Capdax Whitepaper v1.1b PDF

Capdax Exchange
Whitepaper
Version 1.2
Table of contents
3 Important Notice 19 Volume Projections and Valuation
4 Executive Summary 21 Token Functionality
5 Problems Facing Current 22 Token Generation Crowdsale

Cryptocurrency Exchanges
25 Business Plan / Monetization
8 The Solution: Capdax Exchange
27 Capdax Revenue Model
8 User Experience
28 User Acquisition / Marketing Plan
11 Social Trading
30 Roadmap / Timeline
13 Customer Service
31 Potential Risks / Risk Management
14 Fork/Airdrop Policy
37 To Conclude: Why Capdax
15 Platform Over Other Exchanges?
Whitepaper v1.1 2 of 37
Important Notice
This document and information contained herein may not be sent and or addressed wholly or in part,
directly or indirectly, to any person in the United States, New Zealand or the People’s Republic of China, or
any other jurisdiction in which it would be impermissible or restricted to offer, distribute, purchase, sell or
retain cryptographic tokens.
PLEASE READ ALL PARTS OF THIS NOTICE CAREFULLY. THIS WHITEPAPER IS TO BE READ IN
CONJUNCTION WITH THE TERMS AND CONDITIONS (T&C’s). A COPY OF THE T&C’S MAY BE FOUND AT
https://capdax.com/terms-and-conditions
All definitions contained in this notice shall bear the same meaning as provided in the Whitepaper unless
stated otherwise.
The Capdax Token is not intended to constitute:
I. securities in any jurisdiction;

II. currency of any kind;
III. stocks, shares or debentures;
IV. units in a collective investment scheme or business trust;
V. equity in an investment fund
Any regulation or legislation applicable to securities or to any of (I to V) above will not be applicable to this
Whitepaper and the Capdax's Token Generation Event ("TGE").
This Whitepaper does not constitute a prospectus or offer document, nor is it an offer of securities or an
attempted solicitation for investment in securities in any jurisdiction.
This Whitepaper and the Capdax's TGE have not been approved by any regulatory body in any
jurisdiction. It should not be assumed that the Whitepaper, and the Capdax's TGE complies with any laws,
regulation or legislation of any jurisdiction.
The purchase of the Capdax Token and participation in the Capdax's TGE is inherently risky.
No warranty, guarantee or undertaking is made by Capdax and or the Distributors of the Capdax Token
regarding:
I. the performance of the Capdax Token;

II. the performance of the assets underlying the Capdax business or the Capdax Token purchase;
Executive Summary
The buzz around cryptocurrencies is booming and accelerating more quickly

than ever, with more major media outlets covering new developments every
day. With daily exposure in nearly every major newspaper and television station,
it is clear that cryptocurrency is fast becoming mainstream. Not only is the
discussion growing larger, but the market capitalization and trading volumes are
sky-rocketing at an exponential rate.
On January 1, 2017, roughly a year ago1, the market capitalization of all

cryptocurrencies was recorded at US$17 billion, with 24-hour global trading
volumes peaking at US$292 million. On December 31, 2017, the market cap
reached US$610 billion and a 24-hour trading volume of US$33 billion, an increase
of 3588% in market cap and over 10000% increase in trading volume in only one
year! To put these numbers into perspective, this is the equivalent of Whatsapp
(worth US$19 billion) growing its market capitalization to the size of tech
powerhouse Apple (worth over US$700 billion). At the current rate of growth, the
cryptocurrency market could overtake the market capitalization of every
company listed on the Dow Jones by April 2018.
Although this boom creates an amazing opportunity for traders and startup
projects, it also uncovers challenges to the cryptocurrency exchange infrastructure
that supports them. Frequent outages and trading delays are being seen on
exchanges unprepared to deal with swarms of new users, sometimes reaching
over 100,000 per day2. Trading platforms are also under constant attack from
hackers, experience stolen funds, and lack policy transparency, eroding the trust
of their users. Just in July of 2017, over US$50 million3 worth of stolen
cryptocurrency was reported, and it can be assumed that that number does not
include unreported thefts that may be occurring daily.
1) Based on statistics from CoinMarketCap.com

2) https://cointelegraph.com/news/binance-bitfinex-bittrex-temporarily-say-no-to-new-users
3) https://www.benzinga.com/fintech/17/11/10824764/12-biggest-cryptocurrency-hacks-in-history
Executive Summary
Additionally, many large cryptocurrency exchanges fail to service both the expert
trader as well as the crypto novice, those who are just getting into the market.
Simplified retail exchanges exist, but offer poor rates to their customers, and
do little to educate their users. Full-featured exchanges are too confusing for a
beginner to use.
The problems facing current cryptocurrency exchanges is at an all-time high.

