Terms and Conditions for the Trustlines Merkle Drop

Background

The Merkle Drop and the role of the Foundation

The Trustlines Blockchain is a public blockchain for applications that share the overall Trustlines vision of creating decentralized p2p use cases based on networks of mutual-trust. This blockchain requires a native coin, the Trustlines Network Coin (TLC), analogous to Bitcoin or Ether in Ethereum, which will be used by those interacting with the blockchain as a means of payment to the Validators for validating their transactions/interactions on the Trustlines Blockchain.

To distribute TLC, Trustlines Network Tokens (TLN) will be created and made available to Eligible Parties via the Ethereum Mainchain through different distribution methods. Initially however via the Merkle Drop. The Ethereum Mainchain was chosen for this due to interoperability with the Trustlines Blockchain and because the already existing Ethereum address balances and information on the Ethereum Mainchain make the chosen Eligible Party selection methodology possible. Once Claimed from the Merkle Drop Smart Contract, the TLN will be able to be converted to TLC on the Trustlines Blockchain using the Trustlines Bridge.

The Trustlines Foundation’s role in this process comprises

  • The organisation of the creation of the Contracts and related software components;
  • The selection of Eligible Parties and determining their respective allocation of TLN;
  • The collection of Ethereum addresses from the Eligible Parties;
  • The deployment of the Contracts; and
  • The organisation of the creation, and deployment of the Trustlines Bridge.

How the Merkle Drop works

In General

To make Trustlines Network Tokens (TLN) available for Eligible Parties to Claim, a Merkle drop model was chosen as the first distribution method. Merkle drops (or merkle mines) are a variant of air drops or smart drops, in which tokens are not actively sent or transferred to the intended recipients, but are made available so that the tokens may be claimed by a predetermined group is they so desire. In the case of the Merkle Drop, a Smart Contract containing a Merkle root is deployed on the Ethereum Mainchain, from which an Eligible Party can Claim their TLN allocation using an on-chain transaction which provides a Merkle Proof to the Merkle Drop Smart Contract allowing them to Claim their allocated TLN. This method allows Eligible Parties to Claim their allocated TLN without the need of any action by the Foundation or any third party. Once the Merkle Drop Smart Contract is deployed, neither the Foundation nor any other party will have control over the Merkle Drop Smart Contract, thereby ensuring that no changes can be made to the list of Eligible Parties and/or the allocated TLN.

Creation of the Merkle Root for the Merkle Drop Smart Contract and its deployment

Merkle trees are used to validate large amounts of data in an efficient way by combining multiple values and their hashes in a single fixed-size value - a Merkle root. In the case at hand, the Foundation will use the Eligible Party Ethereum addresses and their respective TLN allocation (see Eligible Party selection methodology) to create a Merkle Tree and include its Merkle Root into the Merkle Drop Smart Contract which it will deploy on the Ethereum Mainchain.

Claiming tokens from the Merkle Drop Smart Contract

Merkle proofs are a way to provide proof that a certain value is part of a set of data without the need of exposing the complete set of data. More specifically, in the Merkle Drop, a Merkle Proof that a Ethereum address is included within the Merkle Root of the Merkle Drop Smart Contract needs to be provided to the Merkle Drop Smart Contract in order for an Eligible Party to Claim its allocated TLN.

Step1 - confirming if an Ethereum address is an Eligible Party Ethereum address: open the  Merkle Drop   and enter the Ethereum address that you want to check. If the Ethereum address is an Eligible Party Ethereum address, the Merkle Proof will automatically be generated. If the Ethereum address is not an Eligible Party Ethereum address a corresponding notification will be presented.

Step 2 - Submitting the Merkle Proof to the Merkle Drop Smart Contract: you will be able to Claim TLN directly through the  Merkle Drop   by using a web3 provider such as Metamask. If a Merkle Proof is successfully generated, the website will interact with the web3 provider and initiate the creation of a transaction to Claim the TLN. By clicking the respective claim button and approving the transaction, the Merkle Drop Smart Contract is instructed to transfer the maximum amount of Claimable TLN to the Eligible Party Ethereum address.

