non-technical whitepaper · why blockchain? 9 whitepaper 1. introduction 11 2. the equine industry:...

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©2018 MustangChain. All rights reserved

www.mustangchain.io

Non-Technical Whitepaper


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I’ve often said there is nothing better for the inside of a man than the outside of a horse

Lord Palmerston“ “


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Executive SummaryKey Issues in the Equine Industry 7

The Mission 7

The Vision 7

The Solution 8

Unlocking the Potential 8

Why Blockchain? 9

Whitepaper

1. Introduction 11 2. The equine industry: Size and locked potential 12

2.1. The impressive size of the equine industry

2.2. Removing barriers towards expansion of global equine trade 13

3. The problem: Lack of a global solution for swift equine data 14

verification and communal sharing.

3.1. Lack of transparency and fraud proof equine authentication 14

3.2. Lack of swift accessibility to high integrity equine data 15

3.3. Lack of a global community stage for information exchange 15

3.4. Conclusion: need for a decentralized global solution 15

4. The core solution: Sealed Verification System (SVS) 16

Summary (TL;DR) 16

4.1. The need for a new solution 16

4.2. SVS component 1: Coupling the passport to the blockchain 17

4.3. SVS component 2: Coupling the horse to the blockchain 20

4.3.1. Stage 1: Connecting the equine microchip to the blockchain 20

4.3.2. Stage 2: Connecting the equine iris scan to the blockchain 20

4.3.3.Globalsynchronizationofhorseverification:microchiporirisscan? 22

4.4. SVS auditing system 22

4.5. Future NB-IoT technology possibilities 23

4.6. MustangChainandVeChain:acollaborativeeffort 24


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5. MustangChain: The stakeholders 25

5.1. Horse breeders, merchants, and trainers 26

5.2. Studbook associations 26

5.3. Veterinarians 26

5.4. Equestrian federations 26

5.5. Governments 27

5.6. Research and universities 27

6. MustangChain Company and Ecosystem 28

6.1. The CAF 28

6.2. The MustangChain Company 28

6.3. The MustangChain Ecosystem 32

7. Governance model 33

8. The token circulation 34

8.1. Value drivers and utility of the token 37

8.1.1. Transformation of functionality 37

8.1.2. The abilities 37

8.1.3. The toll 37

8.1.4. The social function 37

8.2. The basic token circulation 38

8.3. The extended token circulation 39

8.4. Token allocation 40

8.5. Token Manifestation Event 43

8.5.1. KYC requirements and exclusion of participation in TME 43

8.5.2. Token Manifestation Event (TME) 43

9. Enterprise risk management 44

9.1. Risk management framework 44

9.2. Internal integrity risks 45

9.3. IT risk framework 46

9.4. Compliance risks 46

10. Roadmap 47

11. Corporate social responsibility 49

12. Team and advisors 50

12.1. Core team 50

12.2. Advisors and industry experts 50

Disclaimer 51

References 54


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Attachment 1: The impressive size of the equine industry 55

Attachment 2: Information on, and examples of fraud in the media 58


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E x e c u t i v e S u m m a r y


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Key Issues in the Equine Industry

• Systemicfraud–Inadequateregulationsandpoliciestoauthenticateandverifyequine

passports,supplementaldata,andoriginidentification.

• Inefficient–Legacypapersystemspreventswiftaccessibilitytoimportantequinedata,

whichhasasignificantnegativeimpactonbusinessbetweensellers,buyers,researchers,

and other stakeholders in the ecosystem.

• Fragmentationlimitsgrowth–Theequineindustryisconductingbusinessofflineor

through regional websites. Lack of a one-stop online platform for the equine industry

isolates important stakeholders into regional niches, impedes expansion and globalization

of the equine industry, and hinders valuable knowledge exchange on handling, training,

and breeding horses.

The Mission

• Globalizationoffraudproofauthenticationandensureinstantaccessibilitytoequinedata.

• Defragmenttheindustrybyaligningtheequinecommunityviaasharedecosystem,

currency, and technology.

The Vision

• Creatingaproperlyregulatedglobalstandardtovalidate,authenticate,andmanageequine

identity, historical data, and transaction through the MustangChain Platform and the fraud-

proofSealedVerificationSystem(SVS).

• Aone-stoponlineplatformwhereallstakeholderscanunite,interact,andeasilytransact

equine merchandise, services, data, and expertise.


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The Solution

• SealedVerificationSystem–MustangChainwillimplementtheSealedVerificationSystem

(SVS)toensurethefastandreliableauthenticationofequinepassportsandidentification

ofhorses,therebyeffectivelycombatingfraudandsupportingthefastglobalizationofthe

equine industry.

• Decentralizedequineecosystem–MustangChainwillunitetheglobalequinecommunity

usingaunifiedcurrencybuiltonblockchaintechnology.Thisdecentralizedplatformcreates

an environment of trust for stakeholders to collaborate and transact equine merchandise,

services, data, and expertise.

Unlocking the Potential

• Providingtransparencytobillionsinassets–CustomersfromChinareportproblemswith

fraudulent transactions whereby they were falsely informed about the horse to be bought.

Removing fraud and establishing a trust for global trade is expected to trigger exponential

growth in the equine industry.

• Makinghighlylucrativemarketsmoreefficient–$300billionmarketworldwide,$133billion

business in Europe. Annual expenditure on equine import and equipment in the Middle

Eastisestimatedaround$1.7billionand$326million,respectively.Equestrianindustryin

Chinaincludes$1.58billioninexpenditure,andmaintains40%growtheachyear.From

2010to2017therewasastaggering1500%growthinthenumberofhorseclubsinChina.

Chinese import between 2,000 and 5,000 high quality horses per year and fraud is a major

issueinthesetransactions.InChina,43%ofthehorsesinequestrianclubsarepurchased

fromoverseasandchinaspentover$70milliononimportinghorsesin2015.


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Why Blockchain?

• Decentralized-Blockchaintransfersthepowerfromacentralizedcorporationto

the community. MustangChain registrations are available to third parties without consent

by design. Downtime is mitigated on this unstoppable machinery.

