Blackfort Exchange Network BXN: Whitepaper V1.0

BlackFort Exchange Network
BXN
Whitepaper V1.0
© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

Table of Contents
1 INTRODUCTION ............................................................................................................................... 4
2 CHALLENGES IN THE MARKET ................................................................................................... 4
2.1 DIFFICULTY NAVIGATING UI .................................................................................................................................. 4
2.2 LACK OF MULTIPLE SERVICES IN ONE PLACE. ................................................................................................... 5
2.3 REFERRAL SYSTEMS................................................................................................................................................... 5
3 PREPERATION TO GO TO MARKET ............................................................................................ 5
3.1 MULTI-CURRENCY CLIENT-SIDE CRYPTOCURRENCY WALLET APP ....................................................... 5
3.2 IN-WALLET SWAPPING FUNCTION........................................................................................................................6
3.3 BUYING OR SELLING CRYPTOCURRENCIES .......................................................................................................6
3.4 BLACKFORT PAYMENT SOLUTION .......................................................................................................................6
3.5 BLACKFORT PAY SCAN............................................................................................................................................ 7
3.6 BLACKFORT REFERRAL AND AFFILIATE PROGRAM ........................................................................................ 7
3.7 SUPPORTED TOKENS AND COINS ......................................................................................................................... 7
4 CROSS-PLATFORM SERVICES: ....................................................................................................8
4.1 WEB-BASED PAYMENT SOLUTION ACCESS AND MANAGEMENT ............................................................. 8
4.2 REVENUE STREAMS FOR BLACKFORT................................................................................................................9
4.3 BLACKFORT REVENUES ..........................................................................................................................................9
5 BLACKFORT EXCHANGE NETWORK ......................................................................................... 9
5.1 REASONING FOR CREATION....................................................................................................................................9
5.2 PRINCIPLES ................................................................................................................................................................ 10
5.3 CONSENSUS AND VALIDATING ............................................................................................................................ 10
5.4 PROOF OF STAKED AUTHORITY (POSA) .......................................................................................................... 11
5.5 VALIDATOR QUORUM ............................................................................................................................................. 12
5.6 SECURITY AND FINALITY ........................................................................................................................................ 12
5.7 REWARD ...................................................................................................................................................................... 12
5.8 NODE ............................................................................................................................................................................ 13
5.9 BLOCKS ........................................................................................................................................................................ 15
5.10 TOKEN ECONOMY .................................................................................................................................................... 16
5.11 OTHER TOKENS ........................................................................................................................................................ 16
5.12 TOKENISING ASSETS ................................................................................................................................................ 16
5.13 STAKING AND GOVERNANCE ............................................................................................................................... 17
5.14 REWARDING............................................................................................................................................................... 17
5.15 SLASHING .................................................................................................................................................................... 17
5.16 DOUBLE SIGN ............................................................................................................................................................ 17
5.17 UNAVAILABILITY........................................................................................................................................................ 17
5.18 GOVERNANCE PARAMETERS ............................................................................................................................... 18
5.19 OUTLOOK .................................................................................................................................................................... 18
6 USE OF FUNDS ................................................................................................................................ 18
7 CORPORATE SOCIAL RESPONSIBILITY ................................................................................. 20
7.1 DONATIONS ............................................................................................................................................................... 20
7.2 COMMUNITY INVOLVEMENT: ................................................................................................................................ 21
7.3 ETHICAL MARKETING: .............................................................................................................................................. 21
THE CORPORATE STRUCTURE .............................................................................................................................................. 21
8 DISCLAIMER & RISK STATEMENT ............................................................................................. 21
8.1 DISCLAIMER: .............................................................................................................................................................. 21
8.2 RISK STATEMENT: .................................................................................................................................................... 25
9 REFERENCES ...................................................................................................................................25

Table of Figures
FIGURE 1 - CHANNELS OF TURNOVER FROM BLACKFORT AS A SERVICE TO THE USER...........................................9

FIGURE 2 - VISUALISATION OF REWARD TYPES. BLOCK REWARD REDUCING OVER TIME AND REWARDS
FROM TRANSACTION AND INTERACTION FEES GROWTH OVER TIME. (ILLUSTRATION FOR
UNDERSTANDING ONLY) ........................................................................................................................................ 13

1 Introduction
The cryptocurrency market and user base grow rapidly day by day. The
number of wallet holders is growing at around 10% per quarter, that’s ~46%
growth per year (1). The company’s view is that there are multiple kinds of
cryptocurrency wallet and service providers out on the market each with its
own pros and cons. Through thorough research we have found that there
are multiple thought processes of different wallet creators. Firstly, there are
those that provide holding of cryptocurrency assets with no other services
provided. These can take the form of client-side or server-side where the
client has full control of their assets or hand over their ultimate control to
the entity providing the service. This has in the past led to exchanges
providing wallet services with disastrous results for both users and the
controlling entity (2). Others provide services in selling or buying. This
usually involves using a wallet and then a third party to be able to access
the other services (swaps, holding, buying and selling). It has its own
problems including lag, lost funds as well as just a general lack of will to use
multiple third parties to achieve the end result. Usually the process will
involve multiple sign ups, passwords and just a general privacy loss due to
handing over information to a lot of service providers and varying AML/KYC
requirements. BlackFort Wallet and Exchange wants to provide the user
with an all the user needs in one service provision. Where you sign up, a
user’s own client-side wallet and a single platform to execute all your
cryptocurrency needs from a to z. In the quickest, easiest and smoothest
possible way. While simultaneously catering to small businesses and large
ones alike for a payment solution integrated with our service. Finally it is the
goal to build blackfort’s own Cryptocurrency blockchain technology called
BXN or Blackfort Exchange Network. This serves the purpose of providing a
platform, with fast and efficient transactions and smart contract
interactions in the world of WEB 3.0.
2 Challenges in the Market

Some of the challenges BlackFort’s Team have encountered in the market
as early adopters and cryptocurrency professionals are.
2.1 Difficulty navigating UI
Some of the most common issues encountered is putting up a

cryptocurrency wallet or service with the most basic of functions and letting
the users figure out how to navigate the UI and its functions because this a
first of its kind and the features count more than UI. This is a common theme
when market voids have to be filled at a rapid pace.