Warnings and recommendations

  • Note that a Claiming transaction can only be signed by the Ethereum address of an Eligible Party Ethereum address.
  • Note you will need to have sufficient ETH to pay for the transaction to be processed on the Ethereum Mainchain.
  • No guarantee is given with regard to the proper functioning of the web3 provider, the Merkle Drop Website or the integration of each of these.

To ensure future economics of the Trustlines Blockchain Claiming TLN will only be possible within 2 years starting from the deployment of the Merkle Drop Smart Contract. To incentivize early adoption, the amount of Claimable allocated TLN will decrease linearly over these 2 years. Non-Claimable TLN will be rendered unusable.

The TLN and TLC

The Trustlines Network Token (TLN)

The Trustlines Network Token (TLN) is an ERC-20 token on the Ethereum Mainchain. It is envisaged to be able to be converted via the Trustlines Bridge to Trustlines Network Coins (TLC), which are the native tokens of the Trustlines Blockchain.

The TLN is  deployed   via a smart contract on the Ethereum Mainchain and has the following token specifications:

Type of smart contract standardERC20
Quantity of tokens80 Million
Decimals18
SymbolTLN
NameTrustlines Network Token

A link to the relevant smart contract can be found  here.  

Trustlines Network Coin (TLC)

Since the Ethereum Mainchain and the Trustlines Blockchain have no direct connection with each other, the Foundation has deployed the  Trustlines Bridge . The Trustlines Bridge registers if someone wishes to convert TLN to TLC on the Trustlines Blockchain. Once such an event is registered in the Trustlines Bridge and validated by at least 50% of the then active Validators, the person will receive the same amount of TLC on the Trustlines Blockchain.
The Trustlines Bridge will hold the same quantity of TLC as there are TLN so that it can be ensured that all TLN can be converted to TLC on the Trustlines Blockchain.

At the start of the Trustlines Blockchain a total of 80,000,000 TLC were pre-mined and deposited into the  Trustlines Bridge contract   deployed on the Trustlines Blockchain. In addition to the pre-mined coins 3 new TLC are created in the form of a block reward after each block is created by a Validator.

Use of the TLN and TLC

As previously stated, the Trustlines Blockchain requires a native coin, the TLC, analogous to Bitcoin or Ethereum in Ethereum, which will be used by those interacting with the Trustlines Blockchain as a means of payment to the Validators for validating their transactions/interactions on the Trustlines Blockchain.

Eligible Party selection methodology

Goal

By making TLN available to a wide range of Eligible Party Ethereum addresses, the Foundation hopes to foster adoption of the Trustlines Blockchain by lowering one of the initial adoption hurdles, i.e. the need to acquire the means to pay for transactions fees on the Trustlines Blockchain. The predetermined Eligible Party Ethereum addresses fall into 3 categories and were selected based on a set of criteria that indicate an increased likelihood of use of the Trustlines Blockchain by the Ethereum address owner.

Retained by Foundation30%
Reserved for future token distribution methodsMin 20%
Early contributors and potential future stakeholdersMax 30%
Wide target audienceMin 20%

Groups of Eligible Parties

The Foundation has identified 3 groups of Ethereum addresses with an increased likelihood of adopting / using the Trustlines Blockchain:

  1. Addresses belonging to entities, individuals or groups of individuals who have either contributed to the Trustlines Network Ecosystem in the past (early contributors);
  2. Ethereum addresses belonging to entities, individuals or groups of individuals who are likely to contribute in the future (potential future stakeholders); and
  3. Addresses belonging to entities, individuals or groups of individuals who have participated in TGEs/ICOs in the past (wider target audience).

Within each group, the Foundation has applied additional criteria which it deemed suitable and reasonable to include or exclude Ethereum addresses from the final list of Eligible Party Ethereum addresses.

Early contributors

The group of early contributors is composed of among others:

  • Laika testnet Validators and Validator Candidates;
  • Directly contributing developers: entities, individuals or groups of individuals who are or have been actively developing around the code base of the Trustlines Protocol or directly related software components;
  • Indirectly contributing developers: entities, individuals or groups of individuals who are or have been developing on open source projects or code, of which substantial components were used in the development of the Trustlines Protocol codebase;
  • Advisors: entities, individuals or groups of individuals who gave technical or strategic advice or helped out in similar, non-tangible ways;
  • Testers: entities, individuals or groups of individuals who tested parts of the code base of the Trustlines Protocol or directly related software components.