• Incorruptibledata-Theintegrityofdatainblockchaintechnologyisguaranteedwith

digitalsignaturesanddistributedvalidation.Atamperproofhistoryfitsnicelywiththe

MustangChain use cases.

• Secureandimmutable-Allparticipantsintheecosystemhaveastakeintheoverall

network and thus ensures the quality control and maintenance of the MustangChain

Platform; that is, the risk for tampering with the system or dismantling its structure by any

single party, is made impossible by its distributed nature.


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1. Introduction

MustangChain’s main objective is to advance the multi-billion-dollar equine industry by implementing

smart technologies, generating unbiased data, optimizing fraud proof authentication and traceability, and

removing global boundaries. This whitepaper entails our current approach which has been developed in

close consultation with our stakeholders and technical experts and might be further improved based on

future research.

MustangChain aims to set a global standard to counter fraud in the equine industry by introducing

tamper-proofpassportauthentication,equineidentification,andaswiftlyaccessibleanddecentralized

data platform, thereby establishing trust among all participants within the ecosystem. Horses will have

a NFC chip integrated passport that grants access to a horse’s data record on the blockchain, registering

items such as ownership, studbook, medical records, breeding history, and other important variables

necessary for informed trading, breeding, and handling. The emergence of ‘big data’ will be accessible for

analysisandadvancementofscientificandentrepreneurialendeavors.

MustangChain data collection approach will provide the basis to build a global community platform that

will function as a portal where all stakeholders can unite to learn, exchange, and trade. Long-term success

of the MustangChain platform depends on widespread industry adoption, which can only be achieved

by actively involving the community in the development of our ecosystem. MustangChain initiated

implementation of systems and protocols that allow for accessible and fraud proof data on horses, will

enable the equine community to build decentralized applications on the MustangChain platform, such as

auction houses and equine marketplaces. Decentralized applications that are ready for mass adoption will

further expand the use of MustangChain as a one-stop platform for all equine services and merchandise.

More information on the technical background of the core solution, and how MustangChain will cooperate

with VeChain on implementing these new technologies, will be available in separate documentation.


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2. The equine industry: Size and locked potential

2.1 The impressive size of the equine industry

Theequineindustryiscurrentlyvaluedasa$300billionmarketworldwide(seefigure1fordistribution),

providingjobstoover896,000people.Alargeportionofthatvalue,around$133billionisgenerated

in Europe, where more than 7 million horses are housed. In addition, the EU is the epicenter for horse

breeding, with the triangle Brussels - Eindhoven - Aachen being the global center for breeding prime

horses. Northern America (US and Canada) houses more than 9 million horses and the equine industry

generatedaround$107billionofrevenuefortheireconomy.Furthermore,equestriansportcontributes

$846.5millioneachyeartotheAustralianeconomy.

TheequestrianindustryinChinaincludes$1.58billioninexpenditure,andisgrowing40%eachyear.

Chineseequestriancommunityshowsastaggering1500%growthinthenumberofhorseclubsfrom2010

to2017(1400clubsnow),withitsmembershipsgrowing30%peryear.Over43%ofthehorsesinChinese

equestrianclubsarepurchasedfromoverseascostingaround$70millionin2015.Also,intheMiddleEast,

annualexpenditureonimportofhorsesisestimatedtobeover$1.7billion,andexpenditureonequine

equipmentisaround$326million.Foradetailedbreakdownoftheequinemarketincludingreferences

see attachment 1 at the end of this whitepaper.

rest of the world

australia

uk & ireland

canada

europe

u.s.A


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2.2 Removing barriers towards expansion of global equine trade

Due to a lack of a global stage the equine industry resides in a fragmented state made up of local or

regional sectors. Part of the natural evolution of the equine business must come from technological

advancements that will connect the dots along a fragmented industry. An industry that has shared goals

and wants to connect but has been limited due to a lack of technological facilities. Trade opportunities

would be enhanced through an accessible global podium. MustangChain solves these issues, and in so

doing, provides the soil for the evolution of the equine industry. MustangChain will facilitate the global

equine business and bolster revenue generated by providing fraud proof systems, immutable passport

verification,andaglobalplatformfortradeandbusiness.

We are currently on the verge of the 3rd industrial revolution, with new and upcoming blockchain-IoT

solutions penetrating all industries across the globe. These blockchain-IoT solutions will help bring about a

new sharing economy whereby interconnected communities, instead of centralized corporate institutions,

determine the growth trajectory of industries.


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3. The problem: Lack of a global solution for swift equine data verification and communal sharing.

3.1 Lack of transparency and fraud proof equine authentication

Due to the lack of transparency and oversight, the equine industry is currently plagued by systemic fraud.

Mainlybasedonglobalfieldresearchwithmorethan170stakeholders,MustangChainconcludedthatover

40%ofallhorsetransactionsinvolvefraud.Examplesoffraudincludethefollowing(seeattachment2for

more information and examples in the media):

1) Horse drugging: display jumping and dressage horses who are drugged heavily for

demonstration purposes. After the horse is shipped to its new buyer it becomes clear that

the horse is troubled, unmanageable, or has low stamina.

2) Shipdifferenthorseafterselling:amajorcomplaintofbuyers,whohaveindicatedthat

theyboughtadifferenthorsethanreceived.

3) Bait and switch: a highly attractive equine is advertised but it does not actually exist. When

the prospective buyers arrive, they are told that the horse has just been sold, and they are

pressured to look at other horses that just happen to be for sale.

4) False impressions: Some fraud is matter of the seller trying to create a false impression by

presenting the horse in a dishonest manner. Included in these methods of deception

are standing a horse on a grade to give the appearance of being well balanced, hiding

hood and ankle defects obscured by tall grass in pictures, tacking up a bridle-shy-horse

ahead of time, or warming up a chronically sore horse before the prospective buyer

arrives.

5) Falsifying medical records: Sometimes the sellers outright falsify the medical records or

leave out important data to show that the horse in great condition.

6) Falsifying passports: In a study carried out by the University of Amsterdam it was

demonstratedthatequinepassportsareeasilyfalsifiedandthatthereiscurrentlyno

reliable way to test the passport for its authenticity (Bruinsma and Ding, 2010).

