This whitepaper is meant to describe the currently anticipated plans of Skratch, Inc. and its affiliates (collectively, “Skratch”) for developing a new blockchain token mechanism (“Token(s)”). Nothing in this document should be treated or read as a guarantee or promise of how Skratchs business, Skratch’s network, its platform or its Tokens will develop or of the utility or value of the Tokens. Skratch’s current plans could change at its discretion, and the success of Skratch’s plans will depend on many factors outside its control, including market-based factors and factors within the data and cryptocurrency industries, among others. Any statements about future events are based solely on Skratch’s analysis of the issues described in this document. That analysis may prove to be incorrect. This document does not constitute an offer or sale of the Tokens (or any other securities) or any other mechanism for purchasing the Tokens (such as, without limitation, a fund holding the Tokens or a simple agreement for future tokens related to the Tokens). Any offer or sale of the Tokens or any related instrument will occur only based on definitive offering documents for the Tokens or the applicable instrument. Purchasing the Tokens or any related instrument is subject to many potential risks. Some of these risks will be described in the offering documents. These documents, along with additional information about Skratch, are available on our website at www.skratchcoin.com. Purchasers of Tokens and related instruments could lose all or some of the value of the funds used for their purchases. Please see the section entitled “Disclaimer” in the Appendix to this white paper for more information.

Skratch - A peer to peer marketplace protocol

How to Read this Whitepaper

The Skratch whitepaper is meant for actual humans to read. We are purposely not filling this document with overly technical jargon and diagrams that you will skim over. Rather, we are highlighting the problem that the protocol solves and how we will drive adoption and monetary performance.

The paper is structured with myriad sections that highlight the main idea with a brief sentence. You are welcome to dig into the detail further within if you want a more detailed review.

Knowing that blockchain is still in the early adoption phase, we’d love your feedback! Anyone who feels any details are missing is welcome to join our Slack channel and engage in the conversation. Any recurring questions will be added to subsequent versions of this document.

Without further ado, here’s how we’re going to help people buy and sell where the conversation happens.

Abstract

Skratch is a decentralized marketplace protocol that allows users to make secure transactions where their conversations happen. The protocol is also a mechanism for sites to access hidden revenue from commissions on the trades that happen on the marketplace within their site.

In practice, users build peer to peer smart contracts that act as both the escrow and governance for their transactions. Our visual smart contract builder allows users to leverage a series of data-driven verification steps to ensure that funds are only released to sellers once the buyers have received what they’ve purchased.

We’re building the protocol using the Ethereum and Hyperledger Fabric blockchains and allowing anyone to participate as a host site and/or a mining node. For participating sites we’re creating an SDK, a series of plugins that integrate with existing Content Management Systems and message board software, and a series of browser extensions that make participation effortless for users.

The Skratch Token is the mechanism of payment across the network for miners, host sites, participants and the network itself. While we will launch as part of existing blockchains, our ultimate goal is to build our own blockchain in 2019 for purposes of better speed and security of the protocol.

They key benefits of Skratch are:

  • Secure Transactions - Users get the ability to secure their transactions with verifiable data-driven conditions. Their funds are not released until delivery is verified by smart contracts.
  • Decentralized and Distributed Marketplace - Sellers can post what they are selling on special interest websites across the network by publishing once. All users can take their transaction history to every site within the distributed marketplace.
  • Access to Hidden Revenue - Host sites on the network get access to hidden revenue as a commission from the transactions that happen within the site.
  • Automated Dispute Resolution - The protocol offers automated dispute resolution based on the verifiable data-driven conditions set forth within the smart contract. This dispute resolution is algorithmically powered by our user TrustScoreTM.
  • Nearly Frictionless - The protocol allows users to complete the transaction entirely where the the conversation between parties happens thereby cutting down on the friction caused by going to a third party website to complete the transaction.
  • Determination of Uniquity - The protocol determines whether or not digital items have been sold across the network previously and will indicate whether or not the item is truly unique or exclusive.
  • Online Identity Merging - Users can associate their various identities across sites with one crypto wallet thereby merging these identities and benefitting from shared transaction history but continued anonymity.
  • Public User Trust Score - User transaction history will be compiled into a TrustScore that gives other users an indication of who they should enter transactions with and also to inform automated dispute resolution.

Token Sale

If we conduct a Token sale, we may conduct a private placement of rights to purchase our Tokens pursuant to one or more exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), and we may also conduct later rounds of Token sales by registering such Tokens with the United States Securities and Exchange Commission (the “SEC”). It is our intention that any Token sale conducted by Skratch will be compliant with SEC regulations. We may also offer Tokens or the right to purchase Tokens pursuant to a Simple Agreement or Future Tokens (“SAFT”) in a pre-sale that would only be open to accredited investors (as such terms is defined under Rule 501(a) of the Securities Act) in multiple rounds.

Token Sale Overview

Target Token Sale Amount

$39,000,000

Max number of sold Tokens (Cap):

4,000,000

Max number of Tokens created (Cap):

8,000,000

Sales geography

Skratch Tokens are not being offered or distributed to, as well as cannot be resold in a country or territory where transactions with digital Tokens are prohibited or in any manner restricted by applicable laws or regulations.

Token price at Pre-Sale

0.0333 ETH (Subject to change based on fluctuations of the price of ETH)

Token Distribution

4,000,000 (50%) Tokens will be created for sale, 3,200,000 (40%) Tokens will be created and retained for the community and 800,000 (10%) will be retained for Skratch's team.

Website

ughh.com/skratch

Payment methods

Ethereum (ETH), Bitcoin (BTC) and United States Dollars (USD)

Pre-sale Details

We are running a pre-sale from 12/30/2017 through 3/1/2018 and if Tokens remain we’ll run an Initial Coin Offering March 1st, 2018 to March 28th, 2018.

Presale start date

December 30th, 2017 12:00PM EST

Presale end date

March 1st, 2018 11:59PM EST

Minimum purchase volume during presale

500 Skratch Tokens

Maximum available Tokens at presale

No cap

Sale start date

March 1st, 2018 12:00PM EST

Sale end date

March 30th, 2018 11:59PM EST (or sooner if the cap is reached)

Token price at Initial Coin Offering

To Be Determined, but at a premium to the pre-sale Token price

Minimum purchase volume per sale

10

Maximum purchase volume per sale

256,000 Skratch Tokens

Initial Token Distribution Date

Tokens will be distributed on April 20th, 2018 at 12:00PM EST just prior to Record Store Day

Introduction

Skratch is a means to give users the ability to make secure peer to peer trades natively within message boards and social networks and give those sites a commission on those trades.

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With the recent acquisition of UndergroundHipHop.com (UGHH), our CEO Michael King has dug into his unique experiences as an independent hiphop musician and as a technical marketer. Recalling an experience that made him a meme in 2005, he’s recognized a need to build a secure, decentralized, and low-friction marketplace for patrons of message boards and social media channels.

Back in the early noughties, King met an artist through the UGHH forums and hired him to record a chorus for a song. That artist was paid, but never followed through on his end of the deal. It took years to recover the funds and, as an indie musician, any amount money lost can be make-or-break. This is a problem for users of any kind and is something that blockchain can easily solve through smart contracts. Smart contracts introduce users to the capability to secure their transactions through clear cut data-driven conditions and store their funds until those conditions are met.

On the other hand, for the sites that host these conversations and create a place for these relationships to form, these transactions are revenue that is otherwise hidden. Users meet each other in these channels and discuss the trade of vinyl records, beats, and hiring for performances, but the site itself gets no value out of the marketplace its existence has created. Many of these sites are hanging on by thin threads weaved by gaudy and disruptive advertising. A decentralized marketplace creates another revenue stream for media sites to thrive and focus on more valuable content.

Cryptocurrency and the smart contract concept create a compelling mechanism for developing a low-friction environment that allows users to trade securely and gives the host sites access to hidden revenue in the form of commissions from these trades.

Business Objectives

  • Revolutionize monetization for music media sites - Music media sites still heavily rely on advertising and have had to focus on lower quality content to drive pageviews. Introducing Skratch as a monetization engine gives those sites more options and the ability to focus on higher quality content rather than clickbait.
  • Improve transaction security - Our users have fallen victim to scams from bad actors in the past due to a lack of governance within our community and we believe this is not unique to UGHH. Skratch’s Secure Transaction Protocol eliminates this through the usage of smart contracts.
  • Make crypto and blockchain accessible - Cryptocurrency and the blockchain offer a steep learning curve. We want to build a protocol that’s easy for the everyday person to capitalize on the value of blockchain and cryptocurrencies.

  • Growth of the UGHH brand - UndergroundHipHop.com itself is undergoing a rebrand and reintroduction as a modern music tech brand. Being at the forefront of technology by embracing blockchain and cryptocurrencies puts the brand on the bleeding edge of innovation.

  • Make the elite accessible - While the web and social media has cut down the conversational distance between the artist at their fans, many artists are still inaccessible because of a lack of trust in the crowd. It is our goal to give elite artists a platform for direct transactions with fans and lesser known practitioners.

Key Features

There are a series of key features that make Skratch a compelling protocol for users as well as the crypto community.

Trustless Transactions through Peer to Peer Smart Contracts driven by external conditions

Buyers and sellers can connect their public transaction history from the blockchain to their various web identities and maintain certain levels of anonymity while getting all the benefits of their transaction equity across the Skratch network.

Smart contracts can be built on a peer-to-peer basis using data from verifiable third-party oracles and user uploaded materials as conditions or criteria of delivery. The criteria can be agreed upon by the buyer and the seller and replicated through digital means of tracking via APIs whose state can be saved on the blockchain.

Dispute resolution can be managed through the algorithmic review of completed verification steps in context of a user’s logarithmic TrustScore. Appeals can be made for human review as a final answer to the dispute if the disparity of the algorithmically reviewed measures is small.

