Fandona Whitepaper 1.0-b

White Paper 1.
0-b
January 2020
Contact: juro@fandona.com
+420 777 012 271
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Fandona White Paper 1.0
Introduction 3
1. Fandona versus conventional betting 4

1.1 Donation versus conventional betting 4
1.2 Decentralized versus conventional betting 5
2. Fandona tickets 6
3. Fandona donation betting cryptonomy 8

3.1 Decentralized odds determination 8
3.2 Betting payout 9
3.2.1 Overvalued odds are not profitable 12
3.2.2 Undervalued odds are not profitable 13
3.3 Donation cashback 14
3.3.1 Donation cashback funded by monetary expansion 14
3.3.2 Donation cashback with fiscal extension 14
3.4 Acknowledgment of fandonors 15
4. Fandona team 16
4.1 Founders 16
4.2 Business development, marketing and sales 19
4.3 Technology development 19
4.4 Charities 19
4.5 Finance, operation and legal 20
5. Donations, charities and ethics 20

5.1 One charitable platform 20
5.2 Many charitable and donation platforms 20
5.3 Donating with Fandona Pay and Fandona network 21
5.4 Ethical principles 21
Conclusion 21
Annex 1 - How donation betting works 25
Annex 2 - Fandona Smart Monetary Policy 30

A2.1 Fandona donation bonds - FDB 31
A2.2 Fandona currency - FDC 36
A2.3 Fandona SMP versus current economies 39
Annex 3 - Fandona Social Responsibility 42
2
Introduction
Fandona is a donation rewarding network daily distributing donation cashback
across donors. Fandona aims to fuel donations by issuing own stable coin. Users
are motivated to donate while purchasing goods and services in exchange for
donation cashback. Fandona Pay is a donation payment engine which can be
integrated into existing payments systemslike Apple Pay, Google Pay and others
for donating during shopping. Stable value of donations and donation cashback
thanks to Fandona stable coin is achieved by issuing total donation cashback
proportionally to the growth of total purchases driving the money issued.
The first donation cashback application will be donation betting where users
purchase a chance to win. Users donate a piece of they betting stake to charities
in exchange for donation cashback. As a result the users benefit from betting
payout and from donation cashback. Donation betting is uniquely designed for a
decentralized peer-to-peer odds creation (bookmaking) allowing for donations
with the cashback. Donations and cashback are in trade-off with betting payout:
the higher/lower donation and donation cashback, the lower/higher the betting
payout. In contrast with conventional betting, donation betting allows for long
run aggregate positive returns due to the issued donation cashback.Betting is
designed to be provided by betting nodes (bookmakers) having free entry to join
Fandona. So Fandona is decentralized from blockchain and cryptocurrency
perspective and also from the betting and donation perspective since odds and
donations result from free choices of the bookmakers and of Fandona users
respectively. Fandona donation betting, being the first donation cashback
application, aims at building the awareness of donation cashback system, to
prove its concept and to learn from the users’ experience. Moreover, Fandona
introduces several innovations in betting which are expected to attract bettors.
Afterwards, ’Fandona Pay’ as an extension to the existing payment methods
allowing to donate while shopping will be developed. Future donation betting
upgrade will launch pure peer-to-peer support platform. Bookmakers will be
allowed to publish odds on players (athletes or sport teams) who can be
themselves subject to the donations. The same will hold for charities - betting
nodes will be allowed to select a charity project.Fandona users will accept the
selected athlete, sport team or charity by the node for the peer-to-peer support.
The comparison between Fandona and conventional betting systemsis displayed

in Section 1. People donate while betting online within Fandona tickets(Section
2).Fandona donation betting cryptonomyis described in Section 3. Fandona
teamis introduced in Section 4. The approach towards donations, charities and
ethicsis summarized in Section 5followed by Conclusion. How donation betting
worksin 9 steps is summarized in Annex 1 , Annex 2introduces Fandona smart
monetary policyand Annex 3Fandona Social Responsibility.
3
1. Fandona versus conventional betting
1.1 Donation versus conventional betting
The difference between donation and conventional betting is displayed in the

figures 1.1 and 1.2. Note for the 50% chance of winning the bet odds=2 (6/3).
Figure 1.1 - conventional betting
Note that donation betting allows for charity donations in exchange for donation
cashback (2 green coins) and that odds decreased (odds=4/3=1.33).
Figure 1.2 - donation betting
4
How Fandona donation betting works in 5 steps (See Figure 1.2):
1. A user (fandonor) chooses a sports event and his/her favorite on whom

s/he wants to bet on Fandona web.
2. S/he pledges an amount and splits it between donation and betting.
3. The user receives a donation cashback for his/her donation.
4. Donation will be sent to charity.
5. If the favorite wins, then the user gains corresponding betting payout.
More detailed how it works in 9 steps is summarized in Annex 1.
1.2 Decentralized versus conventional betting
The difference between decentralized and conventional betting, which is

centralized, is displayed in the figures 1.3 and 1.4. Fandona will start with
centralized donation betting which engages only one betting node (bookmaker).
Figure 1.3 - centralized betting (24 FDC collateral by one bookmaker)
Figure 1.4 - decentralized betting (24 FDC collateral by 3 bookmakers)
A collateral which needs to be pledged to open donation betting is provided by

one bookmaker only which is Fandona (Figure 1.3). Donation betting allows for
multiple bookmakers with decentralized bookmaking with own pledges of
collateral (Figure 1.4). As a result the collateral is distributed across many
bookmakers who are free to join Fandona. For more details see Annex 1.
5
2. Fandona tickets
Fandona offers bet events tickets in black (ticket 2.1) or white (ticket 2.2)
version. Fandona users pledge in dollars or other supported currency and later in
Fandona currency (FDC).1
Ticket 2.1 - black odds with 1% donation
Ticket 2.2 - white odds, 100 FDC pledged with 2% donation
1
Fandona users buy FDC 1:1 for $. Betting payout and donation cashback are credited next day.

6
Fandona recognizes two ticket types2 - (1) black tickets donating the minimum
required percentage of staked amount which is 1% and (2) white tickets which
are free to choose any donation percentage between 2% and 90% of staked
amount.
There are three forms of donations on Fandona - fandonors are allowed (1) to
skip charity selection and delegate it to Fandona, (2) to select one of the five
categories (Equality, Health, Education, Freedom and Environment) and delegate
the selection of particular charity project to Fandona or (3) to select a particular
charity project published on Fandona. Fandona decides on which particular
charity project will get undistributed donations (cases 1 and 2).
Every fandonor is expected to (1) create a Fandona ticket from odds offered by
bookmakers subject to betting payout and select (2a) an amount pledged for
donation betting, (2b) donation % of the pledged amount and (2c) a form of
donation. Both black and white tickets are eligible for daily donation cashbacks
but only white tickets are eligible for all 3 donation forms. Black tickets skip
charity selection and delegate it to Fandona (the form 1) and they are subject to
premium odds (financed by margins on white tickets if applied).
Ticket 2.3 - 100 FDC pledged with 10% donation
Fandonors pledge for returns corresponding to the odds and the pledged
amount. On top of that, daily donation cashbacks are distributed across
fandonors according to the amounts donated.
2
The reason for having two ticket types is to allow for premium odds to be above the

corresponding market odds which is a unique feature only Fandona distributed donation-betting
system can afford.
7
The donation cashback is in trade-off with the betting payout (compare tickets
2.3 with and 2.2), since the donation reduces the betting stake of the fandonor
resulting in lower odds on the pledged amount. For example (ticket 2.3), if a
fandonor pledges 100 FDC on the victory of Radu Albot and Naomi Osaka, who
play matches against different competitors (M.Ebden and M.Sakkari
respectively), s/he gets 246 FDC (100*1.81*1.36) if both Radu and Naomi win,
given 10 FDC of the pledge to be donated. This is a combinated ticket which
consist of multiple odds. On top of that, s/he gets 10.5 FDC for the 10 FDC
donation.3
3. Fandona donation betting cryptonomy
3.1 Decentralized odds determination
Fandona is expected to be launched on EOS blockchain using EOS tokens and

one Fandona bookmaker, later switched to dollars and FDC, to Worbli blockchain
and using multiple bookmakers. The determination of odds to be published
within Fandona tickets is summarized in the Table 3.1.
Table 3.1
Every bookmaker needs to (1) choose a sport game4 to be published on