7) FriesianScam:Thisisahorsescamthatiscurrentlycirculatinginternetclassifiedwebsites.

Thesellerisofferingaveryexpensivebreedofhorsewellbelowmarketprice.

Theyspecificallytargetmoreexpensivebreedstomakethebuyerthinktheyaregettinga

bargain. After payment, the seller simply disappears.


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3.2 Lack of swift accessibility to high integrity equine data

Theequineindustryhasabigchallengeinthefieldofcapturing,processing,andreleasinginformation

fromhorses.Mostinformationexchangeismainlycarriedoutoffline,whichhashinderedafasterand

moreefficientwayofconductingbusinessorgatheringdata,especiallybetweencontinents.Receiving

crucial trading information on a horse, its medical history for example, can take several days. Also, since

themajorityofinformationremainsoffline,optimaladvancementofknowledgeisnotpossible.Scientists,

trainers, breeders, and other interested parties can hardly access (big) data, which is a missed opportunity

for accelerated knowledge development in the equine industry. These key issues would also be solved by

digitizing the industry on a global decentralized platform and ensure swift accessibility to individual equine

data via new evolving technologies.

3.3 Lack of a global community stage for information exchange

The size of the equine industry has grown at an incredible rate over the past decades. In light of this

development, there is a growing demand for a global rostrum to facilitate trade, knowledge exchange,

and globalization of the industry. The globalization of upcoming countries and regions in the equestrian

industry like the Middle East, China, and Russia may be greatly accelerated by creating an easy-to-use

globalplatformwhereeverythingcanbecommunicatedefficientlyandallpartiescantrustthatthe

received information is reliable and of high data integrity. The current absence of a global communal stage

results in a mismatch between supply and demand on the one hand and capital and expertise on the other

hand.Emergingeconomieswithinefficientcapitalmarketslackaccesstotheexpertiseneededtofurther

advance the equine sport and industry.

3.4 Conclusion: need for a decentralized global solution

As seen with any business in the past, establishing more transparency is a major catalyst for growth.

As the equestrian sport is evolving and growing at a fast pace, there is an increasing need for systems

and platforms that can ensure transparency, reliability, and quality control. If the equestrian sport

wishes to evolve outside of the current narrow niche, and expand into a global network where more

and more people have access to this beautiful sport, it is mandatory to create a reliable and fraud-proof

decentralizedsystemwherestakeholderscanconsultimportantequinedatafastandefficiently.Thisis

exactly where the blockchain can provide key advantages through the automation of data storage and

exchange/sharing of data in a distributed and immutable ledger.


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4. The core solution: Sealed Verification System (SVS)

Summary (TL:DR)

The data collected on MustangChain will provide undisputable and fraud proof traceability of past and

currentownership,identity,breedingcharacteristics,andmedicalhistoryviatheSealedVerificationSystem

(SVS). The SVS includes two major and inseparable components which together function to create a sealed

fraud-proofverificationsystem,hencethename.Component1includesaNFCchipintegratedpassport,

which, upon scanning, links the user directly to a data record on the blockchain where all data on the horse

willbecollected.Component2willrecordtheUniqueIdentificationNumber(UIN)ofimplantedmicrochips,

or generated by scanning the iris, to the data record on the blockchain in order to irrefutably couple the

passporttothecorrespondinghorse.MustangChainwillfurtherexplorewhetheririsscanidentificationis

superior to microchipping in terms of reliability, equine safety, and feasibility. Finally, MustangChain will

employ a network of both internal and external auditors to safeguard the integrity of the data recorded on

the MustangChain platform.

4.1 The need for a new solution

Issuingpassportsisanentireindustryonitsown,withsomanyagenciesthatitisdifficulttocontrol

all possible points of corruption or fraud. For example, even a small country like the Netherlands has

33+officialequinepassportissuingagencies(seehttps://www.rvo.nl/file/paardenpaspoort-uitgevende-

instantiespdf).

Tominimizeandpreventfraudulentpracticeswithequineverificationandtheirpassports,anewstandard

is developed in conjunction with key stakeholders that works directly with the MustangChain platform.

This is one step towards enforcing and monitoring fraud prevention. MustangChain will actively engage in

auditing and verifying the information that is stored in the data record through signed and dated source

documents.

MustangChain has developed the SVS, a system of two interlocking components into one overarching

fraud proof authentication system, boosting swift accessibility to high integrity equine data.


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4.2 SVS component 1: Coupling the passport to the blockchain.

ThefirststepistodigitizethepassportandputinformationontheMustangChainplatform.Byscanning

the NFC chip that is on the passport, possibly through a mobile application, the user will have direct

accesstothecorrespondingdatarecordontheblockchain.ThisdatacanbedisplayedthroughtheOfficial

MustangChain application that forms the interface between the user and the blockchain. Stakeholders

such as veterinarians and studbooks will be given authorization to add data to the asset, while other

stakeholders such as horse enthusiasts, research institutions, and trainers will only be able to read the

data record. The general public will be authorized to read certain data, which can be accessed via the

OfficialMustangChainapp.However,stakeholdersthatareauthorizedtoadddatatotheasset,suchas

veterinarians and studbook organizations, or those who are authorized to approve transaction of a horse

such as the owners themselves, will receive a unique wallet ID on the blockchain and will be assigned the

corresponding data records of equines that fall under their care or their possession.


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The data that will be recorded on the blockchain by the authorized party includes the following:

Studbook:

a. Studbook/breeding

b. Ownershipwithprivacyconsiderations

c. Basic Equine Information

Veterinarian:

a. Medical (Vaccinations; Past injuries; Past/current medication received; Date of castration if

applicable)

However,thisisapreliminarylistofprioritizeddatavariables.Othervariables,suchassportresults,which

can be recorded by the equine federations, may be added to the data record of the horse later on.

MustangChain will start working with the current equine passports as issued and attach the NFC chip onto

the passport. These NFC chips will be from the third generation of VeChain NFC chips which are designed

in a way that they cannot be removed without destroying the underlying circuitry. MustangChain will

also experiment with new types of equine passports, such as a pass card with an embedded NFC chip. In

cooperation with the equine industry, MustangChain will explore possibilities to slowly replace the current

paper passport with these new technologically advanced types of passports.

