TABLE OF CONTENTS

1 Project Overview ................................................................................................................... 1

2 Background of the project ................................................................................................. 3

2.1 development of Blockchain technology and digital currency ................... 3

2.2 Art Industry Overview .............................................................................................. 6

2.3 Art industry asset identification and circulation problems....................... 10

3 Artfinity Project Introduction .......................................................................................... 15

3.1 Artfinity Overview.................................................................................................... 15

3.2 Artfinity technology and mechanism ............................................................... 16

4 AT introduction .................................................................................................................... 28

4.1 AT Overview .............................................................................................................. 28

4.2 Artfinity Economic Model ..................................................................................... 28

4.3 AT application scenario ......................................................................................... 30

4.4 AT investment value ............................................................................................... 31

5 Artfinity governance mechanism................................................................................... 34

5.1 Foundation Architecture ....................................................................................... 34

5.2 related responsibilities .......................................................................................... 36

6 Disclaimer .............................................................................................................................. 37
1 Project Overview

The art industry has been an important part of the global economy and

culture since ancient times, and it represents people's unremitting pursuit

of beauty and value. However, after rapid development, adjustment and

consolidation, the Chinese art industry faces many problems in terms of

identification of rights and circulation. The art industry requires a high

degree of professionalism, and there are difficulties in identifying, assessing

distortions and forgery, etc. At the same time, due to the difficulty of

safekeeping, high transaction costs, and lack of financial technology

support, the liquidity of the art industry is constrained.

The birth of blockchain technology has brought a new dawn to the art

industry. Blockchain, as a distributed ledger technology, has been

successfully applied in the field of encrypted digital currency, such as

Bitcoin. It has been carrying digital asset assets in just 10 years, with capital

of more than 200 billion US dollars, its openness, de-centralizing and de-

trusting characteristics have attracted a lot of light. In 2015, it was praised

by The Economist as “a machine for creating trust”, and it has been

successfully applied also in cross-border payment, supply chain, and

copyright protection, where many unicorn companies have been born.

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 Artfinity is an industry-wide public chain of artwork tracing and trading

based on blockchain technology, providing a full-process solution for the

artwork tokenization via blockchain. Artfinity pioneered the technical

identification of AID (Artfinity ID) and IAO (Initial Assets Offering) for the

above-mentioned identification and circulation issues, which achieve the

sincerity, transparency, and modification-proof. Furthermore, it achieves

low cost, high efficiency, and trustworthiness of circulation, which greatly

enhances the value of collectibles and reduce the costs and risks of issuers

and collectors in the transaction process.

Artfinity has already cooperated with the big names of the art industry

such as Jueyi and Baokuyitong, and is supported by lots of investment

institutions and exchanges in the blockchain industry. Artfinity artwork

public chain will connect the blockchain and art industry to open a new era.

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2 Background of the project

2.1 development of Blockchain technology and digital currency

In 2009, the first block of Bitcoin was born. A geek with the pseudonym

“Satoshi Nakamoto” brought the blockchain to the world. The blockchain,

a distributed ledger technology, began to attract people's attention. In 2015,

the Ethereum blockchain was successfully operated, and its smart contract

technology widened people’s imagination of the digital world. The

blockchain 2.0 era came. After experiencing the 2017 ICO boom and the

exchanges battle in 2018 and the first year of the public chain, how to make

the blockchain bring real value and innovation, has become the third-

generation blockchain’s key point.

The birth of blockchain technology ensures that information cannot be

tampered with, reduced costs, enhanced security, and more protection on

privacy. More importantly, this is a mechanism in which everyone can

participate and avoid a strong centralization. It is a “trust” machine for

human beings to enter the digital era.

Industry opportunities brought by blockchain technology applications

Trust is the foundation of asset exchange. Blockchain technology uses

a new encryption authentication technology and decentralized consensus

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mechanism to maintain a complete, distributed, un-modifiable

ledger, allowing participants to ensure the security of asset management,

exchange, and related information via a unified ledger without having to

know each other and build trust. This is of great significance for asset

registration and asset exchange.

(1) reduce the risk of trust

Blockchain technology has open-source and transparent features.

System participants can know the operating rules of the system, verify the

authenticity and integrity of the book contents and the history of the book

construction, which ensures that the asset exchange data and history are

reliable and not tampered, in order to improve the traceability of the system

and reduces the trust risk of the system.

(2) Improve the efficiency of asset management, exchange, and

settlement

The blockchain uses distributed storage and accounting. All exchanged

data is displayed in real-time on a global shared spreadsheet platform.

