AGROTOKEN: THE FIRST GLOBAL INFRASTRUCTURE FOR AGRICULTURAL COMMODITY TOKENIZATION

Agrotoken, the agtech leading a new era in agribusiness with the world's first global infrastructure for agricultural commodity tokenization

Agrotoken is the first grain tokenization platform and the gateway for agribusiness into the crypto economy. Agrotoken aims to create a new financial asset through stablecoins backed by real assets: grains and food. There will always be a need for food, there will always be food stocks, and stablecoins based on agricultural commodities will be the most reliable and transparent in the system. Agrotoken is a global platform organized into stages, each focused on meeting product, technology, and liquidity objectives. Its development includes partnerships with oracles and leading crypto ecosystem players, tokenization of different grains, and protocol improvements, among other functions needed for the platform to grow.

The first stage begins with grain tokenization, starting with soybeans in Argentina, Brazil, and Paraguay. The second adds corn and wheat, extending tokenization to the United States and Uruguay. These countries account for more than 80% of global soybean production. Leading global exporters and grain handlers serve as oracles, guaranteeing Proof of Grain Reserves (PoGR) while complying with the processes and regulations of each local market. Using these stablecoins backed by real assets will not only create new and better opportunities in agribusiness but also help grow the blockchain ecosystem and decentralized finance (DeFi) overall.

UNDERLYING ASSETS FOR STABLECOINS

Advantages of commodity collateral versus fiat currency collateral

Stablecoins open a new world within the crypto economy because this type of crypto asset minimizes price volatility, unlike Bitcoin, enabling an unlimited range of financial services to be developed. Different types of stablecoins use different collateral mechanisms to maintain price stability.

Some are tied to fiat currencies, others to commodities, primarily precious metals such as gold or silver. Some stablecoins use other cryptocurrencies as on-chain collateral and may be linked to a decentralized autonomous organization (DAO) that algorithmically controls their value, as in the case of DAI. Here we compare two types: fiat-backed stablecoins based on fiat currency, such as USDC and Tether, and grain-backed stablecoins based on commodities, such as Agrotoken.

Fiat-backed stablecoins

Fiat-backed stablecoins are the simplest to understand. They maintain a one-to-one relationship with a fiat currency, such as the US dollar or euro, and are also backed one-to-one by fiat money. Although volatility is virtually nonexistent, collateralization through fiat deposits in bank accounts requires a high degree of centralization because users must trust the organization holding those deposits.

Some projects, such as Facebook's Libra, seek to add another layer of trust by drawing on users' existing trust in the consortium's member companies. These centralized systems involve correlated risks and vulnerabilities. The main one is that collateral must be deposited in banks, institutions that are generally not very friendly to the cryptocurrency ecosystem and are heavily regulated by governments and central banks. All these factors conflict with a fundamental principle of the crypto economy: decentralization.

It is also difficult to verify that deposited funds or financial instruments, such as Treasury bonds, stocks, or other assets, are not subject to manipulation or riskier uses. Despite these disadvantages, these stablecoins provide a highly stable cryptocurrency that any user can easily understand.

Such a centralized system requires external auditing to verify that cash collateral matches the stablecoins in circulation. This process can be costly. An external audit also captures only a specific point in time, making it difficult to monitor what happens between audit reports.

Finally, fiat-backed stablecoins are subject to external factors related to geopolitics and the regulations of each country and administration. Based on these considerations, we can conclude that fiat-backed stablecoins are:

• 100% price-stable, except for external factors.
• Simple to understand, adopt, and use.
• Secure in that their collateral cannot be compromised online because it is not held on the network.

Their challenges include:

• Highly centralized, requiring banks to hold the funds.
• Asset settlement can be slow and costly.
• Heavy regulation tied to the underlying asset.
• Ongoing audits are needed to ensure transparency.

Stablecoins backed by agricultural commodities (Agrotoken)

Gold is often seen as a store of value because it retains that characteristic over time relative to other assets. This is why many investors turn to gold during recessions, when most other assets lose value. Yet gold-backed stablecoins, for example one token per gram of gold, face the same problems as fiat-backed stablecoins: gold is generally held in banks and is subject to the same risks and limitations described above. Agrotoken therefore maintains that stablecoins backed by agricultural commodities are the most viable alternative for investors and individuals seeking to use stablecoins backed by real assets in a secure, decentralized way.

