BTCRobot & CoinzBot IPO Planhttp://coinzbot.com 1. What are Btcrobot & CoinzBot?Btcrobot is an open source, highly acclaimed BTC/LTC algorithmic trading software. It is implemented with the GO language, and has its official repository located at
https://github.com/philsong/btcrobot. CoinzBot is commercial product name of Btcrobot.
The Btcrobot software today is able to integrate with a number of exchanges (OKCOIN, HUOBI), and automatically buy and sell based in pre-determined algorithms and parameters. The base algorithms supported include MA, EMA, MACD, KDJ, etc.
There are a number of BTC and LTC enthusiasts using this software to make a steady profit. There are also programmers who are developing customized trading algorithms.
2. The Goal of the CoinzBot IPOThis project is beyond just an idea or a direction. Btcrobot is a mature and stable software. Currently we are planning for its final go-to-market and commercialization.
The CoinzBot IPO plan aims to raise money for the following efforts:
(1)Continue to develop the free open source version Btcrobot.
(2)Expand the development and operations team, start a commercial operation around the software.
(3)Build a commercial version of the software named CoinzBot, market the software and related services for profit.
(4)Develop additional trading algorithms with more advanced strategies, market individual algorithm modules.
3. CoinzBot Business Plan3.1 Commercial VersionThe CoinzBot Commercial Version is to be developed along the directions of: algorithmic trading, large volume transactions, and multi-exchange automation arbitrage.
The commercial version will gradually cover the following functionalities.
(1) Redesign of the user interface, with multiple-language support, such as English.
(2) Support additional exchanges, such as btc-e.com, bitstamp.net.
(3) Support additional virtual currencies and trading algorithms.
(4) More powerful trading capabilities: manual real-time trading (limit orders, market orders, stepping orders) and automatic trading (limit-loss, limit-win, limit orders, market orders, stepping orders)
(5) Additional precision trading algorithms, implement API for trading strategies.
(6) Market depth awareness, portfolio position analysis and control.
(7) Multi-exchange arbitrage, with automatic trading from different exchanges if significant price differences are detected.
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Supporting multi-user multiple-strategy trading.
The Value of Algorithmic TradingAlgorithmic Trading is the practice of designing trading strategies based on technical indicators, and implements such strategies with computer software, which applies the various algorithms and carries out the trades by deciding the buy/sell operation, time, price and quantity, etc.
The advantages include:(1) Large orders can be split into small orders, avoiding to move the market.
(2) Easier execution when there is a sudden surge or drop of the prices.
(3) Rational decisions to limit losses and to limit wins.
(4) Simultaneous trading through multiple accounts.
(5) Fully automated operation, no need for constant monitoring of the market by a human being.
There are a number of disadvantages as well.(1) When a certain strategy becomes widely used, the effectiveness will be diminished. Many trading parties will be executing the same trades, making trades difficult or impossible.
(2) A breakout or a pullback may prove to be false or short-lived. In these situations the trading strategy may incur loses.
(3) The overall trend of the market is not reflected into most trading strategies, manual interventions may be needed if related adjustments are desired.
Algorithmic trading offers great advantages, but it is not a way to make money with your eyes completely blindfolded. The best result will be achieved through the careful combination of algorithmic trading and human judgments.
3.2 Target Customers and Value of Our Project(1) We target holders of large quantities of virtual coins, or professional traders. We help them automate the process of issuing orders, and limit losses and wins. We help them save time and generate more profit.
(2) We also target part-time virtual coin traders. Such users cannot monitor the market around the clock. Our trading software allows them to take advantage of all the trading opportunities.
(3) We further target virtual coin miners with limited computing power. They face increasing difficulties in the mining business, and can use our software to generate additional income to complement their mining income, all the while incurring much lower cost.
(4) Finally we target the arbitragers, who mostly have to execute multiple orders at different exchanges to make a profit. Our software eliminates the risk of price movement by identifying arbitrage opportunities and executing orders at a much faster speed.
3.3 Business Model(1) We plan to sell our software, which includes a number of built-in trading strategies.
(2) We further plan to sell advanced trading strategies individually, which are purposely built and we limit the number of licenses we sell on each of these advanced strategies.
(3) We will enable 3rd parties to develop additional strategies for our software, and sell these strategies on their behalf, earning a commission on each sale.