Fandona, (2) estimate the probabilities of final outcomes of the game, (3) stake
3
Unlike betting payout the donations and donation cashbacks are paid irrespective of the final

result of the match.
4
Bookmakers can choose any betting event in general, since any kind of contest (music, art, craft,

politics,...) where probability distribution of final placements can be estimated are supported by
Fandona.
8
some amount of FDC (EOS, dollars) on all possible outcomes serving as a

collateral for betting payouts and (4) insert independent link(s) where the final
result of the corresponding betting event will be published.
In our example, if the winning probability of the players 1 and 2 is 60% and
40% respectively, then the corresponding probability odds (i.e odds for betting
stakes) are 1,67 (=1/0,6) and 2,50 (=1/0,4) respectively. With 3% margin on
donation betting pledges (2% for Fandona, 1% for the bookmaker) and min. 1%
donation the effective odds (i.e odds for donation betting pledges) are 1,60 and
2,40 respectively (details of the calculations are available in Fandona_odds.xls).
Assume the collateral value staked is 1000, then by default 500 (50%) is
allocated to the placement 1 and 500 to the placement 2.5
Fandona betting system assures complete coverage of amount staked for betting
which means that the collateral is required to cover 100% of possible betting
payout for all betting stakes in place. As a result the maximum amount of
donation betting pledges is calculated. In our example the maximum amount is
313 (313*1,6=500) and 208 (208*2,4=500) for the placements 1 and 2
respectively. Note that if a fandonor chooses higher than 1% donation from the
pledge, then the maximum would increase since the effective odds (odds for
donation betting pledges) would decrease.
Daily return6 on the bookmaker investment of 1000 is 0,0052

((3,13+2,08)/1000), where 3,13 and 2,08 are 1% of 313 and 208 staked on 1
and 2 respectively. This corresponds to 563% annual ROI. If the final result is 1
(player 1 wins) then the betting payout is 500 (313*1,60) and the new level of
collateral of the bookmaker is 1005 (details of the calculations are available in
Fandona_odds.xls).
3.2 Betting payout
Recall that betting payouts result from the odds determined by bookmakers.
Every bookmaker is expected to setup the probabilities of final outcomes which
translate to such odds that maximizes its own profit. The profit of a bookmaker
comes from the 1% margin on every donation betting pledge on odds of the
bookmaker. If the odds is included to a combined ticket, then every bookmaker
gets from the 1% margin a share corresponding to the particular share of a
bookmaker's collateral across the collaterals of the other bookmakers providing
odds of the combined ticket.
5
A bookmaker can adjust the division of the collateral across possible outcomes.
6
ssume the bookmaker stakes the collateral one day before the final results along with the
A
corresponding ticket published on Fandona. Therefore the return is daily.
9
Profit maximization of one betting event calls for setting up such odds for the
selected final placement that would attract maximum donation betting pledges
from which 1% would be the bookmaker’s profit.
Suppose there is higher frequency of odds corresponding to higher probability of

win since we assume higher demand for odds with higher probability of win (for
example 90% probability with corresponding odds=1,1). Given that, let us
assume that a bookmaker offers odds on one winner only. To make the example
simple for better understanding we will show it for 50% probability of win and
1% profit margin for bookmakers.7 The corresponding odds=1,98 and the
collateral 1000 determine the maximum amount of betting staked to be 505. If
the player 1 wins, then the whole collateral 1000 will be used for the betting
payout of the fandonor(s) (Table 3.2) provided the fandonor(s) stakes the
maximum 505 on the player 1 as 1000 (505*1,98) is to be paid to the
fandonor(s) from the collateral.
Table 3.2 Table 3.3
The bookmaker is temporarily in deficit (there was 50/50 chance going for
surplus). Assume that the bookmaker offers tickets for matches which are
played every day. The margin of the bookmaker in day 1 is 5 FDC contained in
collateral (505-5=500 is new collateral). So for next day the bookmaker will add
500 (500+500=1000) to place the same collateral of 1000 again. Now the player
1 is expected to lose, given the 50% probability.8 As a result the 505 pledged by
fandonors will be the income for the bookmaker (1000 payout for the bettors will
7
This is to demonstrate how odds are determined within a simple example. In reality it works for

any probability.
8
In repeating games (in the long run) the number of wins and loses will meet the probability

distribution so this example meets the purpose to show the long-run tendency.
10
not be sent) which would replenish the drawn collateral from the day 1 (Table
3.3).
The bookmaker staked in two days collateral of the value 1500 (1000+500)
which was replenished after two days and gains 10 FDC on 1% margin on top of
that.
Now assume that the probability of player 1 win is 90% with corresponding 1.10
odds for donation betting pledges.
Table 3.4 Table 3.5
Assume that the player 1 wins 9 times (table 3.4) which reflects the 90%
probability of win and the player 1 loses one game of 10 (table 3.5).
The corresponding odds=1.10 and the collateral 1000 determine the maximum
amount of betting staked to be 909. If the player 1 wins, then the whole
collateral 1000 will be used for the betting payout of the fandonor(s) (Table 3.4)
provided the fandonor(s) stakes the maximum 909 on the player 1 as 1000
(909*1.1) is to be paid to the fandonor(s) from the collateral.
The bookmaker is temporarily in deficit (there was 1/10 chance going for
surplus). Assume that the bookmaker offers tickets for matches which are
played every day. The margin of bookmaker in day 1 is 9 FDC contained in
collateral (909-9=900 is the new collateral). So for next day the bookmaker will
add 100 (900+100=1000) to place the same collateral of 1000 again. According
to the 90% probability this outcome is expected to be repeated 9 times. The
margin gained after these 9 outcomes gives 81 FDC (9*9=81) and the
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bookmaker has to pledge 1800 (1000+8*100) to reach that margin. The

probability calls for losing the 10th match with the following outcome (table
3.5): as a result the 909 pledged by fandonators will be the income for the
bookmaker (1000 payout for the bettors will not be sent) which would replenish
the drawn collateral from the days 1-9.
The bookmaker staked in 10 days collateral of the value 1900 (1000+9*100)

which was replenished after 10 days and gains 90 FDC on 1% margin on top of
that.
In comparison the odds on only one player with higher probability of win
requires from a bookmaker higher capital to be released for collateral for longer
time to gain higher profit and collateral replenishment. Accordingly, the higher
the probability of win (the lower the odds), the more released capital for longer
period is needed which brings higher profit.
3.2.1 Overvalued odds are not profitable
Would bookmakers be motivated to offer overvalued (more attractive) odds? For

example odds=9,90 faking the probability of win to 10% even though the
estimation of the true one is 50%? This strategy would not be selected because
the profit (ROI) for the bookmaker decreases - for 1% margin it is 1FDC daily.
(Table 3.6).
Table 3.6 Table 3.7
Moreover the collaterals would not be replenished - the bookmaker invested

