear increase in investors and collectors who are enthusiastic about the

asset value of single malt whisky.

1.2. The Cryptocurrency Market and FIAT Currencies The market for cryptocurrencies grew significantly in value last year. The future of several cryp-

tocurrencies also appears to be promising. However, it should be underlined that the sheer num-

ber of currencies and their redundancy will cause some kind of natural selection. The question at

hand is: What are the key features of crypto currencies?

The innovation driver here is the distributed ledger technology, with the blockchain as the best-

known representative. Once a transaction is validated, it becomes an unchangeable part of the

blockchain. Furthermore, there is no central bank that controls the currency; instead, in plain lan-

guage, the currency is being administered decentrally by its users. In contrast to established FIAT

currencies, this technology thus represents a secure, decentralized and transparent all-in-one

network for payments or data.

In August 1971 the existing gold standard of the US dollar was terminated. For the first time in

history, all major currencies in the world were exempt from gold coverage. However, this deci-

sion had immense consequences: In the following years, the US dollar depreciated massively

against hard currencies such as the German mark. Oil and gold prices, on the other hand, rose to

new highs.

Gold coverage was replaced by an unofficial oil coverage in the 1970s. The so-called "petrodol-

lar" is based on a deal between Saudi Arabia and the USA. The OPEC trades its oil solely in US

dollars, the revenues in turn are invested in US government bonds, thus the dollar could hold its

position as an essential currency to this day.

Nowadays, the majority of cryptocurrencies are based solely on technical ideas instead of cover-

age by asset values. Only a fraction of these currencies will establish themselves in the long term

and on a sustained basis. Few cryptocurrencies try to combine the advantages of cryptocurren-

cies with the advantages of a "covered" FIAT currency. However, two crucial mistakes have been

made so far: First of all, in most of cases the cryptocurrencies are conceptually completely de-

tached from the real asset. Consequently, there is no correlation between market capitalisation

and the underlying asset value, which is contrary to the principle of cover. Secondly, in the case

of the effectively coupled crypto currencies, there is frequently the problem that an increase in

market capitalization is limited by the real value of the asset. This means that the cryptocurrency

never increases in value beyond the underlying asset. WHISKY TOKEN addresses this problem

and enhances the concept of a covered cryptocurrency with an intelligent concept.

2. The Community Community integration: WHYTOKEN GmbH i.G. strives to actively involve the community. This

enables maximum transparency in the composition of our high-end whisky portfolio. In this con-

text, we are planning various concepts for integrating the community into our business model.

Right of co-determination: Building and maintaining a whisky portfolio is a major challenge. It is

therefore essential to keep a close eye on the market. WHYTOKEN GmbH i.G. has developed a

smart concept for a diversified high-end whisky portfolio. In addition, we will give the community

the opportunity to actively influence and participate in our portfolio in three ways:

Active right of proposal: Within our social media presence we offer the possibility to post

individual proposals for whisky bottles for the whisky portfolio. We will carefully review all

suggestions and acquire them in case of compatibility.

Right of co-determination in voting: We will have regular votes on potential whisky for the

portfolio. This gives the community the opportunity to select the most promising bottle for

inclusion in the portfolio from a pre-selection by WHYTOKEN GmbH i.G.

Exclusive preferential right in the event of disposals: If WHYTOKEN GmbH i.G. intends to

sell whisky bottles, the owners of WHISKY TOKEN are initially given the opportunity to pur-

chase these bottles before they are offered on the secondary market.

In contrast to other traditional assets, we are actively in contact with our community through

social media. In this way the WHYTOKEN GmbH i.G. combines full control of the portfolio with

active co-determination by the community. As a result, we create maximum transparency with an

innovative portfolio structure.

3. Financial overview

3.1. Business model The WHISKY TOKEN clearly stands out from previous cryptocurrencies and investment funds.

We reduce costs to a minimum and do not need horrendous management and performance fees.

The aim is to cover all operating costs through alternative sources of income so that the high-end

whisky portfolio can develop its full potential. Any surplus profit from the revenue sources is re-

invested 1:1 in the portfolio.

1,5% transaction fees: These fees apply to every wallet-to-wallet transaction.

Commission: It is generated when a purchase is made in selected whisky online shops with

WHY.