Real-time clearing makes the exchange data more transparent and the

exchange efficiency is greatly improved, thus effectively reducing the cost

of asset exchange and Systemic risk.

(3) Reduce asset management costs

The original asset registration and exchange often face the problems

of a long process, multiple steps, and information asymmetry. The

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blockchain can simplify the exchange process, reduce the exchange of asset

information among different asset investment institutions, which can save

a lot of manpower, material resources and time, and is of great significance

for improving the liquidity of asset investment value.

(4) Improve the level of intelligence

Since all file or asset information data can be represented in the form

of code or ledger, smart contract and automatic exchange can be

implemented on the blockchain by setting up the data processing program

on the blockchain. For example, a smart contract can write an option to the

agreement to ensure that the contract is automatically executed and

defaulted.

In 2019, the tenth year of the birth of Bitcoin, the blockchain is calling

for new assets and values to be built and run on it, to get rid of the "air

currency" doubt, and truly become the value Internet recognized by billions

of people. The physical world, after entering the digital age, also needs the

blockchain to solve the problem of trust, in order to achieve the free flow

of value and the optimal allocation of resources. How to achieve asset

tokenization has become the symbol of the arrival of the blockchain 3.0 era.

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2.2 Art Industry Overview

The basic components of the art market mainly include the creation,

production, development, circulation, collection, and auction of artworks.

The artwork created by the artist flow to the collectors through the agency

of the gallery or art dealer, which is the primary market for artwork trading;

the collectors resell to the auction company, and then the company sell to

other collectors through public auctions, private contacts or online e-

commerce, which is the secondary market for artwork trading. In addition

to the artwork trading market, there will be some service-oriented and

cross-industry business models. They are also an indispensable part of the

scalability and growth of the art industry. The main areas include self-

owned art investment and art finance services, art market consulting, art

storage and logistics, art education, etc.

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2.2.1 Overview of the global art market

In 2018, the total sales of the global art market was about 67.4 billion

US dollars, an increase of 6% year-on-year. The second-highest global art

market in the past decade has shown positive growth for two consecutive

years. In 2018, dealer sales increased by 7% year-on-year to approximately

$35.9 billion, and sales of art and decorative art and antiques for public

auctions reached $29.1 billion, an increase of 3% year-on-year. Although

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 the auction market is still stable, there are large differences between

different countries and price ranges, and dealers of different sizes have also

performed differently. Similar to the situation in 2014 – the highest point in

the past decade (total annual sales of 68.2 billion US dollars), the growth of

total global art market sales in 2018 is also mainly driven by high-end

business growth, especially in the high-end market in the US. Strong. The

world's top three markets - the United States, the United Kingdom, and

China together accounted for 84% of global sales in 2018, the same as in

2017.

2.2.2 the development and problems of the Chinese art

industry

1. China's art industry has experienced a period of rapid development

and subsequent bottlenecks in previous years. It is currently at the stage of

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self-reflection, diagnosis, adjustment, and finding breakthroughs in

innovation.

2. The complete art industry chain should focus on art trading,

including art evaluation, mortgage, fund, pawn, insurance, logistics, etc.,

and even extend to art financial products. However, in China, this market

has never formed an industrial chain system, and it is only in the period of

free development of individual groups.

3. Looking at the current business model, the trade of art in Mainland

China has the characteristics of privatization, fragmentation, speculation,

and poor resource circulation. From the perspective of supply and demand

in the market, art trade still presents a situation of oversupply and

conformity. On the one hand, the solution of this problem depends on the

overall improvement of the level of national aesthetic education, on the

other hand, it is necessary to eliminate the "distrust" caused by the above-

mentioned business model.

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2.3 Art industry asset identification and circulation problems

2.3.1 Identification problem

There are serious problems in the art market, such as forgery and fake

sales, false identification. According to institutional statistics, 70 to 75% of

every 1 billion art trades in China are fraudulent, and the global annual

market for forgery and fraud in art and collectibles is as high as $6 billion,

accounting for almost 1/10 of the total trade volume of art. The crisis of

trust brought about by the fraud of art has seriously restricted the healthy

development of the art industry.

Although there are already many evaluation and appraisal institutions

in the art industry, some so-called “authoritative” appraisal institutions,

and experts provide identifications through experience, “eyes”, and even

“purchase” appraisal certificates. At present, China's art certificate does

not have any legal effect. In the long run, the existing identification system

of “centralization” has the following problems:

1. Art appraisal assessment lacks scientific standards and normative

programs. At present, the evaluation and appraisal of art in China is still

based on the expert appraisal method based on individual subjective

experiences, such as visual inspection and hand feeling. Most of the

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identification points of this method are difficult to describe accurately and

scientifically. As far as the industry is concerned, experience helps to

eliminate counterfeit goods. However, the direct result of the lack of

uniform scientific standards and normative procedures is the lack of

supervision in the art appraisal industry. There are no rules and regulations

to follow, and the development is mixed and chaotic.

