The First ICO Interactive Auction. DebitCoin Initial Coin Offering (ICO): Auction Guidelines

Total sum of 1,000,000,000 (one billion) tokens will be distributed, out of which 65% (650,000,000 tokens) will be available through ICO.

DebitCoin ICO will consist of multiple phases. Each phase will be done in the form of an auction. Each consecutive auction period and term will be determined by the previous phase, taking into account volume and price of distributed tokens.

Auction process is designed to get fair market value during each phase of the ICO.

1st Auction phase will be kick started with the following parameters:

• Initial auction phase will have a 5 days duration;
• Start Day: 24th of October 2017;
• Start of bids acceptance — 12:00 GMT;
• The deadline to enter bids is: 11:00 GMT 28th of October 2017;
• Auction results and data summary will be posted between 11:00 to 12:00 GMT 28th of October 2017;
• Announcement of an auction results — 12:00 GMT 28th of October 2017;
• The bidder is to pay the accepted bid during 24 hours till 12:00 GMT 29th of October 2017, unpaid bids after that time will be void;
• 5 Million DebitCoins cap;
• The maximum price of the token is determined by the results of the auction;
• The minimum price (cut-off price) of the token is established by the results of the auction;
• Weighted average price of the token is determined by the results of the auction.

Bids can be of two types:

Competitive bids. A competitive bid is an offer by a buyer to buy tokens at the price not higher than written in the bid.
If approved, such bids are always met at the minimum selling price (cut-off price) with a corresponding increase of amount of tokens. In this case, the volume of the transaction is specified in the competitive bid by specifying the number of tokens.
This means that if the bids are higher than cut-off price they are not only accepted but the amount of tokens will be added to reflect the spread. This is designed to offer more transparency and fairness to the bidders as well as to give them more choice and freedom.

Noncompetitive bids. A non-competitive bid is an offer by a buyer to buy tokens at a weighted average cost determined by the results of the auction.
In case of approval, such bids shall be satisfied solely taking into account the weighted average price, which is formed at the auction. At the same time, the set transaction volumes are preserved (they are prescribed by specifying the amount of funds used to purchase tokens).
The limit of non-competitive bids from the total volume of tokens put up for sale is set by the seller separately in each period.

What is Competitive bid:

Each competitive bid submitted contains the following requisites:

• total amount of tokens declared for purchase
• bid per token
• the total amount of the transaction (price), is indicated in dollar equivalent.

What is Non-competitive requirements:

All non-competitive bids are realized on the average weighted price parameter.
The total volume of tokens purchased by noncompetitive orders is calculated as follows:
The numerator of the formula contains the total amount of approved non-competitive bids, which were used to buy tokens, and in the denominator — the weighted average cost of the token.

Bidding Process:

Before the start of the auction, buyers reserve on their wallets in Telegraf.Money required amount of ETH and BTC for the subsequent payment of DebitCoin tokens purchased at auction. For the period of the auction and payments for it, earmarked ETH and BTC in wallets are not blocked and can be withdrawn at any time by the owner of the wallet.
Thus, on the one hand, there is a check of the availability of the necessary funds to pay for the tokens purchased at the auction according to the submitted bids and, on the other hand, the buyers own funds are at their disposal until they are transferred to pay for the tokens.
The number of ETH and BTC, reserved to meet competitive and non-competitive bids must take into account Ethereum and Bitcoin commission for the payment of tokens.

During the collection of bids, all participants of the auction have the right to receive data from the public register (blockchain), which will contain all information about bids submitted earlier, as well as their details.

The uniqueness of DebitCoin Auction is that the competitive bids are executed at the most favorable price — all buyers buy tokens at the cut-off price. Thus, buyers receive tokens at the lowest prices, unlike the weighted average price, which executes non-competitive bids.

After the bid is accepted and the adjusted token offer made, the bidders will have 24h to execute, change or withdraw their bid.

All bids will be collected in one register which will list out all competitive bids in descending (maximum to minimum) order.
Upon completion of the collection of bids for all prices that were declared, a weighted average value is established. In the future, it will be indicated in the general register of all applications submitted by the participants of the auction.

Weighted average price at an auction for each period is determined by the following formula:

In the case when the demand for tokens is not higher than the total volume of tokens put on the auction, all submitted bids will be fulfilled in the following sequence:

1. Competitive bids have priority and are always the first in the queue. In this case, the declared value should not be less than the cut-off price.
2. Noncompetitive bids.

