Project Development

We plan to build the Tokenplace platform in 4 stages, achieving a final product release in Q2 of 2020 but continuing to optimize for increasing user acquisition and revenue growth from there.

In this section, we will outline the 4 development stages, a general timeline for project deliverables, and an estimated cost structure for the first 3 years of operation.

In the first two stages, we will gather a network of early adopters by offering a simple and powerful interface from which to trade simultaneously on all the top exchanges. Once we have gained an audience of active traders, we will release our exchange-utility token, TOK. This key initiative will launch in stage 3, setting us up to implement the revolutionary Token Trade engine in stage 4. By growing a community and setting up a stable, innovative funding mechanism, the first three stages allow us to successfully bring the full scope of our technology to market in the final stage.  

4.1 How We’ll Build Tokenplace

In Stage 1 of development, our plan was originally to build a trading terminal that integrates 5 of the top cryptocurrency exchanges: Binance, Bittrex, Huobi, Poloniex, and Bitfinex. This trading terminal must be fast, convenient, and more cost-effective than using individual exchange accounts, as well as having zero added costs to traders. We expect these advantages to help us attract a core user base and community for the initial platform.

We’ve already begun extensive work on Stage 1 and are ready to make not 5, but 8 of the top crypto exchanges available: Binance, Bittrex, Poloniex, Bitfinex, Huobi, Bitstamp, HitBTC, and CoinbasePro. Together, these exchanges support more than $4 billion in daily trading volume.

Shortly after completing our IEO, we’ll move on to Stage 2, which will be centered on continuing to attract active cryptocurrency traders. One way we’ll do that is by adding support for another 10+ exchanges, further increasing the liquidity and cost-effectiveness of Tokenplace. At the same time, we will introduce a personal terminal wallet for users that simplifies deposits and withdrawals, as well as releasing a mobile Tokenplace app for iOS and Android. 

As the community grows, we’ll also be able to implement an atomic swap engine that enables users to make quick transfers between different cryptocurrencies without having to trust an intermediary.

Diagram 2: Before & after implementing the atomic swap engine.

The larger the Tokenplace community becomes, the greater the possibilities for atomic swaps that will be available amongst community members.

Next, with most of the platform’s core features in place, Stage 3 will be focused on investment and growth. We will complete and implement the project’s legal framework, which then enables the launch of TOP, our security token. We can then on-board large investors and potentially smaller, non-accredited investors as well.

The emission of our security token also sets up the key initiative of Stage 3: finalizing the project’s innovative cross-coin architecture. This is when we will introduce TOK, a hybrid exchange-utility token that will serve as an entrypoint to the Tokenplace platform and incentivize its continued use. The hybrid token’s price is tied to that of the security token, meaning that it captures the value of the ecosystem as a whole and grants special benefits to traders who use it on the platform at the same time.

Finally, in Stage 4 we will fulfill our primary value proposition by launching a specialized inter-exchange smart trading (i.e. order splitting & matching) engine, called Token Trade, which will enable users to buy and sell any token on the market at the best available price, in real time. This will help us attract even more users and distinguish Tokenplace as the most commercially appealing trading terminal in the cryptocurrency market.

This smart trading engine will be able to pool together orders made by Tokenplace users and split them in a way that optimizes the price at which each order is filled.

Diagram 3: Example of smart trading engine with 3 incoming orders split across 5 exchanges and filled at optimal prices

By this point, Tokenplace will have the following features:

  • Free user access to the aggregated liquidity coming from our connections to major crypto exchanges
  • Detailed Pro Tools to analyze the market and assist with institutional trading
  • Real-time comparisons for digital asset prices on all major exchanges, ensuring that users can get the best possible prices
  • A built-in stablecoin (TOK) for seamless transitions between fiat and crypto
  • A new cross-coin architecture that incentivizes platform growth and directly rewards the users who drive that growth.

4.2 Cost Breakdown

In order to execute our plan for developing an industry-leading trading terminal and liquidity provider, we have developed the following estimate for how we will allocate funds.

Figure 3: Gross revenue, gross expenses, and net profit projections

Note that this breakdown is just an estimate and is subject to change as necessary once the platform’s development is fully underway.

After considering the costs of wages, taxes, marketing, etc., we estimated that our operating expenses would be $1.12M in year 1, $3.6M in year 2, and $5.04M in year 3. This spending will help us develop a competitive product and advertise it to attract cryptocurrency traders as well as less active investors.

4.3 Projected Revenue

In order to estimate our net revenue and expenses, we first had to conduct extensive market research to determine what we could reasonably expect to accomplish as far as the growth of our platform in the early years.

Based on the trading market today as discussed in Section 1, we estimated that the total number of registered traders on Tokenplace will be 60,000 by year 1, 235,000 by year 2, and 378,000 by year 3. Furthermore, we estimated that the total amount of trades executed by those traders would be 19.9 million, 87 million, and 140 million in years 1, 2, and 3, respectively.

We then assumed an average commission per trade of 0.05% paid by partnering exchanges as well as a 1% commission on deposits and withdrawals. In 2018, top exchanges such as Huobi, Binance, and OKEx reported total trading commissions of $483M, $462M, and $292M, respectively. With continued growth in trading volume, even a tiny sliver of revenue from each of these exchanges can add up to a significant sum for Tokenplace.

Ultimately, this gave us the projected gross revenue and net profit seen in Figure 3 below.

Figure 3: Gross revenue, gross expenses, and net profit projections

If we reach our goals, we can expect to achieve a net profit of nearly $7.4M by year 3 of operations.

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