2. There is a lack of uniform access threshold for art appraisal

assessment. Evaluation of an accreditation body or assessment of an expert,

not

The qualifications and the approval of the relevant audit procedures

include the admission criteria, procedures, and qualifications of employees.

At the same time, the legal construction of the Chinese art market is

relatively lagging behind, and the laws and regulations related to the

appraisal of art have not yet been introduced. It is difficult to meet the

current situation of the art collection, investment, and consumption of the

art. Some civil engineering units and academic research institutions are

engaged in appraisal and evaluation and issued certificates for society.

Some individuals also use the identity of appraisal and evaluation experts

to evaluate and collect fees for the public. There are many blind pursuits of

money, but there is no corresponding supervision and Investigation.

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 3. “Centralized” artwork identification is very likely to cause benefit

transfer. The of the artwork and the actual value of the art have long been

monopolized by galleries, art auction platforms, and evaluation agencies.

Due to the sky-high profits of the art industry, institutions and sellers can

collude to resell counterfeit goods to buyers. And the accreditation body or

expert does not need to bear the legal responsibility for the appraisal. The

industry problems are caused by the professional qualifications and

professional ethics of the experts, as well as the lack of management

mechanisms and the lack of legal supervision. Therefore, the art industry

needs a “decentralized” blockchain traceability platform to store the

source and attribution of art in encrypted form, In order to establish a trust

mechanism shared by the industry.

2.3.2 Circulation problems

2.3.2.1 Safekeeping and transportation

The Chinese art industry chain is still missing many important

components, such as art insurance. Industry experts said that the Chinese

art insurance market has 1.8 billion to be developed. Although the market

is so huge, China's art insurance market is still blank. Insurance helps to

reduce the damage caused to individuals after the art has some problems,

and contributes to the establishment of a standardized identification

system for the art market to counter the risk of counterfeit goods.

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 In the Western countries or regions where the art insurance market is

very mature, there is a very complete industrial chain, from art valuation to

auction, transportation, storage, maintenance, and repair, each is made up

of professional commercial companies. The work that the insurance

company needs to do is simple. China's repeated embarrassing incidents

revealed the serious lack of laws and regulations in the Chinese art industry

chain, which made the whole system in a disorderly state without

regulations.

2.3.2.2 High transaction costs

Increasing transaction costs is a common means of limiting high prices

in the art market, and the cultural relic is one of the victims. The cultural

relics industry chain mainly includes artists, cultural relics, collectors and

auction companies. The rental rate of traditional cultural relics trading

channels is generally above 30%, the auction channel fee is >25%, and the

transaction cost is as high as 50-90%. In addition, the price of cultural relics

is huge and cannot be split into small transactions or investment. The high

trading threshold keeps the people away and causes the problem of

circulation.

Cultural relics originally had the opportunity to become hard currency

like real estate, securities, energy, and gold, but due to high transaction

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 costs and high trading thresholds, they are now degraded into niche games.

If you can lower the trading threshold of cultural relics, reduce transaction

costs and improve liquidity, cultural relics will become a huge market as real

estate and become an important part of family wealth and corporate asset

allocation.

2.3.2.3 Lack of financial support

In addition, the current status of art finance is also due to the imperfect

industrial art chain. Today, the Chinese art market will surely follow the path

of commodification, asset tokenization, financialization, and securitization.

It is precisely because of the excessive financialization and securitization

under the premise that the road of art asset tokenization in China has not

been consolidated, which has caused problems at all levels of the art market.

Due to the liquidity gap, the total market value of the A-share main

board is 50 trillion yuan, which is more than 10 times the market value of

the new three boards of 5 trillion yuan. When the size of the artworks is 2

trillion yuan, if it can leverage high-tech technology, such as the Internet or

Blockchain, to improve the effective mobility of cultural relics. The

Government departments can adjust policies to improve the reliability and

integrity of cultural relics transactions, we believe that the future art market

space is expected to double.