Capdax is recognizing these issues and is positioned to address them head-on.
Offering users a choice between advanced and basic trading modes, users of
all skill levels are served with an optimal experience. Superb customer service,
clear policies, and fully audited security standards create the necessary user trust,
and an innovative copy-trading feature allows traders to seamlessly follow the
portfolios of others automatically.
Problems Facing Current

User Friendliness
Newcomers to the cryptocurrency world face the most significant challenge as
soon as they sign up to an exchange. The interfaces are difficult to use, and there
is little help for getting started. It is challenging to get newcomers to operate
on the platform if they can't figure out how to use an exchange, and fixing this
problem would do a great deal in helping user adoption for cryptocurrency in
general.
Customer Service
By far the biggest complaint users currently have with existing cryptocurrency
exchanges is poor customer support. The issues are many and include long
withdrawal times, login issues, unanswered support tickets, and nonexistent
documentation. Horror stories abound with funds locked up for months due to
something as simple as a 2 factor authentication reset with nobody there to
help. When dealing with such large amounts of funds, users need a professional
customer support experience.
Security
Some of the largest exchanges currently in operation have a history marked with
security breaches and stolen funds. The largest, of course, was the infamous
MtGox hack, but many other exchanges have been compromised, having user data
and funds stolen. Some eventually repaid the affected users, and some quietly
closed up shop. Such amateur levels of security are unacceptable when dealing
with user funds and personal data.
Website Speed
Extreme trade volume, a massive influx of new users, inadequate IT infrastructure,
and poorly coded frameworks have been driving poor user experiences. Many
exchanges started small, some as hobbies, never expecting the popularity they are
faced with today, and therefore were not designed to scale to meet demand.
Redesigning while operating is a lengthy, heavily involved process and poses
significant downtime risks. Rebuilding these platforms from scratch may be their
only option, but may never happen.
Downtime
Even worse than just a slowly operating exchange, downtime can cause significant
financial loss to users unable to place or modify trades, especially during times
of high market volatility. The inability to access an exchange holding user funds
destroys trust in not only the exchange, but cryptocurrency as a whole. With huge
wallet balances at stake, uptime must be comparable to the standards set by
traditional global financial systems.
Unclear Policies
With the recent Bitcoin hardforks, there has been much talk about cryptocurrency
exchange policy in regard to handling forks and airdrops. In nearly every case,
current exchanges do not take any position prior to the fork or airdrop as to their
policy of crediting or listing the new tokens. One recently even changed its policy
after the fact, costing some users hundreds of thousands of dollars. This is simply
unacceptable practice, and such decisions should be made crystal clear before the
event so users can act accordingly and with confidence.
The Solution: Capdax Exchange
Capdax Exchange addresses these primary concerns in the current landscape

by improving usability, scalability, and reliability while providing an innovative
and stable environment for new traders, and a sophisticated and trustworthy
experience for expert traders.
User Experience
As experienced cryptocurrency traders, the founders of Capdax Exchange have

noticed quite a few problems with the user experience on existing exchanges. With
these in mind, the exchange has been designed from the ground up to offer a
flawless user experience for both inexperienced and experienced traders. Two
modes of use are available: Basic Mode, and Expert Mode.
Basic Mode
A smooth user experience for newcomers to the cryptocurrency world is
something lacking on current exchanges. The market page is cluttered with order
books, graphs, lots of scrolling numbers, and a complex order form. For an
experienced trader who knows what all the numbers mean, this is fine, but for an
inexperienced trader, someone just starting out, it might cause them to quit in
frustration.
User Experience
Basic mode provides a simple user experience for novice traders in need of an
easy-to-use interface. Simple order types and detailed tutorials on how to deposit
funds and trade currencies are available. Capdax removes the barrier to entry that
is created through complicated order types and difficult to use interfaces. Instead,
buying and selling are a one-click experience similar to how e-commerce offerings
work. This opens the market to more users, as well as educates a wider audience.
Expert Mode
Expert mode offers the full breadth of functionality needed by professional
traders. Detailed graphs allow the user to see historical market data in great detail.
Live trades and ticker data are streamed and updated in real time. An advanced
order form allows for trading with advanced order types, giving expert traders the
control they need.
While every notable exchange offers the same basic features such as historical
charts, live-updating order books, market depths, and a live trade feed, most have
some flaws that make the experience far from optimal. By surveying experienced
traders, and consulting with user experience experts, Capdax Exchange has
designed an optimized flow that allows traders to log in, see the information they
need quickly, instantly access markets they are interested in, and make trades.
Further, ongoing user experience analytics are monitored to make ongoing
improvements.
User Experience
Custom Markets Overview

Upon logging into the exchange, rather than being left alone with a random
market page, users are sent to an overview page showing "at a glance"
information pertaining to their account. Graphs detailing the value of their current
holdings, and a customizable list of markets are available here. Clicking any
market on the list brings them to the market page for that currency.
In addition to having favorited currency prices listed on the overview page, a feed
containing important news items about the favorited coins is also shown. This
allows users to stay up to date on what's happening with the currencies they care
about and make well informed trading decisions. Not everyone has time to follow
social media for every currency they hold to know if they need to buy or sell.
Capdax markets overview page puts all that information in one place, saving time
and helping users make better, more informed trades.
Market Research Page

One basic feature most current exchanges lack is the ability to do market research
from within the exchange itself. Capdax consolidates relevant information about
each listed cryptocurrency in a market research page, easily accessible from the
market page. Here users can find a detailed summary of the currency, links to
social media profiles, whitepapers, community forums, as well as a live updating
feed of recent news.
Social Trading
Capdax is also introducing social trading, which is an exciting new feature allowing
users to follow more experienced investors by copying their portfolio and mirroring
all future adjustments. This allows inexperienced traders, or those without enough
time, to invest their money in the trades of someone with more experience. This
has huge benefits for both the leader and the followers:
For the Leader