The Skratch protocol provides a granular smart contract builder which features a series of templates to choose from. Alternatively, users can choose from a series of delivery options and build their own smart contract. Verification options leverage external APIs or user actions and allow users to specify the timeframe in which each step must be completed.

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As an example, when selling a song, the sound files can be uploaded via IPFS and verified against input files that the buyer and seller agree upon, such as a lower quality MP3 version of the track’s stems (individual sound files comprising the song). Once programmatically verified, the smart contract, acting as an escrow, releases the funds. At this point the transaction is complete and users are notified.

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(Skratch Protocol Smart Contract Workflow - An example of the Skratch protocol smart contract workflow between the users that have met on a host website)

For physically delivered goods, verification could happen through a combination of image matching using computer vision APIs and tracking numbers. For instance, the buyer and seller can collectively build a smart contract and the seller can take a picture or a series of pictures of the contents of the box and provide the tracking number and details of the package such as dimensions or weight. Once the shipping carrier’s tracking API indicates that the package has been delivered, the buyer has a specified number of days to verify the contents of the package. Upon receipt, the buyer uploads pictures of the items received using our mobile app and if they match, the funds are released. The smart contract also indicates that if the seller does not remedy any issues within X number of days after delivery, their refundable deposit is lost in addition to the funds being returned to the buyer. Finally, should the buyer not verify the package within that timeframe, the funds are automatically released to the seller. Should a dispute arise, both users’ TrustScores will be reviewed in context of the verified completion steps and funds will be released to the more trusted user.

The granular smart contract mechanism allows for truly trustless transactions between unknown parties which makes the platform potentially very appealing to more famous acts in the music space. They can enter the marketplace from whichever host site they feel comfortable, and only reveal the minimum details about themselves to complete the transaction.

Delivery Verification

Delivery verification removes the need for third parties to mediate disputes.

Skratch will always require the verification steps to be split between both parties to require verification on both ends. Any contract that lays dormant after the agreed upon time period will automatically refund the relevant parties. A contract that sees neither party complete verification steps will refund parties minus the gas and the respective service deposits.

Verification possibility examples:

  • File comparison - A user can sell a file and compare the sample file against the final delivered file
  • File upload check - A file can be uploaded and the verification that it is uploaded to IPFS is the confirmation
  • Delivery based on confirmation number - A user can physically mail an item and the confirmation number can be used to determine that the delivery is confirmed
  • Photo verification - A seller can take a picture of an item and the buyer can take a picture of the item that has arrived to determine whether or not it matches what the seller is supposed to send.

The smart contract can be controlled in the granular smart contract builder based on the data sources that the buyer and seller agree to use for verification. We will prepare a series of templates for different types of transactions and users can choose from a series of available conditions based on what is relevant to the sale. These data source, or “Oracles” make requests off of the blockchain that can be authenticated and verified to ensure the integrity of the data.

Each of those conditions is given an expected date and time to be checked and how many attempts the smart contract will make until it’s deemed to not have happened. For instance, if a shipping confirmation is meant to happen on 5/6/18 at 11am, the users can specify that it will be checked everyday for 6 days until it’s deemed to been missed. Either user can determine the contract, but the contract doesn’t start until both users agree to it.

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Automated Dispute Resolution

For any dispute that cannot be resolved by smart contract, either party will have the ability to raise a dispute within the protocol. Disputes are first algorithmically reviewed taking into account the TrustScore of both users. Should the algorithmic calculation be a margin of 10% or less then the losing user is welcome to appeal the algorithmic dispute resolution by bringing in our Dispute Resolution staff. However, the losing party will lose their deposit to the protocol.

Nearly Frictionless

Rather than leaving the site where communications are taking place and going to a third party marketplace such as OpenBazaar or using PayPal, Venmo, et al, which have no direct connection to the actual transaction, the user can review or complete transactions directly within the site using our message board plugin or browser extension.

Step 1 - A seller posts what they are selling on the message board.

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Step 2 - Users discuss the transaction - This can happen either within the message board or within the direct messaging center of the plugin or browser extension.true

Step 3 - Users work together to construct their smart contract. trueStep 4 - Users agree to smart contract terms.

true

Step 5 - Users continually get status updates on smart contract conditions until the transaction is complete.true

Users also have the ability to review each other’s transaction history and TrustScore to determine whether or not the user is trustworthy.true

The user never leaves the site they are on to complete or review the transaction. Leveraging blockchain, all transactions across the Skratch network are transparent and can be accessed from any website on the network or from within the browser extension.

Determination of Uniquity

This protocol captures content data as a hash, allowing users to identify whether content has been sold (or attempted to be sold more than once) by comparing details of the blockchain’s transaction history. Users will get an indicator of whether or not digitally sold goods have been sold more than once.

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Users will be able to leave transactional feedback as an added layer of human-determined validation for new and future transactions and to give a level of insight to users before entering into a transaction.

Distributed Marketplace

Skratch builds a marketplace that is decentralized and can be plugged into any website. We’ll expand into social networks via our browser extension.

With our browser extension, users can transact on any website including social media sites such as Reddit, Facebook, and Twitter thereby unlocking the hidden revenue in the marketplace of over 2.5 billion people.

Our initial focus will be on music-related transactions because the idea of hyper-specific peer-to-peer smart contracts serves this group very well, but we will seek expansion into other specific verticals as we uncover definitive oracles for inclusion. As we scale these smart contracts will continue to be the catalyst for trustless transactions since we do not want to require the use of third-party individual verification for trustless transactions unless absolutely necessary for dispute resolution.

Other solutions require users to leave the native platform wherein the discussion is happening, the additional steps required to complete a transaction introduce a level of friction that potentially causes the transaction not to be completed. This is an axiom of user experience and the web regarding conversion activity of any kind. Making the transaction happen completely within the platform is a far better solution in that it cuts down on steps to conversion completion and leads to more users making sales.

Identity Merging

Users can merge their disparate online identities with their wallet addresses and take their history between sites.

Aside from Facebook, very few online communities enforce the use of your actual identity online and as a result users often have differing personas across the web. For instance, a user may be WutangKillaBee49311 on Wutang-Corp.com’s forum and also PhonteZonday on Okayplayer.com’s message board. Further still, the user may have an identity on UndergroundHipHop.com’s forum that is neither of those, but uses their eBay identity (ShawnCarterNYC) or Paypal account (email address) to make private transactions with all three thereby losing their anonymity as soon as they try to trade on another site.

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With the Skratch protocol, the user can leverage their anonymous wallet address across all three accounts thereby connecting the identity to transaction history and the ability to make transactions across any site in the network while remaining as anonymous as they’d like regarding their personally identifiable information.

To do so, the user simply needs to add their address to their account in the Skratch section of their user profile and the plugin will populate the feedback and TrustScore to their public profiles based on Skratch transactions with their address available in the blockchain.

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Public User Trust Score

Users will have a logarithmic value on a scale of 1-10 that determines their trustworthiness based on their transaction history and the scores of who they trade with.

Finally, the details of the entire transaction are published publicly on the blockchain thereby creating a public record of what has happened throughout the course of the transaction to build an immutable Trust Score assigned to a user. This score will be purely driven by the level of follow-through determined by smart contracts. For instance, if a buyer in the examples above fails to follow through on the verification process for delivery of the product, their TrustScore would be lower than a buyer that always verifies. The notes about where the buyer failed to follow through on the smart contract would be available for all future sellers to see in their transaction history.

Mathematically, the trust score is computed as follows:

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The “TrustScore” is a logarithmic value that takes into account the number of completed steps for all transactions as well as the TrustScores of the users that a given user has transacted with. Similar to Google’s PageRank, the completion of transactions with higher rated users causes a given user’s rank to increase thereby adding value to those that continue to trade with trusted users.

Rationality

Similar to the financial method “present value of cash flow”, we’ll score users based on how well they complete transactions, whom they transact with and consider the time decay of trust based on how regularly they interact with the protocol.

The value of a customer consists of three parts:

  • Completion behavior of verification steps - Users are rewarded in their score by completing more verification steps assigned to them and penalized when they do not.
  • The quality of people they transact with - Users are reward for trading with other trusted users.
  • Actual money spent - Users are rewarded based on how much they spend in a trusted transaction.

How it Works

  • n is the timeframe in which transactions are reviewed
  • t=time. n/t is the frequency of review. It can be daily, weekly or monthly or semi-monthly, etc.
  • r= discount rate. This represents how much the time decay should be. It is smaller if we review more frequently.
  • w, M, L, Y, X act as weights to each respective part of the formula

How does the Skratch model work?

The Skratch protocol creates a plug and play distributed marketplace where users set the prices, the host site and Skratch share 1.5%, effectively providing a service that is cheaper, more secure and more frictionless than any other marketplace. The user can associate their wallet, TrustScore, and Skratch identity with their profile and transact directly without ever having to leave the site they are on. In effect, our Token will make it simple to perform peer to peer transactions on any music website or social channel that features direct user interaction. There will be 8,000,000 Skratch Tokens available. As of this writing, 1 Skratch Token is equal to 1/30 ETH or $12.19 USD. This is subject to change based on market fluctuations and the current price can be found at http://skratchcoin.com/price.

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Token holders in the Skratch network have four roles:

  • Hosts - These site owners add the Skratch protocol to their site on the forum or chat channels using either the Skratch SDK or the relevant application plugin and set their revenue share rate. From there, the users do the rest of the work. Host sites can also host mining nodes on the network.
  • Sellers - These users specify which products or services at what price point are available either by posting new threads on the message board/chat channel or through direct messaging with buyers. They also work with buyers to set up the criteria for the smart contract which governs the transaction. The price point will be governed by minimum viable pricing set by the network.
  • Buyers - These users determine which products and services they want to purchase by engaging with sellers in public or direct/private forum discussions. They also work with the buyers to set up the criteria of the smart contract for the transaction.
  • Miners - These users mine blocks and maintain the Proof of Stake consensus across the decentralized network.