1900 (1000+900 where 1000-100=900, collateral in the table including margin)
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and exhibits 1101 with margin (Table 3.7) after two days so the bookmaker
would run out of money in the long run. Therefore bookmakers are not
motivated to offer overvalued (=more attractive) odds.
3.2.2 Undervalued odds are not profitable
How about undervalued, less attractive odds? They generate higher profits
ceteris paribus. For 1% margin it is 8 FDC (1% from 808 pledge - Table 3.8) and
they more than fully replenish the collateral value (1800 vs 1200), as the
bookmaker added 200 to meet the collateral of 1000 for the second day (Table
3.9).
However, market competition of conventional betting and free entry on Fandona

to become a Fandona bookmaker do not allow for offering odds which would be
biased towards less attractive undervalued odds and thus not reflecting the true
probabilities. Fandonors would move to the bookmakers which would offer more
attractive (=higher) betting odds and the profit for bookmakers would move to
the bookmakers offering higher odds.
Even if there is the demand for the undervalued odds due to the fact that
fandonors value the Fandona charity option, the number of bookmakers would
expand aiming to collect attractive profits (ROI). This would lead to not meeting
the maximum possible donation betting pledges (not enough fandonors to satisfy
all bookmakers) with corresponding profit decreases.
Table 3.8 Table 3.9
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As a result, it would be profitable to offer more attractive odds, attract fandonors

and meet the maximum betting stake amounts. Also, fandonors will learn that
they can reach more attractive odds and thus to afford higher donations. There
will be a pressure to increase the undervalued odds up to the true value.
Hence, the offer of true odds is the equilibrium outcome on Fandona and the
Fandona decentralized market mechanism supports the equilibrium outcomes.
3.3 Donation cashback
Donation cashback is the reward distributed across donors in exchange for their
donations. Donation cashback is issued and supported by Fandona Smart
Monetary Policy (SMP) and collected from the fee on purchases on top of that
based on Smart Fiscal extension of SMP (see Annex 2.3).
3.3.1 Donation cashback funded by monetary expansion
Smart Monetary Policy engages the fiat money and Fandona coins. Smart
Monetary Policy is designed around Fandona and E-shops. Fandona represents a
monetary authority while E-shops serve as intermediaries between Fandona and
donors who donate to charities. Fandona monetary policy applies automated
operations driven by software codes called smart contracts thereof Smart
Monetary Policy (SMP). Fandona coins are issued as cryptocurrency governed by
smart contracts on blockchain.
Consumersare motivated to donate while purchasing goods and services in

exchange for donation cashback.9 E-shops are motivated to implement Fandona
Pay for a margin charged to consumers for their donation shopping.
Fandona SMP is designed to start with Fandona donation bonds (FDB) to be

extended by Fandona currency (FDC) when E-shops accept it for payments. FDB
will be issued as a perpetual bond with daily coupon while FDC will be issued as
donation cashback with daily interest.
Detailed description of Fandona Smart Monetary Policy is provided in Annex 2.
3.3.2 Donation cashback with fiscal extension
Smart Monetary policy generates fully compensated donations by full donation

cashback generating 100% donation return (FDC) or nearly full donation
cashback generating nearly 100% donation return (FDB), as long as donation
shopping grows. Otherwise, donation return is zero since no donation cashback
can be issued (details inAnnex 2).
9
Donation rewards are distributed daily (for example at 1pm UTC) for the previous 24 hours.

14
As a result, Fandona applies Smart Fiscal (SF) extension to the SMP in order to
guarantee minimum donation cashback in any situation. Donors will be charged
3% fee on every donation purchase (in dollars within FDB or in FDC) which will
be distributed across donors proportionally to their donations.
Note that if everyone purchases and donates the same, then money taken from
the fee will be just returned back to donors with zero gain. Donation cashback
will equal the costs of donors. Profit is positive but net profit is zero. As a result
positive donation cashback translates to zero donation return in this case.
However, donors who donate relatively higher % of their purchases will get
positive net donation return since the donation cashback would exceed the fee
they pay from their purchases, resulting in positive net profit. Donors who
donate relatively lower % will compensate for that resulting in their negative
donation return due to negative net profit (donation cashback lower than costs).
In aggregate (and on average) there is no gain for the donors resulting in zero
donation return.
More on Smart Fiscal extension is provided inAnnex 2.3.
3.4 Acknowledgment of fandonors
On top of donation cashback, the ranking of top fandonors will be published on

Fandona as a form of acknowledgment. The ranking will be based on daily
amount of FDC gained from donations cashbacks by every particular fandonor.
Top 1% fandonors get 5 stars, top 4% get 4 stars, top 10% get 3 stars, top 25%
get 2 stars and top 50% get 1 star to be recorded every day. Fandona will
calculate weekly, monthly, yearly and all the time averages of stars for every
fandonor and will display the results in the following 11 categories of fandonors:
1) the average > 4,75 stars: 5 STAR
2) 4,75 stars >= the average > 4,25 stars: 4,5 STAR
3) 4,25 stars >= the average > 3,75 stars: 4 STAR
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11) 0,25 stars >= the average : 0 STAR
4. Fandona team
Fandona group consists of Fandona team and investors. There are currently ten
Fandona team members looking for investors.
4.1 Founders
Juraj Antaland Ivana Antalova, founders
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Ivana Antalova, Director for Fandona Social Responsibility
I am from Prague in the Czech Republic and I work as a financial manager and a
human rights promoter in the Czech Women´s Lobby, which is part of the
European Women´s Lobbyin Brussels. I studied at Tomas Bata Universityin
Zlin, Faculty of technology. During this study I participated in the overthrow of
the dictatorial regime in the Czech Republic, the so-called Velvet Revolution.
After graduation I worked in the environmental department and in various
economic positions in public sector as well as in business. The events around
births of my children had a huge impact on my future and involvement with
charities. I work on the elimination of obstetrics violence during childbirths as
well as on the support of parental bonding. I founded a non-profit organization
“BabyKlokánci/BabyKangaroos, z.s. Zrnka” that supports families of premature
babies collaborating with the organization EFCNI(European Foundation for the
Care of Newborn Infants) and the project “Give birth with love - terrible stories
about a childbirth and wishes of women” which was addressed to politicians and
obstetricians. I became the co-author of a book “Bonding – Joy of Birthing,
Family Support as a Way to Cure Obstetrics and Society?”. I am the author of a
petition to the Minister of Health entitled “Parental Bonding as a standard in the
provision of health services in obstetrics care” and the co-author and actor of a
theater performance called “The Episiotomy”. I was a member of the executive
committee of the “Movement for active motherhood” and of “Acentrum”, both
non-profit organizations. I was a program director of the festival “International
Week for Respecting Childbirth” in Prague. I worked as a volunteer and a
lecturer of a child at the organization “People in Need” which is a Czech
non-governmental, non-profit organization active all over the world. I have been
working as a volunteer - a cook of food for homeless since 2018.
I have a dream. I want to live in a society that is safe for everyone. Equal
opportunities is the way to go.
17
Juraj Antal, Director for Fandona Cryptonomy
Juraj received his PhD in Economics from CERGE-EI (Center for Economic
Research and Graduate Education - Economics Institute) which is ranked globally
in the top 4% of economics institutions by SSRN and in the top 5% by RePEC.
Juraj has been focusing on Macroeconomics, Monetary Theory and Policy and on
Economic modelling for 20 years, last 10 years in combination with credit risk
modeling, measurement and management. Juraj came across cryptocurrencies
in 2017 and became a crypto enthusiast from then on. Juraj views one of the
cryptocurrency benefits in liberating monetary policy from the dependency on
central fiat money and central banks influenced by governments. Bitcoin
established new money playfield, where public fiat centralized money represent
one extreme and Bitcoin itself the opposite decentralized extreme. The space in
between is ready for private money to be utilized. Juraj believes the private
money will improve financial services, increase the wealth while reducing income
inequality and induce new effective investments and donations to charities.
After studies Juraj worked 7 years for Czech National Bank(CNB) within
Economic Research Department coordinating research on monetary policy
applying inflation targeting by means of DSGE (Dynamic Stochastic General
Equilibrium) models. Juraj was also advicing to CNB Board. For last 7 years Juraj
has been leading a team focusing on credit risk measurement validation in
CSOB, one of the three largest banks in the Czech Republic, being part of the
KBCGroup located in Brussels. Juraj was the leading author of the up-to-date
methodology on LGD (Loss Given Default) modeling within the KBC Group which
has been implemented since 2018. Juraj is active in promoting innovations
related to automation, digital banking in digital economy and to blockchain
aiming to increase effectiveness and efficiency within CSOB and KBC.
Juraj participated in the overthrow of the dictatorial regime in former