All stakeholders that are involved in the (medical) care and legal responsibility of the equine will have their

own MustangChain identity, comparable to a wallet, in which all data records of the horses they own or

under their care will be recorded. Thus, the studbook, veterinarian, and horse owner will all have the horse

as a data record in their MustangChain identity. Studbooks will use the data record as a means of keeping

track of all registrations. Veterinarians will be able to add medical information to the data records. The

horse owner will have to approve and sign any future transactions such as sale to a new owner, registry at

adifferentstudbook,orwheneveranewvetisappointedtothehorse.

WhenthefirststepiscompletedallhorseswillhavetheirownNFCpassportthatlinksdirectlytoadata

record. However, at this point there is no immutable way to ensure that a passport belongs to the horse.

MustangChainwillcouplethepassporttoadvancedequineidentificationtechniquesasisdescribedbelow.


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a u t h o r i z e d t o w r i t e

c o n n e c t e d

a u d i t

h o r s e o w n e r

a u d i t o r

s t u d b o o k

v e t s e q u e s t r i a n f e d e r a t i o n s

r e a d o n l y

Functions of different key stakeholders in the SVS system.


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4.3 SVS component 2: Coupling the horse to the blockchain

MustangChain’s second focus is to employ a fraud proof procedure that will immutably link the passport

toeachhorse.Thiscomponentwillbeimplementedindifferentstagessincetherearealreadyprocedures

inplacetoverifiablyidentifyequines.MustangChainaimstocooperatewithexistingmeasuressuchasthe

mandatorymicrochippingofhorsesintheEU,butalsomakeequineverificationaccessibleincountries

where regulations prevent the implanting of internal chips into horses.

4.3.1 Stage 1: Connecting the equine microchip to the blockchain

MustangChainaimstoincorporateexistingsolutionswithblockchaintechnologytoimproveverificationof

equineID.Differentcountriesalreadyhaveregulationsinplacethatprotectagainstfraudulentactivities.

In the EU for example it is mandatory to microchip each horse. Scanning a microchip with a custom

device,whichanyhorsebreederorowneroftenalreadyowns,willdisplayauniqueidentificationnumber

(UIN). This UIN will be recorded to the data record on the blockchain. Entering the UIN into a special

“identificationfield”inthedatarecord,asaccessedbytheNFCchipinthepassport,willconsequently

verify the identity of the horse and authenticate the corresponding passport.

4.3.2 Stage 2: Connecting the equine iris scan to the blockchain

Countries that do not employ implanted microchips because of animal safety regulations, MustangChain

aimstoinvestigateamorerevolutionaryapproachtotheidentificationofequines.Mostregulationsare

erected due to potential health concerns that may arise by introducing a foreign material (RFID chip) into

the horse’s biological system. To identify a horse without any invasive measures (i.e., blood sampling,

microchippingetc.)wehavechosentoexamineirisscanidentificationsincethisisahighlyreliableway

toidentifyhorses,similartoafingerprintwithhumans.Newtechnologiesregardingirisscannerscreate

aUniqueIdentificationNumber(UIN)basedontheirisscan,muchlikemobilephonesusecomplicated

algorithmstostorefingerprints.


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Similar to the UIN recorded to the microchip, entering the generated UIN from the scanner into the

“identificationfield”inthedatarecord,asaccessedbytheNFCchipinthepassport,willconsequently

verify a horse’s identity and authenticate the corresponding passport. This technology will make the horse

and passport inseparable from one another, and consequently tamper-proof. Any organization, institution,

or even individual with access to iris scan technology will be able to simply verify a horse and its passport

through the MustangChain platform within seconds. See below for a table comparing the advantages of

iris scan to other techniques used to immutably identify a horse.

IRIS SCANRFIDCHIP

EAR TAGS,MARKINGSTATTOOS,

ETC.DNA

RISKOFIDENTIFIERLOSS

RISKOFCONTAMINATION

SECURITY

ACCURACY

SPEED

EASEOFUSE

NON-INVASIVE

LOWCOST

DIGITAL

Comparing the advantages of iris scanning to identify horses to other methods (taken from http://eyed.com).


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4.3.3 Global synchronization of horse verification: Microchip or iris scan?

MustangChainwillengageindifferentresearchinitiativestodeterminewhethermicrochippingoriris

scanningismorereliableforverificationbutalsosaferforthehorsefromamedicalperspective.Other

factors that will be weighed are ease-of-use, hardware and software possibilities, ease-of-implementation,

andfinallyefficiencyandcost.

OnceaconclusionisreachedMustangChainwillactivelylobbyforaglobalsolution.Theinformation

that is collected from countries that will employ either iris scan technology or microchipping will aid

tremendously in making an informed and responsible decision for the future of authentication and

verificationintheequineindustry.Whethertousemicrochippingoririsscanningasaglobalsolutionwill

mainly apply to countries where both alternatives are viable since microchipping is prohibited in many

countries and thus iris scan is the only alternative.

4.4 SVS auditing system

The following measures will be taken to remediate breaches of data integrity recorded via the SVS system,

including inconsistent, incorrect, incomplete, or fraudulent data entry.

MustangChain will establish a state-of-the-art independent auditor division. In this endeavor of utmost

integrity, MustangChain will examine possibilities to co-create and partner with auditors already in place at

studbook agencies to ensure the integrity of the recorded data.

Whether MustangChain sets up partnerships with studbooks, federations, veterinarians, or other

stakeholders, the contract will include several clauses in order to make auditing as robust as possible. First

off,partnerswillberequiredbystatutetoretainsourcedocumentswhichsupportthedatarecordedon

the MustangChain platform. This requirement imposes a responsibility to ensure that the recorded data

can be traced back to the source documents during audit trials. Secondly, partners will be required by

statute to sign and date all source documents regardless of whether these source documents are digital or

analog. Unsigned or undated documents will not be counted as valid. If it has not been reported, signed,

or dated, it did not happen, no matter how many witnesses can vouch for the action or analysis. Final data

points recorded on the platform will be compared with the signed and dated source documents. All data

must be consistent and accounted for.