BlackFort has explored multiple platforms and used features that are
known to make entering the cryptocurrency space for users easier whether
being an experienced user or not.
2.2 Lack of multiple services in one place.
Using cryptocurrencies is not just about holding it on a wallet and leaving it

there forever to be forgotten. A user needs to first buy or acquire some
crypto. This in itself is not always the easiest step especially when a user has
never done this before. To make this simpler BlackFort has integrated the
option to buy with bank cards and in the future the option to purchase via
bank transfer directly. Other users may have bitcoins but want to have some
XRP, the usual process is to sign up to an exchange and then buy the XRP
with the bitcoins. That would mean a sign up, user verification (multiple
verification levels) as well as providing other personal details. BlackFort is
providing a direct swap mechanism in the application that will let users
swap in the app seamlessly and also have the ability to convert all their
holdings directly to USDT which means volatility in assets is removed.
2.3 Referral systems
Most referral systems in the market aim to make a one-off bonus on a sign
up with no further benefits. This limits users to the organic spread of the
market with no extra enticement. BlackFort is introducing a token economy
for the users to earn and benefit from spreading the wallet and nodes and
have earnings based on the referrals they make as long as they actively
participate in the wallet’s products and wider community.
3 Preperation to go to market
3.1 Multi-Currency Client-side Cryptocurrency Wallet App
The multi signature feature is the fact that the user’s multi-coin wallets are
generated from the same mnemonic phrases. This provides the user with
the opportunity to sign into the user’s wallets any time without limitations
or restore in any other compatible wallet, whether hardware or software.
What is a Client-Side Cryptocurrency Wallet?
It is an app that is completely focused on the client ownership and control.

This type of wallet application works in the following way. The client side
means private and secure. Why? The private keys to your wallet are not kept
on any servers but instead are stored on your device and never leave it. They
are created entirely on your device, and no one can get access to them or
steal them. Even if there should be a hack attack on the server of your wallet
your funds are safe. You can just import your mnemonic into another wallet

provider, hardware or software should service stop or safety becomes a
concern.
What are the advantages of this?

• Completely safe and protected. Just keep the mnemonic phrases safe
and use a password for your device
• The user’s private keys are only the users. No third party can have
access to them.
• The user’s funds are always readily accessible without any hindrance.
• The user can choose any another wallet and access or transfer their
funds with the mnemonic phrases.
What are some of the disadvantages?

• The user needs to trust the operational system of their device and its
security
• The user has a risk of losing access to their funds If they lose their
mnemonic phrase. If they misplace or store their 12-word phrase in an
exposed place, no one can possibly open the wallets again.
Another important point with this kind of wallet is the private keys. What
are they needed for? A private key is a sophisticated form of cryptography
that allows a user to access their cryptocurrency anytime. Sounds
complicated? Simply think of it like the “signature” that a user would give
for each transaction. With the help of this “signature” the transaction will be
identified as the user’s, and no one will be able to replicate it without access
to it. That’s why you need to keep it safe, and the best way is a client-side
wallet without any third party controlling the user’s private keys.
3.2 In-wallet swapping function
While being in the wallet application the user will be able to execute
swaps from one cryptocurrency to another with minimal effort. The user
will only need to choose what to swap and how much, no need to enter
addresses, it is all automated in the background. The swap process takes
less than 30 minutes and depends on what currency is being swapped.
3.3 Buying or selling Cryptocurrencies
Many users starting out in the cryptocurrency economy all seems to have
the same issue, where do I get the first coins or tokens? BlackFort gives the
users the possibility to buy directly in the application with their chosen bank
card. Soon, SEPA bank transfer will enable both buying and selling directly
from and to your bank account.
3.4 BlackFort Payment Solution

This is a standalone product feature for merchant clients. It can also for
regular transactions where a user or business desires to accept
cryptocurrencies for their everyday sales or settlements. B2B users can
choose to accept cryptocurrencies for their services by either integrating
the payment solution in their checkout process or by adding a widget. A
mobile POS system will be developed in a handheld format much like a card
machine in stores that is going to let users pay for anything in shops by
scanning the generated QR which will contain address to send to and exact
amount to be sent. Then it’s just confirming the payment on the buyer’s
wallet and sending coins for services.
3.5 BlackFort Pay Scan
As a feature in the wallet linked to the BlackFort Payment Solution, it was

decided to make it as easy as possible to pay using the wallet any merchant
using the BlackFort Payment Solution. Always send the exact required
amounts to settle with buyers and sellers without any over or
underpayment anymore. The process is such that a merchant or user enters
the desired amount in Fiat or coins to be received, a QR code is generated
by the payment solution containing all the details (amount, address, and
fees as well as order ID for reference) this will be scanned by the user and
confirmed. We use deep linking between payments done with BlackFort
wallet and BlackFort payment solution. The same result can be reproduced
by using the button “pay with wallet” under the payment QR code of
BlackFort pay. Using BlackFort wallet in this way is going to make payments
easy for users, even if they are new to the cryptocurrency economy.
3.6 BlackFort referral and affiliate program
Referrals and affiliations between users are some of the most powerful tools
of spreading a vision (4) especially if it’s one that gives back to the
community making everything possible. The marketing strategy
implemented BlackFort has chosen is where the users gets commissions
for sales of our products and vision as well as free airdrops when sponsoring
other users. The company also decided to run marketing campaigns that
involve PR Marketing and produce high quality content on social media and
news outlets. The strategy behind the combination of these marketing
channels is to achieve as much organic growth as possible. The
management believes strongly that the key to success is a happy user. This
can only be achieved by an easy way of navigation functions, the possibility
to earn rewards and most importantly a company and team that is
dedicated to a common vision. Referrals will be rewarded in Ethereum.
3.7 Supported Tokens and coins
BlackFort Wallet and Exchange as well as the BlackFort Payment Solution

will initially be supporting the following cryptocurrencies;