(4) We will consider offering the service of self-contained “Trading Servers” to our users, which bundles a hosted virtual private server (VPS) and our CoinzBot software. This would be a turn-key solution for our users, who will be able to start trading immediately and not having to worry about installing and configuring software, etc.
(5) Finally we will run our own software to trade for our own account. This will not be a significant way for us to generate profit, but it is important for us to constantly use our own software for testing and quality assurance purpose on an end-to-end basis.
3.4 Project Team Members(1) Philsong： Lead Programmer (founding developer of the Btcrobot and CoinzBot), 11 years C/C++ development experiences, six years team management experiences, 2 years GO development experiences.Bitcointalk account: Bitcointalk account:
https://bitcointalk.org/index.php?action=profile;u=337473 (2) Eric：Project Operation and Algorithm Research, he has 13 years C/C++ development and management experiences, now he is a doctoral student of Shenzhen University from China, majoring in Computer network and information security. His thesis for the Doctorate is Research on coin-mixing and un-coin-mixing of Crypto-currency. Bitcointalk account:
https://bitcointalk.org/index.php?action=profile;u=144945 (3) Steve：Sales and Marketing Consultant, Steve has been a veteran technologist iin the Silicon Valley, he has held senior executive positions with Fortune 500 companies such as Cisco and Amazon.com, responsible for technology and products in major divisions. He had also held technical positions with other hi-tech companies such as Sun Micro and Oracle, Inc.
(4) Other Members: 1 technical support person, 1 programmer in C/C++ language
(5) Additional Hires: 8-10 programmers in GO/C/C++ languages.
3.5 Operations Plan(1) We plan to launch our commercial version around the August/September time frame in 2014. We will also launch our sales and marketing operation at the same time.
(2)We plan to make our shares tradable on virtual exchanges in the October/November time frame, subject to board and share holder approval.
(3) We plan to introduce the first batch of advanced trading strategy modules between September and December.
4. This IPO Plan4.1 Shares Issuing Plan(1) We have created 2,000 shares for this CoinzBot project. Existing project founders will be issued 1,200 shares (or 60%). We plan to make 800 shares available in the upcoming IPO.
(2) We plan an IPO price of 1 BTC per share, raising 800 BTC in funding for the project.
(3) The purchasers of the first 200 shares will get a 15% rebate of their purchase price. The purchasers of the 201st and 400th shares will get a 10% rebate. The purchases of the 401th and 600th shares will get 5% rebate. This constitutes 60 BTC in the IPO sales cost. The project will receive a net proceed of 740 BTC at the end of the IPO process.
(4) We plan to keep 80% of the IPO proceeds in BTC, and the other 20% in fiat currencies as working capital. As the project proceeds, we will exchange the BTC funds into fit currencies on an as-needed basis.
4.2 Board We plan to operate this project using customary practices of operating a corporation. We plan to have a board to represent the interest of the share holders and make major decisions for the project.
(1) The board shall have 5 seats, 3 of them will be designated by the founding members of this project.
(2) The shares sold through the IPO are called “floating shares”. Owners of the floating shares are entitled to appoint 2 members to the board using the following process: The two largest holders of floating shares can each appoint a board member (possibly the holders themselves) provided that such holders’ shares exceed 1% of total outstanding shares. If there are remaining board seat, the top 5 remaining floating shares owners can each appoint a board member candidate, and a vote of the floating share holders will determine the board members.
(3) In general the board makes decisions by simple majority. If any decisions are made against the votes of the 2 board members appointed by the floating share owners, the board is to provide a good-faith explanation on the issues.
(4) Board Meeting. The board makes decision through board meetings, each of which is to be attended by board members. Board members can attend such meetings remotely through telephone or instant messaging services, provided that each board members is able to clearly hear (or otherwise understand) the issues being discussed, and be able to effectively cast votes on decisions. The board shall keep minutes of each meeting and make it available for inspection for all share holders of 1% of more shares, upon request.
4.3 Shareholder Rights(1) A share holder can elect board members, and can also be elected as board members.
(2) A share holder is entitled to dividend payout proportional to the shares. When the project starts to generate profits, we plan to declare a dividend every month. 20% of net profit will be kept by the project as working capital, the other 80% will be declared as dividend.
(3) A share holder has priority in purchasing our software, especially advanced trading strategy modules, whenever there is a license quantity limit and/or waiting list.
(4) A share holder also enjoys a 20% to 30% discount on the purchase prices of our software modules.