Unlike fiat money, Agrotoken's stablecoins are backed by grains with intrinsic value, offering the advantage of independence from governments' central banks. Grain-backed stablecoins can also be an effective inflation hedge, making them a medium- to long-term investment instrument for investors with a low-risk profile. The commodities Agrotoken uses, such as soybeans, wheat, corn, and rice, are well suited to backing a stablecoin because they generally have a low-volatility profile and are easy for investors and the public to understand.

The way grains are produced, stored, and traded in traditional markets enables a form of decentralization that aligns with the principles of the crypto community and blockchain platforms. Agrotoken uses smart contracts and governance systems to issue and retire these crypto assets, providing transparency and simplicity that can be audited in real time. Its agricultural commodity-backed stablecoins complement fiat-backed stablecoins because the collateral is different, allowing institutional investors to use both to diversify portfolio risk.

In summary, Agrotoken's commodity-backed stablecoins offer the following advantages:

• Efficient use of capital tied up by supply chain participants that store grain, including farmers, grain handlers, and brokers.
• 100% backed by real assets.
• High liquidity.
• Easy for investors and users to understand.
• Price stability relative to the underlying asset.
• Greater decentralization than fiat-backed stablecoins.

Although decentralized finance is still in its early stages and stablecoins are creating new financial service models and opportunities, Agrotoken's tokenization platform and implementation of Proof of Grain Reserve (PoGR) open a new vertical in crypto assets and finance overall.

AGROTOKEN TECHNOLOGY PLATFORM

General Flow

1. A farmer deposits grain with an oracle, which locks the grain and issues a PoGR certificate.
2. The farmer requests cryptograin issuance through the Agrotoken platform, at one metric ton of grain per cryptograin token, and transfers the PoGR as collateral.
3. Agrotoken mints the cryptograins and deposits them in the PoGR depositor's wallet.
4. The PoGR depositor, which may be a farmer, oracle, or Global Network Partner (GNP), transfers cryptograins into the crypto ecosystem for use on exchanges, DeFi apps, marketplaces, or any application that accepts them.
5. Any ecosystem participant with a cryptograin-compatible wallet can transact within the ecosystem.
6. Any ecosystem participant can transfer cryptograins to an exchange that accepts them and convert them into fiat currency, deposited in a bank account in the country where the exchange operates.
7. Any crypto asset user can participate through an exchange, marketplace, or DeFi application and invest in cryptograins.
8. If a farmer, oracle, or Global Network Partner wants to exit a cryptograin position and return to grain, they can request detokenization by sending their cryptograins to Agrotoken.
9. Agrotoken burns these cryptograins, removing them from circulation.
10. Agrotoken returns the PoGR certificates to the farmers, oracles, or Global Network Partners, maintaining parity between metric tons and cryptograin tokens.
11. Detokenized grain is released for normal trading.

Agrotoken is the sole custodian authorized to mint or burn cryptograin tokens, ensuring the system's solvency and equivalence between metric tons of grain and tokens.

Concept: Proof of Grain Reserve (PoGR)

One of the main challenges in designing crypto assets that represent real assets, grains in this case, is demonstrating that those assets exist and can serve as collateral. Once collateralized, mechanisms must ensure that the same grain cannot be used simultaneously to generate

In conventional financial terms, the goal is to minimize counterparty risk. Agrotoken must demonstrate to users that real collateral exists and is held by a third party. Its Proof of Grain Reserve solution simplifies the process of ensuring that 100% of issued tokens are backed by a 100% reserve of real grain.

During the PoGR process, Agrotoken establishes a grain custody system demonstrating that grain is in stock, verified by oracles, and cannot be transferred. Each country where Agrotoken operates has a documentation transfer and oracle verification process establishing that grain is part of the PoGR. The farmer's grain is transferred to Agrotoken temporarily during tokenization and locked by the oracle. It can only be released through a detokenization request on the platform for farmers, oracles, or Global Network Partners.