If the volume of competitive bids submitted for the purchase of tokens exceeds the real offer, then the bids with the highest price are fulfilled first of all. In addition, competitive bids can be fulfilled proportionally, depending on the share of the application in the general auction. In turn, non-competitive bids are rejected and treated as below.
In the case where the total demand for competitive and noncompetitive bids is not higher than the total volume of tokens placed at the auction, then competitive bids will be fully accepted wherein non competitive bids will be partly accepted subject to remaining volume of all submitted bids.

EXAMPLE of a competitive bid:

Alex made a bid to buy 800 tokens for $2,400, Alice offered $600 for 300 tokens, and Victor filed an bit for 375 tokens for $375, the minimum price for which competitive bids are accepted (cut-off price) was $1.

TOTAL:
Alex — 800 tokens at a price of $3 for $2,400;
Alice — 300 tokens at a price of $2 for $600;
Victor — 375 tokens at a price of $1 for $375
Cut-off price — $1

As soon as all bids are transferred to the system, tokens are distributed among bidders, starting with the highest bidder, until they are fully distributed. However, the price that each of the bidders will pay will be the lowest of all offered, that is, determined by the last successful bid (cut-off price).

Therefore, even if Alex offered $2,400 for 800 tokens, and the last successful bid from Victor was $375 for 375 tokens, then Alex will receive 2400 tokens instead of 800, and Alice will have 600 tokens instead of 300.

Additional number of tokens (winnings):
Alex — 1600;
Alice — 300;
Viktor — 0.

EXAMPLE of summarizing the auction results:

Consider the order of summarizing the auction. To distribute the auction, 500,000 Debit Coin tokens were listed, after receiving all bids, a limit was set for non-competitive bids — no more than 25% and no more than 122,800 tokens. The cut-off price at this limit was 1 USD. The following competitive bids were submitted for auction (orders are ranked in descending order of price):

1 000 tokens at a price of $3.0 per one token;
2 000 tokens at a price of $2.5 per one token;
2 200 tokens at a price of $2.0 per one token;
2 000 tokens at a price of $1.7 for one token;
5 000 tokens at a price of $1.5 for one token;
15 000 tokens at a price of $1.2 per one token;
100 000 tokens at a price of $1.1 per one token;
250 000 tokens at a price of $1.0 for one token;
260 000 tokens at a price of $0.7 per one token;
270 000 tokens at a price of $0.5 for one token;
300 000 tokens at a price of $0.3 for one token.

The cut-off price will be determined as follows: the accumulated amount of competitive bids is calculated until 377,200 tokens are reached (as 122,800 fell on non-competitive bids). That price, which corresponds to the price of the token in the applications and at which the specified number of tokens is reached, will be determined as the cut-off price. Competitive bids with a price less than the cut-off price will not be met.

As you can see from the table above, the amount allocated for competitive bids is selected at the level of 1 USD per one token. Consequently, all subsequent applications will not be satisfied.

The weighted average price of the auction will be 401 300 USD / 377 200 tokens = 1.06 USD per one token.

The number of tokens that will be sold to auction participants who submitted non-competitive bids will be the difference between the total number of tokens sold and the number of tokens that are placed on competitive bids. In our example, the number of tokens that will be sold for non-competitive bids will be (500 000–377 200) = 122 800 tokens.

So, as a result of the auction, all the tokens of this issue were placed, and the total amount of funds that the seller will receive following the auction results will be:

377 200 tokens x 1 USD (cut-off price) = 377 200 USD — amount received from competitive bids

122 800 tokens x 1.06 USD (weighted average price) = 130 168 USD — the amount received from non-competitive bids

377 200 USD + (122 800 × 1.06 USD) = 507 368 USD (the estimated total value is rounded to the whole value).

10% Appreciation Guarantee

The buyers who bought tokens through auction during the 30 days (after the start of the ICO) will receive a buyback guarantee. Buyback guarantee allows conversion of DebitCoin tokens to an equivalent in USD at the exchange minimum exchange rate of 1.1. This guarantee will be available 90 days after the purchase of tokens.
This guarantees early buyers 10% appreciation no matter what converted DebitCoins will be available in USD and become accessible through issued VISA/MasterCard card.
For every DebitCoin sale through ICO partners, private sales, auctions, or on an exchange platform, 50% of the sale value will be held in our Reserve Fund to stabilize and further grow the value of our DebitCoin by using a top secret formula, developed to insure deflation.