Czechoslovakia, the so-called Velvet Revolution. He plays a role in the theater
performance called ”The Episiotomy”.
The experience of Juraj with economics, monetary policy, credit risk and
modeling together with his excitement for crypto space opening new
opportunities for decentralized free and better financial services based on private
money was combined with the experience of Ivana with non-profit organizations,
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social work, charitable activities and passion which resulted in their common
foundation of Fandona project. Fandona is a donor rewarding network based on
Fandona smart monetary policybased on smart contracts governed on
blockchain.Fandona aims to fuel global donations by issuing own stable coin.
4.2 Business development, marketing and sales
Sam Russell Chethan Rangaswamy
4.3 Technology development
Dimitar Dzhurenov Peter Nikolov
4.4 Charities
Michael Blu Milan Fico
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4.5 Finance, operation and legal
Tony Fan Harly Zappino
5. Donations, charities and ethics

Fandona system of donating to charities will evolve in the following 3 stages: (1)
one charitable platform, (2) many charitable and donation platforms (3)
donating with Fandona Pay.
5.1 One charitable platform

Donation betting will start with one charitable platform which will be offered for
donations, preferably one in Australia where Fandona aims to launch.
5.2 Many charitable and donation platforms

Afterwards, more charitable and donation platforms will be invited to join
Fandona in collaboration with Uplift Nation on Voice social network supported by
EOS platform. Charitable platforms launch charitable projects subject to
donations, while donation platforms organize donations to charities within an
online donation network of charitable projects/platforms and donors. Fandona
does not want to depend on own stand-alone donation platform given there are
several established donation platforms with customers who can use Fandona and
benefit from it on their platforms. Fandona aims at collaborating with donation
platforms like www.upliftnation.io/ w
ww.giveeasy.org/ www.justgiving.com/
www.betterplace.org/ www.facebook.com/ expected to enter Voice.
Fandona donation betting and shopping will be exposed to the selection of

charitable categories from the list defined by Fandona on Voice. Fandona users
will be allowed to search across categories. After the confirmation of a selected
20
category the list of charitable projects within this category of all cooperating
donation platforms will be displayed on Voice. Fandona users will select a
particular charitable project from the selected donation platform.
5.3 Donating with Fandona Pay and Fandona network

Donation shopping by means of Fandona Pay will be developed after donation
betting is established. Fandona first develops the donation betting application
aiming at building the awareness of donation rewarding system, to prove its
concept and to learn from the users’ experience. More collaborating charitable
and donating platforms are expected to be attracted to join Fandona.
5.4 Ethical principles

Fandona foundation respects every individual’s dignity and rights to privacy and
confidentiality and rejects any instances of sexism, gender inequality and other
power imbalances that leave some people at risk of harm. Charities have a
responsibility to carry out their purposes for the public benefit. Fandona on Voice
is also space where donors and supporters, as well as the wider public, can see
and understand how charities spend Fandona funds.
Conclusion
Fandona is a donation cashback network based on Fandona smart monetary
policy. Fandona aims to fuel global donations by issuing own stable coin. Users
are motivated to donate while purchasing goods and services in exchange for
donation cashback. Fandona Pay supporting this unique donation cashback
shopping will be developed to be integrated to already established payments
methods like Apple Pay, Google Pay, Revolut, Libra and others. Stable value of
donations and donation cashback thanks to Fandona stable coin is achieved by
issuing total donation cashback proportionally to the growth of total purchases
which drive the money issued. The first donation cashback application will be
donation betting where users purchase a chance to win. Donation betting is
uniquely designed for a decentralized peer-to-peer odds creation allowing for
donations with cashback. Donations and cashback are in trade-off with betting
payout: the higher/lower donation and corresponding donation cashback, the
lower/higher the betting payout. In contrast with conventional betting, donation
betting allows for long run aggregate positive returns due to the issued donation
cashback.
Betting odds are provided by bookmakers having free entry to Fandona. Fandona
is decentralized from blockchain and cryptocurrency perspective and also from
21
the betting and donation perspective since odds and donations result from free
choices of the bookmakers and of fandonators respectively.
The mission of Fandona is to contribute to the amount of money donated

worldwide by making people donate while enjoying betting. Fandona aims at
transferring some share of money spent on betting to donations transparently
and in the decentralized fashion. A piece of money from a donation betting
pledge is transferred to a charity and the donation is rewarded by cryptocurrency
generating positive return.
Fandona creates a unique donation-betting concept within decentralized

platform, where donation-betting pledges (donations+betting), betting payouts
and charity donations will be transacted in dollars, Fandona currency (FDC) or
other supported currency secured by EOS and Worbli blockchains powered by
EOS.IO software.
The following 11 features highlight the innovative Fandona decentralized

donation betting system (FD DB):
1) 100% secured
FD DB system assures that the agreed betting payout (=betting stake*odds) will
be paid for certain. It is achieved by having the corresponding collateral value
pledged upfront by a bookmaker (=odds maker) to be spent on the betting
payouts. The value of collateral (=amount of FDC pledged for collateral) and
odds determine the maximum amount of FDC that could be staked within the
Fandona ticket covered by this collateral.
2) Decentralized odds creation by bookmakers having free entry

FD DB system is open to bookmakers who are free to open donation betting by
offering odds to be published within Fandona tickets.
3) Motivating
Every bookmaker earns 1% margin from each donation-betting pledge on its
own odds. The existence of own independent crypto currency with flexible
exchange rate allows to keep attractive donation rewards for large donation
amounts by means of FDC appreciation. Own unique FDC fuels Fandona
donations.
4) Unbiased and fair