Global Network Partners transfer a certificate to Agrotoken for a specified quantity of grain from a global floating inventory pool that they fully own. This grain has not been sold, is not held on behalf of customers, and has not been pledged as collateral for other instruments. Smart contracts encode the rules and actions needed to ensure issuance is always 100% backed by real grain. The token's unit of measure is the metric ton, also used in the PoGR and corresponding audits.

Oracles

Oracles validate the existence of grain, lock it, and issue the Proof of Grain Reserve (PoGR), which may be indirect for farmer-owned grain or direct for their own inventory. Agrotoken holds the PoGR documentation and approves interfaces with other ecosystem participants. Governance tokens determine farmer incentives, oracle fees for PoGR management, and transaction fees.

Global Network Partner

GNPs are major global exporters able to issue tokens through their connection to Agrotoken after submitting documentation for custody covering the PoGR of verified floating inventory. Once issued, all tokens are fungible regardless of whether a local oracle or GNP issued them and regardless of where the grain is located.

AGROTOKEN'S GENERAL SETTLEMENT MODEL

Farmers can generate cryptograins by tokenizing local PoGR documentation, then use or transfer some or all tokens to other ecosystem users, such as merchants, farmers, and exchanges. When a farmer chooses to detokenize and regain access to the grain, only the tonnage corresponding to the burned tokens can be released, 40 metric tons in this example. To detokenize the full amount, 100 metric tons here, the farmer would need to buy 60 cryptograin tokens on the market. Agrotoken cannot simply liquidate that farmer's grain for fiat currency, because this would cancel the documentation backing cryptograins still in circulation and break the one-to-one relationship.

When a farmer wants to partially redeem the documentation backing cryptograin tokens through burning, the following options maintain the PoGR:

• A) Replace the farmer's PoGR with a local oracle PoGR. The oracle replaces the documentation backing the farmer's cryptograin tokens with new oracle–Agrotoken documentation, settling the outstanding obligation between oracle and farmer. The PoGR is maintained by moving from designated oracle–farmer inventory to floating oracle–Agrotoken inventory.
• B) Replace the farmer's PoGR with cryptograin payment from the oracle. The oracle settles the PoGR documentation using cryptograins. Agrotoken returns the certificate to the oracle and burns the cryptograins paid, maintaining the one-to-one relationship between cryptograins and real grain.
• C) Replace the farmer's PoGR with a global GNP oracle PoGR. The local oracle exchanges the farmer's PoGR documentation for global PoGR documentation, maintaining the one-to-one relationship between cryptograins and real grain.

Oracle clearing and settlement strategies

As explained above, oracles are responsible for maintaining the PoGR. The following outlines how this works in each use case:

A) The oracle accepts cryptograin payments:

• Farmers pay for inputs, services, or products in cryptograins.
• Importers pay for grain in cryptograins.
• The oracle's financial services accept cryptograins as collateral.

B) The oracle offsets inventory or intercompany payments using floating inventory documentation to exchange local cryptograin backing documentation for global documentation.

C) The oracle buys cryptograins on the secondary market, through P2P wallets or an exchange, to burn them and settle the PoGR of farmers who redeemed only part of their holdings.

Farmer Wallet

The Farmer Wallet is the crypto asset wallet farmers use to receive cryptograin tokens generated by tokenizing their grain. Farmers can specify an existing ERC-20-compatible wallet, such as MetaMask, or receive a destination wallet from Agrotoken if they do not have one. Agrotoken-generated wallets provide users with the corresponding security safeguards.

Agrotoken-generated wallets will also support other tokens, including fiat-related stablecoins such as DAI and USDC, to facilitate crypto asset exchange and swaps.

Merchant Wallet

A Merchant Wallet is the crypto wallet of any business accepting cryptograins as payment. It must support ERC-20 tokens, as MetaMask and other wallets do. This makes it easier to onboard businesses and increase Agrotoken transaction volumes.

Exchange wallet

Users who manage Agrotoken crypto assets through an exchange that supports their trading are subject to the terms and risks of leaving their assets in that exchange's custody. Agrotoken will work with most recognized global exchanges to support the liquidity and trading of its tokens.

MAIN APPLICATIONS

For farmers

Low-interest financing opportunities backed by cryptograins.