BTC
ETH
XRP
LTC
DASH
BCH
USDT (ERC20)
ERC20 Tokens
BXN (coming soon)
BRC20 BRC721 etc (coming soon)
More tokens are going to be added over time provided they garner
community support. BlackFort will generally only add coins or tokens that
have strong credibility, user base, liquidity, positive community review and
a strong management team. If you have a coin that you wish to be listed on
the Wallet/Exchange or BlackFort Payment Solution, participating in the
BXN node distribution is going to help make this happen.
4 Cross-platform services:
4.1 Web-based Payment Solution access and management
1.1. Users will be able to access to both their merchant and agent
account (if applicable) via their preferred web browser. The users will
be able to register their account and manage it from
pay.blackfort.exchange.
1.2. As of now there is no mobile app version in development for the

payment solution but will be one of the future upgrades and
additions to our payment services.
2. Android native client (Mobile application)
An android app is developed to allow Android users to download and

utilise the BlackFort wallet. The app will be available from the Google
play store as well as an apk download on the blackfort.exchange
website.
3. iOS native client (pending App Store review) (mobile application)
An IOS app is developed to allow IOS users to download and utilise

the BlackFort wallet. The app will be available from the App store as
well as a dmg download on the blackfort.exchange website.

4.2 Revenue Streams for BlackFort
1. Crypto to crypto swaps

2. Fiat to Cryptocurrency exchange (via Bank transfer)
3. Fiat to Cryptocurrency exchange (via Credit card)
4. Cryptocurrency to Fiat exchange (bank transfer)
5. eCommerce – Merchandise, Virtual and Physical Products
6. Business to business partnerships (Fixed listing of Partner’s Tokens
into BFW Coin-list. Subject to a thorough Compliance check)
7. Payment solution services
4.3 BlackFort Revenues
Blackfort’s fees can be viewed in the Fee Section on the official website
here.
Source
Swaps
Buy Crypto with Credit Card
Buy Crypto Via SEPA Transfer
Sell Crypto to Bank Account
Merchandise
Figure 1 - Channels of turnover from Blackfort as a service to the User
5 BlackFort Exchange Network

A Nodular Blockchain to Enable Smart Contracts and Mass TPS
NOTE: This document is under development. As such it may change
without notice.
5.1 Reasoning for creation
As its mainnet community launch is approaching in June 2022, BlackFort

Exchange Network plans and maintains focus on reliability and high
transaction throughput at a minimal cost to its users. BlackFort Exchange
Network’s primary focus, its native decentralised (“dApp”) BlackFort
Exchange Network DEX, with tokenisation and high liquidity with
consistent backing and array of assets as well as high transaction and speed
of execution.
High throughput of transactions, speed of confirmations and low fees are

some of the most requested features of any blockchain. Coupled with the
ability to add own tokens onto such a native blockchain. Furthermore, an
ability for the addition of smart contract governance that can be settled in
a fast and cheap coin with high liquidity and reliability is necessary for any
blockchain that strives to drive mainstream adoption and tokenisation of

real-world asset classes and physical objects. NFT creation and delegation is
something that will be a first for BXN, each node is an NFT that is delegated
or can act as a validator. This means that your artwork is at work generating
new BXN coins while also being limited and a prized possession of its owner.
5.2 Principles
For the creation of the BXN blockchain some of the guiding principles are
the creation of a flexible and extension network of ethereum and binance
chains to create a symbiotic harmony. It aims to complement existing
blockchains and not replace them entirely. Here are the principles of BXN:
1. Standalone, independent, and unique Blockchain: technically, BXN is

a standalone blockchain, instead of a layer-2 solution even though it
will run on your existing ETH address. Most BXN fundamental
technical and business functions are self-contained so that it can
serve its complementary purpose to other blockchains and
interoperability and cross chain transfers that are to come.
2. Ethereum Compatibility: The first practical and widely used Smart
Contract platform is Ethereum. To take advantage of the relatively
mature applications and community, BXN chooses to be compatible
with the existing Ethereum mainnet. This means most of the dApps,
ecosystem components, and toolings will work with BXN and require
zero or minimum changes; BXN nodes will require minimal and low
investment hardware specification and skills to run and operate as
barrier to entry should be as low as possible to ensure a wide-reaching
decentralisation for the general health of the network avoiding a
concentration into the hands of a few large network players. The
implementation should leave room for BXN to be on par with further
Ethereum upgrades that are themselves conducted in a
decentralised and wide- and far-reaching development community.
3. Staking Involves Consensus and Governance: Staking-based
consensus is more environmentally friendly and generates a higher
degree of flexibility in terms of community governance. Expectedly,
this consensus should enable better network performance and lower
costs over proof-of-work blockchains, i.e., faster block creation times
and higher transaction capacity than is traditionally possible on proof-
of-work blockchains.
5.3 Consensus and Validating
Based on the principles, the consensus protocol of BXN is to adhere at core

to the following:
1. Blocking time should be shorter or equivalent to Ethereum or

comparable networks, which after our evaluation is set to be
approximately five seconds and independent of the number of
validators.