These revenues from transaction fees will fully cover the operating costs as projected. Any sur-

plus profit is reinvested 1:1 in the high-end whisky portfolio, so that there is a steady increase in

the value of the portfolio.

Profit realization return: Should the operational costs exceed the above-mentioned sources

of income, the costs incurred will be covered by the sale of whisky bottles. Any additional in-

come is reinvested directly in the portfolio.

The core of the business model is the long-term success of WHISKY TOKEN (WHY), which is

why it is essential to keep operating costs as low as possible. A large part of the costs will be one-

off, which is why 95% of crowdsale revenues will be invested in the whisky portfolio as planned.

In the medium to long term, this will result in a sustainable business model with significantly im-

proved value growth. To ensure a stable increase in value for all WHY owners, the following op-

erational costs are involved:

Logistics: This includes energy and ancillary costs for ensuring optimum storage and temper-

ature of the whisky. We also guarantee optimal safety standards for the whisky portfolio.

We also guarantee the highest safety standards for the whisky portfolio. As whisky is a craft,

professional handling is essential for transport and storage. We rely on years of experience

with our strategic partners and use the most modern technologies for storage.

Warehouse location: In order to be able to select an optimal location, it is important that the

high standards of WHYTOKEN GmbH i.G. are met and at the same time that the monetary

burden on the business model is as low as possible. We have come to the conclusion that

Germany will be an ideal location for this and for the coming years. On the one hand, there is

an ideal infrastructure and on the other hand, there is a high degree of political stability, legal

security and an extraordinarily low risk of natural hazards.

Insurance and expert opinion: Insurance of the high-end whisky portfolio is essential for

WHISKY TOKEN coverage. For this purpose, an expert will determine the current fair value

of the portfolio at regular intervals and use it as the basis for subsequent insurance. This

makes it possible to transparently pass on current value developments to the community at

all times and ensures maximum security thanks to the adapted insurance. In order to keep in-

surance premiums as low as possible in the long term, investments are made in comprehen-

sive security measures such as a CO2 extinguishing system and the highest security stand-

ards against burglary.

3.2. Operating model The WHYTOKEN GmbH i.G. constantly analyses the whisky market and is in close contact with

experts, importers and direct contacts in the distillery world. The aim is to identify potentially

profitable whiskies by integrating experts and economic models and then participate in market

developments. Once suitable whiskies have been discovered, they are acquired through various

purchasing channels and communicated transparently to the community after the purchase deci-

sion has been made. WHYTOKEN GmbH i.G. can save costs by cooperating directly with the

bottler. The purchased bottles are transported either by post or in person (depending on the val-

ue of the bottles) for safe storage. The current portfolio value is determined at regular intervals

by an expert. The portfolio is reviewed and the insurance value is adjusted. The result of the

evaluation will be announced to the community through a blockchain event. The portfolio struc-

ture is precisely tailored to a high return. Depending on developments, this may lead to an active

portfolio restructuring. In concrete terms, fewer-performing whiskies will be sold on the market

and replaced by more promising whiskies.

4. High-end Whisky Portfolio The high-end whisky portfolio is subject to value fluctuations and must be monitored regularly

for optimal performance. A conservative average return (i) is assumed, calculated from statistical

models and expert opinions specifically modeled for the portfolio. The performance of the port-

folio can therefore be represented by the following formula, where t is the time in years:

𝑃 = (1 + 𝑖)𝑡

Several key factors must be highlighted for a successful whisky portfolio. A particularly high-

performance portfolio can only be designed if all factors are taken into account successfully.

Whisky Type: Blended, bourbon, first-fill, grain whisky, single batch or single malt, to name

just a few types of whisky and their subcategories. Everyone has their advantages in produc-

tion, taste and origin, but not all types are equally suitable for a profitable investment. In the

following WHYTOKEN GmbH i.G. will focus on single malt whisky, which will make up the

largest part of the portfolio. In addition, however, high potentials of other types of whisky are

identified and considered for a possible investment.

Age: The whisky market is particular in that the current demand for whisky bottles should

have been anticipated many years ago. This enormous increase, which was recorded in recent

years, is reflected in the trend that more and more whisky is bottled without any indication of

age of said whisky (No Age Statements - NAS). For this purpose, whisky of different age-

groups are usually combined. This is of course done to meet the current demand, resulting in

the shortage thereof. In addition, most distilleries have a classic age pyramid of whiskies, i.e.

with increasing age the number of pieces decreases. There are many reasons for this, but the

most contributing one is the fact, that distilleries have to invest over a period of 25 years in

order to produce high quality products. Therefore, this investment has to be paid off by de-

manding a premium for aged single malt whisky.