Potential future stakeholders

The group of potential future stakeholders is composed of among others:

  • Entities, individuals or groups of individuals with an aligned vision/mission: projects or members of projects, which are working towards a similar goal or have a similar purpose as the Foundation and are as such seen to potentially contribute or become stakeholders of the Trustlines Ecosystem in the future.
  • Entities, individuals or groups of individuals which develop software components that Trustlines is built on top of: projects or members of projects, which have been developing software which is used within the Trustlines Protocol or that has/will benefit(ted) the Trustlines Protocol in a significant way.
  • Potential future users: people who are deemed likely to become future users of any of the components of the Trustlines technology stack why can be identified with other means than the methodology used for the wider target audience as described below. An example of this would be if they have shown interest in Trustlines technology, i.e. by following or contributing to the Trustlines Github repositories or social media..

Wider target audience

Besides early contributors and potential stakeholders (as described above), the Foundation considered 2 additional sub-groups having an increased likelihood of becoming a future Trustlines Ecosystem participant:

  1. Entities, individuals or groups of individuals who have participated in TGEs/ICOs (which has announced some form of ID verification process) in the past; and
  2. A subset of entities, individuals or groups of individuals from a group of approximately 1M Twitter-accounts that are within two hops (friends-of-friends-of-friends) of roughly 20 Twitter-anchor accounts. The Twitter-anchor accounts were chosen based on their owner’s subjective trustworthiness as well as their good public reputation within the general Ethereum community.

Definitions

Ethereum Mainchain or Ethereum Blockchain means the smart contract protocol, virtual machine and decentralized network including all its related components and protocol-related projects both present and future, which began operation (Genesis Block) on July 30th, 2015.

Ether (ETH) means the cryptocurrency native to the Ethereum Mainchain, i.e. the blockchain token of Ethereum.

Trustlines Network is short for “The Trustlines Network ecosystem”, which is an ecosystem of entities, individuals, organisations and code that aims to promote financial &qeconomic inclusion of all people through decentralized and open source systems.

Trustlines Protocol represents a set of rules, processes and definitions translated into deployable code that forms part of the Trustlines Network. It will, amongst others, comprise several technical components used to calculate paths and store transactions, i.e. smart contracts, the Trustlines Blockchain and the code for the relay servers. It aims to provide a base layer to enable interactions within the Trustlines Network.

Trustlines Blockchain means a purpose built Side-Chain to the Ethereum Mainchain that is intended to serve as a database and storage for transactions to support implementations of the Trustlines Protocol.

Foundation means the Trustlines Foundation, a Liechtenstein non-profit foundation registered in Ruggell, Liechtenstein.

Side-Chain means a designation for a blockchain that runs in parallel to a primary blockchain. Entries from the primary blockchain can be linked to and from the Side-Chain; this allows the Side-Chain to otherwise operate independently of the primary blockchain.

Terms mean these terms and conditions forming the Agreement between you, the Eligible Party and the Foundation.

Disputes means any dispute, claim, suit, action, cause of action, demand or proceeding arising out or in connection with these Terms, or the breach, termination or invalidity thereof.

Trustlines Bridge means a combination of one  smart contract   deployed on the Ethereum Mainchain, one  smart contract   deployed on the Trustlines Blockchain and a monitoring tool that runs on the Validator nodes. It allows for the mono directional conversion of Trustlines Network Token from the Ethereum Mainchain into the Trustlines Blockchain as native Trustlines Network Coins.

Trustlines Network Tokens (TLN)   means tokens within the ERC20 TLN  token contract   on the Ethereum Mainchain, which can be converted to TLC by sending them to the Trustlines Bridge.

Trustlines Network Coins (TLC) means the native cryptocurrency of the Truslines Blockchain.

Smart Contract(s) means a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties.

Contracts means the specific smart contracts used for this Merkle Drop and the Trustlines Bridge.

Merkle Tree means the merkle tree including the Eligible Party Ethereum addresses and their respective TLN allocation forming the basis of the Merkle Root.

Merkle Proof means a merkle proof that an Address is included within the Merkle Root of the Merkle Drop Smart Contract.

Merkle Drop means the merkle drop organised by the Trustlines Foundation and being the mechanism for Eligible Parties to Claim TLN.