Granular Smart Contracts

Buyers and sellers construct smart contracts connecting data-driven conditions from oracles such as file delivery tools, package delivery carriers or other relevant APIs to develop a criteria for the release of funds to the seller.

Dispute Resolution

Algorithmic dispute resolution is a function of the completed verification steps reviewed in context of both users’ TrustScores. Consider a situation wherein there are four verification steps and each user completed two, but the buyer is disputing the transaction. The dispute resolution function would multiply the number of completed steps for both parties by their respective TrustScores and compare them similar to how Quality Score works for Google’s AdWords. Whichever number is greater is the winner of the dispute. If the dispute score is close then the losing user has the ability to appeal the algorithmic decision.

User 1

User 2

2 Steps Completed x TrustScore 5

2 Steps Completed x TrustScore 5.6

Dispute Score 10

Dispute Score 11.2

In this case User 2 wins and, since the disparity in scores is greater than 10%, User 1 cannot appeal the decision.

Trust Scoring Mechanism

The TrustScore is a time decaying and logarithmic score that increases based on the completion of verification steps and the value of the TrustScores of people that the user transacts with. Effectively, the score rewards continued usage of the network as compared to eBay where your feedback is static irrespective in your change in behavior. The TrustScore also acts a multiplier to determine confidence in a given user during a dispute.

Host and Skratch Network Compensation

Hosts and the Skratch Network will be compensated at the initiation of the transaction when funds are taken into holding by the smart contract. Irrespective of the outcome of the transaction, hosts and the Skratch network will receive their portion of the funds for the transaction.

Musician Patronage

Buyers, sellers, hosts and nodes on the Skratch network will have the ability to determine if they want a portion of their Skratch Tokens collected to go towards musicians they want to support. These proceeds will be paid out monthly.

How do I use Skratch Tokens?

Skratch Tokens can be used to join the network, trade on the network, or pay for computational fees on the network. During the beta period, host sites will be able to join for free, but in the future they will need to buy in.

While the seller will be able to set their own price, the Skratch platform will enforce minimum pricing based what is being sold. The minimum viable pricing will be malleable based on discretion of the community.

Decentralized Community Voting Mechanism

The community will have direct influence over the minimum viable pricing of any given product or service throughout the network. Through the Skratch protocol, each holder of Skratch Tokens will have the opportunity to voice their opinion on issues of pricing:

Issues

Quorum required

Votes needed

Pricing of a given product type

20%+1

⅔ majority

Pricing of a given service type

20%+1

⅔ majority

Basic voting rules via DCV:

  • Information on upcoming voting will be made available for the Skratch Token holders at least 48 hours in advance (published on the website, sent via email, or communicated to them otherwise).
  • Each Skratch Token holder will have the opportunity to voice his/her opinion within 48 hours after the start of respective voting procedure.
  • If the Skratch Token holder does not voice his/her opinion by the end of this period, then his /her opinion will not be taken into account by the Skratch network.
  •  One Token equals one vote.

UndergroundHipHop.com

Skratch Tokens can also be used as a method of payment for products on UndergroundHipHop.com. As of this writing, UGHH has over 75k products available for purchase.

Token Economics

Minimum viable pricing is to ensure profitability of host sites and the network itself.

Product/Service

Minimum Viable Pricing

Vinyl 12” Single

0.5 Skratch

Vinyl LP

1 Skratch

Original Production (Beat)

42.66 Skratch

Original Vocal Performance (Recorded Verses)

21.33 Skratch

Tokens can be used by buyers to purchase products and services from sellers and traded between third parties on open marketplaces.

Why does anyone want this?

Buyers and sellers benefit from the creation of special interest marketplaces and host sites benefit from access to commissions from hidden revenue.

Skratch serve three sides of the marketplace: the buyer, the seller, and the host site. The buyer, looking for a product or service, finds a very specific item they can’t find on eBay or Amazon from a seller that has a detailed understanding of their need, but they cannot necessarily trust a seller they meet outside the guardrails of a standard marketplace. The seller has a unique product or service that won’t gain much attention on a non-specific marketplace, but cannot necessarily trust potential patrons they meet on message boards or social media. The host site is already creating opportunities for people to meet but is now able to benefit from those relationships in a monetary sense.

Buyers

  1. Hyper-specific marketplaces in their online habitats - Buyers can find products and services that they are looking for in-line on sites that they are already naturally engaging.
  2. Low Transaction Fees - The buyer pays a transaction fee of 0.75% of the cost + the gas required to leverage the blockchain. This is cheaper than any other marketplace or online payment platform. The buyer also pays a refundable security deposit of 5%.
  3. Trustless Transactions - Payment is only issued upon exact fulfillment of the smart contract by the seller and can carry penalties to the seller if they do not follow through, thereby ensuring that the transaction is always followed through. Disputes are also solved algorithmically allowing buyers to rely on the facts of the transaction. Dispute resolution is available for a final appeal.

Sellers

  1. The Marketplace is everywhere - With other marketplaces, a seller posts to one site and hopes that the right buyer shows up. In the case of Skratch, the posting is added across the network on host sites that take more than 50% of the commission.
  2. Low Transaction Fees - The seller pays a transaction fee of 0.75% of the cost + the gas required to leverage the blockchain. This is cheaper than any other marketplace or online payment platform. The seller also pays a 5% deposit refundable at the successful completion of the sale.
  3. Trustless Transactions - As long as the seller fulfills their end of the bargain, the smart contract will execute ensuring that their payment is fulfilled. Disputes are also handled based on verifiable facts, however in situations where verification is questionable, the seller’s history is accounted for in their TrustScore thereby giving them an advantage.

Hosts

  1. Access to Hidden Revenue - Hosting sites get access to some function of 1.5% commission of any transaction that takes place on or due to their site. They also get to choose the percentage of the 1.5% that they take. However, if the host specifies that they want a percentage higher than 50% of the commission, the platform will advertise other seller’s products from around the network on the site in-line on the message board.
  2. No liability - While the site hosts the transaction, the transaction is peer- to- peer so if anything negative were to happen, the site itself has no risk of liability and the smart contract governs the transaction.

Token Sale Participant

Token sale participants get access to features and offers that standard UGHH and Skratch users will not. Additionally, they get 3-year access to all the features of the UGHH Premier subscription service issued from when the participant commits to purchase Tokens.

  • Consumptive value on UGHH - Skratch Tokens can be used for a 5% off discount on items on UGHH and give you access to TBA exclusive releases that cannot otherwise be purchased. We intend to pursue the coveted WuTang Clan “Once Upon a Time in Shaolin” album or another album from a similarly famous hiphop act.
  • Discounted Tokens for transactions - Early pre-sale and public Token participants and eligible to purchase Tokens at 5%-40% bonus.
  • Access to exclusive music content - We will release music on UGHH that can only be accessed by users that engage in the Token sale.
  • All UGHH Premier benefits - UGHH Premier is a subscription program offered by UndergroundHipHop.com. The incentives include deep discounts on product, access to exclusive releases and free entry into shows. Token holders get a three year membership issued from when the participant commits to purchase Tokens.
  • Voting in Minimum Viable Pricing - Token holders are able to vote on the minimum viable pricing for the network effectively determine minimum profit margins of the host sites and the network itself
  • Tokens can be used towards UGHH merchandise - Merchandise on UGHH can be purchased at cheaper prices when using Skratch Tokens.

As we want to encourage the growth of the network, we are offering these bonuses for a very limited time window. The bonus structure incentives for pre-sale participants are fixed based on the round of participation and are as follows.

Pre-Sale

Public Token Sale

  • 50% Bonus 506(b) Pre-Sale
  • 40% Reg S Pre-Sale
  • 30% 506(c) Pre-Sale
  • 25% Bonus Day 1
  • 20% Bonus Day 2
  • 10% Bonus Day 3
  • 5% Bonus Day 4
  •   5% Bonus Day 5

What is the Opportunity?

The opportunity for the Skratch protocol lies in the commissions from hidden revenue. Consider the fact that UndergroundHipHop.com, a site that has seen 113 million page views in 20 years as of this writing, has generated $10 million in hidden revenue as defined by the number of peer to peer transactions that have taken place within the site.

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(example of a post of a user looking to sell music production equipment)

By joining the Skratch network, the commission model would expose a site of UGHH’s size and performance to a percentage from the average of $41,666.67 per month in transactions happening on the site.

Now consider larger sites such as Complex.com or HotNewHipHop.com which generate over 100 million page views per year according to SimilarWeb. Assuming that these sites see a 0.5% conversion rate for Skratch transactions and an average transaction value of $50, the protocol brings in over $15mm in commissions a month once it crosses the 500 website threshold of sites in the network.

true

If we further extrapolate these numbers into sites such as social networks that see hundreds of billions of page views per year the opportunity for Skratch as a marketplace is potentially in the billions annually. If we consider the audience of users in the United States that fall into this category, we find that there are 200 million people and it skews most heavily into the 18-44 age groups. Interestingly, this group also skews in the direction of making six figures each year. This indicates that this group of users is well-poised to spend regularly through the Skratch protocol.

true

Source: Hitwise

Surprisingly, the user base of music fans that use message boards is in the millions and slightly skews towards women. true

Source: Hitwise

These users also skew heavily toward making $100k+ in salary.

While it is difficult to determine the volume of transactions happening within these sites, PayPal indicates continued growth of online payments seeing over $100 billion in payments in Q2 of 2017. If we use their continued growth as a proxy, it is safe to say that peer to peer transactions online will continue to rise.

true

Source: Statista

To further support this idea, we see that Venmo’s public growth numbers also indicate tremendous growth with all $17.6 billion of the transactions on the app being peer to peer.

true

Source: BI Intelligence

How do host sites get paid?

