Zen Inc. EXO: A U.S. Based, Regulated, Decentralized Autonomous Organization Backed By Crude Oil

Exo - ˈɛksəʊ/ prefix

1. external; from outside

The Zen Inc. EXO whitepaper is not an attempt from Zen inc. or any of its associates to offer or solicit the sale of securities. This whitepaper was published on the above date with the purpose and intent of explaining a technical approach to the creation of a cryptocurrency to allow environmental sentiment to be expressed in the modern oil market. The concepts expressed in the Zen Inc. EXO whitepaper are forward-thinking opinions based on existing

information cited in this paper; the Zen Inc. EXO whitepaper however is not intended to be utilized by any individual for the basis of decision for buying or selling Zen Inc. EXO tokens. All orders to purchase Zen Inc. EXO

in any prospective crowdsale are subject to the terms, conditions, risk potential, and doctrine pursuant to your jurisdiction. Zen inc. & it’s proprietors assume no liability in losses or gains pertaining to Zen Inc. EXO and it’s

purchase or sale. All rights reserved © Zen inc. 2018.

Mission & Purpose

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Zen Inc. EXO is a regulated blockchain security that will be traded on compliant,

registered cryptocurrency exchanges as EXO. The goal and intent of creating this generalized

crypto-commodity is to (i) create a cryptocurrency with a tangible backing, and (ii) to incentivize

the long term storage of crude oil through a concept we call Oil-as-bullion (OaB) which will

provide a pollution dividend paid in cryptocurrency. The goal, being the decentralization of oil

reserve ownership, and slowly encouraging the conservation of natural resources while still

supporting the oil drilling industry for a term through energy consumption found in traditional

cryptocurrency mining as well as the private energy sector.

Impact and Scope

! Figure 1 shows a pie-chart representing 2017 U.S. Energy Information Administration data on sources for

electrical power within the U.S.

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According to the U.S. Energy Information Administration, the primary sources utilized for

energy production today are natural gas, coal and oil. EXO aims to change these sources to

renewable options such as; wind, solar, and hydro - oil and fossil fuels will become a means for

storing value and hedging against economic risks associated with natural disaster, market

fluctuations, or socioeconomic issues that may impact green energy production in short-term

circumstances. In the past, society had less demand for energy, therefore currency found backing

in precious metals. Following the industrial revolution, energy and it’s means of production have

become the centerpiece in economies worldwide. Our goal is to create a currency that meets the

demands for a modern energy production-backed and also oil backed cryptocurrency instead of

an energy consumption-backed model with no liquid able asset backing the cryptocurrency as

seen in most cryptocurrency mining today.

Blockchain & Natural Resources

The capability of tracing natural resources from extraction to the barrel through blockchain

technology allows citizens, governments, regulators, private companies, non-profits, and other

interested parties the satisfaction of verifying the origin of barrels. By utilizing blockchain

technology, we avoid the potential for illicit organizations to profit off of the middle-man sale of

illegally obtained black-market oil.

In the long term, the research and development of renewable energy will directly benefit from

access to the EXO’s public ledger which will provide concrete data on crude oil holdings and

consumption. Current representations of how renewables such as batteries, charging stations etc.

obtain energy in the first place is ambiguous and often skewed.

Through the development and use of Zen Inc. EXO, global oil trade will be revolutionized like

never before through creating a user friendly, P2P platform that provides a cryptocurrency

standard for energy trade. Zen Inc. EXO will also be the first cryptocurrency that follow SEC

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compliances for the initial ICO release which is backed by crude oil. Zen Inc. EXO will be

recognized by the SEC as the Corporation transitions into an IPO model

Business Model

Zen inc. created EXO as a non-profit software endeavor with development efforts intended as a

for a for-profit US-based blockchain petroleum solutions firm located in Minnesota, United

States to create and facilitate an open Blockchain standard for energy trade while monetizing our

patent pending blockchain oil barrel solution. The intention of the corporation is to enter

numerous barrels of oil backed by ETF funds under this system, and these barrels will continue

to be held and insured by the corporations we already know and trust with energy production.

Now with the added dynamic of being owned by individual people in a peer-to-peer, regulated,

digital marketplace that is available to customers all over the globe.

ICO Roadmap

Zen inc. intends to facilitate and oversee the core development of Zen Inc. EXO which will be an

open source cryptocurrency under the MIT license. The initial mineable supply of the coin will

have no cap, allowing the market to grow over time and support an ecosystem that encourages

the consumption of excess energy. The initial supply will be set at 84 million tokens in efforts to

give a metric and large price that will eventually attain parity with the daily demand for crude oil

in 42 gallon barrels at WTI prices and metrics (i.e. 1 barrel in reserve per network token). we

will set aside 50% of the initial supply - 42 million tokens in a software dictated pre-mine which

will be designated as the initial coin offering or ICO crowd sale tokens designed to provision Zen

inc. with the funds necessary to develop software and hardware solutions and subsequently back

such solutions we have derived.