(5) A share holder is entitled to review the monthly financial statements of the project.
4.4 Board Members Rights and ResponsibilitiesBoard Members Rights(1) Board members have all rights of shareholders.
(2) Board members are to attend a board meeting once every quarter, possibly through a video/web/im conferencing arrangement. We make important decisions for the project in these meetings.
(3) Board members are to attend special board meetings when called upon, to make certain necessary and urgent decisions for the project.
(4) Board members enjoy 30% to 40% discount when purchasing our software modules.
(5) Board members enjoy priority for trial uses of our new trading strategies.
Board Member Responsibilities(1) Attend regular board meeting on a quarterly basis.
(2) Keep project information in strict confidence, unless specifically authorized by the board to communicate certain limited information to outside parties.
(3) Not to trade the floating shares or any derivative rights of this project based on inside information gained from board meetings.
(4) Violation of rules above will result in the termination of board membership, as decided by a majority of board members. Vacated seats will be filled through special elections.
(5) Board members are to stay current with the desires and thinking of the share holders, and help represent their interest at board meetings.
4.5 Exit Methods(1) Floating shares can be traded freely post IPO, provided that such trading is properly recorded with the project.
(2) After we make our shares available on exchanges, the shares can be traded freely.
(3) The project founders’ 60% shares are to be locked up for 12 months after the IPO date. No sales of such shares shall take place during the lock-up period.
4.6 Information Disclosure on Finances and Dividends(1) The project will send out a newsletter to all registered share holders at the beginning of every month, with information on project progress over the past month, and project balance sheet and income statement.
(2) In special situations, the project may contact all share holders for special information disclosure, and/or call for special elections.
(3) The project will declare 80% of operating profit (if any，defined as revenue minus cost) as dividend at the beginning of every month, and issue to all share holders.
4.7 Share Holder Risks(1) The project team members and IPO organizers may fail to fulfill their obligations. The project lead programmer “Btcrobot” enjoys a great reputation in the open source community and has long carried this project up to this date. The other team member Eric was the organizer of the Bitcoin Arbitrage Fund (BAF) with well kept records on bitcointalk.org. The BAF project incurred losses at the end, but Eric made sure every share holder was properly compensated according to the established rules and have not received a single complaint. We believe the project team carries excellent reputation.
(2) Additional risk exists with the possibility that we will not be able to sell the software in enough qualities, or at all. So far we have seen great demand for such software and believe this to be a low risk, which nevertheless exists.
(3) Other unforeseen risks.
4.8 Project Termination and LiquidationWe plan to terminate this project in the following scenarios.(1) We incur losses for two consecutive years.
(2) Unforeseen factors causing our project not to be able to continue.
Upon project termination, we use the following formula to calculate the value of each outstanding share.(1) If we have net profit of the project (defined as revenue minus cost) for the life of the project, every one of the floating shares is to be worth:
(IPO proceeds + (sales profit- dividend)* 40%) / floating shares
(2) If the net sales profit above is negative, every one of the floating shares is to be worth:
(IPO proceeds + profit - dividend) / floating shares
The project will repurchase each floating share at a price calculated above.
D
emonstration Scheme: We issues 800 BTC and 800 shares are raised in funding for the project. One day, the project has to be terminated. We calculate the value of every floating shares depended on two different situations.
(1) Revenue 1300B, dividend 640B, cost 500B
The value of every floating share:
=(800+(800-640)*40%)/800=864/800=1.08B
So, every floating share will receive 1.08B.
Shareholders’ total income = 1.08+640*0.4/800=1.40B
Project founders will get 384B.
(2) Revenue 500B, dividend 0B, cost 1000B
The value of every floating shares= (800-100)/800=700/800=0.875B
Shareholders’ total income = 0.875B
Project founders will get 0B.
It is obviously that the project team can’t make money unless they operate the project better and will be rewarded a lot from shares, that is the common interest of IPO shareholders’.
4.9 Possible Secondary Offering
The project may conduct a secondary offering to issue additional shares, when the following conditions are met.
(1) The project is seeing some sales volume.
(2) The project is seeing additional new direction of development.
(3) The board has approved such secondary offering plan.
The project team commits to the following:
(1) The secondary offering will not take place within 6 month of the IPO.
(2) We make every effort to protect the interest of the floating share holders.
Btcrobot & CoinzBot Project Team
5/30/2014