Price: The aim is to achieve the highest possible average price per whisky bottle through in-

telligent investments, so that the storage area and the associated ancillary costs are distribut-

ed over the smallest possible area. Storage costs are a key to success for the WHYTOKEN

GmbH i.G. Nevertheless, it is not possible to buy only the most expensive bottles on the mar-

ket, as they are overvalued, and their access is limited. Above the operational goal of low

storage costs is of course the highest possible net return on the portfolio, as WHYTOKEN

GmbH i.G. is measured against this.

Limited bottling: Each single malt whisky is unique. However, there are also several special

limited bottlings, e.g. anniversary bottlings. From an investment point of view, the develop-

ment of collectors of whisky bottles shows that limited editions particularly increased in value

in recent years. For the successful management of the high-end whisky portfolio, the focus is

almost exclusively on limited bottlings.

Origin: The origin of the whisky is a determining factor for two things: First, it plays a role in

categorizing the whisky and second of all, it statistically indicates different performances.

Traditionally the single malt originates from countries like Scotland and Ireland. Bourbon, on

the other hand, is primarily native to the USA. Other countries such as Japan, India, Taiwan

and Canada are also well-known market participants and host well-known brands. It cannot

be generalized that one country of origin is better than another for an investment. The WHY-

TOKEN GmbH i.G. team will constantly monitor the market environment in order to integrate

current positive market trends into the portfolio. However, single malts from Scotland, Ireland

and Japan will be an essential part of the high-end whisky portfolio.

Brands: The choice of brands has a significant influence on the performance of the bottle.

This is confirmed by the demand at whisky auctions for special distilleries. WHYTOKEN

GmbH i.G. focuses on well-known brands such as Macallan, Ardbeg and Bowmore, but also

rarities, which are explained below.

Rarities: Rarities can be defined as a variety of whisky bottles. WHYTOKEN GmbH i.G. de-

fines this as a unique market opportunity, which are caused by special events. These include

distilleries such as Port Ellen, Brora and Karuizawa, which are now closed and no longer pro-

duce whisky.

Miscellaneous: For a successful high-end whisky portfolio, safety is an essential core of suc-

cess. It is grossly negligent and not responsible to leave bottles of this quality level uninsured.

In addition, one of the highest security standards for the investment will be provided. At the

same time, it is an essential part of WHYTOKEN GmbH i.G.'s business model to keep its op-

erating costs as low as possible while maintaining the highest quality standards.

Taking all of the factors mentioned into account, WHYTOKEN GmbH i.G. assumes an annual high

single-digit return. The estimated operating costs were set at their maximum and sales were as-

sumed to be significantly lower than the market standard. This is an extraordinarily solid assump-

tion that WHYTOKEN GmbH i.G. is very optimistic about achieving. With an average net return

of approximately 9% p.a., thus, the above-mentioned 1:1 coverage of each WHY owner is guar-

anteed.

5. WHISKY TOKEN crowdsale - Initial Coin Offering The capital required to create the high-end whisky portfolio is provided by a crowdsale campaign.

This is called ICO ('Inital Coin Offering'). The crowdsale campaign is divided into a pre-sale phase

and three public ICO phases. Depending on the phase, the number of tokens sold and their price

differ. The ICO phases are open to all interested parties as planned in the 4th quarter of 2018.

During this time, it will be possible to purchase tokens at www.WHYTOKEN.de. Interested par-

ties must enter their ERC20 Wallet address and some Know Your Customer (KYC) and whitelist

data directly on the website. The KYC/Whitelist data is necessary information to ensure that the

interested parties are not criminal persons, bots or suchlike. The purchase of WHISKY TOKEN

will be possible via both crypto and FIAT currencies. Five WHY are attributed to the first 8000

successfully whitelisted addresses.

After successful purchase of the tokens within one of the ICO rounds, they are transferred to the

ERC20 account indicated by the interested party. All unsold tokens within the ICO are burned

after completion of the respective phase. If the targeted soft cap is not reached, all pre-sale and

ICO participants receive a 100% return on their investment.