We intend for this initial supply of 42 million tokens to be sold at the cumulative USD value of

0.80 cents to represent the ICO price of approximately 1 metric liter per token. Therefore setting

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our funding hard cap at the equivalent value of 33.6 million USD and giving us enough money

on hand to back the entire potential supply with various ETF shares available on the market

today as outlined in Figure 2. at the initial value of 1 liter per token, and 159 liters per block.

Our soft cap would be set at the equivalent value of 25 million USD which would allow basic

backing of the 42 million ICO tokens sold in the crowd sale using ETF shares and cover 5 years

of software and hardware development budget which would be spearheaded with the intent to

transfer the backing model entirely to our patented physical barrel system found in Figure 3 as

means of decentralizing and backing the token.

Following the completion of our fundraising event, 25% of the accumulated funds will be

immediately liquidated at market value to their USD equivalent by our legal compliance team

and then we will use the funds derived from this sale to begin software and hardware

development and appropriate SEC registration protocols eventually transitioning to being backed

in a manner which would henceforth allow Zen Inc. EXO to become listed on regulated

exchanges within the U.S. and abroad.

The other 25% of the ICO funds collected for development will remain stored in cryptocurrency

due to our involvement and active participation in the blockchain space. The remaining 50% of

the ICO funds representing 21,000,000 liters of oil, in which is representing a reserve ratio of

50% with 21 mega liters on reserve, supporting 42,000,000 coins; will be placed on a one year

hold in which time we intend to find a minimum of 6 corporate partners to purchase the initial

crude oil ETF backing to remain complicit with our commitment to decentralize the ownership

of oil reserves and adequately back our coin standard. To maintain complicit with US Law, these

ETF holdings will be purchased on US Markets, our ETF purchases will remain in the top 10

funds which currently includes markets such as these.

(refer to next page Figure 2)

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Figure 2. * Assets and Average Volume as of 2018-04-25 20:21:02 UTC Source: http://etfdb.com/type/commodity/energy/

crude-oil/

Symbol ETF Name Asset

Class

Total

Assets

($MM)

YTD Avg

Volume

Previous

Closing

Price

1-Day

Chang

e

USO United

States Oil

Fund

Commod

ity

$1,873.

54

14.24

%

20,811,7

40

$13.72 0.29%

DBO PowerShar

es DB Oil

Fund

Commod

ity

$467.55 15.47

%

1,431,24

8

$11.72 0.51%

UCO ProShares

Ultra

Bloomberg

Crude Oil

Commod

ity

$419.93 28.71

%

2,840,87

3

$30.17 0.84%

DWT VelocitySh

ares 3x

Inverse

Crude Oil

ETN

Commod

ity

$257.08 -38.79

%

6,669,81

3

$8.60 -0.92%

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Proof of Work The remaining 42 million coins of the initial supply will be used to reward contemporary energy

consumption and the drilling industry indirectly through traditional cryptocurrency ASIC & GPU

mining. The mineable supply is estimated* to be mined in its entirety by 2036, leaving in place

the potential for EXO owners to create new coins through the ‘minting’ process known as proof-

of-stake pioneered in Peercoin.

Proof of Stake

Proof of Stake or PoS for short, allows a 1% inflationary cryptocurrency incentive to be paid to

owners of EXO every quarter during staking periods allowing for new coins to enter the

ecosystem through a process known as ‘minting’ which rewards EXO holders for staying in the

ecosystem and holding onto Oil as Bullion. Any coins over the 84 million supply generated in

PoS holdings will have their value subsequently backed by Zen inc. ETF holdings outlined in

Figure 2.

It is only in the 70th quarter that the reserve ratio will go below 25%. After 69

quarters(42,000,000)(1+0.01)^69 = 83,449,565.8 coins, after 69 quarters, the reserve ratio is

21,000,000 liters / 83,449,565.8 coins = 0.251649 L/coin = 25.1649%. After 70 quarters

(42,000,000)(1+0.01)^70 = 84,284,061.4 coins. After 70 quarters, the reserve ratio is 21,000,000

liters / 84,284,061.4 coins = 0.249157 L/coin = 24.9157%. Our reserve ratio will then be hit on a

target date of March 31st 2036. There are adequate reserves even until 140 quarters (October 1,

2018 ---> October 1, 2053) where the reserve ratio will hit 12.5%, or 1/8. Naturally as large

SCO ProShares

UltraShort

Commod

ity

$192.32 -27.40

%

1,875,95

2

$17.83 -0.78%

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holders of oil "deposit" some oil with EXO, new coins can be issued. The above calculations

should still hold correct with the market expanding at a constant 1% supply increase annually

following March 2036.