Incentives for correct data entry: When it is concluded through audit trials that data is entered correctly,

the responsible partners will be incentivized in the form of reputation points on the platform. Those who

havenotyetbeenauditedwillhaveastateof“notyetaudited”therebyprovidingextraincentivetothose

authorizedstakeholderstogetauditedassoonaspossibletobecertifiedontheplatform.Inaddition,


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locked CECIL tokens that have been transferred to vets for their data entries will be unlocked after a

successful audit, thereby further incentivizing vets to get audited on a regular basis.

Penalties for corrupt, bad, or missing data: When it is concluded through audit trials that data is

inconsistent with source documents or fraudulent, the responsible party will receive a penalty that is

measuredaccordingtothetransgressionseverity.Onlyinthecaseofreasonabledoubtthathonest

human error is the reason for the inconsistency, will there be made an exception in the form of a warning

system,wherebythetransgressorwillreceiveonefinalwarning.However,whentheinconsistencyinvolves

an impact on medical data, a zero tolerance policy will be applied, whereby mistakes as well as fraudulent

data entry is penalized in the same manner, with immediate restrictions to further access. Simply put,

either transparency is facilitated and hailed or the respective party is denied access to the platform.

MustangChain will not allow partners that want to be part of the ecosystem but operate in secrecy or pose

any kind of arguments that their business is private.

4.5 Future NB-IoT technology possibilities

WhiletheSVSisacoresolutionthatisnecessarytofulfillourmission,othertechnologiesmayalsobe

implementedtohelpadvancetheequineindustry.Onecomplementarytechnologythatmaybepotentially

applied in the future is NB-IoT. For this next step MustangChain will use the expertise of VeChain for

developing medically assessed and superior NB-IoT chipsets.

NB-IoT is a radio technology that uses the cellular telecommunications band to emit real-time data

extracted from the horse to the blockchain on a regular pace-maker like style. The exact real-time data to

be transmitted on a regular basis may consist of the horse’s temperature, heart beat, and GPS-location,

amongst others. In this manner, the NB-IoT chip will continuously update the horse’s data record with real-

time data, thereby organically building a database around multiple variables without human intervention.

This data may be utilized to analyze the overall health of a horse over a longer period of time, day by day,

or even hour by hour.

Finally, NB-IoT will also optimize care taking of horses. The NB-IoT technology will inform them in real time

about the health of their horse, which will enable timely interventions so that the health of our equine

friends may be guaranteed to a greater degree than is available at the moment. What is technology if it can

notaidusingreatersatisfactionandhealththroughoutlife?MustangChainthereforebelievesthisisan

important reason, in addition to generating big data, to implement real-time data collection on the health

of horses. MustangChain will have a primary focus on implementing the core solution (i.e., SVS) before

exploring other venues for technological advancement such as NB-IoT in the equine industry.


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4.6 MustangChain and VeChain: a collaborative effort

MustangChain will launch on VeChain technology. VeChain is an industry leader when it comes to creating

andimplementingtrackingsolutions.WehaveconfidenceintheabilityofVeChaintodeliversuperior

IoT and blockchain solutions matching the needs of MustangChain. MustangChain has established a

collaborative partnership with VeChain. Weekly status and development meetings guarantee we can swiftly

deploy new solutions which have been rigorously tested. We have reserved the technical background of

the various MustangChain solutions for the technical documentation, which will be released around Q3 in

2018.


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5. MustangChain: The Stakeholders

MustangChain’s overarching goal is to create a global platform to deliver value to all stakeholders in the

equine industry. To avoid a so-called ‘cold start’, MustangChain partners with key stakeholders and the

main registries to digitize equine passports and display the advantages of making it a permanent record

through blockchain technology. To ensure that this goal is attained, MustangChain has designed the

technology and ecosystem according to the needs of the following stakeholders.


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5.1 Horse breeders, merchants, and trainers

Horse breeders and merchants are the backbone of the sport and industry. Horse breeders are already

usingofflinesolutions(paperpassports)torecorddataandtransferownership.Swiftaccessibilityof

equine data on the MustangChain platform will support horse breeders, merchants, and trainers in their

businesses. This will bolster the incentive for breeders, merchants, and trainers to join the platform,

thereby seeding the platform with enough valuable members. Through these various strategies

MustangChain aims to foster mass adoption of the platform.

5.2 Studbook associations

Horse breeders and merchants registering at studbooks that are connected to MustangChain will gradually

benefitfromhighintegritydata.Thiswillmakeconnectedstudbooksmoreattractiveandwillthusenhance

their current business model and expand business opportunities. In addition, the MustangChain solution

will simplify and secure their current administrative processes.

5.3 Veterinarians

Veterinarians are trusted advisers and crucial partners in the equine industry with a high reputation to

protect. Their advice, treatments, and continuous research drive the sport and the business. MustangChain

aimstosimplifytheworkflowandworkloadofveterinariansandtoenhancetheirreputationviasecuring

integrity in their documentation, thereby increasing business generating capabilities. Veterinarians will be

enabled to make better informed decisions based on a horse’s historical medical visibility. Furthermore,

MustangChain will enable veterinarians to interact more closely with research groups or institutions

thatareexaminingnewtreatmentmethods.Thiswaytheirfieldresearchmayhelpadvancetheequine

industrybyprovidingmoreeffectivetreatmentsolutions.

5.4 Equestrian federations

Equestrian federations are formative stakeholders that foster and harness regulatory conditions for a

healthy equine industry at the local, national, and global levels. MustangChain aims to align the equestrian

federations at all levels and enable them to communicate in a uniform fashion and share data and

knowledge. For example, by creating protocols and a digitalized infrastructure that is compatible for all

federations.


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5.5 Governments

Providing transparency through the MustangChain platform will enable governments to better perform

their function as a regulator and arbiter of the equine industry. This will also improve the government’s

ability to base policy and decision making on high integrity data. MustangChain is in talks with

governmental agencies on regional and national levels to examine possible partnerships to advance the

industry together.