Eligible Party means an entity, individual or groups of individuals who own an Ethereum address that is included in the Merkle Tree and is therefore able to Claim TLN in the Merkle Drop.

Validator means an entity, individual or groups of individuals who or which has deployed and operates the Trustlines Blockchain client in order to validate and relay transactions on the Trustlines Blockchain and is part of the current Validator Set.

Validator Candidate means entity, individual or groups of individuals whose Ethereum address which he/she/it has provided to the Foundation and has been whitelisted in the first validator auction smart contract by the Foundation in order to take part in the first Trustlines Validator auction.

Claiming means sending a transaction to the Merkle Drop Smart Contract that initiates a transfer of TLN as described in the section “Claiming tokens from the Merkle Drop Smart Contract” in this document.

Affiliate(s) means any and all persons and or entities directly or indirectly controlling, controlled by or under common control with such person, where control may be by either management authority, contract or equity interest.

Merkle Drop Smart Contract means the Smart Contract deployed by the Foundation on the Ethereum Mainchain with the purpose of providing a mechanism for Eligible Parties to Claim TLN.

Party/Parties means an Eligible Party Claiming TLN and/or the Foundation as the case may be.

Public Key means on Ethereum, the public key derived cryptographically from a corresponding private key, which is used for authentication purposes on Ethereum.

Address means a representation of an Ethereum Mainchain account, e.g. to hold ETH or other tokens in Ethereum. It is derived cryptographically from the Public Key.

Acceptance of terms and conditions

By Claiming TLN from the Merkle Drop Smart Contract, you accept and are subject to these terms and conditions.

Representations and warranties of the Merkle Drop participant

By Claiming TLN from the Merkle Drop Smart Contract, the Eligible Party represents and warrants that:

  1. Claiming TLN from the Merkle Drop Smart Contract and all your other actions related to the Merkle Drop are voluntary, there is no obligation to take part in the Merkle Drop.
  2. You have read, understand and accept these Terms;
  3. You understand the restrictions and risks associated with the Merkle Drop as set forth in these Terms, and acknowledge and assume all such restrictions and risks;
  4. You have a sufficient understanding of the functionality, usage, storage, transmission mechanisms and intricacies associated with cryptographic tokens and blockchain-based software systems;
  5. You have obtained sufficient information about the Trustlines Protocol, the Trustlines Network, the Merkle Drop, the TLN and TLC, the Trustlines Blockchain and the Foundation to make an informed decision whether or not to claim TLN from the Merkle Drop Smart Contract;
  6. You understand and accept that none of the information contained in these Terms is intended to form the basis for a solicitation or recommendation for an investment of any kind whatsoever;
  7. You understand and accept that you waive your rights to have any Dispute resolved in a court, and that you waive your rights to a jury trial. Instead, any Disputes will be settled through amicable negotiations and/or through binding arbitration.
  8. You are not registered on any of the following sanction lists; United Nations Sanctions (UN), US Consolidated Sanctions OFAC, Specially Designated Nationals (SDN), EU Financial Sanctions, UK Financial Sanctions (HMT), Australian Sanctions, Switzerland Sanction List - SECO, INTERPOL Wanted List, Consolidated Canadian Autonomous Sanctions List, Office of the Superintendent of Financial Institutions (Canada), Bureau of Industry and Security (US), Department of State, AECA Debarred List (US), Department of State, Nonproliferation Sanctions (US), or any other internationally recognised sanction list.
  9. Any and all of your actions, whether directly or indirectly related to the Merkle Drop, the TLN and TLC and the Trustlines Protocol comply with applicable laws and regulations in your jurisdiction, including, but not limited to, (i) legal capacity and any other threshold requirements in your jurisdiction (ii) and any foreign exchange or regulatory restrictions applicable to such actions.

Review and testing of the Smart Contracts

The Merkle Drop Smart Contract, the Trustlines Network Token Smart Contract and the Trustlines Bridge Smart Contracts (together the “Contracts”) have been, on a reasonable effort basis, reviewed, tested and approved by technical experts. The technical experts have confirmed to the Foundation that the Contracts have, with regard to both accuracy and security, been programmed according to the current state of the art. The Eligible Party however, understands and accepts that smart contract technology is still in an early development stage and its application is of an experimental nature which carries significant operational, technological, financial, regulatory and reputational risks. Accordingly, while the conducted review and testing raises the level of security and accuracy, in theory, the Eligible Party understands and accepts that the review and testing does not amount to any form of warranty, including direct or indirect warranties that the Contracts are fit for a particular purpose or do not contain any weaknesses, vulnerabilities or bugs which could cause, inter alia, the complete loss of the TLN or TLC or your ETH.