Furthermore, the PoS system will allow for a more secure system of minting/holding coins. In a

proof of work model, an attacker who amasses more than 50% of the network's computational

power could carry out an attack whereby her greater network hashing power can create

fraudulent additions to the blockchain faster than the legitimate blockchain can be appended.

Since the longest chain is always assumed to be the true and legitimate record of transactions,

this attacker could secure control of the transaction ledger by virtue of having created the longest

chain. This is known as a 51% attack. With the PoS model, this type of attack is unlikely. In the

PoS model, instead of controlling more than half of the network computing power, the attacker

would need to control more than 50% of the coin itself. Not only would this be an expensive

endeavor, but once any party accomplishes this, it becomes against their self interest to attack the

network. Doing so would diminish the value of the coin in which they hold a majority share. In

summary, a majority stake owner in the PoS model is more incentivized to maintain a secure

network than to attack it.

Zenergy EXO and Peercoin

Peercoin emerged in the summer of 2012 with the intent of curbing Bitcoin’s massive carbon

footprint through a combination of properties, and furthermore why we have selected it for the

basis of our codebase. According to the Bitcoin Energy Consumption Index, one transaction

within its network requires 929 KWh. Peercoin on the other hand uses a mere 0.0133 TWh per

year, compared to Bitcoin’s 65.2701 TWh per year. Peercoin and Bitcoin utilize the same

SHA-256 protocol for proof of work mining, although with Peercoin’s lower block reward and

lower level of difficulty in finding hash(s) below a given target, results in deeper levels of

decentralization and efficiency from an electrical standpoint. Zen Inc. Network and EXO coins

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will be derived from a codebase fork of Peercoin in its current state with a pre-mine of 42 million

to accommodate for the initial coin offering.

Zen Inc. and EXO

Zen inc. was founded in 2017 with the intent of creating a seamless transition between digital

assets and real world market value of a cryptocurrency backed by a liquid able product. In our

first product, EXO; we intend to compensate our team for their development efforts with the

funds collected during the crowdfunding operation. The salaried employees will have their

income disclosed in quarterly updates, and the employees that elect stock compensation will

receive shares of Zen inc. which will be outlined in the same corporate statement designed to

provide background to our holding companies internal finances and payroll. Which will later

facilitate a potential public offering to accredited investors within the United States of America.

Zen inc. AML & Compliance Toolkit

Our secondary interest in EXO will involve the development and licensing or simple usage of an

already available analyst product of a proprietary toolkit for NGO, other NON-NGO

organizations, DOD, DOJ, DOS, and corporate agencies to utilize. This toolkit will be designed

or used to identify various compounding problems that many of these agencies face in the energy

sector today from unlawful exploitation of natural resources. This division of Zen Inc. will have

a presence and also be a liaison in online cybersecurity as well as a physical presence of the

current active market of international crude oil in the drilling, storage, operations, management,

information security, and also private sectors.

EXO: A CryptoCommodity DAO Explained

Zenergy wants to begin putting a proper contemporary value on non-renewables. Our first

endeavor is Crude Oil due to its position as the world’s most valuable commodity. The goal is to

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create a standard for the energy industry that allows for a new incentive to buy and hold oil

through various economic circumstances.

EXO is fundamentally a digital smart contract that interacts with real world assets on a

blockchain dictated supply chain. What we are doing is taking the rules present in the source

code, and using them like rules to a game; like baseball - to dictate our real work business

Figure 3. Our patent pending system pairs Blockchain-logged public and private key pairs with a physical, tamper-proof

crude oil container, making them IoT ready.

practices and interaction with these IOT tagged oil barrels and containers at large. We are aiming

to incentivize users to hold a tried and true commodity instead of bolstering the value of energy-

consuming cryptocurrencies that rely solely on wasteful mining. Using proof-of-stake technology

pioneered by Peercoin, we are able to pay a compounding CO2 dividend of 1% in

cryptocurrency on Zen Inc. EXO tokens being owned and held by businesses and individuals;

while giving users an option between participating in traditional mining until the supply ceiling

is reached & PoS CO2 dividends to accrue more tokens. This model allows for the initial supply

to be backed with relative ease while leaving room for more barrels to enter the supply chain as

the market for oil begins to shrink and energy moves to renewables.