2. It requires limited time to confirm the finality of transactions, e.g.
around 1-min level or shorter and less confirmation before being
considered final by the receivers.
3. Block reward is pre-set for each individual reward, validation and
delegation reward is collected from global transaction fees, and it is
distributed in BXN therefore creating a fair environment for users and
validators as well as delegators.
4. It is compatible with Ethereum’s guiding principles as much as
possible and will continue to do so.
5. It allows for proof-of-stake blockchain network governance (weighted
authority) with a wide consensus mechanism.
5.4 Proof of Staked Authority (PoSA)
Although Proof-of-Work (PoW) has been recognised as an excellent and

secure mechanism to implement a decentralized network, it has a very high
barrier to entry and is not allowing for wide participation that will pay off to
all participants. Ethereum and some other blockchain networks, such as
MATIC Bor, TOMOChain, GoChain, xDAI, do use Proof-of-Authority (PoA) or
its variants in different scenarios, including both testnet and mainnet. PoA
provides some defense to 51% attack, with improved efficiency and
tolerance to certain levels of Byzantine players (malicious or hacked). It
serves as an easy choice to pick as the fundamentals for the network.
Meanwhile, the PoA protocol is most criticized for not being as

decentralised as PoW, as the validators, i.e. the nodes that take turns to
produce blocks, have all the authorities and are prone to corruption and
security attacks. Other blockchains, such as EOS and Lisk both, introduce
different types of Delegated Proof of Stake (DPoS) to allow the token holders
to vote and elect the validator set. It increases the decentralisation and
favors community governance.
BXN uses the proven process to combine DPoS and PoA for consensus into
PoSA, so that:
1. Blocks are produced by a limited set of validators. To become a

validators one needs to setup a hosted node and meet certain
requirements that need to be accepted by other validators.
2. Validators take turns to produce blocks in a PoA manner, similar to
Ethereum’s Clique consensus design, however all Validators and their
delegators receive a share of the fees through the ratio of BXN-Node
type, that delegators hold with the validators.
3. Validator sets are elected in and out based on a delegation-based
governance and delegators can move freely or create new validators
through consensus and joining and no one validator can overrule all
validators meaning the entire process will be transparent and widely
agreed upon.

5.5 Validator Quorum
In the genesis stage, a few trusted nodes will run as the initial Validator Set,
this is to ensure the beginning is smooth and handled carefully in case of
any genesis abortion and fix required. After live observation phase finishes,
anyone can compete to join as candidates, delegator, validator as well as
elect as a validator. Once all available nodes are distributed as well as
delegated, the total weight of 22% of total coin supply is going to be locked
in validator nodes. BXN is the token used to stake on the BlackFort
Exchange Network
In order to remain as compatible as Ethereum and upgradeable to future

consensus protocols to be developed, BXN chooses to rely on SMART
CONTRACTS for its management. There is a dedicated staking module for
BXN. It will accept BXN staking from BXN node holders.
5.6 Security and Finality
Given more than 50%+1 of all validators are honest, PoSA based networks
usually work securely and properly. However, there are still cases where a
certain number of Byzantine validators may still manage to attack the
network, e.g. through the “Clone Attack”. To secure as much as BXN users
are encouraged to wait until receiving blocks sealed by more than 66%+1
different validators. In that way, the BXN can be trusted and can tolerate less
than 33% Byzantine validators.
For example, taking 21 Masternode validators, if the block time is 5 seconds,

the 66%+1 different validator seals will need a time period of (66%*21+1)*5 =
75 seconds. Any critical applications for BXN may have to wait for 66%+1 to
ensure a relatively secure finality. However, besides such arrangement, BXN
introduces a slashing logic to penalise Byzantine validators for double
signing or unavailability, which will be covered in the “Staking and
Governance” section later. The slashing logic will expose the malicious
validators in a very short time and make the “Clone Attack” very hard or
extremely non-beneficial to execute. With this enhancement, 50%+1 or even
fewer blocks are enough as confirmation for most transactions.
5.7 Reward
All the BXN validators in the current validator set will be rewarded with
Block rewards and transaction fees in BXN. As BXN has a set total supply it
is comparable to the production of Bitcoin and Ethereum network enabling
a fairer distribution of reward, and the gas fee is the major reward for
validators in the long term. As BXN is also a utility token with other use cases,
delegators and validators will still enjoy other benefits of holding BXN.

The reward for validators are the fees collected from transactions and smart
contract interactions in each block. Validators can decide how much to give
back to the delegators who stake their BXN to them. Every validator will take
turns to produce the blocks in the same probability (if they stick to 100%
liveness), thus, in the long run, all the stable validators may get a similar size
of the reward. Meanwhile, the stakes on each validator may be different, so
this brings a counter-intuitive situation that more users trust and delegate
to one validator, they potentially get less reward. So rational delegators will
tend to delegate to the one with fewer stakes as long as the validator is still
trustful (insecure validator may bring risk of being slashed).
Some parts of the gas fee will also be rewarded to relayers for Cross-Chain
communication in case there will be cross chain implementations in the
future.
Figure 2 - Visualisation of reward types. Block reward reducing over time and Rewards from
transaction and interaction fees growth over time. (ILLUSTRATION FOR UNDERSTANDING ONLY)
5.8 Node
5.8.1 Weight
There is a total set number of Nodes to be distributed to users. The total

number of this is 304.000. Each node is a non-fungible collection of native
tokens (nNFT) with a certain representation in weight, described as Coin-
lock. One node is one entity and cannot be broken down into individual
coins. Each node comes as a package to be delegated to add to the proof
the weight of the holder’s authority in the validation mechanism.
Nodes Names Node quantity Token lock

Chillon 2.5M 500 BXN 2,500,000
Landskron 1M 1,000 BXN 1,000,000

Malbork 500K 2,500 BXN 500,000
Kronborg 250K 10,000 BXN 250,000
Trogir 100K 15,000 BXN 100,000
Trakai 50K 25,000 BXN 50,000
Vianden 10K 100,000 BXN 10,000
Hever 5K 150,000 BXN 5,000
BXN
304,000 10,500,000,000
5.8.2 Sale Price increase
Current IVO sale price (TBA) 0.01€

Target IVO sale price at exchange Launch (TBA) 0.02€
TOTAL METRICS WILL BE RELEASED AT MAINNET LAUNCH
5.8.3 Sale-Turnover dedication
Here we present our strategy as to how we spend turnover from the same
of nodes.
Turnover Dedication 100%
Liquidity Dex/Cex 25%

Marketing 50%
Company Capitalisation 21%
Charity 1%
Tokenizing and blockchain
fees 1%
Team 2%
5.8.4 Production
Each node has a fixed amount of BXN Coins that are released as block
rewards to the holders’ BXN Address. Once activated, every node is going to
claim its block rewards starting the block after successful activation and
delegator rewards (Aliquoted transaction fee earnings). Block rewards are
set out to be distributed automatically by the algorithm for ten years with a
halving time of one year (Number of blocks 6307200). This is calculated from
5 second block times, to be halving the result yearly until the tenth year.
After the tenth year is over, block rewards for that node are going to stop.
Aliquoted transaction fee collections are enabled for lifetime of the
blockchain and start upon node delegation.