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3 Artfinity Project Introduction

3.1 Artfinity Overview

Artfinity is an industry chain of industry traceability and trading based

on blockchain technology. Through putting the whole process of art

creation and trading on blockchain, the current art industry's identification

and circulation problems are solved. Specifically, Artfinity uses the Internet

of Things technology to record the entire process of artwork creation and

generates a unique identification (AID) for each artwork based on the

cryptographic hashing, extracting the “digital fingerprint” and uploading

it to the blockchain. As a result, the traceability is true, transparent, and

cannot be tampered with.

Artfinity adopts the decentralized method to select the node and

generates the tokens while the art object is stored in the warehouse of the

node. The tokens storing the AID and the acceptance agreement can

exchange for the designated artwork at any time via the node. Furthermore,

the token has rich smart contracts that support financial services such as

circulation and mortgage, it also creates the new model of IAO (Initial

Assets Offering), the circulation of trading on the blockchain greatly

reduces the trust and communication costs of both parties to the art

transaction, and improves asset liquidity.

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3.2 Artfinity technology and mechanism

3.2.1 DPOS consensus mechanism and technical

characteristics

As an industry vertical public chain, Artfinity uses the DPOS (Delegated

Proof of Stake) consensus mechanism to ensure the transparency and

fairness of each block. The DPOS mechanism was invented by Dan Larimer

and successfully applied in mainstream public chains such as Bitshares,

Steem and EOS, and can achieve much higher computing speeds than other

consensus mechanisms.

Below we introduce the details of the mechanism. The consensus

mechanism mainly answers three questions:

a. Who will produce the block

b. When to generate a block

c. How to verify the validity of the block

For question a, DPOS is determined by the current top list of principals

(ie, supernodes) and the current time;

for question b, it is generated periodically at regular intervals.

For problem c, in order to prevent the instability caused by the

exorbitant right of the principal and the drift of the timestamp, at the

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implementation level, the PBFT (Practical Byzantine Fault Tolerance)

algorithm is used to verify the validity of the block, considering the block

validation and persistence. For the verification of the block, the method of

all-node voting is adopted. When the new block is created, the delegate

node of the DPOS needs to wait for the voting of other nodes, instead of

having the right to write into the blockchain immediately. In the case where

the number of nodes is 3f+1 and the number of nodes with a Byzantine

fault does not exceed f, the blockchain data can guarantee consistency,

namely:

i. If a correct node accepts and executes a block, all correct nodes

submit the same block

Ii. All correct nodes are either behind the longest chain or consistent

with the longest chain, and the block hashes of the same height are the

same.

At the same time, Artfinity uses the Internet of Things technology and

the tokenization nodes to complete the mapping between the physical art

and tokens. The tokenization node is selected by the community voting, it

will complete the functions of registration, verification, custody, and

acceptance of the art objects. The technical means and governance

mechanism will be leveraged to ensure that the whole process is

transparent and trustworthy, and the node is under community supervision.

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 The above-mentioned DPOS+PBFT guarantees the basic functions and

performance advantages of Artfinity. In order to complete the art

identification and trading circulation, Artfinity has made the following

technological innovations:

a function based pluggable sub-chain construction:

Sometimes we need specific functional modules to solve specific

problems. In general, specific functional modules have better performance

(similar to ASICs and CPUs) than general-purpose modules. Let's take the

Artfinity token transaction function as an example. Its (write) function can

be abstracted into a limited set of operations: locking (top up), withdrawal,

placing order, revoking order, matching, and so on. In order to support

more general (weak Turing complete) functions, versatile smart contracts

often need to run complex virtual machines and supporting infrastructure,

which makes their tps lower, which is unacceptable for high-frequency

trading modules. Therefore, for a specific functional module, Artfinity builds

a specific functional sub-chain for it. Let's take the transaction module as

an example, the function logic is shown in the following figure:

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 The status of the token is recorded in the Artfinity main chain, and the

transaction sub-chain is responsible for completing the trading function of

the tokens. The function and interaction of the main chain and the

transaction sub-chain are determined by a series of mutually agreed APIs,

such as i. Locking the tokens (top up) ii. Unlocking the tokens (withdrawal).

After sub-chaining by function, a complete function loop is:

i. The user locks the specified tokens on the main chain through the API

(token splitting by the main chain smart contract) and logically transfers it

to the corresponding user account wallet in the transaction sub-chain.

Ii. The user completes the transaction between the tokens and other

tokens (or stable coin) through a series of operations such as placing an

order and canceling the order.

Iii. The user unlocks the transaction through the API and logically

transfers it to the corresponding account wallet of the main chain.

After the API and the communication protocol are agreed, the function

of the chain has been divided into multiple parts with a relatively low degree

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of coupling. In the implementation of Artfinity, the operation of the sub-

chain is coordinated by the super-node, that is, the super-node is

responsible for the block producing of the main chain and the sub-chain.