Bookmakers are motivated to offer odds which are based on their best estimates
of true corresponding probabilities of wins. It is not profitable for the
bookmakers to deviate from offering the odds based on true probabilities. Higher
(more attractive) than true odds lead to lower betting stakes for given collateral
lowering profit and to running out of any collateral in the long run. Lower than
true odds lead to the loss of fandonors (=loss of profit) who would switch to
other bookmakers providing more attractive unbiased odds which would satisfy
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the demand given the free entry. As a result, unbiased and fair odds provided by
bookmakers for natural profit (1% margin) is the equilibrium outcome of the FD
DB system.
5) Decentralized financing
The aggregate collateral value covering the betting payouts determines the
whole Fandona supply of donation betting volume that can be pledged. It is
formed as the sum of small individual collateral pledges across all bookmakers.
So Fandona is not required to centrally finance the aggregate collateral value on
its own but decentralized financing assures it.
6) Decentralized PR/promotion
Every bookmaker is motivated to sell its own donation betting pledge offer
(supply) so it is expected to self-promote by contacting friends, relatives,
supporters, clients and people living in close regions who would buy it. In this
regard, it is similar to crowdfunding concept which also counts on
self-promotion.
7) Connecting
Bookmakers will be allowed to follow any other bookmaker (for example the FD
bookmaker). Following a bookmaker means that selected contests with
corresponding odds published by the bookmaker are automatically accepted for
the usage of the follower, in exchange for 10% of the 1% margin. Only the
collateral stake remains to be decided by the follower. As a result, bookmakers
can be connected and pools of bookmakers are expected to be formed. Moreover
social networking among bookmakers, fandonators and charities is expected to
be formed.
8) Peer-to-peer
Next to the Fandona charity support, Fandona will offer peer-to-peer support,
which means that bookmakers will be allowed to publish odds on players
(athletes or sport teams) who can be themselves subject to the donations or the
subject can be a charity project determined by the bookmaker to be published
on Fandona.Fandonors will be required to accept the selected athlete, sport
team or the charity by the bookmaker for the peer-to-peer support. The
peer-to-peer sport support is expected to involve competitions of talented
perspective athletes and sport teams without any or small prize money who do
not have enough capital to grow in their careers. FD DB system is expected to be
very helpful in this regard because local bookmakers can be formed, which will
set up and publish odds on Fandona. Within the peer-to-peer support not only
the particular bookmaker is motivated to find fandonators for such Fandona
tickets who would donate to the athlete, sport team or charity project but also
the athletes, sport teams and charity projects themselves are motivated to do
the same as the money donated will go to their pockets.
9)Long term returns
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Note we can view staked amounts as investments where betting payouts return
principal in the long run and donation rewards return the interest on top of that.
10) The value of donations

In equilibrium, the dollar value of aggregate daily donations is the dollar value of
the daily donation reward.
11) Positive returns unlike conventional betting

The introduction of own Fandona Smart monetary policy (see Annex 2) allows for
sustainable long run real positive donation returns. As a result, returns on
Fandona are designed to exceed conventional betting payout of providers
operating outside blockchain and cryptonomies.
Fandona demonstrates the added value of crypto-space within which its own
cryptocurrency fuels the whole donation betting system due to sustainable
positive aggregate donation reward. The alternative donation betting system
outside crypto-space is feasible and it is to be financed by a fee on donation
betting pledges. While it can deliver sustainable positive individual donation
returns, it cannot deliver positive aggregate donation returns because the same
fee for the same pledge corresponds to higher/lower donation return than the
fee for above/below average donations resulting in zero net aggregate donation
return.
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Annex 1 - How donation betting works

Figure A1 - Fandona issues an amount of FDC daily governed by Fandona Smart
Monetary Policy (see Annex 2). FDCs were collected from 1% fee during the day
and assume 6 FDCs will be sent to the fandonor at the end of the day.
Figure A2 - A collateral of some FDC amount needs to be pledged by a betting
bookmaker to open donation betting. Assume 16 FDC was pledged as the

collateral.
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Figure A3 - The bookmaker offers a betting event and estimates its probability
of win. Assume it is 50% which translates to betting odds=2 (=1/0.5).

Figure A4 - As a result the limit for betting is 8 FDC (=16/2) which means that
an upcoming fandonor is allowed to bet 8 FDC maximum.
26
Figure A5 - A fandonor chooses his favorite, pledges some FDC (for example 6
FDC) and he needs to split it between donation and betting on the win of his
favorite.
Figure A6 - Let 2 FDC be donated and 4 FDC used for betting. FDC limit for next
betting decreases accordingly (by 4 FDC). The corresponding donation betting

odds=8/6=1.33 (6 FDC pledged for 8 FDC potential gain), since the betting odds
of 2 determines 8 FDC betting payout (=4*2) in case the favorite of the
fandonor wins. There will be no betting payout in case of loss.
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Figure A7 - Donation will be sent to a selected charity.
Figure A8 - Since the fandonor received more FDCs (6 FDCs) than he donated (2
FDCs), other fandonors must have donated less compared to their pledge giving
to the donation budget more (1% of pledge) than they received from it (for
donating). Note that fandonors are eligible for the donation cashbacks
irrespective of the final result of betting events.
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Figure A9 - If the favorite wins, then 8 FDC will be sent to the fandonator from
the collateral. The collateral amount decreases accordingly (by 8 FDC).

Otherwise no betting payout is sent to the fandonor.
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Annex 2 - Fandona Smart Monetary Policy

Before introducing Fandona Smart Monetary Policy let us first address basic
money principles. They are summarized for example in the primer Modern
Money Theory by Wray L. Randall. Fandona Smart Monetary Policy applies the
basic common principles of how money is issued (by keystrokes that credit
accounts) and of money elimination from circulation by burning money with
reverse keystrokes that debit accounts (by taxing or selling bonds).
There are several differences. Modern Money Theory is designed around

governments and banks. Governments represent sovereign monetary authorities
issuing fiat money while banks serve as financial intermediaries between
government and private sector (firms and households). Smart Monetary Policy
engages the fiat money and also Fandona coins on top of that. Smart Monetary
Policy is designed around Fandona and E-shops. Fandona represents a monetary
authority while E-shops serve as intermediaries between Fandona and donors
who donate to charities. Fandona coin is issued as a perpetual donation bond
with daily interest before it is accepted as currency. Fandona monetary policy
applies automated operations driven by software codes called smart contracts
thereof Smart Monetary Policy (SMP). Fandona coins are issued as
cryptocurrency governed by smart contracts on blockchain.
Modern Money Theory (MMT) is based on governments (in broad sense including
central bank and treasury) which issue money to deliver liquidity for public or
private demand for goods and services fueling economies to meets their
potential output. Money issued aims to keep up with the aggregate demand to
stabilize prices. Governments spend by crediting bank reserves. Taxes are
engaged to create a demand for the money. Governments buy stuff by issuing
its currency which is demanded since taxpayers need it. Taxes are used to drain
money from the economies to prevent inflation which arises when governments
compete with private demand for a limited supply of output. Governments tax by
debiting bank reserves.
The scope of Fandona SMP is to provide liquidity for donations to charities.

Fandona focuses on charities by motivating consumers to donate while
purchasing goods and services and by motivating E-shops to implement Fandona
Pay which is a payment method designed for donation shopping. Fandona is a
donation cashback network based on Fandona Smart Monetary Policy (SMP).
Consumersare motivated to donate while purchasing goods and services in
exchange for donation cashback. E-shops are motivated to implement Fandona
Pay for a margin charged to consumers for the donation shopping.
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Both MMT and SMP engage money to be endogenous. Within MMT aggregate
demand for all goods and services drives (fiat) money while within SMP
aggregate demand for donations drives Fandona coins. People buy goods and
services as they bring them utility. People donate in exchange for donation
cashback which can be exchanged for goods and services bringing them utility.
Fandona SMP is designed to start with Fandona donation bonds (FDB) to be