Associated risks

By Claiming TLN from the Merkle Drop Smart Contract, you expressly acknowledge and assume the following risks:

  • Risk of losing ETH, TLN, TLC or other tokens due to loss of private key(s);
  • Risks associated with the Ethereum blockchain: any malfunction, breakdown or abandonment of the Ethereum blockchain may have a material adverse effect on the Contracts;
  • Risk of mining attacks: the Contracts are susceptible to attacks by miners on the Ethereum blockchain, including, but not limited, to double-spend attacks, majority mining power attacks, and selfish-mining attacks. Any successful attacks present a risk to the Merkle Drop;
  • Risk of hacking and security weaknesses: hackers or other malicious groups or organizations may attempt to interfere with the Merkle Drop in a variety of ways, including, but not limited to, malware attacks, denial of service attacks, consensus-based attacks, Sybil attacks, smurfing, and spoofing;
  • Risk of uninsured Losses: unlike bank accounts or accounts at financial institutions, the TLN held in the Contracts is uninsured unless you specifically obtain private insurance to insure them. Thus, in the event of loss or loss of utility value, there is no public insurer or private insurance arranged by the Foundation, to offer recourse to you;
  • Risks associated with uncertain regulations and enforcement actions: the regulatory status of, including but not limited to the Merkle Drop, the TLN and TLC, and distributed ledger technology is unclear or unsettled in many jurisdictions. It is difficult to predict how or whether regulatory agencies may apply existing regulation with respect to such technology and its applications. It is likewise difficult to predict how or whether legislatures or regulatory agencies may implement changes to law and regulations affecting distributed ledger technology and its applications, including but not limited to the Merkle Drop and the TLN and TLC. Regulatory actions could negatively impact the whole Trustlines Protocol in various ways, including, for purposes of illustration only, that some or all of the parties involved in the Trustlines Protocol in general might require licensing or is subject to existing licensing requirements;
  • Risks arising from taxation; the tax characterization of the Merkle Drop, claiming TLN and of TLN and TLC in general is uncertain. You must seek your own tax advice before Claiming TLN from the Merkle Drop Smart Contract, which may result in adverse tax consequences to you, including but not limited to withholding taxes, income taxes and tax reporting requirements.
  • Unanticipated risks: blockchain technology and the Trustlines Protocol are a new and untested technology. In addition to the risks referred to above, there are other risks associated with the Merkle Drop, including unanticipated risks. Such risks may further materialize as unanticipated variations or combinations of the risks previously referred to.

Indemnification

To the fullest extent permitted by applicable law, you will indemnify, defend and hold harmless the Foundation and its Affiliates from and against all claims, demands, actions, damages, losses, costs and expenses (including attorneys’ fees) that arise from or relate to (i) you participating in the Merkle drop; (ii) your obligations, representations and warranties under these Terms, (iii) your violation of these Terms, and/or (iv) your violation of any rights of any other person or entity directly and indirectly related to the Merkle drop.

Exclusion of Warranties

To the full extent permitted by law, no warranty, guarantee or similar assurance whatsoever is expressed or implied with regard to the Trustlines Protocol and its components. The Contracts are used at the sole risk of the user (users including but not limited to Eligible Parties) and on an ‘as is’, ‘under development’ and ‘as available’ basis.
Being an Eligible Party in the Merkle Drop and agreeing to these Terms does neither entail a right nor an entitlement in any way whatsoever to receiving TLN or TLC.

No Reliance

You, the Eligible Party has had an opportunity to (i) review these Terms, (ii) ask questions and receive answers from the Foundation concerning these Terms and the Merkle Drop, and (iii) obtain any additional information concerning the Merkle Drop, the Contracts and the Foundation to the extent necessary for in order to make an informed decision to enter into these Terms and to Claim TLN from the Merkle Drop Smart Contract. The Eligible Party acknowledges that in making a decision to Claim TLN from the Merkle Drop Smart Contract, the Eligible Party has relied solely upon these Terms and independent investigations made by the Eligible Party. The Eligible Party is not relying on the Foundation with respect to the legal, tax and general economic factors involved in entering into these Terms and understands that it is solely responsible for reviewing the legal, tax and general economic considerations involved with Claiming TLN from the Merkle Drop Smart Contract with its own legal, tax and other advisers.