5.1. Token Distribution Starting with the pre-sale, all WHISKY TOKEN (WHY) are created, no further Token are generat-

ed afterwards. The total number of WHY created will be 28,100,000.

There is a linear model behind the Token distribution, which clearly differentiates itself from the

previously known ICO´s. The founders Token are reduced linear from 10% when the soft cap is

reached to 5% when the hard cap is reached. The team agreed on a reduction of its own shares,

as higher team shares (e.g. 15%) would have a considerably negative effect on the targeted 1:1

coverage of WHY. In addition, a cost share of approx. EUR 50,000 is determined for an ICO

Bounty Program.

Of the 28,100,000 generated tokens, up to 25,250,000 WHY are sold for a maximum volume of

EUR 25,000,000. Of this amount, EUR 200,000 is reserved for a pre-sale for strategic partners

and the remaining EUR 24,800,000 for the ICO stages. The ICO is divided into three phases, with

the EUR/WHY price of the tokens rising from 0.8 to 1.2.

Pre-Sale: In order to raise initial capital and cover initial operational costs, a WHY pre-sale

will take place, in the course of which strategic partners will be recruited by WHYTOKEN

GmbH i.G.. During pre-sale, a total of 333,333 Token are sold, i.e. 1.32% of the maximum

Token for sale.

ICO-Phase 1: After completion of pre-sale, the first public sales phase starts. In all ICO phas-

es, a minimum investment of EUR 30 is required. 2,250,000 WHY will be sold in stage 1,

which corresponds to 8.91% of the Token to be sold. The price per WHY is EUR 0.80.

ICO-Phase 2: During the second phase, the largest share of WHY will be sold. A total of

12,000,000 WHY are for sale. The price in this phase will be EUR 1.00 per WHY.

ICO-Phase 3 The third stage marks the completion of the ICO. The number of Token for sale

in this phase is 9,166,667, the price per WHY is EUR 1.20.

If not all tokens intended for the particular stage are sold during the individual ICO phases, the

unsold tokens are then burned after the end of the respective phase. This ensures the maximum

value of WHY.

Token Distribution Soft Cap in % Hard Cap in %

Pre-Sale & ICO 83.7% 89.9%

R&D / Advisor 5.0% 5.0%

Founders Token 10.0% 5.0%

Bounty Program 1.3% 0.1%

The individual ICO rounds are structured as follows:

ICO Round 1 Round 2 Round 3

Start Q4 Q4 Q4

End Q4 Q4 Q4

EUR/WHY 0.80 1.00 1.20

Max. EUR 1,800,000 12,000,000 11,000,000

Max. WHY 2,250,000 12,000,000 9,166,667

5.2. Funding Use The funds raised in the pre-sale are used directly to cover the company's initial costs. Should

these initial costs be covered and a financial surplus arise from the pre-sale, this will be used for

the initial development of the high-end whisky portfolio.

95% of the revenues of the ICO go towards the creation of the high-end whisky portfolio. This

also includes costs for safe transport. The remaining 5% of the revenue is used for the storage of

the whisky bottles, including the incidental costs of storage. If there is a financial surplus, this

share will also be invested in the high-end whisky portfolio.

6. Technical Overview Investors often face the problem, that their funds are difficult to monitor and manage without

brokerage. For this reason, WHISKY TOKEN will use blockchain technology based on the

Ethereum network. WHY is implemented as an ERC-20-compatible Token via the Ethereum

blockchain. This assures successful management of even the smallest contributions with maxi-

mum transparency at the same time. There are further advantages of crypto technology:

Elimination of intermediaries: In many cases, management and administration fees are a

fixed value for investments. This means that the financial resources employed are reduced

by the aforementioned brokerage fees, even if there is little or no return. This quickly makes

them unprofitable or forces them to hold the investment much longer than intended to make

it profitable. By using a cryptocurrency, running costs and management fees are kept to a

minimum.

Easy to liquidate and trade: In contrast to traditional investments, WHY can be easily traded

or sold to private individuals via several marketplaces. It is even possible to divide your capi-

tal into smaller amounts so that they can easily be handled via several marketplaces.

Maximum control: There are numerous situations in which your assets may be exposed to

certain risks, especially if you entrust your assets to third parties. Our business model gives

you full control over your investments, as your money cannot be transferred or dissolved by

WHYTOKEN GmbH i.G. in contrast to conventional financial investments. The reason for

this is the nature of the WHISKY TOKEN code: The currency is initially programmed with a

specially written code and can subsequently no longer be changed and is thus protected

against manipulation.