extended by Fandona currency (FDC) when E-shops accept it for payments. FDB
will be issued as a perpetual bond with daily coupon while FDC will be issued as
donation cashback with daily interest. The coupon, which is exogenously given
by Fandona before it will be determined on donation bonds market, is credited to
E-shop for holding FDB which can trade the bonds after the market is
established.
Fandona Pay will ask affiliated E-shops to choose 1-3 parameters during their
signup - (1) accepting Fandona coins as donation bonds or as currency, if it is
donation bond then (2) donation cap and (3) debt/income cap (all can be
changed at any time in the future). All financial transactions will be automated
within Fandona Pay based on this input. E-shops will get financial compensation
for implementing Fandona Pay and they are expected to be attracted to
implement Fandona Pay also to position themselves as the supporters of raising
donations for charities which is valuable from the PR perspective.
A2.1 Fandona donation bonds - FDB
Assume Fandona Pay is adopted by an affiliated E-shop at the end of the DAY 0.
Fandona Pay is designed to be an extension to the existing payment methods
(Apple Pay, Google Pay, Revolut, Master Card, VISA, Curve, Libra Pay and
others) allowing for donations while shopping. Consumers are not asked to leave
they preferred payment methods, they are asked to use Fandona pay on top of
them.
Suppose E-shops typically start with choosing FDB because the income,
donations and donation cashback will be in paid dollars. FDC would be new and it
is not expected to be accepted by the suppliers, charities and donors from day 1.
Therefore let us first investigate donation cap and debt/income cap which need
to be selected by the E-shop joining Fandona Pay with the FDB selection.
Donation cap
Donation cap is the first parameter. Affiliated E-shops commit to allow for
automated purchase of the same amount of FDB as is the amount donated by a
particular consumer. The money from the FDB purchase will be used for
donation cashback. E-shops will be asked to choose a donation cap (in %) which
needs to be at least 10%.
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Here is an example how it works: Let the price of the selected product without
donation shopping be 100$. With 1% fee charged by Fandona the price with
donation shopping will be 101$. Suppose the E-shop chooses 30% donation cap.
The maximum donation of the consumer will be 30$ and let the consumer
donate the maximum. In that case the consumer will credit 131$ via Fandona
Pay. Fandona Pay distributes the income as follows:
(1) it will send 1$ to Fandona account,

(2) it will issue and credit to the E-shop Fandona donation bonds with the 30$
face value,
(3) it will stake the coupon which equals the product of the face value of all
Fandona donation bonds historically issued to the E-shop so far and the daily
coupon rate (let it be 0.01%). In our case the coupon is 0.03$ (the face value of
all bonds held by the E-shop is 30$ times 0.01% = 0.03$). The coupon will be
unstaked and distributed with all collected coupons of the day across FDB
holders at the end of the day (without FDB market only across E-shops). If the
E-shop sells FDB on the market, its consumers will still pay the coupon to the
FDB holders. Thich is feasible due to blockchain where all transaction of the FDB
will be traceable. This is as if every FDB is registered to the particular E-shop for
which it was issued.
(4) it will stake 30$ (since 30$ was donated) for daily donation cashback to be
unstaked and distributed with all collected money of the day to be used for
donation cashbacks across donors at the end of the day,
(5) it will send 29.97$ to the charity selected by the consumer and
(6) the remaining 70$ income will be sent to the E-shop to pay its suppliers,
employees, to save and invest and to earn some profit. Note that the E-shop
buys FDB from its profit margin or reserves and other savings.
Figure A1.1 - Income distribution of donation shopping
In total it gives 131$. Note that donors paid 30$ more with donation shopping
(30$ donated on top of the price of the product) and received the same 30$
back being fully compensated. Donors donated 30$ but the charities will receive
only 29.97$ because the coupon needs to be paid to the FDB holders (the
E-shop in this example). The balance of the E-shop after one day increased of
32
+0.03$ and the assets equal 100.03$. The E-shop holds Fandona donation
bonds worth 30$ (bonds with 30$ face value bear daily coupon) and 70.03$ in
cash which is 0.03$ (30$+70.03$=100.03$) more than without donation
shopping (it would be 100$) due to the daily coupon paid by donors (Figure A1.1
summarizes the income distribution).
Without donation shopping the E-shop would collect 100$ whereas it would be
100.03$ after one day of donation shopping. Since E-shops pay for the donation
cashback, it is effectively money of E-shops which is sent to charities in
exchange for the coupon which is paid by donors (otherwise it would go to a
charity or the donor would not spend it and it would keep it).
Suppose the next day the sales are the same. Now the face value of all donation
bonds held by the shop is 60$ so the fee for coupon is 0.06$, the donation
cashback is 30$ and the amount sent to the selected charity is 29.94$. Without
donation shopping the E-shop would collect 100$ whereas it would be 100.06$
after two days of donation shopping.
Fandona induces E-shops to invest into donation bonds for the daily coupon.
Fandona donation bonds will be tradable so the price of donation bonds will be
determined on the donation bonds market resulting in yield which might differ
from the coupon. The yield will increase/decrease (bond price decrease/increase)
with increasing/decreasing demand for donation bonds. E-shops will be free to
buy donation bonds provided they will have free capacity to purchase them. Free
capacity is determined by the debt/income cap which is the second parameter to
be selected by each E-shop operating under FDB.
Debt/income cap
E-shops are required to select the debt/income cap which is the ratio of total
FDB held by the particular E-shop over the daily income of the E-shop.
Automated purchase of the FDB respecting the donation cap (Figure A1.1) will
continue until the debt/income cap is reached. Figure A2.2 illustrates the
accumulation of FDB issued (yellow bars) driven by donations to charities (green
bars) to pay back donors. Recall that the sum of the amount sent to charities
and coupon (CH+c) equals the face value of corresponding FDB issued.
Initial daily volume of sales of the E-shop is displayed by grey bar (Figure A2.2 -
DAY 0). Assume donation shopping started next day (DAY 1) and let the volume
of sales increase also due to donations (DAY 1, grey+green bars). Consumers
placed buying orders using their prefered payment method (Apple Pay, Google
Pay, Revolut, Curve, Libra Pay, etc) and confirmed that they selected Fandona
Pay on top of the standard purchase. This allows them to shop with donating in
exchange for donation cashback. For example a consumer chooses 5% donation
for 100$ product creating 106$ donation shopping cart (100$ shopping, 1$
Fandona fee with 5$ donation) which generates a 106$ payment. The income is
33
distributed as described within Figure A2.1. The amount of donation bonds

corresponding to FDB 1 was issued and it is held by the E-shop at the end of the
day 1.
Figure A2.2 - SMP - donations drive FDB
Assume that next day (DAY 2) the volume of sales increases (DAY 2,
grey+green+yellow bars). New amount FDB 2=CH2+c is issued and sold as FDB
2 bond to the E-shop in exchange for the donation cashback since total FDB held
by the shop (FDB 1+2) does not exceed the debt/income cap of 50% (assume
this cap was selected by the E-shop). Next day (DAY 3) donation shopping
continues and donors are again fully compensated with donation cashback which
equals CH3+c.
Equilibrium amount of donations

Let us investigate how much people are expected to donate as they are free to
choose any amount of donation equal or above 1%. As long as donations are
fully compensated, donors tend to increase them since they get the full
cashback. However, full compensations face a constraint which is determined by
the debt/income cap. Suppose the E-shop selected 50% debt/income cap.
Donations are fully compensated by donation cashback for donations of the days
1 and 2 (Figure A2.3).
Note that the donations of the day 3 are not fully compensated since the FDB
held by the E-shop at the end of the day 3 (FDB 1+2+3) hits the 50%
debt/income cap. Donors are free to donate with limited (DAY 3) or zero
donation cashback (DAYS 4 and 5), but it is not expected to be the equilibrium
outcome (Fandona is a donor rewarding platform not a charity platform for
donors who do not aim at any financial compensation). As a result donations are
expected to diminish with limited or zero donation cashback which works as an
automated stabilizer of debt accumulation since donations drive debt. As a result
the accumulation of FDB, which is driven by donations, slows down which leads
to the decrease of the debt/income ratio provided the income of the E-shop
34
increases. The decrease of the debt/income ratio below 50% allows for full
compensation of donations (Figure A2.3, DAY 6).
In equilibrium the amount of donations equals the amount of daily debt/income.