A host site gets attributed the commission from any relationships where the first transaction happens due to their site. For instance, if a user talks to another user on a number of sites on the network, but does not execute a smart contract until they came to Site A, then Site A gets the commission for any transaction those two users partake in on any site participating in Skratch as long as Site A participates in the network.

However, if two users connect on a site via the browser extension and that site is not a member of the network, the entirety of the commission is absorbed by Skratch.

The host site revenue model is such that the hosting site can determine the revenue split between themselves and Skratch up to 80/20 in their direction. However, the higher the revenue split is in their favor, the more posts of products representing relationships outside of their site will be added by our plugins this allows Skratch to continue to maximize its own revenue by placing higher margin posts on sites across the decentralized network.

How are you going to make it happen?

As there are partial precedents for the Skratch protocol in OpenBazaar, eBay, Venmo and PayPal, our work is not so much about dramatically changing human behavior. Rather, it’s more about systematically providing and promoting a better option.The following is an overview of how we will get it done.

Timeline and Roadmap

We expect to launch the platform starting on the UGHH site by mid-2018 and have the first release of the platform live on partner sites by the end of 2018. In 2019, we’ll launch our own blockchain and expand into Fashion and Technology. We expect to be live in all relevant verticals by the end of 2020. We expect the Skratch Token to available for trading within 60 days after the completion of the Token sale, with special early issuances to pre-sale participants. The following is our high-level roadmap; recognizing that it is subject to change, please visit Skratchcoin.com for the latest.

  • October 31st  - Launch of Website - We launched Skratch in a subdirectory on the UGHH website in support of visibility of the Token sale.
  • December 30th  – Launch of Pre-sale - We’re making the presale available to all accredited investors and promoting it through paid, Owned and Earned Media channels.
  • March 1st  – Close of Pre-sale - The pre-sale will close and we will begin promoting the open sale internationally.
  • March 1st  – Hiring of Staff - We’ll begin the process of building a best-in-class development team and business development staff.
  • March 1st - Launch of Public Token Sale - We’ll open the public Token sale to non-US participants only.
  • March 30th - Close of Public Token Sale - The public Token sale is over at 11:59 PM EST.
  • March 1st - April 30th - Development of Discourse and BuddyPress plugins and mobile app for UGHH.com - The UGHH site is moving to Discourse and BuddyPress so the first series of plugins we’ll create will be on the platform. We’ll also prepare the iOS and Android mobile apps with the first iteration being limited to verification features.
  • April 20th - Issuance of Tokens - Tokens will be issued the day before Record Store Day so users can use them toward discounted purchases on UGHH.
  • March 1st - June 30th - Message Board plugin Build & Business Development -The team will be hard at work on the first release of the plugin while the business development team builds partnerships and marketing continues to build the UGHH and Skratch brands.
  • May 1st - June 30th - Alpha Testing on UGHH.com & Browser Extension Build - The development team will build the Chrome extension.
  • July 1st - August 31st - Beta Launch on UndergroundHipHop.com - We’ll push the bbPress and BuddyPress plugins live and begin marketing efforts to get users onboard.
  • September 1st - 30th - Beta Testing on Partner sites - The beta release to early partners that are interested in placing their sites on the Skratch network.
  • October 1st - First Release - The first public release of the Skratch SDK, Chrome Extension and the top ten plugins.
  • October 1st - December 31st - Feedback Collection and Subsequent Releases.
  • December 1st - Token Submission on Marketplaces - We’ll submit for inclusion on exchanges to allow people to trade Tokens.
  • 2019 - Release of Skratch Blockchain. Expansion into Fashion and Technology Verticals - We will launch our own blockchain with a more secure fork of Solidity. The remaining plugins and new oracles in support of fashion and technology transactions.
  • 2020 - All Vertical expansion - We will continue releases and identify more oracles in support of transactions from all verticals

Who is on the team?

UGHH and iPullRank are both owned by Michael King and the teams collaborate tightly with iPullRank acting as the development, design and marketing teams. The Skratch launch will continue to capitalize on the relationship as the team grows.

Core Team

  •  Michael King – CEO,, Marketing Thought Leader and Computer Scientist - Michael King is a decorated internet marketer and hiphop musician with a background in Computer Science. He’s a sought after speaker and thought leader in the digital marketing space and consultant for Fortune 100 brands and venture-backed startups. Mr. King is the founder of iPullRank and owner of UndergroundHipHop.com.
  •  Jiafeng Li – Marketing & Business Development Director - With 5+ years' marketing experience and a master's degree in Marketing from University of Rochester, Jiafeng has worked at Bloomingdale's where she managed the Search Engine Optimization channel and at marketing agencies where she advised Fortune 500 companies and tech startups. Jiafeng is a blockchain enthusiast and also founded and owned a restaurant in China during college before she came to the US to pursue further study in 2011.
  • Tao Wan - Blockchain Engineer - He has 15 years' tech experience and started his journey with Bitcoin and blockchain technology in 2009. He's been involved in many different blockchain projects.
  •  Kathy Iandoli – Editor at Large and Media Thought Leader - Kathy Iandoli is a critically acclaimed author and journalist, with bylines everywhere from XXL to the Guardian. She is also your favorite rapper’s favorite writer.

Marketing Team

true

iPullRank is a better performance marketing agency based in NYC. Founded in 2014 by industry thought leader, Michael King, the shop brings a team with expertise in Content Strategy, Digital Advertising, Search Engine Optimization, Machine Learning, Conversion Rate Optimization, Analytics and Web Development.

true

UndergroundHipHop.com is an e-commerce and media company founded in 1997. The site and its surrounding community has highlighted and supported acts such as Eminem, Macklemore and Run the Jewels since before they achieved mainstream success. UGHH attracts a vibrant community of over 400k people drawn to independent hiphop and the UGHH team features hiphop tastemakers, artists, community management and e-commerce staff.

Legal Counsel

  • Marc Adesso - Corporate Attorney - Waller Lansden Dortch & Davis, LLP

Advisors

  • Brittan Bright - Google, Principal Account Executive -  Business Development Advisor  - Brittan Bright brings 14 years of sales and business development experience in Tech to the team. Her eclectic perspective stems from years spent both rolling up her sleeves selling for start-ups and defining an industry, to learning from the best and helping to innovate in top global enterprise organizations.  
  • C. Brandon Ogbunu - Professor, Computational Biologist, Data Scientist - Harvard University - Data Science Advisor -  C. Brandon Ogbunu is a research associate at Harvard University, a research affiliate at Brown University, and an Assistant Professor the University of Vermont. In July 2018, he will start a position as an Assistant Professor at Brown University.  His research takes place at the crossroads between computational biology and evolutionary genetics, applied to questions of bioengineering and infectious disease.  In the popular sphere, he is interested in data science applications in education, culture, and policy.

You’ll notice that UGHH currently does not have much in the way of its own dedicated technical staff. The allocation of funds (see “How is Skratch going to use the money?”) indicates that a $11.6 million will go to the building and maintenance of an all-star team of Blockchain Engineers, Web Developers, DevOps in addition to business development, dispute resolution, content, and marketing folks that can help grow the brand.

Technical Implementation

The following is a high level overview of how we’ll build the Skratch protocol leveraging Ethereum, Hyperledger Fabric, a series of plugins, browser extensions and a mobile app.

The underlying technical details of this concept are not necessarily difficult, but also not trivial in scale. Rather they are tedious because Skratch requires the building of a JavaScript SDK as an abstraction layer to Web3JS and the Fabric client. This allows sites to create custom Skratch integrations as well as the development of a variety of plugins for various content management systems, message board software, web development frameworks and mobile apps.

We will first develop the SDK and plugins for bbPress and BuddyPress to support the initial launch on UndergroundHipHop.com. We recognize that adoption is all about ease so we will systematically rollout plugins and apps starting with the most popular message board solutions such as vBulletin and work our way down into lesser used forums such as Vanilla Forums and Phorum. The following is an indication of the top 10 forum softwares currently in use across the web.

true

We will build a series of browser extensions for Chrome, Firefox, Safari, Edge and Opera. The end goal is for users to complete transactions with other users no matter which site they are on.

Mobile banking and payments are dramatically on the rise, so we’ll build a mobile app for iOS and Android with deep link integrations to cut down on the friction of mobile transactions and to support real world verification in smart contracts.

The Skratch protocol is a DApp that acts as a parent contract to a series of user generated children smart contracts built on a library of functions. The DApp and master parent contract manages the host site relationships to the protocol while the child contracts manage the relationship between buyer-seller-host site and the protocol. These contracts are generated peer to peer and then pushed to the Ethereum blockchain. External conditions are reviewed against calls to Oraclize it recursively until the conditions are met or expire based on the criteria in the child smart contract.

The smart contract builder acts as a frontend for deploying smart contracts to the Ethereum blockchain and uses Web3JS functions to interface with it. Before the smart contracts are deployed, they are saved to the Hyperledger Fabric blockchain while it’s being edited between parties.

The parent smart contract governs the DApp and users deploy granular smart contracts that inherit from the MadeFromSkratch library.

true

The master contract manages the host site relationship to the protocol. The library features all building blocks for child contracts which are generated between users in the smart contract builder.

Posts on the message board are saved to a public blockchain on Hyperledger Fabric so as to avoid the mining fees required for this large volume of messages. A user’s Ethereum wallet address acts as their identity on the Hyperledger Fabric blockchain and posts are pulled from this blockchain and distributed to other relevant message boards across the Skratch network.

Plugins

Plugins serve a number of purposes in the Skratch network. They serve the frontend use cases outlined above, but in the client-distributed server relationship they push new transaction related posts from the message board to the network as they happen. The Skratch DApp continuously looks for new posts to then push out to the rest of network. Plugins create API endpoints for the DApp on the host sites in order to push posts from across the network to other host sites on the network via the Hyperledger blockchain.

true

Browser Extension

true

The browser extension is to be built on top of the Skratch SDK and allows for the creation and deployment of smart contracts and direct messages. The server pushes to these clients based on data in the Ethereum and Hyperledger Fabric blockchains. The browser extension also interacts with the Hyperledger Fabric blockchain as users work through the edits in their smart contracts.