Its structure is shown below:

Each supernode functions on multiple blockchains at the same time.

When there is no main-subchain communication, it runs the regular DPOS

+ PBFT consensus protocol to produce blocks. When the communication is

needed, the sub-chain node calls its main node APIs of the supernode.

b. layer2 structure:

Generally speaking, for the main chain, we have a high degree of

decentralization. However, even the DPOS+PBFT consensus mechanism

adopted by Artfinity is not as decentralized as another blockchain that

consists of thousands of nodes and uses POW (proof of the work), the

typical representative of which is Ethereum and Bitcoin. Similarly, the multi-

node architecture of DPOS+PBFT makes its throughput less than a single

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node architecture because the latter does not require consensus between

nodes. Although the cost of a single node architecture is insufficient

security (attacks, node falsification), it is the best choice in some security-

insensitive, speed-sensitive scenarios. Similarly, although the POW

throughput is small, Some scenarios are also the best choice for scenarios

that are extremely security-sensitive. To this end, Artfinity makes the layer2

architecture design for the balance between speed and security, as shown

in the following figure:

Layer2 itself is a complete functional system that is relatively

independent of Artfinity (can be a third party) and includes two important

modules:

1. Logic calculation module: complete the task according to different

data and process, abstracted as a function (s, p, h) = f(x), where x is data,

which can be provided by the main chain, local storage unit and external

commands ; s is the result of the calculation (final state); p is the

representation of the calculation process (for example, the selection of

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intermediate random numbers, etc.); h is the hash value of the calculation

process p, used to verify the calculation process.

2. Storage unit: used to store intermediate results and calculations. It

provides the verification function g(p, h), where p is the calculation process

and h is the unique hash value produced by this calculation process.

Layer2 first obtains data x from the main chain, local storage unit, and

the outside world; then completes the logical calculation (s, p, h) = f(x) and

stores the computational verification process p in the local storage unit;

finally the final result s and the calculation Hash h submitted to the main

chain to complete the synchronization, the communication method for

submission is described in c below. This completes a functional loop. For

the authenticity of the data on the main chain, we can provide the hash

value of the main chain data, and call the verification module g(p, h) in

layer2 for verification.

According to the trade-off between security and throughput, layer2

usually has the following options:

1. Single node: has the fastest speed, but security and decentralization

are weaknesses. An application scenario is a situation in which the decision

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process is multi-stage, the real-time requirements are high, and ultimately

only the results are concerned.

2. Multi-copy state machine: Here we specifically refer to the

Consortium blockchain, which runs the pbft consensus algorithm. It has a

certain degree of decentralization and speed. It is a method that is a

compromise of 1 and 3.

3. Other public chains with a POW consensus mechanism: they are

highly secure, slow, and decentralized. An application scenario is value

binding. For example, the Artfinity chain value is bound to the Bitcoin

network, where data synchronization between the networks is required.

c. persistent voted oracle (PVO)

In the Artfinity ecosystem, there are often situations where external

information is required, such as art market information, art real-time image

and video data, etc.; the function extension of layer 2 mentioned in b can

also be regarded as external data demand(a certain degree of controllable).

In this case, we need the oracle service, that is, we need the proxy to grab

the outside world data. The problem we are most concerned with is the

authenticity of the data. To this end, we propose a persistent voted oracle

(PVO).

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 PVO can be regarded as an on-demand sub-chain. Its main function is

to record the situation in which the main chain calls external information,

and adopts the logic of “post verification”. Specifically, for a smart

contract S on the main chain, which calls the external data d_1,...,d_n in

order through the API provided by the PVO, the main chain produces the

block and simultaneously submits a PVO block containing the external data.

For the main chain block containing external data, the basic consensus

mechanism POS+PBFT of the supernode is not responsible for verifying the

authenticity of the external data, which ensures the speed of the main chain

block generation. For POV blocks, each supernode j will verify its data:

For each data d_i, try to get the data d'_ij in the same way as the one

recorded in the PVO block, if:

a. d_i = d'_ij, then the tag data d_i is reproducible data;

b. d_i ≠ d'_ij, then the tag data d_i is non-reproducible data;

For each d_i, if more than 2/3 of the supernodes are marked as

reproducible data, then this block is a reproducible block; otherwise it is a

non-reproducible block. In both cases, the data is permanently stored by

pbft's consensus mechanism. Note that non-reproducible blocks do not

represent data fraud because the verification process is post-processed and

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 the raw data may be generated in real time and overwrite old data. In the

latter case, manual (post-test) review of the block is required.