Nodes Names BXN Production/block Year 1 Year 2 Year 3 Year 4
Chillon 2.5M
BXN 0.6247755 BXN 3,748,653 BXN 1,874,327 BXN 937,163 BXN 468,582
Landskron 1M
BXN 0.2450100 BXN 1,470,060 BXN 735,030 BXN 367,515 BXN 183,758
Malbork 500K
BXN 0.1201029 BXN 720,618 BXN 360,309 BXN 180,154 BXN 90,077
Kronborg 250K
Trogir 100K
Trakai 50K
Vianden 10K
Hever 5K
BXN 0.0010878 BXN 6,527 BXN 3,263 BXN 1,632 BXN 816
Total Per year BXN 6,518,849 BXN 3,259,424 BXN 1,629,712 BXN 814,856
Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
BXN 234,291 BXN 117,145 BXN 58,573 BXN 29,286 BXN 14,643 BXN 7,322
BXN 22,078 BXN 11,039 BXN 5,519 BXN 2,760 BXN 1,380 BXN 690
BXN 8,658 BXN 4,329 BXN 2,164 BXN 1,082 BXN 541 BXN 271
BXN 4,244 BXN 2,122 BXN 1,061 BXN 531 BXN 265 BXN 133
BXN 832 BXN 416 BXN 208 BXN 104 BXN 52 BXN 26
BXN 408 BXN 204 BXN 102 BXN 51 BXN 25 BXN 13
*All values are approximate. Rewards are generated at every block which is ~5sec/Block.
5.9 Blocks
One block represents a set of entries into the blockchain, to be verified and validated. Once
this batch of transaction and interaction recordings as well as the release or production of
block reward has been processed using the transaction fees, paid by the blockchain user.
Distribution automatically happens and the next block starts to form.
How to approximate the yearly halving-period:
At the set time for blocks to be created and validated, it takes 6307200 blocks to be
approximately equivalent to one year in Real time. Block reward halving happens at every
6307200th block. Example: The fifth year starts at block number 31536000. This can be
calculated by the following: 6307200 * 5 = 31536000

5.10 Token Economy
5.10.1 Pre-sale Block reward
During pre-sale as well as pre-launch, we follow the idea of implementing a

higher block reward for every user that activates a node of any size before
mainnet launch, there is an increased amount of block reward that is added
as an incentive. This pre-launch block reward added benefit will only be
calculated until mainnet is launched. This number of overproduced coins
are included after the genesis block. Pre-Launch production of BXN will be
distributed through Assets section in BXN Dashboard. This is to ensure, that
every user generates a BXN Blockchain Address. After Address generation,
Node, BXN Coins and BxAssets can be claimed to the users address.
5.10.2 Native Token
BXN will run on BXN in the same way as ETH runs on Ethereum so that it
remains as “native token”. This means, in addition to BXN being used to pay
most of the fees on BXN Blockchain and BlackFort DEX, BXN will be also
used to:
1. pay “fees“ to deploy and interact with smart contracts on BXN

2. perform cross-chain operations, such as transfer token assets across
multi BXN Chains.
5.11 Other Tokens
BXN supports BXN tokens and upcoming BXP20, BXP721 etc. tokens, which
are native assets transferrable and tradable (if listed) via fast transactions
and sub-second finality. Meanwhile, as BXN is Ethereum compatible, it is
natural to support ERC20 tokens on BXN in the upcoming future.
5.12 Tokenising assets
It is our goal to become a platform that enables people and entities to use
our technology, Blockchain as well as smart contracts to digitize assets and
use BXN technology to create, hold, transfer, and exchange tokenized
assets.
5.12.1 Bridging foreign cryptocurrencies
Exact strategy and information to be released.
5.12.2 Tokenising of offline or Fiat-based, Real estate or monetary assets

5.13 Staking and Governance
Proof of Staked Authority brings in decentralization and community

involvement. Its core logic can be summarized as the below. You may see
similar ideas from other networks, especially Cosmos and EOS.
1. Token holders, including the validators, can put their tokens “bonded”
into the stake. Token holders can delegate their nodes onto any
validator or validator candidate, to expect it can become an actual
validator, and later they can choose a different validator or candidate
to re-delegate their nodes.
2. All validator candidates will be ranked by the number of bonded
tokens on them, and the top ones will become the real validators.
3. Validators can share (part of) their blocking reward with their
delegators.
4. Validators can suffer from “Slashing”, a punishment for their bad
behaviors, such as double sign and/or instability.
5. There is an “unbonding period” for validators and delegators so that
the system makes sure the tokens remain bonded when bad
behaviours are caught, the responsible will get slashed during this
period.
5.14 Rewarding
Both the validator update and reward distribution happen at every block.
(Please note BXN blocking fees will remain rewarding to BXN validators
only.):
1. The block reward is directly claimed from BXN Coinbase
2. The node holder can claim the reward at every block.
3. Validator rewards are global transaction fee rewards, sent to Coinbase
and Coinbase distributes reward aliquoted to all node delegators.
5.15 Slashing
Slashing is part of the on-chain governance, to ensure the malicious or

negative behaviours are punished. BXN slash can be submitted by anyone.
The transaction submission requires slash evidence and cost fees but also
brings a larger reward when it is successful.
5.16 Double Sign
5.17 Unavailability