Systems Architecture

Skratch’s technical initial implementation is elegantly simple. We’ll host Ethereum and Hyperledger nodes for speed with NodeJS instances of EthereumJS-TX and HyperLedger Fabric peers. We’ll host these nodes behind a load balancer allowing these instances to autoscale once nodes have reached 70% capacity thereby allowing additional nodes to download the blockchain before they can take on new transactions.

true

The system is comprised of a series of clients and a series of decentralized servers. The clients are plugins, browser extensions and the mobile app. The servers are broken into five components:

  1. Verification Nodes
  2. Ethereum Nodes
  3. Hyperledger Fabric Nodes
  4. Skratch API

Hyperledger Fabric acts as a decentralized data store for posts and messages across the network while Ethereum acts as the escrow with deployed smart contracts. Most of the functionality is managed on the frontend and handled by the MadeFromSkratch library in the plugins and browser extension. Plugins and browser extensions store the user relationship to their blockchain accounts which allows the frontend apps to pull data on demand or have it pushed from the server as events occur. For all oracles, we will prepare a single verification API endpoint that pulls from all of data sources that connect to the various verification APIs and return their data. This is to ensure that if verification sources are DDOS’d neither party is penalized.For our initial launch, these servers will be hosted by Skratch, but we will provide Docker containers and encourage miners to join the decentralized network from as soon as the network goes online. We will also encourage host sites to host their own mining nodes.

Future Developments - the Skratch Blockchain

In the spirit of quick deployment, we will launch on the Ethereum and Hyperledger Fabric blockchains, but we will make the switch to our own blockchain in 2019 for the following reasons:

Friction Concerns

The biggest issue with nearly all cryptocurrency based applications and projects is that using them is akin to setting up a Linux server. The numerous steps to get up and running will continue to make all projects high friction. We want Skratch to be as easy to get started as buying a product on Amazon.

Speed Concerns

The volume of transactions on the Ethereum blockchain makes it slow and inefficient in production and we are still currently in the early adoption phase of the protocol. As the Ethereum protocol grows, the volume of transactions will also increase and potentially create a poor user experience for our user base. Race conditions in the real world verification could potentially break the whole model. Our ideal future state includes host sites hosting nodes on the Skratch blockchain in addition to miners for speed and true decentralization.

Consensus Considerations

Currently, Ethereum is a Proof of Work protocol and while Proof of Stake is being explored in subsequent releases, we want to solely rely on a Proof of Stake consensus with Skratch.

Security Concerns

While Ethereum seems to be continually under attack from hackers looking to snatch funds from ICOs, there has also been a history of large scale attack attempts on the protocol that raise concern. Currently, there are a series of known exploits for smart contracts that are relevant to Skratch that raise concerns.

  • Race Condition Attacks - Both the reentrancy and cross-function attacks can allow a hacker to drain a smart contract of its value if the address balances are set after a condition is reviewed.
  • Call Stack limit and Gas limit attacks - When smart contracts call other smart contracts Ethereum builds a call stack and gas limit for contracts in the stack. If you run out of gas during this, Ethereum arbitrarily and silently skip calls making the logic of smart contract stack potentially fall apart and exploitable.
  • Timestamp Dependence attack - Miners can potentially manipulate timestamps of blocks and break the smart contract logic.
  • Integer Overflow and Underflow - If a balance goes to uint 2^256 it resets to 0 and if a balance is set to less than 0 it resets to the maximum value of 2^256.

Future Developments - Vertical Expansion

We expect that Skratch has applications in a variety of, if not all, verticals. We expect that there will be simple Fashion and Technology vertical applications such as the buying and selling of clothing and clothing design work or the buying and selling of development work and gadgets. These use cases can be verified using the very same mechanisms laid out for the music vertical.

However, it is our goal to develop a series of oracles for the systematic expansion into these verticals starting in 2019. Additionally, we expect that users will shoehorn Skratch into transactions across verticals before we officially go into them thereby allowing us to crowd source use cases by reviewing transactions. Members of the decentralized protocol will also have the ability to suggest oracles and their use cases for addition to the protocol.

As an example, in the technology vertical, a user might devise an oracle for the purchase of source code wherein that a Git repository could be provided and resulting source code could be compiled and run against a series of expected results.

Marketing and Partnerships

true

While the technical details are not trivial, the largest issue to overcome with adoption is awareness and the development of a network of host sites. Surely, the decentralized network can thrive on its own through the creation of a browser extension, but the growth of the host site network will accelerate user growth dramatically by capitalizing on pre-existing audiences.

The iPullRank-led marketing effort will heavily leverage Paid Media, Content Marketing, Influencer Marketing and Events to increase the brand awareness of the Skratch network. We will focus heavily on users of other marketplaces and payment platforms to try out the platform by giving them their first transaction for free. UGHH’s own streaming and original content infrastructure will also contribute to this effort in that we will ramp up the release of content considerably following the completion of our pre-sale. We will attempt to purchase the much discussed “Once Upon A Time in Shaolin” album by Wu-Tang Clan. Alternatively, we’ll seek another album for a high profile artist.

Additionally, iPullRank has client relationships with several hiphop media sites and will leverage those relationships to kickstart the Skratch Network through a series of partnerships.

Marketing Efforts

Our core strategy with the marketing effort is to leverage the 20 year old UGHH brand to build the newly developed Skratch brand. We will ramp up existing UGHH efforts with the goal to build out our audience and mailing lists. Once the Skratch protocol has launched, the marketing effort shifts to the promotion of both brands as they are interconnected until the Skratch network grows beyond UGHH itself towards the end of 2018.

Our marketing effort will combine an “always on” series of Paid Media buys in digital channels combined by key traditional media activations launched in concert with our entry into each vertical. Additionally, we’ll secure a series of endorsement deals to leverage artists in each vertical as influencers and tie them to a series of events throughout the United States.

  • Record Store Day/Black Friday/Small Business Saturday/Cyber Monday Token Push - Our Token Events complete the day before Record Store Day and several months before the holiday shopping season begins so we’ll push the Token to our user base by offering discounts and exclusive access in exchange for Tokens.
  • UGHH20 Tour - 20th Anniversary tour - The UndergroundHipHop.com audience has been eager to celebrate our 20 years in existence. We will launch a 20-date tour domestically making it free to get in and use it as a vehicle to promote the forthcoming launch of the Skratch protocol.
  • Paid Media Launch - Our always-on Paid Media campaign will drive brand awareness and ultimately usage to the specific subsegment of the population that engages in special interest message boards related to music. We’ll use visitors from these Paid Media channels to build a mailing list and cookie pool for continued marketing efforts. We will activate the following channels, ramping up the spend as we get closer to the beta launch:

  • Facebook Ads - We’ll leverage Facebook ads to target specific demographics and psychographics relevant to our subsegment and build a cookie pool of users as well as lookalike audiences to effectively promote Skratch to relevant users.
  • Display ads on partner sites - We’ll purchase sizable media buys on partner websites as a point of leverage to encourage sites to join the Skratch network.
  • Google Display Network - We’ll advertise on relevant media sites and message boards to drive awareness of UGHH and the Skratch protocol on sites that our where our audience is likely active.
  • Native Advertising - We will promote our content marketing efforts through native advertising channels and continue to drive users back to the UGHH site as a method to capture them for subsequent marketing.
  • Reddit Ads - Once the browser extension is launched, we’ll look to purchase Reddit ads on a series of music related Subreddits as a method to drive downloads and get users to start making transactions within Reddit.

  • UGHH Premier boost - UGHH Premier is a growing subscription-based program wherein we are releasing exclusive music with artists. Subscribers to UGHH Premier will also be encouraged to become mining nodes and generate Skratch Tokens for usage across the network. Furthermore, we will expand the releases on UGHH Premier as a method to get more users into the ecosystem in advance of the launch of the Skratch beta.
  • Influencer Marketing - We will partner with a series of famous rappers and producers and get their endorsements through content creation and social media to drive their audiences to engage with UGHH and the Skratch protocol.

  • Content Marketing - We will expand the UGHH Magazine, increasing the volume of articles and start to inject educational and entertaining content about cryptocurrency making it cool and accessible to the audience. For example, we’ll launch of a series of videos wherein rappers explain blockchain.
  • Television commercial in 2019 - Focusing on specific programming that speaks to hiphop niche such as Cartoon Network’s Adult Swim, we will take the “rappers explaining blockchain” to the airwaves, launching a series of television commercials featuring rappers endorsing Skratch as a payment protocol.

As we enter new verticals, we will replicate these tactics in these same channels sans the UGHH specific initiatives. To that end, we will look to purchase a similarly positioned website in each vertical we enter in order to have a strong starting point of adoption.

Building the Network through Partnerships

Skratch offers access to hidden revenue through the commission of transactions that happen between users of a given website. The series of plugins that we’re building make connecting a website to this revenue stream plug and play in that it only requires the host site to register a crypto wallet, install a plugin and configure payout options.

The concept is a compelling offer to sites that feature communities and monetize largely through advertising. These sites typically design themselves to trick the user to click on ads through annoying pagination, pop-ups, click-jacking and confusing image placements. Skratch introduces a new mechanism for revenue that can potentially put the power back into the hands of sites and compel them to invest more into content quality.

In support of growing the network, we will hire a business development team within the organization to build exclusive partnerships with key sites in the space with the goal of bringing on 80 websites per quarter. New users will be incentivized with 10 free use-or-lose Tokens to make a transaction within their first 30 days. We will grow the usage of the network by allowing users to invite their friends, giving them both 5 use-or-lose Skratch Tokens with 30 day expiration.