Exact overview of your investments: Through tokenization, you can check the current value

of your purchased WHY on your own at any time. Listing on stock exchanges means, that

the latest market prices are accessible to you at all times.

Security: A key aspect of combining blockchain technology with an alternative asset is secu-

rity. Both the negative influence on the whisky assets and the manipulation of the WHISKY

TOKEN are almost impossible. By combining both elements, any negative influence of third

parties on the business model can be almost completely ruled out.

6.1. WHISKY TOKEN mechanism As already mentioned, WHISKY TOKEN (WHY) are implemented as ERC-20-compatible tokens

via the Ethereum blockchain, the Ethereum network being the basic technology. WHY repre-

sents not only a tradable cryptocurrency in the Ethereum blockchain, but also a digital asset.

However, unlike previous asset-backed cryptocurrencies, e.g. with gold coverage, this currency is

not limited in its growth: Previous market participants have placed a limiting factor on the growth

potential of their cryptocurrency by linking the asset value with the market price via a smart con-

tract. As a result, the maximum growth rate was only as strong as the underlying asset.

The principle behind WHY avoids this bottleneck using the Whisky asset. This means, that while

the stock market price is linked and backed by real value, it also offers unlimited growth oppor-

tunities. Furthermore, WHY owner have pre-emptive rights to the exclusive high-end whisky

portfolio.

6.2. Technical details WHISKY TOKEN (WHY) are created and distributed as ERC-20 Token. The ERC-20 standard

contains a set of rules that allow compatibility with other Ethereum-based Token and various

wallets. Accordingly, WHY are also compatible with ERC-20 wallets and ERC-20 hardware wal-

lets.

Within the WHY code a burn function was implemented, which allows WHYTOKEN GmbH i.G.

to burn tokens and to finally separate them from the market. This mechanism is used as planned

in two cases:

1. all unsold tokens within the ICO are burned by the burn function. This guarantees a sus-

tainable performance after the stock market launch of WHY.

2. all WHYTOKEN GmbH i.G. tokens acquired through a buy-back are burned. This causes a

deflation that has a sustainable positive influence on the WHY share price.

Other technical modalities of WHY:

Asset-Value Event: In order to have a constant overview over the current portfolio value of

the whisky, WHYTOKEN GmbH i.G. will regularly work with experts to determine the valua-

tion. After the current portfolio value has been determined by a renewed appraisal, an asset-

value event is triggered on the blockchain. This asset-value event shows the relevant results

of the expert opinion on the blockchain and thus makes the portfolio status comprehensible

for the community. The assets already determined can no longer be adjusted retrospectively

by mapping them on the blockchain, protecting the portfolio and its development from dam-

age caused by manipulation and speculation. The asset-value event thus enables maximum

transparency for the community and at the same time protects against harmful influence by

third parties.

Token purchase during the ICO: On initial purchase of WHY during the ICO, the 1.5% trans-

action fee will be automatically cancelled. Within the WHY code it was implemented that the

owner of the WHY crowdsale Smart Contract does not have to pay any fees for the first dis-

tribution. This means that 100% of the funds transferred by the asset-basseer are also con-

verted into WHY and credited to the buyer by WHYTOKEN GmbH i.G. The transaction fee

is only suspended for tokens distributed by the official WHISKY TOKEN ICO. Should inter-

ested parties try to obtain WHY through any third-party sources, WHYTOKEN GmbH i.G.

assumes no responsibility for this. For all wallet-to-wallet transactions following the ICO To-

ken purchase the transaction fee of 1.5% will be charged.

6.3. Product Roadmap

2018 Q3

2018 Q2

2018 Q4

2019 Q1

Website Website Design update

Whitepaper final Version

Token Development Testing the Blockchain-code

Pre-Sale WHY pre-sale

Portfolio Strategy

Token Security Audit Functionality guaranteed by an independent test centre

Token ICO After completion: distribution of bonus tokens

Portfolio Development Purchase and development of the high-end whisky port-

folio

Exchange Listing Partnership with wallet providers to offer WHY

Portfolio Management Active management to ensure the highest value

Community Involvement of the community in strategic portfolio de-

cisions

7. Legal

7.1. General information The WHISKY TOKEN does not have the legal qualification of a security, as it does not confer any

rights to dividends or shareholdings. The sale of WHISKY TOKEN is final and non-refundable.