How is this possible? Through creating a trade ecosystem that ensures the fulfillment of the

following three points:

1. The Crude Oil is accounted for and exists

2. We are able to maintain a sentiment in the crude oil market that values storing Oil-as-

Bullion

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3. We are still promoting and supporting the use of energy, not just its conservation

EXO’s Socioeconomic Effect on Crude Oil

Population, Infrastructure, and Physical Environment. These are the pillars that form the

urban triad, a synonymous and synchronous cog in the machine of modern society. With more

and more cities becoming urbanized and connected to the IoT, the need for transparency in all

three pillars is of the utmost urgency. A recent study suggests that the global population currently

living in cities will reach 67% within the next few decades. This increase will directly influence

the amount of fossil fuels, specifically crude oil, utilized to power such living hubs. This figure is

especially dawning considering British Petroleum’s 2014 estimate of only 53.3 years left of oil

reserves at current production rates. Since the release of these estimates, oil production has only

increased over the last four years, furthermore proving the necessity for change in the industry.

Currently, OPEC, Russia, U.S. and other

oil producing nations aim to cutting down

on fracking, and greatly reduce their

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inventories of oil. According to Frank Holmes of Forbes, “Oil’s poised to have its best week

since late March on news multiple countries are planning to extend production cuts into next

year, with Saudi Arabia saying it’s prepared to do “whatever it takes” to draw down inventories.” This is congruent with our model for reducing oil production by 2030 and holding all assets to

both increase the valuation of oil and EXO coin. To illustrate the effects of the Crude Oil assay in

relation to the of the hedge held by Zen Inc. and our ETF partners - we have included a

covariance algorithm that clearly displays the covariance calculations and its subsequent relation

between the assay of speculative investment in crude oil reserves. This algorithm takes into

account the hedging demands of producers in a broker-dealer petroleum market; henceforth

weighing risk against assets held in the hedge.

Throughout 2017, Bitcoin’s price increased greatly, reaching heights of nearly 21,000

USD valuation, the cryptocurrency set forth, the standard for just how powerful the market is.

With it’s influence, brings room for massive volatility, especially so in the beginning of 2018.

Scholars, journalists, market experts alike all joined in both praising and warning of the potential

dangers the coin could pose and unsurprisingly many individuals, companies and startups took

heed to that warning, missing out on billions of dollars in trade. With EXO, the disparity and risk

arbitrage seen in 2016-2018 is wiped clean. There no longer is room for speculation about

mining and its role in the valuation of currencies, as there is tangible finite backing of the coin.

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Team & Advisory Council

! William G. Pete started his career as a developer at age 12 with a computer program that tested various industrial lubricants. By age 16 he became involved with the Thiel Foundations summit program and l secured internships from all the way in Silicon Valley at a Y-combinator startup called CircuitHub, to becoming a founding member of New York City’s first Bitcoin center.

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Lucas Hoath has served 5 years as a United States Infantryman and 3 years as a Civil Affairs Specialist in service of the United States ARMY. He was deployed as an Infantryman collaboratively supporting U.S. forces in Afghanistan for OEF 2010-2011 with multiple levels of

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management and diverse cultural audiences in visibly high-tempo environments in the middle east as well as across the European Command area of operations. Lucas is a Security / Operations Manager and Military Veteran with a Secret Security Clearance and over 8 years as a corporate steward interacting and collaborating with multiple levels of management and diverse cultural audiences in visibly high-tempo environments across the European Command area of responsibility. Russian speaking capabilities as well as cultural proficiency. Corporate steward with 6 years of experience in business continuity planning and disaster recovery plans. Frequently tested documented disaster recovers strategies and plans. Analyzes impact on, and risk to, essential business functions and information systems that identify acceptable recovery time periods and resource requirements for the organization. Developed over 25 emergency management plans for recovery decision making and communications or temporary shutdown of non-critical departments to ensure continuity of operation and governance. Accomplished measurable results in meeting deadlines and objectives and led numerous teams of over 10 personnel in both the civilian and military sectors. Skilled in training and development, process improvement, logistics, strategic planning, policy management, and records management. Recipient of multiple awards for outstanding performance and professionalism in the United States Army. Lucas also has experience in the following: Command and Control, Internal and Domestic Operations, Motorcade Procedures, Practical Mission Package Preparation, Vehicle Personnel & Space Searches, Law Enforcement/First Responder Tactical Casualty Care (NAEMT), Combatives for Security Professionals, Practical Advance Work & Route Selection, Mission Planning Computer Labs, Non-Permissive Environment Procedures, Unlawful Detention Procedures, SERE-C High Risk (Survive, Evade, Resist, Escape), Surveillance, Practical Exercises in TSCM Searches on Residences, Residential Security Assessments, Threat & Vulnerability Assessments, Surveillance Detection Route Planning, and Advanced Security Driving. Lucas is also fluent in speaking, reading, and writing Russian, he is attending the University of St Thomas in Saint Paul, Minnesota to finish his undergraduate degree in International Business.

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