We will execute an influencer and content marketing campaign and purchase ads on host sites. The latter tactic increases brand awareness and ensures that media buys are big enough to compel host sites give the network at least a 30-day shot.

Finally, we will give users collateral within the network to send to other webmasters inviting them to join the Skratch network and incentivizing them with 100 Tokens for any site that joins.

Comparison to Existing Solutions

In-experience trading and granular smart contracts set Skratch apart from existing solutions.

OpenBazaar

Skratch differs from OpenBazaar in that there is no need for the buyer or seller to download a specific software application nor host any portion of a blockchain on their own machine to participate. OpenBazaar also does not leverage granular smart contracts to govern their transactions. In fact, representatives of the company believe there’s no way to effectively verify a commerce transaction with smart contracts due to the fact that a buyer or seller could take drastic measures to sabotage the verification mechanisms.

true

Source - https://medium.com/@therealopenbazaar/the-case-for-dumb-contracts-6308aa5b757

Open Bazaar uses a potentially unscalable approach of incentivized mediators to verify transactions and release funds in the case of dispute. However, it should be noted that Open Bazaar does not charge transaction fees, nor does it have its own Token and relies entirely on Bitcoin for transactions.

eBay

eBay differs from Skratch in that it is centralized, does not use a cryptocurrency, charges a 5% fee to its sellers, but does offer a layer of staff to support dispute resolution.

true

Venmo & PayPal

Venmo, PayPal and the various other payment solutions can act as payment systems irrespective of the type of transaction. They also tend to have support staff to help in the case of any disputes and there are simple mechanisms for reversing payments that tend to work entirely in the buyer’s favor. PayPal specifically, is already ubiquitous across the web with its various plugins and gateways and is made to be plugged into a variety of systems across the web. However, PayPal usually takes the user out of native experience and into the PayPal experience to make the payment and has been known to arbitrarily freeze funds of its users. All of these solutions also charge around 3% per commercial transaction.

Odesk, Elance, and other Marketplaces

true 

In comparing Skratch to service marketplaces such as Odesk, Elance, Freelancer, and 99Designs, these sites do provide human support for dispute resolution, but the transaction fees on these networks tend to be incredibly high for the seller with rates varying from 8.75% - 40%. An average 3% fee is charged to the buyer as well. These platforms also require the buyer and seller to go to them directly rather than have the transaction happen natively where users may meet, thus cutting out the ability of host sites to get a commission. Finally, no one goes to these sites in search of producers, recording engineers or other music personnel.

Anonymity is an option on these sites, but people always look for ways to de-anonymize users to build trust and enter a service relationship.

Skratch is superior to these solutions in that it leverages smart contracts, allows the user to remain within their native site experience for communication and charges a fixed 1.5% per transaction that host sites can use for monetization.

Strategy to get on Exchanges

Our goal is to get the Token on the exchanges such as Poloniex and Shapeshift twelve months after the Token pre-sale to allow participants in the Token sale to freely trade them. However, it is our goal to showcase actual value rather than just speculative. To that end, the Skratch Token will be a valid method of payment that customers can use on UndergroundHipHop.com shortly after the close of the pre-sale. Being that UndergroundHipHop.com has a history of 7-figure revenue performance, allowing Skratch Tokens to be used on our e-commerce site in exchange for access to exclusive content and discounts on the goods they are purchasing will quickly create demand for Tokens among our existing customer-base of over 100k people.

We will make our smart contracts and all other relevant code available for auditing at the Skratch GitHub account so the relevant exchanges and third parties can ensure that we’re not hiding malicious instructions that will rob them of their funds. We’ll also make the smart contract library that comprises the granular smart contract builder available on GitHub.

Once we’ve proven the demand of the Token, we will immediately approach altcoin exchanges such as Poloniex and Shapeshift, proposing that Skratch be included for trade on these exchanges, highlighting the transaction activity. With Record Store Day, Black Friday, Small Business Saturday and Cyber Monday on the horizon, we anticipate that the growth in demand will position Skratch to hit the altcoin exchanges within twelve months after the Token pre-sale.

As the network grows and the coin becomes more ubiquitous through increased usage beyond the UGHH user base, we will apply for more mainstream exchanges such as Global Digital Asset Exchange (GDAX).

There can be no assurances that any of the foregoing exchanges will agree to list Skratch or its Tokens.

How we’ll allocate the funds

Funds raised will go towards building a world class development team, infrastructure and executing a marketing strategy focused primarily on brand awareness. In an effort toward transparency, we will identify an independent auditor that will prepare an annual report so that verified Token purchasers can have visibility into how these funds have been spent year over year.

How do I participate?

Glad to hear that you’re interested. Here’s how you can get involved.

  • Ask Questions
    You can ask your questions via email at
    ask@skratchcoin.com, our Slack channel, on Twitter at @skratchcoin, or on Facebook.

  • Participate in the Pre-Sale
    Head to
    www.ughh.com/skratch and join the mailing list to enter to participate in the Pre-Sale. It starts November 27th, 2017 12:00PM EST and ends January 28th, 2018 11:59PM EST
  • Participate in the Crowd Sale
    Head to
    www.ughh.com/skratch for more details on how to purchase Tokens in our crowd sale. It opens up January 1st at 12:00pm EST and closes February 30th at 11:59PM EST.

Issues and Responses

  • There are already marketplace solutions available
    They don’t use Blockchain and they don’t allow a user to connect to a single identity that they can take from site to site.
  • What if a seller sends a box of rocks? What if a buyer fakes a verification step?
    The smart contracts will have mechanisms for dispute resolution that rely on the review of the completed steps versus the trustworthiness of the user based on their transaction history. If all else fails a user can appeal an automated dispute decision by interfacing with humans for dispute resolution. However, in any transaction the penalty fee is paid to the network by the noncompliant party.
  • What happens if a seller mails an item and it is delivered but stolen?
    We recommend sellers purchase shipping insurance and specify that the packages are held for pickup to ensure that they are delivered.
  • Blockchain identities are anonymous what is to stop a user from making a bunch of accounts?
    Yes, identity is anonymous on the blockchain, but there are two layers of identity in this case. First, the user’s identity on the message board or social network. Second, the user’s wallet identity on Skratch. Both of these identities carry equity with them that the user may not want to discard. On the message board or social network, there is their persona that they may have worked for years to build up. On Skratch, there is the TrustScore that they build up over a series of transactions. So while the user could indeed create many identities, they are at a disadvantage in dispute resolution on the Skratch protocol if they do so.

  • How is this different from Open Bazaar?
    Open Bazaar requires the user to download a software and list their products and services and a third party to verify transactions. On Skratch users can list anywhere they want and transact natively on that site or within our tools

  • Why are you limiting this to music?
    It’s the specific niche that we know and have a solid audience that can amplify the platform. Also, we can uniquely use the platform to solve the problem by making the user identity and transaction history portable.

  • You're putting ads on sites?
    The advertisements will appear as native posts on the message board for the host site and only if pay out less than 50% of the revenue.
  • Why are you raising so much money?
    Marketing and Advertising are the biggest obstacles for adoption. Skratch’s success will require changes in human behavior and the best way to do so is through continual promotion of our message in a variety of ways.
  • Can I use Skratch to buy products on UGHH?
    Yes.

Appendix

Corporate Structure

Skratch Tokens will by issued by Skratch, Inc., a Delaware corporation

However, tThe Skratch protocol will be developed and operated principally in partnership with by Company’s affiliate UndergroundHipHop.com, LLC, a limited liability company incorporated in Massachusetts. This company will develop the Skratch protocol and foster the community around the Skratch protocol until it has the staff and performance to act as an independent entity.

What are Skratch Tokens?

Overview of Skratch Tokens

  • What are Skratch Tokens?

    The Skratch Tokens are software with cryptographic elements that are sold out as a utility appliance for the Skratch platform. The Skratch Tokens are based on the Ethereum protocol and conform to the widely-used ERC20 standard.

    The Skratch Tokens have their functional utility only within the Skratch protocol and their creation is conditioned by the need to develop an internal economy in the Skratch ecosystem that will establish transparent and fair relations among the Skratch community.

    The Skratch Tokens are intended to be used by their holders only for its designated purposes. Number of such purposes may be increased over time, including, but not limited to, by means of adding new products, services and features available in exchange for the Skratch Tokens.

  • Usage of Skratch Tokens

    Means to use and interact with the Skratch protocol. The Skratch Tokens carry backbone functions of the Skratch protocol. The full functionality of the Skratch protocol is available only for Skratch Token holders. As applicable, we plan to place the Skratch Tokens on cryptographic Token exchanges within 60 days of the completion of the Token sale, giving an opportunity to openly buy them (to residents of countries where the purchase of Tokens does not violate laws). A user seeking to enter the Skratch protocol will have to buy the Skratch Tokens at the such exchanges. Conversely, the Skratch Tokens could be sold at an exchange if their holder would like to exit the Skratch ecosystem.

    However, legislation on the circulation of securities in certain countries may prohibit the sale of the Skratch Tokens to the residents of those countries. When buying the Skratch Tokens, the purchaser should be aware of the restrictions on their subsequent sale and thereby obliges to follow our instructions and/or those of the exchange when he/she resells them to other users.

    Form of settlement. The Skratch Tokens will be used as a form of settlement in the transactions conducted within the Skratch protocol. In particular, Skratch Tokens holders may be able to use their Skratch Tokens to purchase services and products to be offered within the Skratch platform or on UndergroundHipHop.com.

  • What do Skratch Tokens Not Represent

    Skratch Tokens are securities in the United States. This White Paper does not constitute a prospectus or offer document of any sort, is not intended to constitute an offer of securities or a solicitation for investment, does not pertain in any way to an initial public offering or a share/equity offering, and does not pertain in any way to an offering of securities in any jurisdiction. The Skratch Tokens are not intended to be marketed, offered for sale, purchased, sold, or traded in any jurisdiction where they are prohibited by applicable laws or require further registration with any applicable governmental authorities.