WHISKY TOKEN are not shares and do not entitle to participate in an Annual General Meeting of

WHYTOKEN GmbH i.G. The buyer of WHISKY TOKEN is aware that national securities laws

ensuring that investors sell investments that contain all proper information and are subject to

regulatory review to protect investors are not applicable. Anyone who purchases WHISKY TO-

KEN explicitly acknowledges and declares that they have carefully reviewed this white paper and

WHISKY TOKEN and fully understand the risks, costs and benefits associated with purchasing

WHISKY TOKEN.

7.2. Required proficiency The buyer of WHISKY TOKEN is obliged to fully comprehend and understand cryptocurrencies,

blockchain systems and services and the risks associated with crowdsales and the mechanisms

associated with the use of cryptocurrencies (including storage). WHYTOKEN GmbH i.G. is not

responsible for the loss of WHISKY TOKEN or situations that make access to WHISKY TOKEN

impossible, which may result from actions or omissions of the user or from an obligation made by

the user himself to purchase WHISKY TOKEN, or in the case of hacker attacks.

7.3. Risks The acquisition and safekeeping of WHISKY TOKEN involves various risks, in particular the risk

that WHYTOKEN GmbH i.G. may not be in a position to commence its business activities, devel-

op its whisky stock and provide the services mentioned in the whitepaper. Therefore, before pur-

chasing WHISKY TOKEN, every user should carefully weigh up the risks, costs and advantages of

purchasing WHISKY TOKEN within the framework of the crowdsale and, if necessary, seek ad-

vice in this regard. Any interested person who is unable to accept or understand the risks associ-

ated with the activity (including the risks associated with the non-development of the whisky

stock) or other risks as stated in the General Terms and Conditions of the WHISKY TOKEN

crowdsale should not purchase WHISKY TOKEN.

7.4. Important legal notice and Disclaimer This whitepaper does not constitute a basis for an investment decision. The whitepaper or other

material made available by WHYTOKEN GmbH i.G. is not to be understood as an investment or

financial product, but as a software application. This whitepaper cannot and must not be consid-

ered to be a solicitation to conclude an investment. It does not in any way constitute an offer of

securities in any jurisdiction and should not be considered as an offer of securities. This whitepa-

per does not contain any information or advice that could be considered as a recommendation or

as a basis for an investment decision. WHYTOKEN GmbH i.G. is not to be regarded as a consult-

ant in legal, tax or financial matters.

The WHYTOKEN GmbH i.G. does not assume any liability for the correctness and completeness

of this information. WHYTOKEN GmbH i.G. is not a financial intermediary under German law and

is not obliged to obtain a licence to combat money laundering. The acquisition of WHISKY TO-

KEN does not confer any rights or influence on the organization and administration of WHYTO-

KEN GmbH i.G. Supervisory authorities carefully examine the global business and operations as-

sociated with cryptocurrencies. In this respect, regulatory measures, investigations or actions can

have an impact on the business activities of WHYTOKEN GmbH i.G. and even prevent or restrict

them from continuing their business activities in the future. Every person who acquires WHISKY

TOKEN must be aware of the business model of WHYTOKEN GmbH i.G. and its risks.

The whitepaper or the Terms and Conditions may change or may need to change due to new

regulatory and compliance requirements from all applicable laws in all jurisdictions. In such a case,

the buyers and all who decide to purchase WHISKY TOKEN acknowledge the changes and un-

derstand that neither WHYTOKEN GmbH i.G. nor any of its subsidiaries can be held liable for

direct or indirect losses or damages caused by such changes.

WHYTOKEN GmbH i.G. will do everything in its power to start operations and develop a whisky

stock. Whoever decides to purchase WHISKY TOKEN accepts and understands that WHYTO-

KEN GmbH i.G. does not guarantee that it will succeed in doing so. You therefore acknowledge

and understand that WHYTOKEN GmbH i.G. (including its executive bodies and employees) as-

sumes no liability or responsibility for loss or damage arising from the unusability of WHISKY

TOKEN or in connection therewith, unless there is intent or gross negligence.

white paper - whisky token · than the whisky market, but it is justifiably regarded as very...

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