The majority of leaders likely start out of necessity with a small following of friends
and family. Time constraints make it unrealistic to assist everyone on an individual
basis when sharing recommended trades and portfolio adjustments. Now leaders
can help friends and family invest in cryptocurrency without contacting them
directly for every trade. Instead, these followers can simply allocate funds under
the guidance of the leader, and they no longer need to be managed individually.
This saves time for everyone involved. Over time, if the leader performs well, they
naturally grow following and generate extra income in the process.
The most obvious benefit to becoming a successful leader in the Capdax Social
Trading program is the ability to collect XCD tokens from one's followers.
Successful leaders naturally build a name for themselves in the cryptocurrency
investing world. By linking social media accounts, the leaders can naturally grow
their influence by showing real trading results, which helps build an even larger
Social Trading following.
Social Trading
While not a primary benefit of the Social Trading program, leaders with a large
following and reputation use the weight of their followers' funds to move the price
in favor of their supported currencies. Now you can become a market mover with
a legitimate profile and following.
For the Follower

For followers, the process is simple. After depositing funds to Capdax, simply select
a leader, choose the amount of funds to allocate, and click “Follow”. The allocated
funds are then used to buy the portfolio currently held by the leader to match
his/her holdings. Any future trades made by the leader are then matched at the
current market rate.
Using Capdax Social Trading allows followers to trust someone with more
experience or available time to manage their trades. With so many tokens
available for trading and so many new ones being created and released every
day, most people do not have the time to research and evaluate them all. Asking a
more experienced trader for advice is always an option, but getting one-on-one
help is time consuming for both parties. Instead, use Capdax Social Trading to
follow someone more experienced from the public listings, or even a trusted friend
or family member.
Customer Service
Customer service on current cryptocurrency exchanges is becoming a primary

concern as exponential growth leads to an ever larger backlog of issues. User
trust is eroded when there is no reasonable expectation that a support ticket will
be resolved in a timely manner, especially for time sensitive issues such as fund
withdrawals and inaccessible accounts. User funds are often locked up for months
without any answer from customer service. In an emergency, timely access to
funds is essential, and these issues must be handled as expeditiously as possible.
At Capdax Exchange, one of the top priorities is a pleasant user experience, and
the largest user experience improvement to be made on current cryptocurrency
exchanges is customer support. A customer support ticket system is essential, of
course, but it is useless without adequate staffing and training. Capdax customer
support is overstaffed and easily scalable. As the number of users grows, so does
the customer support team, seamlessly.
These are the customer service areas that are most important:
Easy-to-use ticketing system
Fully-staffed and well-trained support team
Fast resolution for login/account issues
Fast processing of withdrawals
Capdax sets the standard for quality responsive customer service.
Fork/Airdrop Policy
Recently there have been some substantial issues with current exchanges in
regards to blockchain hard-forks and airdrops. In both situations, holders of a
token are distributed a new balance of a different token based on their current
token holding. For example, at the time of the Bitcoin Cash hard-fork, users holding
the private keys for any Bitcoin balance now had access to an equal amount of
Bitcoin Cash. If your tokens are being held on an exchange, the exchange itself
holds the private keys for that balance, and they must decide what to do with the
new funds.
The vast majority of exchanges and services holding user Bitcoin funds did not
communicate their intentions at all before the fork. The only way users could be
certain they would get the Bitcoin Cash tokens was to withdraw their Bitcoin to a
wallet they held the private keys for. Of the few exchanges that did communicate
their intentions before the fork, most stated that they would not be distributing
the new tokens. This lack of clarity has led to much confusion and even lawsuits
against one of the largest exchanges.
On the other hand, many new tokens are incorporating a fork or airdrop
distribution into their business plan, hoping that users attempting to get "free
money" will drum up support and force major exchanges to give them free press
and volume. This is unfair to exchanges that now need to worry about being sued
if they don't distribute tokens or refuse to comment on them at all.
Fork/Airdrop Policy
Capdax Exchange can't possibly support every potential split and airdrop, as there
are many of them, and some are so insignificant that they should be considered
spam. If the fork or airdrop is significant, the policy of Capdax Exchange is to
release a blog post detailing with 100% clarity the level of support for the new
token. This will be done with adequate advance notice to allow users to act
accordingly. Will the new tokens be distributed to users? In what timeframe? Will
the new token be tradable on Capdax? Immediately? These questions are all
answered to avoid confusion and allow the users the opportunity to make the best
possible decisions with their holdings.
Platform
Technology
Capdax Exchange is built on a modern technology stack using best practices from
high-performance web application development and experienced developers from
the financial sector. All trades and withdrawals are atomically safe transactions,
and the system runs a full suite of unit tests and self-health checks once every
hour. Every API function is load tested for speed and reliability, and the platform is
deployed with proven auto-scaling technologies.
The unit test suite is comprised of over 1,000 individual spot-checks that ensure all
API calls behave in a sane and predictable manner. A robust staging environment
has been deployed with thousands of bots continually placing hundreds of
orders per second (which is more order-book activity than is seen on 99% of live
exchanges as of time of writing), matching and executing up to 1 million trade
actions daily; every night at midnight, all the bots stop trading and account for
their funds, and a management routine verifies every single transaction and
account balance across the entirety of the system.
Platform
Trade and account balances are stored in a primary database which replicates
in real-time to 3 secondary failover databases on discrete power and networking
grids in nearby data centers. The live database states are then encrypted and
backed up every 60 minutes to five additional data center locations around
the globe. Once per day, the latest full copy is downloaded to military-grade
tape media rated to survive a nuclear-grade electromagnetic pulse. Database
outages in up to three of the four primary availability zones can recover in up to 10
seconds, but have been seen to have no service disruption in 90% of cases.
All web services run redundantly, and in the event of a total datacenter failure,
have been tested to fully recover in secondary and tertiary sites in less than 10
minutes of outage (the median catastrophic web service outage recovery time is 3
minutes and 52 seconds). All DNS and static asset hosting are propagated
through a network of over 100 global points of presence, all API calls terminate at
load balancers strategically placed around the world, and all API calls are both SSL
encrypted and cryptographically signed to ensure tamper-proof connections.
Security
Any online service responsible for handling user funds has the responsibility to
be as secure as possible. In the past several years, security breaches have been
widespread, causing losses of user funds from exchanges and cryptocurrency
related services in the millions. While no system can ever be considered 100%
secure (especially one connected to the Internet), Capdax Exchange has been
engineered from the ground up with security in mind.
Platform
Standards Compliance
Capdax Exchange aims to be fully ISO 27001 (and 27002)4 Information Security
Standards compliant on launch. ISO 27001 is the standard for Information
Security Management; it is part of the ISO 27000 family of standards which
helps organizations keep information assets secure. Adopted by thousands of
organizations across the world, its implementation puts in place a systematic
approach to managing sensitive organizational information, ensuring it remains
both secure and available. It is a broad standard which covers process, personnel,
and physical and technical security.
ISO 27001 specifies the requirements for establishing, implementing, maintaining