    Skratch Tokens do not represent a loan to Company. The Skratch Tokens neither debt instrument or bonds of any kind nor any other form of loan advanced to Company. Acquisition of the Skratch Tokens, whether through the Token Sale or otherwise, does not grant to Token holders any right of claim on Company’s financial or any other assets. Skratch Tokens don’t grant participation in Company or its assets. The Skratch Tokens do not provide Token holders with any ownership or other interest in Company. Acquisition of the Skratch Tokens does not present an exchange of cryptocurrencies for any form of shares in Company or Company’s assets, including intellectual property. Token holders are not entitled to any guaranteed form of dividends, revenue distributions, and voting rights.

    Skratch Tokens are non-refundable. Company is not obliged to provide Token holders with a refund related to the Skratch Tokens for any reason, and Token holders will not receive money or other compensation in lieu of the refund. No promises of future performance or value are or will be made in respect to the Skratch Tokens, including no promise of inherent value, no promise of continuing payments, and no guarantee that the Skratch Tokens will hold any particular value.

Disclaimer

This whitepaper (“Whitepaper”) in current form is being circulated by Skratch Incorporated (“Skratch”) for general information and to invite community feedback only on the Skratch project as presently conceived, and is subject to review and revision. Please do not replicate or distribute any part of this Whitepaper without this note attached. No part of this Whitepaper is intended to create legal relations between a recipient of this Whitepaper or to be legally binding or enforceable by such recipient against Skratch or any of its affiliates. An updated version or versions of this Whitepaper may be published on a date to be determined and announced by Skratch in due course. PLEASE READ THIS SECTION AND THE FOLLOWING SECTIONS ENTITLED “DISCLAIMER OF LIABILITY”, “NO REPRESENTATIONS AND WARRANTIES”, “REPRESENTATIONS AND WARRANTIES BY YOU”, “FORWARD-LOOKING STATEMENTS”, “THIRD PARTY INFORMATION AND NO CONSENT OF OTHER PERSONS”, “TERMS USED”, “NO ADVICE”, “NO FURTHER INFORMATION OR UPDATE”, “RESTRICTIONS ON DISTRIBUTION AND DISSEMINATION”, “NO OFFER OF INVESTMENT OR REGISTRATION” AND “RISKS AND UNCERTAINTIES” CAREFULLY. IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR LEGAL, FINANCIAL, TAX OR OTHER PROFESSIONAL ADVISOR(S).

This Whitepaper does not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities of any form, units in a business trust, units in a collective investment scheme or any other form of investment, or a solicitation for any form of investment in any jurisdiction.

Skratch Tokens are non-refundable. Skratch Tokens and any related authentication Tokens convey, possess and have attached no rights beyond the separate document that will govern the sale, purchase and/or use of each Skratch Token. Holders of Skratch Tokens shall have no rights in equity, title or interest in any dividends or distributions of income, gain or profits from Skratch or its affiliates; shall not benefit from, share in, receive or otherwise participate in any capital appreciation in or of Skratch or its affiliates; shall not benefit from, share in, receive or otherwise participate in any distribution of any assets upon a liquidation or dissolution of Skratch or its affiliates; shall have no rights, title or interest as either a shareholder, member, noteholder, bondholder or creditor of Skratch or its affiliates; shall have no rights, title or interest to participate in any other transaction of Skratch or its affiliates, except potentially as ordinary commercial transactions as a retail customer; shall have no future rights, benefits or privileges in Skratch or its affiliates, including any rights in the future development of Skratch or its affiliates or any rights to any intellectual property or trade secrets of Skratch or its affiliates; shall have no rights to refund or sell back an unused Skratch Token or anything else which could be received upon conversion, exercise, purchase or redemption of such Tokens, or any part thereof; and no rights to any refunds, credits, exchanges or other compensation, or to any new license or new Skratch Token, if any Token’s conversion or exchange or “mining” right should expire or be terminated.

While this Whitepaper does not preclude Skratch from offering holders of Skratch Tokens a share of the fees and revenue generated from the commercial applications of Skratch network, such offer, if any, and the extent thereof, will be at the sole and absolute discretion of Skratch. Accordingly, there is no assurance whatsoever as to whether such offer will be made and holders of Skratch Tokens should have no expectation of receiving any such offer. In the premises, no Skratch Token should be construed, interpreted, classified or treated as enabling, or according any opportunity to, own an equity interest in Skratch, purchase Skratch Tokens, participate in or receive profits, income, or other payments or returns arising from or in connection with the Skratch platform, the Skratch Tokens or the proceeds of the Skratch Token sale (as described in this Whitepaper), or to receive sums paid out of such profits, income, or other payments or returns.

This Whitepaper does not constitute or form part of any opinion on any advice to sell, or any solicitation of any offer by Skratch to purchase any Skratch Tokens nor shall it or any part of it nor the fact of its presentation form the basis of, or be relied upon in connection with, any contract or investment decision. Skratch intends to deploy all proceeds of sale of the Skratch Tokens to support ongoing development and growth of the Skratch network. No person is bound to enter into any contract or binding legal commitment in relation to the sale and purchase of the Skratch Tokens and no cryptocurrency or other form of payment is to be accepted on the basis of this Whitepaper. Any agreement as between Skratch and you as a purchaser, and in relation to any sale and purchase, of Skratch Tokens (as referred to in this Whitepaper) is to be governed by only a separate document setting out the terms and conditions of such agreement. In the event of any inconsistencies between such a separate document and this Whitepaper, the former shall prevail.

No regulatory authority has examined or approved of any of the information set out in this Whitepaper. No such action has been or will be taken under the laws, regulatory requirements or rules of any jurisdiction. The publication, distribution or dissemination of this Whitepaper does not imply that the applicable laws, regulatory requirements or rules have been complied with. There are risks and uncertainties associated with Skratch’s proposed business and operations, the Skratch Tokens, and the Skratch Token sale (each as referred to in this Whitepaper). This Whitepaper, any part thereof and any copy thereof must not be taken or transmitted to any country where distribution or dissemination of this Whitepaper is prohibited or restricted. No part of this Whitepaper is to be reproduced, distributed or disseminated without including this section and the following sections entitled “Disclaimer of Liability”, “No Representations and Warranties”, “Representations and Warranties By You”, “Forward-Looking Statements”, “Third Party Information and No Consent of Other Persons”, “Terms Used”, “No Advice”, “No Further Information or Update”, “Restrictions On Distribution and Dissemination”, “No Offer of Investment Or Registration” and “Risks and Uncertainties”.

DISCLAIMER OF LIABILITY

To the maximum extent permitted by the applicable laws, regulations and rules, Skratch and its affiliates shall not be liable for any indirect, special, incidental, consequential or other losses of any kind, in tort, contract or otherwise (including but not limited to loss of revenue, income or profits, and loss of use or data), arising out of or in connection with any acceptance of or reliance on this Whitepaper or any part thereof by you. IT IS YOUR RESPONSIBILITY TO FULLY OBSERVE THE LAWS OF ANY RELEVANT TERRITORY OR JURISDICTION IN CONNECTION WITH THIS WHITEPAPER, INCLUDING OBTAINING REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER REQUIRED LEGAL OR OTHER FORMALITIES.

NO REPRESENTATIONS AND WARRANTIES

Neither Skratch nor its affiliates makes or purports to make any representation, warranty or undertaking in any form whatsoever to any entity or person, including any representation, warranty or undertaking in relation to the truth, accuracy and completeness of any of the information set out in this Whitepaper. Furthermore Skratch and its affiliates hereby disclaim any representation, warranty or undertaking in any form whatsoever to any entity or person, including any representation, warranty or undertaking in relation to the truth, accuracy and completeness of any of the information set out in this Whitepaper.

REPRESENTATIONS AND WARRANTIES BY YOU

By accessing and/or accepting possession of any information in this Whitepaper or such part thereof (as the case may be), you represent and warrant to Skratch as follows:

(a) you agree and acknowledge that Skratch Tokens may not constitute securities of any form, units in a business trust, units in a collective investment scheme or any other form of investment in any jurisdiction;

(b) you agree and acknowledge that this Whitepaper does not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities of any form, units in a business trust, units in a collective investment scheme or any other form of investment in any jurisdiction, or a solicitation for any form of investment, and you are not bound to enter into any contract or binding legal commitment and no cryptocurrency or other form of payment is to be accepted on the basis of this Whitepaper;

(c) you acknowledge and understand that: (i) although Skratch Tokens may not constitute securities of any form, units in a business trust, units in a collective investment scheme or any other form of investment in any jurisdiction, this Whitepaper does not preclude Skratch from registering Skratch Tokens as if they were securities in any jurisdiction, at the sole and absolute discretion of Skratch; (ii) this Whitepaper does not preclude Skratch from offering holders of Skratch Tokens a share of the fees and revenue generated from its commercial operations, but such offer, if any, and the extent thereof, will be at the sole and absolute discretion of Skratch; (iii) there is no assurance whatsoever as to whether such offer will be made and holders of Skratch Tokens should have no expectation of receiving any such offer; and (iii) no Skratch Token should be construed, interpreted, classified or treated as enabling, or according any opportunity to, purchasers to participate in or receive profits, income, or other payments or returns arising from or in connection with the Skratch platform, Skratch Tokens or the proceeds of the Skratch Token sale (as described in this Whitepaper), or to receive sums paid out of such profits, income, or other payments or returns;

(d) you agree and acknowledge that no regulatory authority has examined or approved of the information set out in this Whitepaper, no action has been or will be taken under the laws, regulatory requirements or rules of any jurisdiction and the publication, distribution or dissemination of this Whitepaper to you does not imply that the applicable laws, regulatory requirements or rules have been complied with;