5.6 Researchers and universities

MustangChain will generate data across all domains of equine health and breeding background. Through

subscriptions on the MustangChain platform, research groups and universities will have access to this ‘big’

data to analyze and to advance the equine industry. Alternatively, researchers may also share their own

findingsthroughtheplatformandinturnbeincentivizedbyotherswhowanttousetheirresearch.


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6. MustangChain: Companyand Ecosystem

6.1 Cecil Alliance Foundation (CAF)

The MustangChain Company falls under the umbrella of the Cecil Alliance Foundation (CAF). The CAF was

set up to achieve its global mission of advancing he wildlife preservation, livestock, and domestic animal

industry by providing them a state-of-the-art toolkit, consisting of both hardware and software solutions, in

a bid to identify and track animals on the blockchain so that their welfare is promoted and their life better

protected.

6.2 The MustangChain Company

Successfully registering horses on MustangChain through the use of the SVS will enable the CAF and

community to engage with the data by creating decentralized applications on the platform. The CAF will

provide the technical support to the developer community and enable them to build relevant decentralized

applications (Dapps) to grow and expand the ecosystem. The MustangChain Company will further actively

pursue international partnerships with studbooks, federations, trade associations, and governments in

order to grow MustangChain into a global and recognized standard for the equine industry.

The MustangChain Company will be contracted by the CAF. A robust integral risk management framework

will be in place to mitigate operational risks. The Company’s fees will be in line with market prices

and it will be bound by service level agreements to develop and maintain the technical solution. The

MustangChain Company can choose to work together with third parties who have a unique skillset or

solution.

6.3 The MustangChain Ecosystem

MustangChain aims to be a comprehensive ecosystem serving the needs of all stakeholders, professionals,

and amateurs within the equine industry. By creating a global community around common interests and

providing the technological platform to enhance transparency, strengthening the match between supply

and demand, and unlocking new markets, various Dapps can be created.

Firstoff,wewillreleasetheOfficialMustangChainappthatwillbedevelopedfordifferentexisting

operatingsystems(e.g.Android,iOS)andwillfunctionastheMustangChainplatform.Thiswillbethe

main app on which all other Dapps may be installed and accessed.


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ThemainfeatureoftheOfficialMustangChainappisthe“AuthenticationandVerification”screen.Viathis

screenuserscanaccessthedatarecordsofdifferentequines,andauthenticateandverifytheiridentity.

TheCAFwillsubsequentlydevelopanumberof“crucial”Dappsthatwillenablemassadoptionandthese

willalsocomepre-installedintheOfficialMustangChainappinlaterversions:

1) Auction Hall Dapp:

With true digital, IoT, and blockchain based passports, stakeholders will be able to trust

the information provided to them on the platform. The Auction Hall Dapp will provide a

decentralized global auction hall for horse traders to do business. Traders and trainers

selling horses on the platform can use CECIL tokens to add listings on the platform. We

will work with a freemium model in which basic listings are free and promoted listings

shall be charged.

2) X-Ray Dapp:

When it comes down to the equine trade business there is one aspect that causes

more disputes than any other, and that is the analysis/interpretation of a horse’s X-ray

Results.Moreoftenthannot,theX-rayfindingsareopentointerpretation,whichcan

thenresultindisagreementsbetweenthedifferentveterinariansonwhetheracertain

area signals an injury or not.

For example, equine X-rays could be uploaded into a specialized Dapp for second

opinion purposes. Veterinarians will be incentivized to provide their independent,

anonymous, and unbiased judgement via registering to the Dapp. By utilizing

independent veterinarians to the judgment of equine X-rays, MustangChain will


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prevent drawn out and unnecessary arguments between the buyer and seller and

settle such disputes directly via an independent board.

3) Data Analytics Dapp:

MustangChain will make certain data recorded on the platform available for analysis.

TheDataAnalyticsDappwillprovideinsightintodifferentbigdatasetscentered

aroundthedifferentequinevariablesrecordedontheMustangChainplatform.For

example, making big data available will enable more informed breeding practices

by providing the ability to couple independent horse characteristics to pedigree and

heritage.

However, MustangChain with support from the CAF, will also support the development of Dapps

specificallymadebyandfortheequinecommunity.TheCAFwillprovidethenecessarytechnological

modularcomponentsforthedevelopmentandsuccessfullaunchoftheDapp.Seefigure2foranoverview

oftheMustangChainecosystem.TherearedifferenttypesofDappsthatcanbedevelopedbythe

community. See below for a non-exhaustive list of example Dapps that could be developed:

1. Equine Services: Service providers will be able to add their offerings on the

platform such as:

a. Stallion owners and sales agents that can sell and ship authenticated

horse semen directly.

b. Logistics providers such as air freight/transport companies and specialized

in horses that can also take care of custom clearance.

c. Sales of tickets to equine events.

2. Equine Marketplace: Product providers will be able to add their commodities on

the platform including:

a. Riding equipment.

b. Clothing.

c. Supplements and dietary products.

d. Transporting material such as trucks and vans.

3. Equine Community:

A place where the equine community can create or respond to content such as blogs, news,

and articles, and where the users may reward the content creators. This could operate in a

similar fashion to the way Steem functions at the moment.


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a u t h o r i z e d t o w r i t e

c o n n e c t e d

a u d i t

r e a d o n l y

h o r s e o w n e r

a u d i t o r

s t u d b o o k

v e t s

h o r s e e n t h u s i a s tr e s e a r c h i n s i t u t i o ng o v e r n m e n t s

b u y e r

e q u e s t r i a n f e d e r a t i o n s

MustangChain Ecosystem


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4. Equine Knowledge:

Equine Knowledge: MustangChain aims to facilitate the advancement of equine science by

stimulatingresearcherstocommercializetheirfindingsthroughtheMustangChainplatform.

Articles to be published on the MustangChain platform will be peer-reviewed. Secondly,

the Knowledge Dapp will also enable sharing of crucial equine information between horse

enthusiasts. Instructors and mentors will be able to share knowledge on riding, handling, and

training horses on the platform.

5. Equine Real Estate

Ownerswantingtosellorrenttheirequineindustryrelatedrealestatesuchasstablesand

training centers will be able to create listings on the platform.