3.2.2 Ecosystem token AT description

Local Digital token (AT) is an important part of the Artfinity ecosystem

and is designed to fully serve the Aritifinity network. Before the launch of

Artfinity's main network, the tokens are deployed on the Ethereum network

in accordance with the ERC20 standard. After the main network was

released, the tokens will be completely migrated to the Artfinity main

network. The total supply of AT issuance is 1 billion.

As an eco-service payment medium and community management

tokens, AT tokens are used to improve AT value in the Artfinity ecosystem

by extending payment scenarios and node-locked liquidity, motivating

community participants and builders, and maintaining Artfinity ecosystem's

stability. Generating and transferring artwork in Artfinity will consume AT

as a virtual "fuel”. At the same time, each node needs to pledge no less

than 500,000 AT tokens. AT consumption and locking will greatly increase

the value of AT with ecological development. At the same time, AT will be

widely used as an exchange rate unit and medium in the payment and

transaction of ecological partners, and enhance the awareness and liquidity

of AT.

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3.2.3 Description of Trusteeship Nodes, Creation Nodes,

and Super Nodes

Artfinity is an ecosystem of public governance. The three types of nodes

form the cornerstone of the ecosystem:

Trusteeship Nodes: Responsible for the holding and tokenization of

physical art, need to pledge not less than 500,000 AT, and need to complete

the goal of holding 100 million yuan of art assets per quarter, with 10-20

pieces of artwork. Specifically, the Trusteeship node is responsible for asset

mining, asset depository, and generation of asset AID and tokens on the

blockchain;

Creation Nodes: Responsible for maintaining consensus and

community governance, need to pledge not less than 500,000 AT, and need

to get more than 10,000 AT address vote from no less than 50 addresses.

There will be 99 genesis nodes. Specifically, the genesis Node is equivalent

to the “NPC Deputies” of the AT community, and is responsible for

supervising blockchain verification, community proposal collection, and

voting on major issues;

Super nodes: Responsible for public chain block generation and

technical governance. It needs to have reliable technical service capability

26
 on the basis of meeting the requirements of the Genesis node. 21 nodes

will be elected by voting. Specifically, the supernode is the highest honor

and computational power guarantee of the AT community, and is

responsible for block generation and information packaging, technology

upgrade, and consensus operation.

3.2.4 On-Chain-and-off-chain integration complete

solution

Automatic generation of AID digital identification: For the need to

identify the fidelity of art, Artfinity distributes the identity data of each

artwork such as the appearance, texture, and creator's signature certificate

in the database of the verification node, and adopts encryption

compression algorithm to take snapshots of the artwork identity data in

forward and reverse multi-angle, and uploads the obtained high-precision,

small-volume, irreversible AID identity data to the tokens of the Artfinity

main chain, and truly achieves the one-to-one mapping between artwork

and token. Compared with the solution of uploading all the authentic data

into the blockchain, AID creatively proposed identity data compression and

data fingerprint extraction technology, which greatly reduced the

blockchain storage pressure and standardized the data to be compatible

with all art categories, and enhanced the scalability of Artfinity.

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4 AT introduction

4.1 AT Overview

As mentioned above, AT represents the value and the governance

certificate of Artfinity ecosystem, with a total supply of 1 billion, which is

issued by pre-mining methodology. The distribution plan is as follows:

Team: 200 million, unlocked in 36 months, unlocked 1/36 per month;

Fund Raising: 200 million, released all at the time when launching

exchange;

Foundation: 500 million, where 100 million are for ecological partners,

100 million for business activities, 300 million for community incentives,

released in four years.

Node rewards: 100 million, distributes monthly, where 50 million are

given to the supernodes, 50 million are given to the Trusteeship nodes. The

tokens for supernodes are distributed evenly. The tokens for supernodes

are distributed according to the proportion of the holding art asset. The

reward will be released in 10 years in a progressively decreasing manner.

4.2 Artfinity Economic Model

Artfinity is a vertical chain of asset tokenization in the art industry,

connecting the value of On-Chain-and-off-chain assets. Different from the

28
 economic model depending on community consensus and token deflation,

Artfinity innovatively proposes a “dual-channel growth model”. The

Artfinity ecosystem consists of the following four core parts:

4.2.1 Tokenization and transfer

Nodes or individuals will consume AT as a virtual "fuel" when they

implement art tokenization and tokens transfers through smart contracts.

The combustion mechanism is similar to ETH. The burned AT will enter the

miner's reward pool for rewards of block generation.