and continually improving an Information Security Management System (ISMS).
There are many clear business benefits in adopting ISO 27001, either as best
practice or by formally certifying against it. Key benefits of this compliance are the
improvement of IT security that provides an independent view on the state of the
security of the infrastructure, and finally increases confidence in customers that
their information is stored and handled in a secure environment.
4) https://www.itgovernance.co.uk/iso27000-family
Platform
Independent Audits
Prior to launch, and as a periodic requirement, Capdax Exchange must be fully
audited by an independent security firm. This is not only part of the ISO 27001
compliance but as part of an additional security layer for Capdax users.
Cold Storage of Funds

Considering that such large balances of cryptocurrencies are being stored on
major exchanges, it is important to have a strong 'deep cold storage' system to
keep user funds secure. In such a system, only funds that are needed immediately
to process withdrawals are made available to the exchange systems. This balance
is called a 'hot wallet' and is kept at a modest but adequate level at all times as
withdrawals and deposits are processed. The remaining funds are locked in 'cold
storage' wallets. Cold storage wallets have private keys that are generated offline
with a strong security policy in place to prevent anyone other than authorized
personnel from accessing the funds.
Balance Sanity Checks

Periodically, Capdax Exchange does a scan of its balances and compares them
to user wallets to make sure there are no discrepancies. In the unlikely event an
attacker were to gain access to the system’s 'hot wallet' and maliciously withdraw
user funds, the numbers would not match, and failsafe processes are activated to
prevent further loss of funds.
Platform
Two-Factor Authentication
Two-factor authentication (2FA) is a requirement for any user wishing to withdraw
funds from Capdax Exchange. Without proper 2FA, logging into an account with
stolen credentials and withdrawing funds is simply too easy. Setting up 2FA with
services like Google Authenticator may be a bit advanced for the most basic user,
and with this in mind, there is a simple tutorial in the Basic Mode version of Capdax
Exchange.
Volume Projections and Valuation
Over the past few months (at the time of this writing), the total global
cryptocurrency trading volume ranged from US$5 billion to US$70 billion per
day.5 These figures are based on public cryptocurrency exchange volume data,
and as such may actually be much higher if off-market trades and non-public
exchange volume data were included.
Capdax Exchange trading fees are 0.15% + 0.25% (maker and taker) per trade.
With the planned discounted trading tiers for large volume traders and token
holders, the estimated average trading fee for each trade should be at least 0.15%.
Based on these numbers, it can be estimated:
US$35 billion * 0.15% = US$52.5 million generated globally

each day in fees
These are conservative estimates, as exchange fees vary and are in general
higher than 0.15% on most exchanges. To give a real-world example, Bitfinex
cryptocurrency exchange alone had trading fees amount to an average of at
least US$5 million per day6 around the time of this writing. This is only in fees
from the exchange market itself, and does not include fees generated from
margin lending, the figures for which are not available to the public.
Capdax Exchange's conservative goal is to take 1.5% of the current market share,
resulting in daily fees of:
US$52.5 million * 1.5% = US$787,500 per day
Using a four year multiplier, this leads to an overall revenue valuation of:
US$787,500 per day * 365 days * 4 years = ~US$1.145 billion
However, in order to bring maximum benefit to token holders, Team Capdax