(e) you agree and acknowledge that this Whitepaper, the undertaking and/or the completion of the Skratch Token sale, or future trading of the Skratch Tokens on any exchange (whether for cryptocurrency or otherwise), shall not be construed, interpreted or deemed by you as an indication of the merits of the Skratch Tokens, the Skratch Token sale, or the Skratch platform (each as referred to in this Whitepaper);

(f) you are familiar with the laws of your jurisdiction, have consulted counsel regarding the applicable laws in your jurisdiction, and the distribution or dissemination of this Whitepaper, any part thereof or any copy thereof, or acceptance of the same by you, is not prohibited or restricted by the applicable laws, regulations or rules in your jurisdiction, and where any restrictions in relation to possession are applicable, you have observed and complied with all such restrictions at your own expense and without liability to Skratch or its affiliates;

(g) you agree and acknowledge that in the case where you wish to purchase any Skratch Tokens the Skratch Tokens may not be construed, interpreted, classified or treated as: (i) any kind of currency other than cryptocurrency; (ii) debentures, stocks or shares issued by any person or entity; (iii) rights, options or derivatives in respect of such debentures, stocks or shares; (iv) rights under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss; (v) units in a collective investment scheme; (vi) units in a business trust; (vii) derivatives of units in a business trust; or (viii) any other security, class of securities or form of investment;

(h) you understand the operation, functionality, usage, storage, transmission mechanisms and other material characteristics of cryptocurrencies, blockchain-based software systems, cryptocurrency wallets or other related Token storage mechanisms, blockchain technology and smart contract technology;

(i) you are fully aware and understand that in the case where you wish to purchase any Skratch Tokens, there are risks associated with Skratch and its respective business and operations, the Skratch Tokens, the Skratch Token sale, the Skratch platform or protocol and the Skratch network (each as referred to in the Whitepaper);

(j) you agree and acknowledge that Skratch is not liable for any indirect, special, incidental, consequential or other losses of any kind, in tort, contract or otherwise (including but not limited to loss of revenue, income or profits, and loss of use or data), arising out of or in connection with any acceptance of or reliance on this Whitepaper or any part thereof by you; and

(k) all of the above representations and warranties are true, complete, accurate and non-misleading from the time of your access to and/or acceptance of possession this Whitepaper or such part thereof (as the case may be).

FORWARD-LOOKING STATEMENTS

All statements contained in this Whitepaper, statements made in press releases or in any place accessible by the public and oral statements that may be made by Skratch or its directors, executive officers or employees acting on behalf of the Skratch (as the case may be), that are not statements of historical fact, constitute “forward-looking statements”. Some of these statements can be identified by forward-looking terms such as “aim”, “believe”, “target”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “if”, “intend”, “may”, “plan”, “possible”, “probable”, “project”, “should”, “would”, “will” or other similar terms. However, these terms are not the exclusive means of identifying forward-looking statements. All statements regarding Skratch’s financial position, business strategies, growth strategies, plans and prospects and the future prospects of the industry which Skratch is in, including including the state of legality or regulations regarding blockchain technology and/or cryptocurrencies, are forward-looking statements. These forward-looking statements, including but not limited to statements as to Skratch’s revenue and profitability, prospects, future plans, other expected industry trends and other matters discussed in this Whitepaper regarding Skratch are matters that are not historic facts, but only predictions. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual future results, performance or achievements of Skratch to be materially different from any future results, performance or achievements expected, expressed or implied by such forward-looking statements. These factors include, amongst others:

(a) changes in political, social, economic and stock or cryptocurrency market conditions, capital markets and the regulatory environment in the countries in which Skratch conducts its respective businesses and operations;

(b) competition from other similar companies, potentially with more experience in our industry;

(c) the risk that Skratch may be unable to execute or implement their respective business strategies and future plans;

(d) changes in interest rates and exchange rates of fiat currencies and cryptocurrencies;

(e) changes in the anticipated growth strategies and expected internal growth of Skratch;

(f) changes in the availability and fees payable to Skratch in connection with its businesses and operations;

(g) changes in the availability and salaries of employees who are required by Skratch to operate their respective businesses and operations;

(h) changes in preferences of users of the Skratch platform;

(i) changes in competitive conditions under which Skratch operates, and the ability of Skratch to compete under such conditions;

(j) changes in the future capital needs of Skratch and the availability of financing and capital to fund such needs;

(k) all of the above representations and warranties are true, complete, accurate and non-misleading from the time of your access to and/or acceptance of possession this Whitepaper or such part thereof (as the case may be).

(l) occurrences of catastrophic events, natural disasters and acts of God that affect the businesses and/or operations of Skratch;

(m) other factors beyond the control of Skratch; and

(n) any risk and uncertainties associated with Skratch and its businesses and operations, the Skratch Tokens, the Skratch Token sale and the Skratch platform or protocol (each as referred to in the Whitepaper).

In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Memorandum will in fact occur. All forward-looking statements made by or attributable to Skratch or persons acting on behalf of Skratch are expressly qualified in their entirety by such factors. Given that risks and uncertainties that may cause the actual future results, performance or achievements of Skratch to be materially different from that expected, expressed or implied by the forward-looking statements in this Whitepaper, undue reliance must not be placed on these statements. These forward-looking statements are applicable only as of the date of this Whitepaper. Neither Skratch nor any other person represents, warrants and/or undertakes that the actual future results, performance or achievements of Skratch will be as discussed in those forward-looking statements. The actual results, performance or achievements of Skratch may differ materially from those anticipated in these forward-looking statements. Nothing contained in this Whitepaper is or may be relied upon as a promise, representation or undertaking as to the future performance or policies of Skratch. Further, Skratch disclaims any responsibility to update any of those forward-looking statements or publicly announce any revisions to those forward-looking statements to reflect future developments, events or circumstances, even if new information becomes available or other events occur in the future.

THIRD PARTY INFORMATION AND NO CONSENT OF OTHER PERSONS

This Whitepaper includes information obtained from various third party sources (“Third Party Information”). None of the publishers of the Third Party Information has consented to the inclusion of the Third Party Information in this Whitepaper and is therefore not liable for the Third Party Information. While Skratch has taken reasonable action to ensure that the Third Party Information have been included in their proper form and context, neither Skratch, nor its directors, executive officers and employees acting on its behalf, has independently verified the accuracy, reliability, completeness of the contents, or ascertained any applicable underlying assumption, of the relevant Third Party Information. Consequently, neither Skratch nor its directors, executive officers and employees acting on their behalf makes any representation or warranty as to the accuracy, reliability or completeness of such information and shall not be obliged to provide any updates on the same.

TERMS USED

To facilitate a better understanding of the Skratch Tokens being offered for purchase by Skratch, and the businesses and operations of Skratch, certain technical terms and abbreviations, as well as, in certain instances, their descriptions, have been used in this Whitepaper. These descriptions and assigned meanings should not be treated as being definitive of their meanings and may not correspond to standard industry meanings or usage. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations.

NO ADVICE

No information in this Whitepaper should be considered to be business, legal, financial or tax advice regarding Skratch, the Skratch Tokens, the Skratch Token sale, and the Skratch platform or protocol (each as referred to in the Whitepaper). You should consult your own legal, financial, tax or other professional adviser regarding Skratch and its businesses and operations, the Skratch Tokens, the Skratch Token sale, the Skratch platform or protocol and the Skratch network (each as referred to in the Whitepaper). You should be aware that you may be required to bear the financial risk of any purchase of Skratch Tokens for an indefinite period of time.

NO FURTHER INFORMATION OR UPDATE

No person has been or is authorized to give any information or representation not contained in this Whitepaper in connection with Skratch and its businesses and operations, the Skratch Tokens, the Skratch Token sale, and the Skratch platform or protocol (each as referred to in the Whitepaper) and, if given, such information or representation must not be relied upon as having been authorized by or on behalf of Skratch. The Skratch Token sale (as referred to in the Whitepaper) shall not, under any circumstances, constitute a continuing representation or create any suggestion or implication that there has been no change, or development reasonably likely to involve a material change in the affairs, conditions and prospects of Skratch or in any statement of fact or information contained in this Whitepaper since the date hereof.

RESTRICTIONS ON DISTRIBUTION AND DISSEMINATION

The distribution or dissemination of this Whitepaper or any part thereof may be prohibited or restricted by the laws, regulatory requirements and rules of any jurisdiction. In the case where any restriction applies, you are to inform yourself about, and to observe, any restrictions which are applicable to your possession of this Whitepaper or such part thereof (as the case may be) at your own expense and without liability to Skratch or its affiliates. Persons to whom a copy of this Whitepaper has been distributed or disseminated, provided access to or who otherwise have the Whitepaper in their possession shall not circulate it to any other persons, reproduce or otherwise distribute this Whitepaper or any information contained herein for any purpose whatsoever nor permit or cause the same to occur.

NO OFFER OF INVESTMENT OR REGISTRATION

This Whitepaper does not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities of any form, units in a business trust, units in a collective investment scheme or any other form of investment, or a solicitation for any form of investment in any jurisdiction. No person is bound to enter into any contract or binding legal commitment and no cryptocurrency or other form of payment is to be accepted on the basis of this Whitepaper.

No regulatory authority has examined or approved of any of the information set out in this Whitepaper. No such action has been or will be taken under the laws, regulatory requirements or rules of any jurisdiction. The publication, distribution or dissemination of this Whitepaper does not imply that the applicable laws, regulatory requirements or rules have been complied with.

RISKS AND UNCERTAINTIES

Skratch is a newly formed entity, lacks any significant operating history and offers no assurances that anyone will adopt or utilize Skatch Tokens as described in this Whitepaper. As such, Skratch is subject to the risks and uncertainties of any technology start-up company without significant profits or capitalization at inception. If any of such risks and uncertainties develops into actual events, the business, financial condition, results of operations and prospects of Skratch could be materially and adversely affected. In such cases, Skratch Tokens could lose all or part of their value.