4.2.2 Mining

Supernode mining can get the AT in the reward pool as an incentive, in

the early stage, it can get a total of 50 million ATs of the block generation

reward.

4.2.3 Airdrops of tokenized Assets

After the trusteeship node completes the asset tokenization, the smart

contract will automatically split 1% of the assets equally into all the genesis

nodes according to the underlying protocol, and 1% of the assets will be

equally divided for all the supernodes.

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4.2.4 Node locking, vote staking

As mentioned above, the trusteeship node, the genesis node and the

supernode all need to lock the position of not less than 500,000 AT. In

addition, in the node election campaign, the node operator and the user

can vote using the AT tokens in hand. And the major issues of the

community are also need voting, the AT being used in voting can not flow

freely.

4.3 AT application scenario

1. The original application of blockchain: asset token generation, the

consumption of asset token and the token-locking of nodes;

2. Payment of ecosystem services: deduction of exchange fee,

trusteeship, traceability of asset, data inquiry, etc., is the exchange rate unit,

and will soon become the transaction pair of the AT ecosystem in the

cooperative exchange;

3. Community Governance Voting: AT holders can participate in

Artfinity's public chain governance through open and transparent voting

on the blockchain.

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4.4 AT investment value

As the pioneer of the art asset tokenization, Artfinity pioneered the IAO

(Initial Assets Offering) asset tokenization and offering subscription model.

Specifically, art collectors can use the Artfinity's trusteeship node to put

assets into inventory to get the artwork token and then initiates the offering

to the community through the smart contract on the Artfinity platform, thus

greatly promoting the identification and circulation of assets. The

emergence of IAO effectively solved the pain points of the traditional

collectibles industry, such as undisclosed information, opaque prices,

inconvenient circulation, and high transaction costs in the middle. It will

surely be sought after by numerous art publishers and collectors. And IAO's

smart contract will use AT as a payment medium, which is bound to bring

a large number of users to AT in the art and asset chain market.

As a core asset in the Artfinity ecosystem, AT has long-term and

obvious financial logic of value preservation and value-added.

We abstract the growth of AT value as a "dual-channel growth model"

Channel 1: Trading consumption leads to scarcity, scarcity leads to a

price increase, and price increase attracts new trading users

Channel 2: The node rewards promote the token-locking, the token-

locking leads to scarcity, the scarcity leads to the price increase, and the

price increase encourages the token-locking.

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 With the gradual development of Artfinity's ecology, the excellent

ecological application represented by JueYi will attract a large number of

art investors and collectors to tokenize artwork and trade them. The art

tokenization and tokens transactions will continue to consume a large

number of ATs. After this part of the fuel enters the miner's reward pool, it

will not immediately flow into the secondary market. Since this part of the

fuel is purchased by the user from the secondary market, the buying power

is greater than the selling power, which will lead to an increase in the AT

price. And the benchmark effect of AT price growth will bring confidence to

investors, while attracting more investors to enter, to achieve the first

channel of AT price growth cycle.

From the perspective of the mechanism of the token-locking, in

addition to the mining revenue, the trusteeship node will also obtain

valuable assets, and a certain amount of locked token will become a ticket

to continuously obtain excess returns. This method is different from the

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general POS type public chain’s hold-and-get-interest pattern. The

income comes from the assets being held. There will be no inflation on the

tokens, so it will not consume new inflows into the secondary market. This

excess return will fully mobilize the enthusiasm of the market, form a buying

trend and increase the price of AT. The increase in the price of AT has

allowed the nodes that previously locked the tokens to obtain more

revenue. Motivated by this two ways, there will be more value investors

competing to become the nodes of the AT, further leading to the AT’s

scarcity and value-adding, achieving a second channel of AT price growth

cycle.

In addition to the original dual-channel growth model, AT will also

expand the ecological scene. As the total amount of AT is fixed, once the

new scene adopts the model of profit repurchase, token dividend, and

secondary market purchase-and-burn, AT will also obtain more sustained

growth drivers. In the future, holding AT will not only be a symbol of wealth,

but also a symbol of excellent investment vision!

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5 Artfinity governance mechanism

As a believer in blockchain technology, Artfinity team advocates that

communities and ecology belong to all human beings, instead of a small

number of people that use for profit. Therefore, the Artfinity Foundation

was established in Singapore, whose main mission is to operate the Artfinity

Ecology openly, fairly and transparently, and to support Artfinity's

development team.