The debt/income amount is expected to equal the cap and 1% donation (which is
the minimum to be donated) of the daily sales of the E-shop on top of that. It is
the outcome maximizing the amount of donations (Figure A2.2, DAY 6). Daily
raise of income allows for daily donations to keep up with the debt/income cap.
This is why E-shops experiencing the growth of income create a free capacity to
buy donation bonds and thus can afford to buy the FDB offered by other E-shops
which may have hit their capacity given by the debt/income cap.
Figure A2.3 - SMP is automated debt stabilizer
Note that E-shops hit the capacity to offer fully compensated donations if their
income does not grow. If their income grows, E-shops can offer donations which
keep up with the income growth having full donation cashback in place.
Recall Fandona Pay requires that consumers pay for Fandona margin, coupons of
E-shops and minimum 1% donation. If an E-shop stagnates (its income does not
grow), then this is the cost of donation shopping with donation bonds FDB paid
by consumers (Figure A2.4 - black, grey and green bars). The cost is lower for
growing E-shops since consumers’ donations are fully compensated by the
donation cashback.
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Recall that for E-shops implementing Fandona Pay within the FDB regime are
required to select the debt/income cap for daily income. Fandona might apply
longer period (weekly, monthly, annual) as long as daily income covers for
coupons to be paid at the end of the day to the FDB holders. This would lead to
higher donations and higher donation debt held in FDB. Fandona will apply it
depending on market conditions.
Figure A2.4 - cost of donation shopping with FDB
Note that for the full compensation of donations by donation cashback the
amount of donations (accumulating every day) determines the aggregate
amount of savings needed. In turn the amount of savings generates the amount
of FDB. The amount of savings is determined by E-shops that are free to choose
their targeted share of FDB on their daily revenues (up to 50%). Therefore
E-shops decide on how much donations will be fully compensated. Fandona
affects the decision of E-shops by adjusting the coupon interest rate which is
exogenously set by Fandona. The increase of the coupon rate induces savings
and it raises prices of goods and services under donation shopping with FDB.
A2.2 Fandona currency - FDC
As soon as E-shops accept Fandona currency (FDC) for Fandona Pay, Fandona
will be ready to issue FDC and buy FDB in exchange for FDC. Fandona donation
bonds will be partially or fully replaced with Fandona currency and the
distribution of FDB and FDC amounts in circulation will depend on the
preferences of Fandona users. FDC arises when the first E-shop starts accepting
it for payments. From then on the income from donation shopping of the E-shops
accepting FDC will be distributed across Fandona users in FDC instead of dollars.
Fandona will issue FDC for donors as the donation cashback. Charities will get
FDC currency.
For the donation shopping within FDC regime Fandona will no longer collect the
fee (effectively tax) from consumers but it will issue FDC in the same amount
instead. Similarly, Fandona will replace the coupon with interest to be issued and
paid to E-shops for holding FDC. There will be no need to collect coupon
payments from consumers any longer. Therefore, FDC is designed to be a
currency that bears interest to motivate E-shop so that they implement Fandona
Pay with FDC acceptance. It may increase demand for donation shopping since
36
payments in FDC are cheaper than in FDB for consumers as they do not have to
pay for the Fandona margin and for coupons. On the other hand they face
limited usage of FDC compared to dollars and higher exchange rate risk
compared to dollars when FDC will enter exchange market.
Donations to charities (30$ in our example), donation cashback (with 30$ full
cashback), Fandona fee (1$) and interest for the E-shop (1$) will be credited in
FDC. Figure A2.5 illustrates this distribution of the issued FDC (black fee, pink
interest and green donation to charity and donation cashback).
Figure A2.5 - FDC issued to cover for costs
Some E-shops might opt for keeping on operating under FDB regime and stick to
donation bonds (in case they prepare more stable payments in dollars) while
other E-shops might go for the FDC regime (in case FDC generates higher
risk/return). The coupon will be in place as long as there are FDB holders in
place and consumers will have to pay for it.
Currency/income cap
Fandona needs to limit the issue of FDC to keep its value stable. The
currency/income cap is to be set up. Otherwise the amount of FDC would rise
without any limits because donations, which cause the FDC rise, are fully
compensated and thus attractive. As soon as the E-shop accepts FDC, it faces
the currency/income cap instead of the bonds/income cap. The bonds/income
cap becomes obsolete since the E-shop is no longer asked to spend from their
income on FDB purchases. Fandona issues FDC for donors as donation cashback
instead of issuing FDB to E-shops. FDC is also driven by donations. The amount
of FDC is determined by the amount of donations (plus the Fandona margin and
E-shop interest on top of that). FDC limited by the income stabilizes FDC prices.
Therefore the currency/income cap is applied - FDC currency is issued to fully

compensate donors until the amount of FDC currency reaches 50% of annual
income of all affiliated E-shops accepting FDC. The currency/income cap is set up
exogenously by Fandona to be 50%. With FDB it was debt/income cap, which
refers to
dailyincome of the E-shop. With FDC the currency/income cap refers to
annualincome (recall Fandona is free to extend the debt/income cap to yearly
income as well).
In Figure A2.6 the transition from bond to currency occurs at the end of day 10
when the bonds in the E-shop holding (FDB 9) were sold to Fandona which
issued FDC and credited it to the E-shop. In addition it issued FDC for donation
cashback, Fandona fee (f) and E-shop interest (i) which gives FDC 10 in total.
37
Donations are to be sent to charities (CH10). Note that donations of the day 10
are fully compensated with the donation cashback while those of the day 11 are
not because the currency/income cap is exceeded.
Figure A2.6 - SMP of FDC transition from bond to currency
Day 11 is counted as the first day when FDC currency/income cap is applied.
Therefore the 50% constraint is applied for the issuance of new FDC reducing
the donation cashback (FDC 11 does not fully cover D11+f+i). However
donations of the day 12 can be fully compensated by issuing FDC to cover for
D12+f+i increasing the total amount of FDC in circulation (FDC 12). The
maximum cashback is feasible because the ratio of FDC 12 to the income of days
11 and 12 is less than 50% due to the income growth.
Figure A2.7 - SMP of FDC currency fueling donations
Note that FDC donations driving FDC can be higher than donations driving FDB
because donation cashback facing the annualcurrency/income cap can be higher
than the donation cashback facing dailydebt/income cap. In Figure A2.7
donations with corresponding FDC are displayed for the first week, month and
38
year and a for a general year. Note that donation cashbacks are still distributed
daily and that for every donation purchase the currency/income is calculated to
check it with the cap to determine whether full donation cashback can be issued
for the corresponding donation.
Figure A2.8 - SMP with donation return below 100%
Note that donors are not constrained. They are free to donate any amount. It is
donation cashback which is constrained. If donors accept partial donation
cashback, then donations exceeds the amount of FDC is circulation (Figure A2.8)
and donors gain donation return below 100%.
Donation return
Return On Investment (ROI) measures how much investors get back in
exchange for the investment. It is the ratio of net profit over investment. If
investors get back the same amount as they invested (net profit is zero), then
ROI is zero.
Donation return measures how much donors get back in exchange for donating.
If they get the same amount as they donated then financial terminology would
call it zero donation return but Fandona communicates such return as 100%
return since it in fact means that 100% of invested (donated) amount was
returned. Within the FDB regime donation cashback is the profit and the net
profit is the sum of the costs a donor encounters deducted from the donation
cashback. Suppose full donation cashback is fueled by income growth. Within
FDB the costs of donors are (1) Fandona fee and (2) the coupon to be sent to
FDB holders (primarily E-shops) while there are no costs within FDC. As a result,
the FDB donation return is less than but close to 100% as the net profit is
relatively high (95-99%) while the FDC donation return equals 100% provided
full compensation is allowed (when income caps are not exceeded).
A2.3 Fandona SMP versus current economies
Fandona Smart Fiscal Extension