Exchange has set the crowdsale goal (hard cap) for total funds raised to between
US$16-18 million. The actual amount is to be fixed at the time of the
pre-sale closing date, prior to the crowdsale launch based on the fluctuating price
of ETH.
This crowdsale goal is particularly conservative because:
It is not unlikely that Capdax Exchange will be able to secure a larger market
share than 1.5%
The overall global trading volume has been increasing rapidly with no signs
of slowing, meaning a 1.5% market share will likely represent a significantly
greater share of the fees than it does today
Token Functionality and Loyalty Program

Capdax Token (XCD) is a fully audited Ethereum based ERC20 utility token that
is used for exchange fees on the Capdax exchange. As an ERC20 token, Capdax
Token can be traded on Capdax Exchange as well as any cryptocurrency
exchange supporting ERC20 based tokens.
When a user makes a trade on Capdax Exchange, the transaction fee must be
paid using Capdax Token. The number of tokens required is calculated based on
the current exchange rate for Capdax Token on the exchange. When a user
executes a trade but does not have Capdax Token in their exchange wallet, or
the user has not opted to use their balance of Capdax Token for exchange fees,
the exchange fee is taken from the base currency of the trade, and a market
order is automatically executed to purchase Capdax Token for the trade. This
method not only makes for a seamless user experience as it pertains to the
utility token, but ensure an active market for Capdax Token with constant
demand. This automatically purchased token is the distributed to Capdax Token
Holders.
Token Functionality
In order to encourage users to hold Capdax Tokens in their Capdax Token

Wallets, any users who choose to hold Capdax Tokens in their Capdax Exchange
wallet shall be granted gifts in the form of free Capdax Tokens as part of the
Capdax Exchange’s Loyalty Program. Such gifts shall be regularly distributed
from transaction fees collected by the Capdax Exchange and shall be granted to
Users only when and for only as long as existing Capdax Tokens are held in a
User’s Capdax Exchange Wallet. The operators of the Capdax Exchange may
offer a proportionately larger amount of free Capdax Tokens to users who hold a
larger amount of existing Capdax Tokens in their Capdax Exchange Wallet. The
operators of the Capdax Exchange reserve the right to suspend, discontinue, or to
alter the terms of the Loyalty Program at any time.
Token Generation Crowdsale

Capdax Tokens (XCD) will be generated to represent 25% of the total order
execution fees collected on Capdax Exchange. A total of 51% of all tokens will be
sold to the public, 33% will be held in a foundation for future growth, 12% will be
paid to the Capdax team, and 4% will be paid to a Capdax ambassador program,
advisor, and partnership programs. The maximum contribution amount for the
public crowdsale tokens will be 6500 ETH. This number is subject to change prior
to the public crowdsale, but the ETH amount will be locked in before it starts to
reflect a total (public and private) crowdsale fundraising cap between US$16-$18
million.
Seed Funding (Early 2017)

In early 2017, Capdax raised early seed funding from private participants
representing roughly 3% of the crowdsale hard cap.
Presale For Strategic Participants (January 2018)

Starting in January, there will be a private pre-sale for strategic participants
which will be capped at a maximum of US$9.5 million .
Public Crowdsale (February 2018)

The public crowdsale, starting in February, will consist of 5 tiers and be capped at
a maximum of US$6.5 million. This sale will last no longer than 4 weeks. When one
tier has sold out, the following tier will be immediately activated, until all tokens
are sold. The tiers are as follows:
Tier 1: 1300 ETH (25% Bonus)

Tier 5: 1300 ETH (0 Bonus)
Prior to the public crowdsale, participants must sign up for the waiting list
and complete a simple KYC questionnaire. Once approved and the number of
participants has been assessed, a maximum contribution amount will be assigned
to each user to ensure that everyone who wishes to participate on the first day
has an opportunity to do so. If after a period of 24 hours the hard cap has not
been filled, pre-approved users will be given the opportunity to buy the remaining
tokens.
Unsold tokens will be burned.
Token Distribution (Q1 2018)

Following the conclusion of the public crowdsale, participants will be given the
option to withdraw the ERC20 token balance of their Capdax Tokens. If they
choose to not withdraw manually, their Capdax Tokens will be waiting for them in
their Capdax Exchange account, available for trade or withdrawal upon the launch
of the exchange. The public crowdsale account created during the waiting list
period will automatically become a Capdax Exchange account on launch, so care
should be taken to save the login credentials.
Business Plan / Monetization
Use of Crowdsale Funds

The Capdax team has a long-standing track record of building stable and
scalable businesses. The goal is to have an up-and-running product in full
operation as quickly and securely as possible, and thus the collected funds will be
distributed according to the following: account on launch, so care should be taken
to save the login credentials.
Engineering & Development 30%

The largest portion of the crowdsale funds will be allocated to the exchange
development. An exchange requires a great deal of engineering and development
work to function properly, and Capdax Exchange has assembled a team of top
talent to build the best platform possible. Features like social trading and margin
trading are additional large undertakings that require a highly skilled development
team.
Marketing 25%
In order to meet market share goals, large marketing pushes, both online and
offline, will be required to bring in new users. The marketing team strives for the
best and word of mouth alone will not be enough to make Capdax Exchange the
most popular in the industry.
Business Plan / Monetization
Administration & Support 15%