5.1 Foundation Architecture

Artfinity's governance adopts the three-tier governance structure of

the AT Holders' Conference, the Autonomous Commission, and the

Executive Committee. The Executive Committee consists of the Technical

Committee, the Application Committee, the Finance Committee, the

Compliance Risk Control Committee, and the Market and Public Relations

Committee. The specifically responsible affairs of each department are as

follows:

(1) Technical Committee: Responsible for Artfinity technical

management, including open source code management, code

development, code modification, code testing, code review, code

deployment, network security, vulnerability repair, etc.

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 (2) Application Committee: Responsible for the application scenario

after the launch of Artfinity, the verification of the tokenized data, the

disclosure of the tokenized information, and the management of the

tokenized asset.

(3) Finance Committee: Responsible for the conversion and use of legal

currency and bitcoin, Ethereum, project development, daily operation,

staffing expenses and planning arrangements.

(4) Compliance Risk Control Committee: Responsible for the

registration and review of domestic and foreign companies, and give

pragmatic professional advice on legal affairs.

(5) Market and Public Relations Committee: Serving the blockchain

community, responsible for technology promotion, product introduction,

business cooperation and publicity.

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5.2 related responsibilities

5.2.1 Periodic information disclosure

The annual report is prepared and disclosed within three months from

the date of each fiscal year. Reports include, but are not limited to,

Artfinity's technology development Milestones and progress, application

development milestones and progress, digital asset management, team

performance, etc.

5.2.2 Temporary information disclosure

The Artfinity Foundation should promptly report major collaborations

on the Artfinity project, changes to core team members, and litigation

involving Artfinity.

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6 Disclaimer

This document is for informational purposes only and does not

constitute an opinion of the purchase or sale of Artfinity shares or securities.

Any similar offer or levy will be made under a trusted clause and with the

applicable securities laws and other relevant laws, and the above

information or analysis does not constitute investment decisions or specific

recommendations. This document does not constitute any investment

advice, investment intention or instructed investment in the form of

securities. This document is not intended to be an understanding or offer

of any purchase or sale, or any invitation to buy or sell any form of securities,

nor is it a contract or commitment of any kind.

- The purchase of AT means that the participants have reached the age

standard and have the complete civil capacity, and the contract with

Artfinity is true and effective. All participants voluntarily signed the contract

and had a clear and necessary understanding of Artfinity before signing the

contract. Once an investor participates in an investment, he or she

understands and accepts the risk of the project and is willing to bear the

corresponding results and consequences.

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 - The Artfinity team will continue to make reasonable attempts to

ensure that the information in this white paper is true and accurate. During

the development process, the platform may be updated, including but not

limited to platform mechanisms, tokens and their mechanisms, and token

distribution. Some of the content of the document may be adjusted in the

new white paper as the project progresses. The team will post the update

to the public by posting an announcement or a new whitepaper on the

website. Participants are encouraged to keep up to date with the latest

white papers and adjust their decisions in a timely manner based on the

updates. Artfinity expressly disclaims any loss as a result of (i) reliance on

the contents of this document, (ii) inaccuracies in this document, and (iii)

any actions resulting from this document.

- The team will spare no effort to achieve the goals mentioned in the

document, but based on the existence of force majeure, the team cannot

fully complete the commitment.

- The value-added of AT depends on the market law and the demand

after the application falls. It may not have any value, the team does not

promise its value-added, and is not responsible for the consequences

caused by the increase or decrease of value.

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 - Artfinity expressly disclaims any direct or indirect damages from any

participating projects, including:

- Personal operational risk: any error, negligence or inaccurate

information resulting from personal understanding of the user's trading

operations, loss of personal block trading of various blockchain assets and

any resulting behavior;

- AT token fluctuation risk: When the AT enters the market, the price

may rise or fall, and the fluctuation of the market price may cause losses;

- Regulatory and policy risks: Blockchain technology is a new type of

Internet technology. The current regulatory policies are not clear about the

regulatory direction, guiding policies, and legal establishment of such

situations. Changes in regulatory policies may be causing an impact to the

project itself or to token transactions at any time;

- Risk of project R&D failure: As a new type of science and technology

project, the project is still under construction and development period

when there is no previous development or similar application. The progress

of the project product on R&D is less than expected or failed.

- Project Operational Risk: As an initial project, operational risks are

more likely to be exposed, including but not limited to various risks such as

technical R&D failure, serious brain drain, financial loss, and business model

theft. Participants should be fully aware of the risks associated with project

operations;

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 - Digital Asset Security Risk: Blockchain As a new Internet technology,

there have been many precedents for digital assets and exchanges being

stolen. Therefore, participants in this project must be aware that the digital

assets and the tokens of this project are lost, missing, and hacked, and these

risks may cause losses.

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