The liveness of BXN relies on everyone in the Proof of Staked Authority
validator set to produce blocks timely when it is their turn. Validators can
miss their turn due to any reason, especially problems in their hardware,
software, configuration or network. This instability of the operation will hurt
the performance and introduce more indeterministic into the system.
There can be an internal smart contract responsible for recording the
missed blocking metrics of each validator. Once the metrics are above the
predefined threshold, the blocking reward for validator will not be relayed
to BXN for distribution but shared with other better validators. In such a way,
the poorly operating validator should be gradually voted out of the validator
set as their delegators will receive less or none reward. If the metrics remain
above another higher level of threshold, the validator will be dropped from
the rotation, and this will be propagated back to BXN, then a predefined
amount of BXN would be slashed from the self-delegated BXN of the
validator. Both validators and delegators will not receive their staking
rewards.
5.18 Governance Parameters
WILL BE RELEASED AFTER MAINNET LAUNCH
5.19 Outlook
It is hard to conclude for BlackFort Exchange Network, as it will never stop

evolving. Below are some of the topics to look into so as to facilitate
discussion and improvement for the community in terms of better usability
and extensibility:
1. Add different digital asset model for different business use cases
2. Enable more data feed, especially DEX market data, to be
communicated from BlackFort Exchange DEX to BXN
3. Provide interface and compatibility to integrate with Ethereum,
including its further upgrade, and other blockchains include future
tokenisation and assetisation of physical assets
4. Improve client-side experience to manage wallets and use blockchain
more conveniently
[1]: BXN business practitioners may provide other benefits for BXN
delegators to attract more stakers and delegators alike.
6 Use of Funds
Stage goals will be communicated in further emails as we are currently at
the beginning with operations and initial wallet having been setup.
Stage 1 – Global OPS Setup

When Stage 1 is reached then the company is going to use the raised funds
to create its global structure in preparation for the ventures and projects in
the later cap milestones and also gives the company a full international
business structure allowing the BlackFort brand to have operating rights
and bases in all applicable countries that are required in fulfilling the
company’s goals and vision.
Stage 2 – Node and Blockchain launch
When Stage 2 is reached, the company is going to upgrade the BXN Token
Economy to a full nodular PoSA blockchain explained in section 5.
Stage 3 – Further Wallet Upgrades
When stage 3 is reached further improvements shall be added to the wallet

this is going to potentially include but is not limited to, addition of more
blockchains and their coins upon user feedback and requests, further
integration with the BlackFort payment solution, addition of further third-
party services and creating some of the services offered in house. BlackFort
will also start setting up the upcoming fiat section of the application in the
background.
Stage 4 – BlackFort Payment Solution Upgrades
When stage 4 is reached, further improvements to the payment solutions,

this may include but not limited to, improvements to the dashboard,
integrating further options in transactions handling, automated transaction
monitoring and processing and the addition of multilanguage support.
Another upgrade will be the fiat support implementation in preparation for
stage 5.
Stage 5 – Electronic Money Institute License
When stage 5 is reached BlackFort is going to apply for and/or acquire an

EMI license with passporting rights across EU/EEA. This will enable the
wallet to operate as a e-money institute and has the intention to integrate
crypto and banking under one roof, wallet and payment solution services
will be supplemented by traditional banking services and debit cards for
easier spending by the company’s business and private clients.
Stage 6 – Digital Identity
When stage 6 is reached a digital identity platform shall be created, allowing

BlackFort’s users to clear compliance and KYC procedures faster through
data sharing between partner users. This is going to enable a time saving
process where data is shared and no longer shall the user need to constantly

upload KYC and compliance documents with every new partner account
but instead be able to use your digital identity to verify themselves and their
details across all our partner services. This service shall be compliant with
the strictest privacy and data protection regulations as per EEA regulations.
Stage 7 – Exchange & OTC
When stage 7 is reached the development of a full BlackFort exchange

where trading in BXN is done as well as having the wallet application as the
official wallet of the exchange. The orderbook for BXN will be created and
publicly available. The use of token on the exchange is going to be a
reduction of fees or payment of fees for trading. BXN will be available for Bid
and Ask orders which means they are openly traded on the BlackFort
exchange.
6.1.1 Use of funds exceeding Roadmap caps – Upgrading all Services
When the seven stages have been reached all the remaining sales shall be
allocated toward speeding up of developments and hiring a bigger team of
experts in each of the required fields and permanent salaried staffing to fulfil
all the requirements for each project. The company share from the smart
contract will also start reducing the amount that the company reserves
from the funds (to finance roadmap) this means more will be going back to
the community. This is going to occur at the company’s discretion.
At this point the entire BlackFort brand is complete and a full end to end
solution offered to the company’s clients. This means that users are no
longer having to go anywhere else to use a complete crypto, fiat and trading
solution on the market.
Updates on stage progresses on the delivery of project goals will be

communicated as milestones are reached for each stage. Updates will be
delivered via the newsletter, medium posts and also telegram news
channel, to join it please click here.
7 Corporate Social Responsibility
7.1 Donations
BlackFort is committed to supporting worthy causes and some of the raised

funds are to be distributed to charities and community programs. The
company will sometimes choose the recipient, at times this honour may go
to the sales team and at times the company may choose to have the
community vote in a poll of carefully selected causes through the official
telegram channel that can be found here. Regardless of the choice, the

funds donated, and the cause donated to are going to be made public via
the official medium account here.
7.2 Community involvement:
This can include raising money for local charities, providing volunteers,
sponsoring local events, employing local workers, supporting local
economic growth, engaging in fair trade practices, etc. If there is a donation
for a special cause or as chosen by the BlackFort community, the company
may send any representative or community member to present the
donation or pro-bono volunteering provided the selected member agrees
to it, the representative and amount of service donated will always be
disclosed via our medium account for transparency.
7.3 Ethical marketing:
BlackFort is committed to only do ethical marketing, this to the company

means it is not going to engage in discrediting anyone, whether
organisation or individual. All marketing is transparent and backed by
official statements and visions. A further principle is to not spread false
rumours nor advertising regarding the company or any other party. Affiliate
salespeople are also subject to our terms of service and are not allowed to
offer our product in any irresponsible manner. The founders and
management of the company highly value and place great importance on
responsible marketing and sales strategies.
The Corporate Structure
BlackFort Wallet & Exchange is the trading name of the company

incorporated in the Republic of Estonia under the name BlackFort Tech
Estonia OU and comprises of the following sister company:
- BlackFort Inc (BVI) – Is part of global OP setup. It operates the creation

and concepting of the BXN token economy as well as the rights to it.
It also serves the purpose of a possible expansion to other
jurisdictions.
8 Disclaimer & Risk Statement
8.1 Disclaimer:
This whitepaper has been issued and compiled by BlackFort Inc (BVI)
(BlackFort) on 30th of May 2022 and should be read in conjunction with
BlackFort’s terms and conditions (the “Terms”).
This whitepaper does not constitute a prospectus for the purposes of

