Advanced Parimutuel Options ICO

Table of Contents

Introduction
3
What are incomplete financial markets? ........................................................3

Cryptocurrency derivatives problem ..............................................................3

What are reverse parimutuel financial markets? ............................................3

Where can the reverse parimutuel method be used? ....................................4

APO trading platform
5
How does it work? .........................................................................................5

Auction ...........................................................................................................6

Expiration .......................................................................................................7

Guarantee ......................................................................................................7

Market Place .........................

Introduction
What are incomplete financial markets?
Financial markets are referred to as
incomplete when there are more random
sources than there are traded assets and can
occur in an infinite number of ways. Hence,
there is no way to determine the fair price of
the underlying asset or futures contracts.
Since, by assumption, the market is
incomplete, one will not be able to hedge a
generic contingent claim (options). In
particular, there will not be a unique price for
generic derivatives (futures and options).

In a ‘complete’ financial market the price of
any derivative will be uniquely determined by
the necessary absence of arbitrage. In
hedging terms, this means that the price is
unique because the derivative can equally be
replaced by its’ replicating portfolio.

In an incomplete market the requirement of no
arbitrage is no longer su
ffi
cient to determine a
unique price for the options. There...

Reverse parimutuel model di
ff
ers from the standard parimutuel model by establishing a fixed
payo
ff
amount at the time of the sale. Here are some key advantages:

1. Does not require a buyer to be matched
with a seller for a trade to occur. In fact,
reverse parimutuel matching can generate
trades with only buyers of options;

2. Produces lower option prices;

3. G u a r a n t e e s t h a t p a y m e n t s o f a l l
participants go into a common pool (and
provides a method to monitor said pool);


4. Does not require collateral, margin or initial
deposit;

5. Provides decentralization of a trading
system;

6. In the future, we expect to split an option
contract into sub-components (elementary
states) and allow the participant to trade
both, the whole option and individual
components of a given option.

Where can the reverse parimutuel method be used?
A re...

APO trading platform
How does it work?
The APO option trading platform is a set of applications for iOS, Android and the Web that
connect through an authentication server to a decentralized application (Dapp) in the Ethereum
network.

Client’s
APP or
Web App
Database
Auth
and
Server App
Ethereum blockchain
Smart contact which
contains all transaction data
and
Auction application
Intermediate servers play a role of serving
servers. Implementing roles of user
authentication servers, API for mobile
applications, and database servers for storing
secondary information.

The central part of the APO platform is a
smart contract on the Ethereum network. The
main functions assigned to it are:

-
Guarantee of protection for participants

-
Conducting the auction

-
Acceptance and storage of premiums until
expiration

-...

Auction
The main purpose of the auction: collection of applications/orders from the participants with a
goal to determine the premium for each option, as well as the formation of a pool of payments.

The date of the auction is appointed one week before expiration. The frequency and duration of
the auction will be determined during Beta testing. We intended to use the standard expiration
dates for options:

-
2 weeks

-
1 month

-
3 months

Based on this, the frequency of the auctions will depend on the nearest expiring contract, such as
1 week before the expiration of 2-week options, monthly options, or 3-month options.

Participant on platform
APO
Execution transaction
1. Refund of money to the
participant
2. Write-o
ff
of the premium
Sending application
Auction:
-
Collection of application
-
Calculation of premium
-
Bank for...

Expiration
Expiration - the moment when the contract
expires, and is the date of settlement. The
option execution date is indicated in advance
during the auction, for example, 12 am on
January 12, 2018. At the time of expiration,
the price of the underlying asset is locked in
(the price of BTC or ETH index is taken from
several major exchanges for determination).
Based on that price, payments are made to
option holders. After the procedure of
execution, each participant can check the
status of their account. In the first version of
the platform, all payments will be made in
ETH.


-
Receiving and
verifying data
-
Expiration
price
Smart Contract
Payout of
winning options
Cryptocurrency
Exchanges
Options Holders
Market price is determination by participants
The expiration system is fully automatic and is built on the basis of a smart contract, which makes
it transparent t...

ICO
APO Token
The APO tokens are the ERC20
specification tokens. They will be available on
the exchange for secondary circulation, and
can also be displayed in the user's wallet.

Use MyEtherWallet, MetaMask, Mist or other
compatible wallets. to verify the contract, use
etherscan.io

Token Name APO
Token Type
ERC20
ICO Starts
April 25
th
, 2018 at 10:00:00 AM
ICO Ends
May 23
rd
, 2018 at 09:59:59 AM
Soft Cap
6,000 ETH
Hard Cap
14,000 ETH
Min Transaction 0.1 ETH
Token Price
1 ETH = 15,000 APO
Bounty
Yes
Tokens reserved for owners and teams are frozen for 12 months of development of the platform.
They are not subject to sale of any kind.

Dividends
Payment of dividends to holders of tokens is one type of encouragement for investors.
Payments will be pledged when a smart contract containing an auction is issued. Once a month
...

Token Listing
After the completion of the ICO phase, tokens will be placed on the exchanges for secondary
circulation. This process will be conducted in parallel with development of the platform. Prior to
the second circulation, only tokens sold during the ICO stage will be allowed. The rest will be
blocked for 12 months, including team tokens, backup tokens.

Token Distribution and Fund Usage
Funding raised as a result of the ICO will be used to develop a platform for trading reverse
parimutuel options.

Token Distribution


ICO
Team
Private
Reserve
Bounty
Fund Usage

Development
Legal
Marketing
Operations
40 %
10 %
25 %
20 %
5%
42 %
33 %
7%
18 %
Roadmap
‣
3
rd
quarter 2017 – Theoretical development of the idea

‣
1
st
quarter 2018 - Development of a platform for attracting i...