6. Equine Business Club

Putting entrepreneurs from the same industry together will let them grow their network and

increase their business. Another possibility is to set up an automatic reward system to give

back to the community in the form of donations to equestrian related charities, sponsorship of

talents, and development of new treatments.

7. Equine Insurance

The medical history of the equine can be used by the insurance company for their risk

analyses. Additionally, the health of the equine may be monitored by NB-IoT in the future,

which will lower the chance of a serious medical intervention by facilitating pre-emptive

measures. These two factors will give insurance agencies that join the MustangChain

ecosystemacompetitiveadvantage.Ontheotherhand,equineownersthatwanttotake

outaninsurancepolicywillhaveeasieraccesstoareliableoverviewofthedifferentoptions

available thus enabling them to make a more informed decision.

7. Equine transportation

Transportation providers can develop an application that tracks the equines location

and health travel. Through NB-IoT, the equines condition can be monitored during the

transportation. The SVS ensures that the equine that is delivered is the equine that was

promised. By verifying the equine upon delivery, the smart contract can release the funds that

were meant for the sale (in case of a purchase)


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7. Governance model

The MustangChain company is governed under the supervision of the rules and regulations as set out

bytheCecilAllianceFoundation(CAF).TheCAFwasestablishedin2018inSingaporeasanon-profit

organization. The CAF will act as a sponsor and fully devote itself to the development of the ecosystem.

Thepurposeofourgovernancestructureistofindahealthybalancebetweendecentralizationand

effectivedecisionmakingmechanisms,andtoimplementthenecessarychecks,audits,andriskcontrol

measures.CAFalsoaimstobealeaderinthefieldofgovernancestructure,transparency,andanti-

corruptionpolicies.ThroughtheFoundationBoardandthedifferentcommittees,stakeholderswillbe

engaged and included through knowledge sharing, the maintenance and building of the community and

development of Dapps with related token abilities.

Pleaseseethewhitepaperonthececilalliance.comsitewhichwillbeonlinestartingOctober.


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T h e t o k e n c i r c u l a t i o n


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Now, we live in a new world, a world in which a currency is a choice, and not just a choice in terms of use… It is also a mean of expression

Andreas Antonopoulos, The Internet

of Money, a collection of talks, p 66

““


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8. The token circulation

Andreas Antonopoulos, who is widely regarded as the main thought leader in the Bitcoin sphere, describes

aworldvisioninhisbook,“TheInternetofMoney”,wherecurrenciesarenolongerdominatedbynation

states, but by communities. Until the launch of Bitcoin, Antonopoulos argues, currencies chose the user,

not the other way around. The nation where you grow up would determine the currency you used. This

changed with Bitcoin. That is, with Bitcoin you can bypass the nation states and freely exchange value with

users around the world without the intervention of any third party, hence the title of the book the “The

InternetofMoney”.

Antonopoulos goes on to argue that currencies will no longer be valued by the issuer (national banks for

example),butbytheusage.Therewillbeamultitudeofdifferentcoins(altcoins)whichwillbeusedfor

differentpurposes.Currencieswillbebuiltaroundcommunitiesofpeoplewhosharethesameinterests,

intentions,andwillingnesstoalignthemselveswiththecommunity.Acrossthedifferentaltcoinstherewill

be an index currency tracking the purchasing power of your wallet.

Since MustangChain will be running on the Cecil Alliance Platform (CAP) as a vertical within the ecosystem,

the MustangChain economy will use the CECIL token. We see the Cecil Alliance token (ticker: CECIL) as

the means with which global animal enthusiasts and professionals will align themselves with. Through

the international, borderless, and decentralized platform, important functions such as trade, knowledge

exchange,andverificationofdatawillbeenabled.Allofthesetransactions,andthusexchangesofvalue,

will in the long run being transacted through the CECIL token. Just like a toll gives access to use a freeway,

the token enables access to use products and services on the blockchain.

Adaptation is not simply the act of using the currency, it is also attaching oneself to a community that also has chosen to adopt that currency.

Andreas Antonopoulos, The Internet

of Money, a collection of talks, p 73

““


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8.1 Value drivers and utility of the token

A token will only generate long-term value for society and its users when it is being used. Therefore, the

valueofthetokenincreasesbyitsutilityandthenumberofpeopleusingit.Ourdistributedprotocol

mustcreatesufficientutilityforstakeholdersthattheywillinglyobtainitstokensfordifferentusecases.

Wecreatedanoveralleconomicmodelwhichlaysoutdifferentrolesforourtoken,eachofthembuilding

value within the MustangChain ecosystem.

8.1.1 Transformation of functionality

The token enables transformation of functionalities inside the ecosystem, resulting in the creation of a

transaction between buyers and sellers. They can earn it by doing active work (i.e., real work and actions),

or passive work (e.g. sharing data). We believe that the creation of an internal token circulation within the

Ecosystem is paramount to achieving long-term token value and a mass adoption.

8.1.2 The abilities

Having access to a token bestows the ability to activate certain MustangChain functionalities.

8.1.3 The toll

Just like a toll gives access to use a freeway, the token enables access to use products on the blockchain.

Every entry on the blockchain will be processed by the nodes and the execution of smart contracts will be

powered by tokens.

8.1.4 The social function

The token can also be used as a lever to enrich the user experience, including basic actions like joining a

network, or connecting with users. It can also be used as an incentive, if it is given in return to begin usage

or for on-boarding. The common use of one token across the globe will create a global community and will

continue to keep giving back the community by reserving an amount of tokens for equine related charities

and for substantial improvements to equestrianism.


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8.2 The basic token circulation

At a root level, the CECIL token circulation will create an environment to facilitate mass adoption and utility

of the CECIL token from the start. The derivative of the CECIL token circulation is the SVS system, whilst the

extended token circulation will include utility of the CECIL token in later released Dapps as well.

Thefirsttaskforahorseownerwhenitcomestoanewlybornequine,oranequinenotyeton

MustangChain, is to register the horse on their respective studbook in order to index his identity and

receive an equine passport. The horse owner will pay the studbook the required registration fee and the

studbook will load the data record of the horse with a certain amount of available CECIL tokens. That

is, whenever a new horse is signed to a studbook, the studbook will create a new data record on the

MustangChain platform and preload it with a number of available CECIL tokens.