[Directive 2003/71/EEC (the “Prospectus Directive”), and the amending

directive 2010/73/EU] [Regulation (EU) 2017/1129 (the “Prospectus
Regulation”)] or offer document of any sort and is not intended to
constitute an offer of securities or a solicitation for investments in
securities in any jurisdiction mentioned or not in this whitepaper.
The purpose of this whitepaper is to provide prospective purchasers with

the information on BlackFort’s project and vision to permit the prospective
purchasers to make their own decision as to whether or not they wish to
proceed to purchase BlackFort Tokens (“BXN”). This whitepaper does not
constitute an offer or invitation, or any other sale or purchase of shares,
securities, or any of the assets.
Any possession of BXN shall not grant any rights in any form to the user,
including but not limited to any rights of ownership, interest, profit,
redemption, property or intellectual property, decision making, or any
other such rights, such as any rights of financial or legal nature, in
BlackFort or its affiliates. The only right afforded is the right to hold the
hold the BXN tokens purchased or acquired.
BlackFort Inc (BVI) has taken reasonable care to ensure that, as at the date
of this whitepaper, the information contained herein is accurate to the
best its knowledge and there are no other facts, the omission of which,
would make misleading any statement in this whitepaper. No
representation, warranty, assurance or undertaking is made as to its
continued accuracy after such date and all future amendments will be
deemed correct at time of publication.
The information contained in this whitepaper may be subject to

modification, supplementation and amendment at any time and from
time to time.
This whitepaper describes BlackFort Tech Estonia’s business objectives

and the issuing of the BXN Token as well as the Token economy by
BlackFort Inc (BVI). It has not been reviewed, verified, approved or
authorised by any regulatory or supervisory authority. The following
content provided is for informational purposes related to our approach of
providing a solution based on blockchain technology. The information may
not be comprehensive and does not imply any elements of a contractual
relationship. This document does not constitute the provision of
investment or professional advisory services. BlackFort does not
guarantee, and accept legal liability whatsoever arising from or connected
to, the accuracy, reliability, or completeness of any material contained in
this document. It is the responsibility of prospective purchasers of BXN to
undertake their own due diligence. Prospective purchasers of BXN are
wholly responsible for ensuring that all aspects of this whitepaper and the
Terms are acceptable to them. The purchase of BXN may involve special
risks that could lead to a loss of all or a substantial portion of the purchase
amount. BlackFort Inc (BVI) does not represent, warrant, undertake or

assure that the BXN are defect, virus free or will meet any specific
requirements of a prospective purchaser. You should only purchase BXN if
you can afford a complete loss. Unless you fully understand and accept the
nature of the BXN and the potential risks inherent in the purchase of BXN
you should not purchase BXN.
The publication of this whitepaper and the offering of BXN may be

restricted in certain jurisdictions. It is the responsibility of any person in
possession of this whitepaper and any persons wishing to make an
application for BXN (pursuant to the Terms) to inform themselves of, and
to observe, any and all laws and regulations that may be applicable to
them. Accordingly, BXN are not being offered or distributed to, neither can
they be resold or otherwise transferred by their holders to the citizens of,
whether they are private or legal persons, and people who own a
permanent residence or their seat of incorporation in the United States of
America and its territories, the People’s Republic of China, the Republic of
Korea, Singapore, and in any countries, territories, or jurisdictions where
transactions with digital tokens are prohibited or to some extent restricted
by the law.
This whitepaper does not form any legal relationship between BlackFort
and participants of the node sale. The purchase of BXN is only possible
after accepting the terms subject to purchaser having completed
BlackFort Inc (BVI) customer due diligence process in accordance with BVI
Law.
BXN are meant for use strictly within the BlackFort platform and shall not
have any value or use outside of it. BlackFort Inc (BVI) and BlackFort Tech
Estonia do not and shall not provide any guarantees, projections,
estimates, or ensure any profit, income, or gains from BlackFort Tech
Estonia’s products or services. Participants in the token sale shall carefully
assess all available information and possible risks before participating in
the token sale or making use of BlackFort products or services.
BlackFort Inc (BVI) reserves the right to make amendments and changes
to this whitepaper at any time and without notification. In such case, only
the latest version of this Whitepaper published on
https://blackfort.exchange shall be considered valid, whilst all older
versions of this whitepaper shall be considered invalid. BlackFort Inc (BVI)
is not required to give notice of this.
BlackFort Inc (BVI) shall not be held responsible or liable for any losses,
damages, or harm arising from participation in this token sale. BXN shall
not be used for any kind of speculative, investment, or financial purposes.
This whitepaper shall not be reproduced, redistributed, or published

without including this Disclaimer section. In case of reproduction,
redistribution or publishing of this whitepaper without this Disclaimer

section, this whitepaper and all information presented herein shall be
considered invalid.
BlackFort (BVI) makes no warranty whatsoever (express or implied) with