Where most other exchanges fail, Capdax Exchange will provide an overstaffed
and well-trained support team, quickly responding to issues.
Security & Audits 13%

Security audits and penetration testing are both expensive and essential when
being trusted with large amounts of user funds.
Legal 2%
A thorough legal review is important to keep in line with ever-changing
international regulations.
Reserve 15%
Held in reserve for liquidity to be allocated as needed.
Capdax Revenue Model
Exchange fees
Capdax Exchange generates revenue by taking a small trade fee from all executed
orders. These fees are taken from both the buy order as well as the sell order. The
fee schedule is as follows:
Market Maker Fee: 0.15%

Market Taker Fee: 0.25%
On Capdax Exchange, each trade is made between a Market Maker and a Market
Taker. The Market Maker has an existing order in the order book prior to the trade
being executed, and the Market Taker places a matching order, removing it from
the order book. Market Makers provide liquidity to the market, allowing higher
volume on the exchange and more price competition, so they are rewarded with a
lower trade fee. Market Takers have a higher trade fee, but their trade is executed
at the best available rate.
Margin Trading Fees

Margin trading allows users to make trades using funds borrowed from other
users backed with collateral funds. Margin traders can open long or short positions
by borrowing funds and then either buying or selling. Traders can later close those
positions and settle the loans. A lender is paid a lending fee by the borrower, and a
percentage of that interest is taken by the exchange.
User Acquisition / Marketing Plan
Before getting heavily involved in the cryptocurrency world, the founders of

Capdax Exchange were successful leaders in the marketing and advertising world.
Bringing in a large user base is essential for any cryptocurrency exchange to thrive
and have active markets. The strong execution of a well prepared marketing plan
is the best way to ensure success. Outside of simple organic word-of-mouth
growth, Capdax Exchange has plans in motion for paid advertising campaigns, a
lead generation based affiliate commission program, a generous "refer a friend"
program, community outreach, and event sponsorships. Additionally, new users will
be attracted by successful leaders in the social trading platform, as well as the
potential success of the Capdax Token.
Marketing Pushes
A few key members of the Capdax Exchange team have extensive backgrounds
in online marketing. Combining their knowledge of the cryptocurrency market as
well as experience with large-scale paid marketing campaigns, a detailed online
advertising plan has been created to build a great community and user base. A
large portion of the crowdsale funds will be dedicated to onboarding new users
through several marketing pushes before the exchange is launched, on launch, and
when major features are released.
Referral Program
In addition to the large-scale paid marketing pushes, a rewarding referral program
has been implemented, giving bonuses to those who refer new users to the
exchange. Not only are existing users rewarded for a referral, but the new users
are also given a sign-up bonus for being referred by a current user.
User Acquisition / Marketing Plan
Community Outreach
Capdax Exchange cares about the cryptocurrency community. The Capdax
founding team has been organizing international blockchain conferences and
meetups since 2017. Conferences and meetups around the world are essential for
the growth of the industry, and as such, sponsorships are in process for major
upcoming events to not only help spread the news about the exchange, but to help
fund the events themselves to make sure the cryptocurrency community grows as
much as possible.
Capdax Token
The Capdax Token being generated for the crowdsale will be immediately tradable
on any exchange willing to list it, and certainly on existing decentralized Ethereum
token exchanges. Each holder of Capdax Token is involved with the success of the
exchange, which will create a natural viral effect as more people buy, sell, or hold.
Social Trading Leader Promotions

As part of the upcoming social trading feature, Capdax Exchange will assist
successful leaders in promoting themselves in order to gain more followers.
This will not only be beneficial to the leaders, who will enjoy extra revenue from
followers, but will also bring new users to the exchange who may ordinarily never
get involved in cryptocurrency at all.
Roadmap / Timeline
Q2 2017
Foundation Establishment
Team Formation
Planning of Exchange Development
Launching of Internal Tools & Services
Private Seed Funding Round
Q3 2017
Design and Development of Crowdsale Site
Onboarding of First Staff
Exchange Backend Architecting
Corporate Entity Establishment
Q4 2017
Frontend Engineering Alpha
Proof of Concept Backend Alpha
Public Awareness Community Outreach
January 2018 Strategic Presale

February 2018 Public Crowdsale
Roadmap / Timeline
Q1 2018
Capdax ERC20 Token Distribution
Exchange Backend/API Operational Beta
Exchange Frontend Private Beta Testing
Security Audits & Hardening
Social Trading Development
Q2 2018
Capdax Exchange Official Public Launch
First Major Marketing Push
Potential Risks / Risk Management
When evaluating any investment, it is important to understand the potential risks