Limitation of Liability

The Eligible Party acknowledges and agrees that, to the fullest extent permitted by any applicable law, it will not hold the Foundation and any of its Affiliates liable for any direct, indirect, special, incidental, consequential or exemplary damages (including but not limited to loss of income, revenue and profits, or goodwill, or data) or injury whatsoever caused by or related to his/her partaking (or inability to partake) in the Merkle Drop or the use (or inability to use) of the Contracts under any cause of action whatsoever of any kind in any jurisdiction.
The Eligible Party acknowledges and agrees that, to the fullest extent permitted by any applicable law, the risks associated with Claiming TLN from the Merkle Drop Smart Contract, owning and holding TLN rests entirely with the Eligible Party.
The limitations set forth in the Clause do not and will not limit or exclude liability of the Foundation for fraud or intentional, willful or reckless misconduct.

Release

To the fullest extent permitted by applicable law, the Merkle Drop participant releases the Foundation and its Affiliates from responsibility, liability, claims, demands and/or damages (actual and consequential) of every kind and nature, known and unknown (including, but not limited to, claims of negligence), arising out of or related to Disputes between the parties and out of or related to the acts or omissions of any third parties and or affiliates.

Disputes: Binding Arbitration

Any Dispute shall first be endeavoured to be settled through amicable negotiations in good faith by the Parties. If the Parties cannot agree how to resolve the Dispute within thirty (30) days after the date a notice is received by the applicable Party, then either you or the Foundation may, as appropriate, commence arbitration proceedings. The Dispute shall subsequently (and exclusively) be submitted to three arbitrators. The nomination of arbitrators and the rules of arbitration shall be in accordance with the Rules of Arbitration of Liechtenstein (“Schiedsordnung der Liechtensteinischen Industrie- und Handelskammer”). The seat of the arbitral tribunal shall be Ruggell, Liechtenstein. Language of the proceedings shall be English. The arbitral award is final and binding upon the parties. The arbitration fees will be borne by the losing party unless otherwise awarded by the arbitral tribunal. The parties undertake to carry out the arbitral award in accordance with the modalities of said reward.

Notices

Notice to the Foundation shall be sent by e-mail to the Foundation at  contact@trustlines.foundation.  

Notice to you shall be by email to the email address you provide to us.

Your notice must include (i) your name, postal address, email address and telephone number, (ii) a description in reasonable detail of the nature or basis of any possible Dispute, and (iii) the specific relief that you are seeking.

Governing Law and Venue

These Terms will be governed by and construed in accordance with the laws of Liechtenstein, without regard to conflict of law rules or principles that would cause the application of the laws of any other jurisdiction.
Any Dispute that is not or cannot be subject to arbitration will be resolved by the courts of Liechtenstein.

Severability

If any term, clause or provision of these Terms is held unlawful, void or unenforceable, then that term, clause or provision will be severable from these Terms and will not affect the validity or enforceability of any remaining part of that term, clause or provision, or any other term, clause or provision of these Terms. Such unlawful, void or unenforceable clause or provisions shall be replaced by valid and enforceable clause or provisions, which most closely achieve the commercial intent and purpose of these Terms.

Miscellaneous

These Terms constitute the entire agreement between the Parties relating to your participation in the Merkle Drop and supersede any other agreements, statements or information provided by the Foundation and/or any of its Affiliates. the Foundation may assign its rights and obligations under these Terms. the Foundation’s failure to exercise or enforce any right or provision of these Terms will not be construed or understood as a waiver of such right or provision. the Foundation will not be liable for any delay or failure to perform any obligation under these Terms where the delay or failure results from any cause beyond our reasonable control. This Agreement and the (trans)actions envisaged therein does not create any form of partnership, joint venture, or any other similar relationship between the Parties. Except as otherwise provided herein, these Terms are intended solely for the benefit of the Parties and are not intended to confer third-party beneficiary rights upon any other person or entity.