respect to any BXN proposed to be issued by the group, including any:
(i) warranty that the BXN will be issued, (ii) warranty of merchantability; (iii)
warranty of fitness for a particular purpose; (iv) warranty of title; or (v)
warranty against infringement of intellectual property rights of a third
party, whether arising by operation of law, course of dealing, course of
performance, usage of trade, or otherwise except as expressly set forth in
writing between the company and any purchaser of BXN. It is a condition
of you receiving and retaining this whitepaper that you warrant to the
group, its managers, and its officers that you have not relied upon any
warranty made by the group, or any other person on the group’s behalf. By
purchasing BXN you do so at your own risk.
To the maximum extent permitted by the applicable laws, regulations, and

rules, BlackFort and its affiliates and their respective officers, employees, or
agents will, in relation to the website and BlackFort tokens, not be liable
for any damages of any kind, including but not limited to, direct,
consequential, incidental, special or indirect damages (including but not
limited to lost profits, loss of revenue or third party loss whether
foreseeable or otherwise, trading losses or damages that result from use or
loss of use of the website and BlackFort Tokens.)
For the avoidance of doubt, BlackFort Inc (BVI) expressly disclaims any and
all responsibility for any direct or consequential loss or damage of any kind
whatsoever arising directly or indirectly from: (i) reliance on any
information contained in this document; (ii) any error, omission, or
inaccuracy in any such information; (iii) any action resulting therefrom; or
(iv) usage or acquisition of products, available through the website.
Participants of the token sale acknowledge and agree that they are not
purchasing BXN for purposes of investment, speculation, or other financial
purposes.
Some of the statements in the whitepaper include forward-looking

statements which reflect BlackFort Tech Estonia’s current views with
respect to execution roadmap, financial performance, business strategy
and future plans, both with respect to BlackFort Tech Estonia and the
sectors and industries in which BlackFort Tech Estonia operates in.
Statements which include the words “expects”, “plans”, “believes”,
“projects”, “anticipates”, “will”, “aims”, “may”, “would”, “could”, “continue”,
and similar statements are of a future or forward-looking nature. All
forward-looking statements address matters that involve risks and
uncertainties. Accordingly, there are or will be important factors that could
cause BlackFort Tech Estonia’s actual results to differ materially from those

indicated in the statements. These factors include but are not limited to
those described in the part of the Terms entitled “Risks”, which should be
read in conjunction with this Risk Statement and other cautionary
statements in the Terms and Conditions.
Any forward-looking statements in this whitepaper reflect BlackFort Inc

(BVI) & BlackFort Tech Estonia current views with respect to future events
and are subject to these and other risks, uncertainties and assumptions
relating to BlackFort Inc (BVI) & BlackFort Tech Estonia operations, results
of operations and growth strategy. These forward-looking statements
speak only as of the date of this whitepaper. Prospective participants in
the token sale should specifically consider the factors identified in the
Terms could cause actual results to differ before making a purchase
decision. No statement in this Whitepaper is intended as a profit forecast
and no statement in this whitepaper should be interpreted to mean that
BlackFort Inc (BVI) & BlackFort Tech Estonia earnings for the current or
future years would be as may be implied in this whitepaper.
8.2 Risk Statement:
Purchaser, legal and regulatory, market and operational risks are set out in
the in the disclaimer. You should review these risks before purchasing BXN
as well as seek independent financial and tax advice.
9 References
(1) https://www.statista.com/statistics/647374/worldwide-blockchain-
wallet-users/
(2) https://selfkey.org/list-of-cryptocurrency-exchange-hacks/
(3) https://cointelegraph.com/bitcoin-for-beginners/what-is-bitcoin-wallets
(4) https://www.awin.com/us/how-to-use-awin/20-reasons-to-use-affiliate-
marketing

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BlackFort Exchange Network

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

FIGURE 1 - CHANNELS OF TURNOVER FROM BLACKFORT AS A SERVICE TO THE USER...........................................9

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

2 Challenges in the Market

2.1 Difficulty navigating UI

Some of the most common issues encountered is putting up a

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

2.2 Lack of multiple services in one place.

Using cryptocurrencies is not just about holding it on a wallet and leaving it

2.3 Referral systems

3.1 Multi-Currency Client-side Cryptocurrency Wallet App

What is a Client-Side Cryptocurrency Wallet?

It is an app that is completely focused on the client ownership and control.

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

What are the advantages of this?

What are some of the disadvantages?

3.2 In-wallet swapping function

3.3 Buying or selling Cryptocurrencies

3.4 BlackFort Payment Solution

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

3.5 BlackFort Pay Scan

As a feature in the wallet linked to the BlackFort Payment Solution, it was

3.6 BlackFort referral and affiliate program

3.7 Supported Tokens and coins

BlackFort Wallet and Exchange as well as the BlackFort Payment Solution

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

4.1 Web-based Payment Solution access and management

1.2. As of now there is no mobile app version in development for the

2. Android native client (Mobile application)

An android app is developed to allow Android users to download and

3. iOS native client (pending App Store review) (mobile application)

An IOS app is developed to allow IOS users to download and utilise

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

1. Crypto to crypto swaps

4.3 BlackFort Revenues

Figure 1 - Channels of turnover from Blackfort as a service to the User

5 BlackFort Exchange Network

5.1 Reasoning for creation

As its mainnet community launch is approaching in June 2022, BlackFort

High throughput of transactions, speed of confirmations and low fees are

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

1. Standalone, independent, and unique Blockchain: technically, BXN is

5.3 Consensus and Validating

Based on the principles, the consensus protocol of BXN is to adhere at core

1. Blocking time should be shorter or equivalent to Ethereum or

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

5.4 Proof of Staked Authority (PoSA)

Although Proof-of-Work (PoW) has been recognised as an excellent and

Meanwhile, the PoA protocol is most criticized for not being as

1. Blocks are produced by a limited set of validators. To become a

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

In order to remain as compatible as Ethereum and upgradeable to future

5.6 Security and Finality

For example, taking 21 Masternode validators, if the block time is 5 seconds,

© 2022 BlackFort Wallet & Exchange Whitepaper Version 1.0 www.BlackFort.network

There is a total set number of Nodes to be distributed to users. The total

Nodes Names Node quantity Token lock