involved. Cryptocurrency exchanges all have inherent risks, as demonstrated by
numerous failures by previous exchanges, as well as current ones. Users are at
risk every time they trust the exchange with their funds. Exchanges are at risk by
simply being exposed to the internet. Crowdsale participants are at risk as soon as
they trust the project with their own money. Minimizing these risks is an important
part of the planning and development of Capdax Exchange.
Risks to Users
The most obvious risk to a user of a cryptocurrency exchange is lost funds. As
soon as funds are deposited to most cryptocurrency exchanges, there is the risk
that the exchange will simply close and the funds will be lost. In 2014, Bitcoin worth
more than US$6 billion at today's rates was lost when Mt. Gox, then the largest
exchange in the world, unexpectedly closed its doors and filed for bankruptcy
protection.8 Any time cryptocurrency funds are not in a wallet whose private keys
are held by the user, they are at risk. Even with an established track record of
quality service, there is no way to predict if an exchange will suddenly close and
funds disappear. The best way a user can protect against this is by keeping funds
they do not plan on immediately trading in a wallet they personally control.
Capdax Exchange helps users with this by providing easy and timely withdrawals
as well as information about setting up their own wallet. Remember: Balances you
do not hold the private keys for are not technically your balances.
Phishing and malware are another large threat to users of cryptocurrency

exchanges as well as cryptocurrency in general. Phishing attacks have been
rampant, showing users fake login pages for exchanges, or fake web wallets
asking users for private keys. Many millions worth of coins have recently been
stolen this way. The best line of defense for this is a well-educated user. Checking
the URL in the address bar and the SSL security certificate details is a good start,
along with regular malware scans. Using a hardware wallet is also a great way to
prevent keylogging malware. Less experienced cryptocurrency users can't always
be expected to be aware of all these threats and how to mitigate them, however.
There are several steps exchanges can take to help as well. Extended Validation
SSL certificates allow the users to clearly see the company name in the address
bar in most browsers, and having a notice on the login page for the user to
always check for this is also helpful.
8) https://www.wired.com/2014/03/bitcoin-exchange/
Two-factor authentication is another useful tool. Although it can still be attacked

with phishing sites, malware keyloggers will be effectively stopped. Requiring
verification of IP address range changes and email confirmation on withdrawals is
another effective method to help reduce these risks.
In the same category as malware and phishing, account hacking is another risk.
Hacked password databases are openly available, and it is easy to write a bot to
attempt logging into a website with hacked credentials from another website.
Weak passwords contribute to this risk as well. On the end of the user, a strong
password policy is important, but most don't know how to implement one. An
exchange can provide users with password policy suggestions and links to help
with this. Two-factor authentication can also help mitigate hacking attempts. Email
alerts on unsuccessful logins and logins from new IP ranges and requiring email
verification link clicks to allow these logins are helpful, as are login attempt rate
limits and the IP address blocking of attackers.
Risks to Crowdsale Participants
Participating in the Capdax Token Generation Event presents its own set of risks
that are mostly reliant on the success or failure of the exchange itself as well as
on government regulation of tokens in general. If a participant puts his/her trust
in Capdax, the success of that participation relies on the exchange itself being
launched and operating successfully. They are trusting that their contribution will
be put to good use and not wasted. They're also hoping that a government body
won't deem the token illegal or regulate it in such a manner that it would become
useless or dangerous to hold and trade.
At present, due to the decentralized nature of blockchain technology, the

blockchains themselves do not reside in any particular country, thus the law
regarding the classification of cryptocurrencies as "securities" is unsettled. With
respect to legal and regulatory risks associated with this project, there is a real risk
that the government where a crowdsale participant resides declares all
cryptocurrency tokens or specific ones illegal to trade. Although it is impossible to
know what will happen in this regard in the future, it is possible to be as safe as
possible given the current regulatory environment. To this end, Capdax Token's
model has been designed as a "utility" token facilitating trades on the exchange
and has been reviewed by an experienced legal team. While it is impossible to
know what any government will do, Capdax has done its best to decrease the
likelihood of government scrutiny in the future.
As far as the success of the exchange is concerned, the largest participant risk is
the project being of poor quality, being vaporware, or not being able to compete
with current cryptocurrency exchanges, leading to the project failing. Luckily, the
Capdax team is full of experienced leaders who are well-versed in cryptocurrency,
exchanges, and the challenges facing the industry. The engineering team has
experience building large-scale, high-traffic systems, and the entire project has
been designed to be as good or better than any of the existing competition.
The founders have also dedicated significant time and funding to planning and
developing the exchange, and are determined to see their dream become a
reality.
What if cryptocurrency in general fails? Is there a chance that Bitcoin or Ethereum

"die"? While those things are certainly possible, and almost a certainty that there
will be both large gains as well as major devaluations in the value of different
currencies, or the market as a whole, the likelihood of the entire industry dying
seems rather low at this point.
Cryptocurrencies are quickly becoming a mainstream solution to big existing

problems, and so far have been proven resistant to censorship by outside
influences. Unless some enormous flaw is found in the technology itself, this
shouldn't be a problem.
What about decentralized exchanges? On the surface, this exciting emerging