Recall that that Smart Monetary policy generates fully compensated donations
by full donation cashback generating 100% donation return (FDC) or nearly full
donation cashback generating nearly 100% donation return (FDB), as long as
39
donation shopping grows. Otherwise, donation return is zero since no donation

cashback can be issued (profit is zero).
As a result, Fandona applies Smart Fiscal (SF) extension to the SMP in order to
guarantee minimum donation cashback in any situation. Donors will be charged
1% fee on every donation purchase (in dollars within FDB or in FDC) which will
be distributed across donors proportionally to their donations.
Note that if everyone purchases and donates the same, then money taken from
the fee will be just returned back to donors with zero gain (zero net profit).
Donation cashback will equal the costs of donors. Profit is positive but net profit
is zero. Positive donation cashback is linked to zero donation return.
However, donors who donate relatively higher % of their purchases will get
positive net donation return since the donation cashback would exceed the fee
they pay from their purchases resulting in positive net profit. Donors who donate
relatively lower % will compensate for that resulting in their negative donation
return due to negative net profit (donation cashback lower that costs). In
aggregate (and on average) there is no gain for the donors resulting in zero
donation return.
SMP generates the same donation return for every donor which is 100% or close
to 100% during the growth of income while it drops below 100% up to zero
during stagnation with zero donation cashback.
SF extension to SMP allows for individual donation cashbacks to be always

positive although the donation return is expected to be zero.
Fandona applies both SF extension of SMP to maximize donations, donation

cashback and donation return.
Comparison with current economies

Donations to charities is an analogy to public spending. Fiat currency is issued to
finance public spending (on top of supporting private spending). Fandona coins
(FDB+FDC) are issued to finance Fandona charities.
Fandona coupon (for FDB) and interest (for FDC) is an analogy to taxes. They
are paid to create the demand for money (fiat or FDC) or bonds (FDB) which is
used to finance public spending (taxes) or charities (FDB and FDC). Recall that
taxes are effectively not collecting money, they are the means of creating
demand for currency. Within Fandona SMP E-shop and investors demand FDB
and FDC in exchange for coupon and interest respectively. Consumers need to
pay taxes while shopping. Fandona consumers need to pay coupons and
interests while shopping with donating.
40
Public spending is implicitly constrained by the debt/GDP ratio. Fandona

donations are explicitly constrained by the debt/income ratio (for FDB) or the
currency/income ratio (for FDC).
Fiat currency (M) is implicitly governed by the monetary equation MV=PQ

constrained by nominal GDP growth (growth of PQ), where the velocity V is
relatively stable. As a result fiat currency is implicitly governed by the M/PQ
ratio. Fandona currency (FDC) is explicitly governed by the currency/income
ratio which is FDC/PQ, where PQ is the income of E-shops affiliated with
Fandona. Therefore, FDC is constrained by the nominal income growth (growth
of PQ).
Central planning versus market cryptonomy

As soon as FDC is accepted by E-shops, Fandona could issue FDC to centrally
distribute donations directly to charities respecting the currency/income ratio.
Fandona would act as a central planner, as centralized donor. However, Fandona
designs SMP and SF extension as a decentralized system distributing individual
donations according to the preferences of donors. Such system needs to
motivate E-shops by coupons and interests and donors by compensating
donations with donation cashbacks, unless donations to charities will remain to
depend on altruistic behaviour of donors who donate without any financial
compensation.
41
Annex 3 - Fandona Social Responsibility
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White Paper 1.

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1. Fandona versus conventional betting 4

3. Fandona donation betting cryptonomy 8

5. Donations, charities and ethics 20

Annex 1 - How donation betting works 25

Annex 2 - Fandona Smart Monetary Policy 30

Annex 3 - Fandona Social Responsibility 42

The comparison between ​Fandona and conventional betting systems​is displayed

1. Fandona versus conventional betting

1.1 Donation versus conventional betting

The difference between donation and conventional betting is displayed in the

Figure 1.1 - conventional betting

Figure 1.2 - donation betting

How Fandona donation betting works in 5 steps (See Figure 1.2):

1. A user (fandonor) chooses a sports event and his/her favorite on whom

More detailed how it works in 9 steps is summarized in ​Annex 1.

1.2 Decentralized versus conventional betting

The difference between decentralized and conventional betting, which is

Figure 1.3 - centralized betting (24 FDC collateral by one bookmaker)

Figure 1.4 - decentralized betting (24 FDC collateral by 3 bookmakers)

A collateral which needs to be pledged to open donation betting is provided by

Ticket 2.1 - black odds with 1% donation

Ticket 2.2 - white odds, 100 FDC pledged with 2% donation

Ticket 2.3 - 100 FDC pledged with 10% donation

3. Fandona donation betting cryptonomy

3.1 Decentralized odds determination

Fandona is expected to be launched on EOS blockchain using EOS tokens and

Every bookmaker needs to (1) choose a sport game4 to be published on

some amount of FDC (EOS, dollars) on all possible outcomes serving as a

Daily return6 on the bookmaker investment of 1000 is 0,0052

3.2 Betting payout

Suppose there is higher frequency of odds corresponding to higher probability of

Table 3.2 Table 3.3

Table 3.4 Table 3.5

bookmaker has to pledge 1800 (1000+8*100) to reach that margin. The

The bookmaker staked in 10 days collateral of the value 1900 (1000+9*100)

3.2.1 Overvalued odds are not profitable

Would bookmakers be motivated to offer overvalued (more attractive) odds? For

Table 3.6 Table 3.7

Moreover the collaterals would not be replenished - the bookmaker invested

3.2.2 Undervalued odds are not profitable

However, market competition of conventional betting and free entry on Fandona

Table 3.8 Table 3.9

As a result, it would be profitable to offer more attractive odds, attract fandonors

3.3 Donation cashback

3.3.1 Donation cashback funded by monetary expansion

Consumers​are motivated to donate while purchasing goods and services in

Fandona SMP is designed to start with Fandona donation bonds (FDB) to be

Detailed description of Fandona Smart Monetary Policy is provided in ​Annex 2​.

3.3.2 Donation cashback with fiscal extension

Smart Monetary policy generates fully compensated donations by full donation

More on Smart Fiscal extension is provided in​​Annex 2.3​.

3.4 Acknowledgment of fandonors

On top of donation cashback, the ranking of top fandonors will be published on

1) the average > 4,75 stars: 5 STAR

3) 4,25 stars >= the average > 3,75 stars: 4 STAR

5) 3,25 stars >= the average > 2,75 stars: 3 STAR

7) 2,25 stars >= the average > 1,75 stars: 2 STAR

9) 1,25 stars >= the average > 0,75 stars: 1 STAR

11) 0,25 stars >= the average : 0 STAR

Juraj Antal​and ​Ivana Antalova​,​ founders

Ivana Antalova​,​ Director for Fandona Social Responsibility

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The comparison between Fandona and conventional betting systemsis displayed

More detailed how it works in 9 steps is summarized in Annex 1.

Consumersare motivated to donate while purchasing goods and services in

Detailed description of Fandona Smart Monetary Policy is provided in Annex 2.

More on Smart Fiscal extension is provided inAnnex 2.3.

Juraj Antaland Ivana Antalova, founders

Ivana Antalova, Director for Fandona Social Responsibility

Juraj Antal, Director for Fandona Cryptonomy

Sam Russell Chethan Rangaswamy

Dimitar Dzhurenov Peter Nikolov

Michael Blu Milan Fico

Tony Fan Harly Zappino

2) Decentralized odds creation by bookmakers having free entry

4) Unbiased and fair

9)Long term returns

10) The value of donations

11) Positive returns unlike conventional betting