• Interest on tied-up assets.
• Investment in cross-farming projects using cryptograins.
• Purchasing inputs and paying for services.
• Protection against local currency fluctuations.
• Conversion and liquidity of cryptograins into fiat stablecoins or other crypto assets.
• Disintermediation of banks, agents, and brokers.
• Using cryptograin-backed derivatives or synthetic assets for hedging.
• Cooperative insurance systems through smart contracts, with cryptograin coverage.

For merchants

Creating marketplaces that accept cryptograins.

• Payment liquidity through conversion to stablecoins or fiat currency.
• Lower transaction costs and taxes than credit cards or barter.
• Financing product sales with cryptograin collateral.
• Developing loyalty or incentive programs based on cryptograins.
• Reducing administrative and collection costs.
• Paying traditional supply chain vendors in cryptograins.

P2P individuals

• Using cryptograins as a store of value.
• Using cryptograins as a speculative investment based on short-, medium-, or long-term grain price movements.
• Using cryptograins to enter the agricultural market without becoming a farmer.
• Using cryptograins as collateral in DeFi markets.
• Receiving cryptograins for professional services or as dividends from agriculture-related investments.

For exchanges

Adding a new stablecoin vertical: cryptograins.

• Bringing new individual users from agribusiness into the cryptocurrency system.
• Bringing in institutional investors in agricultural projects and allowing them to liquidate cryptograin positions or exchange them for other crypto assets, such as Bitcoin and USDC.
• Creating value-added services for farmers, merchants, and investors who want to hold and use cryptograins in DeFi.
• Managing large importer and exporter accounts through payments and clearing in the global grain market.
• Educating new generations of farmers about including crypto assets in their investment portfolios.
• Sharing transaction fee revenue with Agrotoken.

For major exporters and importers

• Generating new income: financial returns on floating inventory, PoGR management fees through governance tokens, and new DeFi products.
• Low-cost financing in centralized crypto finance (CeFi) and decentralized finance (DeFi).
• Incentives for farmers to increase production.
• Easier P2P clearing between business units and between exporters.
• Accepting cryptograins as payment for grain to grow the ecosystem and market liquidity.
• Paying suppliers in cryptograins.
• Developing farmer services backed by cryptograins.
• Creating synthetic instruments for future grain purchases.
• Forward sales backed by cryptograins.
• Sharing transaction fee revenue with Agrotoken.

AGROTOKEN SMART CONTRACTS

Agrotoken creates each token using the standardized ERC-20 protocol on Ethereum. This preserves fungibility, which is well suited to commodities, and makes the tokens compatible with most decentralized finance applications. It also simplifies smart contract creation, enabling crypto developers and entrepreneurs to build new applications, platforms, protocols, and services that expand the ecosystem around Agrotoken's crypto assets.

Cryptosoy 

Cryptosoy is Agrotoken's first token. One cryptosoy token equals one metric ton of real soybeans. Each one-ton token is divisible to four decimal places, with a minimum unit of 0.0001 metric tons of cryptosoy. Minting and burning cryptosoy tokens is tied to the addition or removal of PoGR certificates that maintain a one-to-one relationship between cryptosoy and real soybeans.

Governance token

The governance token manages and defines agreements between Agrotoken platform participants. Its main functions are:

• Appointing or removing administrators.
• Blocking token circulation if the platform experiences operational issues.
• Voting on protocol changes.
• Setting tokenization, detokenization, and transaction fees, as well as incentives for the different crypto assets generated by Agrotoken.
• Distributing dividends.
• Selecting reference entities for grain spot prices in USD.

FEES — REVENUE MODEL

Tokenization and detokenization fees (minting and burning fees)

Minting and burning fees are the amounts Agrotoken receives for each token created or destroyed on its platform. As custodian, Agrotoken has exclusive responsibility for minting and burning. Fees may vary by grain type, such as cryptosoy or cryptocorn, network partner type, transaction volume, or other criteria established by governance token holders. These fees are determined by a vote of governance token holders.

Transaction fee

The transaction fee is the administrative amount Agrotoken receives whenever tokens are transferred from one wallet to another. It is a percentage of the transaction, ranging from 0% to 2% depending on grain type, such as cryptosoy or cryptocorn. This percentage is determined by a vote of governance token holders.