technology looks like it might make traditional cryptocurrency exchanges obsolete.
So far, however, decentralized exchanges have failed to deliver an adequate
user experience. Relying on a blockchain and smart contracts to execute every
trade is both slow and expensive. Trades can take minutes to execute, if they get
executed at all. Errors where the exchange technology is at fault that result in lost
funds are not resolvable, as there is no customer service for a smart contract.
Trading is also limited to a subset of all available cryptocurrencies. On Ethereum
smart-contract based exchanges, only Ethereum based tokens can be traded, and
only against ETH as the base currency. There are some ways around this involving
3rd parties creating tokens representing off chain currencies, but at that point, you
might as well be using a normal cryptocurrency exchange. Centralized exchanges
being made obsolete by decentralized ones may happen in the future, but the
technology has a long way to evolve before that happens.
Risks to Capdax Exchange
Running the exchange itself presents a unique set of risks due to the nature
of cryptocurrency ledgers being permanent, and the large amount of money
involved. There are constant attacks from all sides including hacking attempts and
DDoS attacks, in addition to basic scaling issues and government scrutiny and
regulation (discussed above).
Due to the large value stored by cryptocurrency exchanges, they have become
prime targets for hackers over the past few years. Hacks have been responsible
for losses of funds from some of the biggest players in the industry, which have
caused some huge setbacks to adoption and trust. By adopting ISO 27001/27002
Information Security Standards, as discussed in the security section, Capdax has
done its absolute best to prevent loss of funds due to malicious hackers. A strict
cold storage policy, and constant balance integrity checking and failsafe mean
users funds are safe on the exchange.
Scaling and DDoS attacks are both huge risks that affect any exchange. Bad
actors can launch DDoS attacks against central points of failure in cryptocurrency
infrastructure in an attempt to make financial gains. Cryptocurrency exchanges
are easy targets for this type of attack. A large influx of users can also cause
heavy load on the exchange itself. If the system infrastructure is not well
engineered, this can cause enormous issues that many exchanges are currently
facing with constant downtime and slow execution. Capdax Exchange has been
engineered from the ground up to be extremely scalable and resistant to DDoS
attacks.
To Conclude:
Why Capdax Over Other Exchanges?
Capdax Exchange is built on a state-of-the-art modern technology stack using

best practices for high performance web applications by experienced developers
from the financial sector. The team has integrated a few key leading-edge tools
that you won't find on many other exchanges. Basic mode, expert mode, a
masterfully inventive market research page, and social trading are just a few of
the features that will help traders of all experience levels.
On top of all this, the Capdax team has been deeply immersed in the
cryptocurrency community for years, and understands that it is an ever-growing
ecosystem that is meant to reward you, the user.
capdax.com

Capdax Whitepaper v1.1b PDF

Uploaded by

Copyright:

Available Formats

Capdax Whitepaper v1.1b PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Capdax Whitepaper v1.1b PDF

Uploaded by

Copyright:

Available Formats

Capdax Exchange

3 Important Notice 19 Volume Projections and Valuation

4 Executive Summary 21 Token Functionality

5 Problems Facing Current 22 Token Generation Crowdsale

The Capdax Token is not intended to constitute:

I. securities in any jurisdiction;

I. the performance of the Capdax Token;

The buzz around cryptocurrencies is booming and accelerating more quickly

On January 1, 2017, roughly a year ago1, the market capitalization of all

1) Based on statistics from CoinMarketCap.com

The problems facing current cryptocurrency exchanges is at an all-time high.

Problems Facing Current

Capdax Exchange addresses these primary concerns in the current landscape

As experienced cryptocurrency traders, the founders of Capdax Exchange have

Custom Markets Overview

Market Research Page

For the Leader

For the Follower

Customer service on current cryptocurrency exchanges is becoming a primary

Capdax sets the standard for quality responsive customer service.

ISO 27001 speciﬁes the requirements for establishing, implementing, maintaining

Cold Storage of Funds

Balance Sanity Checks

Volume Projections and Valuation

5) Based on statistics from CoinMarketCap.com

Based on these numbers, it can be estimated:

US$35 billion * 0.15% = US$52.5 million generated globally

US$52.5 million * 1.5% = US$787,500 per day

US$787,500 per day * 365 days * 4 years = ~US$1.145 billion

However, in order to bring maximum beneﬁt to token holders, Team Capdax

6) Based on statistics from CoinMarketCap.com

This crowdsale goal is particularly conservative because:

Token Functionality and Loyalty Program

In order to encourage users to hold Capdax Tokens in their Capdax Token

Token Generation Crowdsale

Seed Funding (Early 2017)

Presale For Strategic Participants (January 2018)

Public Crowdsale (February 2018)

Tier 1: 1300 ETH (25% Bonus)

Unsold tokens will be burned.

Token Distribution (Q1 2018)

Use of Crowdsale Funds

Engineering & Development 30%

Administration & Support 15%

Security & Audits 13%

Market Maker Fee: 0.15%

Margin Trading Fees

Before getting heavily involved in the cryptocurrency world, the founders of

Social Trading Leader Promotions

January 2018 Strategic Presale

Potential Risks / Risk Management

When evaluating any investment, it is important to understand the potential risks

Phishing and malware are another large threat to users of cryptocurrency

Two-factor authentication is another useful tool. Although it can still be attacked

Risks to Crowdsale Participants

At present, due to the decentralized nature of blockchain technology, the

What if cryptocurrency in general fails? Is there a chance that Bitcoin or Ethereum

Cryptocurrencies are quickly becoming a mainstream solution to big existing

What about decentralized exchanges? On the surface, this exciting emerging