The Basic MustangChain Circulation

v e t s

a u d i t o r

s t u d b o o kh o r s e o w n e r

o f f i c i a l

m u s t a n g c h a i n a p p

00 1 11 0 0 1

1100 1 11 0

0 1 11

load data asset of owned horse with CECIL

create new data assetwith preloaded CECIL

requestregistration

optionialconvert CECIL - fiat

via offical appuse CECILfor audit

requestcheckup

use CECILto record new data

audit stud book and vet data integrity

use periodicsubscription fee

in CECIL

obtain CECILto load data

asset


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These preloaded CECIL tokens will mainly be used via a smart contract to periodically load tokens to stay

registeredontheMustangChainplatform.OwnersmustensurethatthereisenoughCECILtokensinthe

horse’s data record to stay registered and are thus required to load it with tokens once the balance is

insufficient.

While the studbook is required to preload the data record of any newly registered horse with available

CECIL tokens, the vets will receive a small compensation in CECIL tokens from the data record of the horse

for each new data insertion. However, these received tokens will be locked in a smart contract and will be

released upon conclusion by the auditors that data integrity has been followed.

Owners,studbooks,andveterinarianscanobtaintheCECILtokensviatheconversionfeatureinthe

OfficialMustangChainapporviacryptocurrencyexchanges.InthecaseofobtainingCECILtokensviathe

Officialapp,thetokenscanbeeasilysenttothehorse’sdatarecordviaabuilt-infeature,whileobtaining

the tokens on the exchange will require the user to send them to the correct equine data record via the

withdrawal function of the exchange.

The CAF will use the pool of CECIL tokens for registration to commence audits on these new registrations

and medical data input. In the case that the auditor concludes that the data inputted by vets and

studbooks is accurate, complete, and of high integrity, the studbooks will be incentivized in the form of

CECIL tokens from the auditors, while the vets will receive the CECIL tokens locked in the smart contract.

8.3 The extended token circulation

Thebasictokencirculationthatwillensuremassadoptionandpreventa“coldstart”,CECILtoken

circulationwillalsobedrivenbytheutilityofthetokeninthedifferentDappsthatwillbecreatedonthe

MustangChain platform. Possible examples of the way the CECIL token could be used to unlock abilities on

the Dapp platform are the following:

1) Traders and trainers selling horses in the Auction Hall Dapp will use CECIL tokens to add listings on

the platform. We will work with a freemium model in which basic listings are for free and promoted listings

shall be charged in CECIL tokens.

2) Community members can use CECIL tokens in the Equine Community Dapp to reward

user generated content.

3) Breeders and researchers sharing data via the Knowledge Dapp will be rewarded with

CECIL tokens as the data they provide is valuable to other breeders, researchers, and

potentially governmental organizations.

4) Also, instructors and mentors can share riding tips, training tips, and programs via the Knowledge

Dapp. They receive CECIL tokens for valuable knowledge shared on the platform through


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peerreviewsandupvotes.Ourplatformworkswithafreemiummodelinwhichtrainerswillbe

rewarded for their instruction and readers may transfer CECIL tokens for unique content.

5) The Data Analytics Dapp will utilize a tiered subscription model whereby users who compensate

a higher amount of CECIL tokens will receive a higher rank and have access to more data

variable categories.

6) Veterinarians that are connected to the X-ray Dapp initiative may receive CECIL tokens for

their anonymous assessments of uploaded X-rays.

7) Sellers of equine related goods and merchandise on the Equine Marketplace Dapp (e.g., clothes,

equipment, vans, nutrition related products, etc.) may use CECIL tokens to get their own store

on the platform.

8) Breeders, trainers, logistic providers, and event organizations may provide their services on the

Equine Services Dapp, where providers may use CECIL tokens to achieve the authorization to

provide their services on the platform.

9) OwnersofrealestatecouldoffertheirassetsforhireorsaleontheEquineRealEstateDappby

using CECIL tokens.

10) Membership to the Equestrian Business Club may be unlocked through the use of MustangChain

tokens. Tiered membership is possible with basic members gaining access to the basic community

functions of the Business Club Dapp while premium members gain access to a more exclusively inner

circle.

11) Insurance agencies that strive to provide their services to the equine community via the

MustangChain platform may use CECIL tokens as a means of commission.


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9. Enterprise risk management

MustangChainfindsitimportanttoactivelyengageinenterpriseriskmanagement.Anon-exhaustive

overview of the risks that the CAF will face, and how we aim to address these risks can be found below.

1) Internal integrity risks: risks to the integrity of the company by its co-workers or any of its

affiliates.

2) IT risks: malware, network based attacks, etc.

3) Fraud risks: information and/or identity theft, social engineering, corruption, etc.

4) Legal / compliance risks: Particularly the changing regulatory environment for

cryptocurrencies.

5) Operationalrisks:Riskofmonetarylossesasaresultoffaultsanderrorsinprocess,

technology or skills or due to external factors.

MustangChain will implement an excessive risk assessment protocol covering all areas that might

potentiallyaffecttheMustangChainCompany,Foundation,Ecosystem,oranyofitsaffiliatedcompanies

and partners. This includes the likelihood that a risk event may occur, the reasons it may occur, and

thepotentialseverityofitsimpact.Aneffectivelydesignedriskassessmentprotocolalsohelpsthe

CAFprioritizerisks,maptheseriskstotheapplicableriskowners/stakeholders,andeffectivelyallocate

resources to risk mitigation.

9.1 Risk management framework

MustangChain has chosen to set up a risk management framework based on the widely recognized best

practiceriskmanagementframeworkofCOSOERM(EnterpriseRiskManagement).COSOERMenables

to comprehensively and systematically address all types of risks on all processes, activities, stakeholders,

products,andservices.Thisframeworkisbasedonfiveprinciples(seefigurebelow)thatwillhelpand

assist MustangChain organization to identify, assess, manage and monitor risks to its strategy and

performance.

The CAF Board will be supported by a Risk Management Support team that oversees and manages risks

associates with MustangChain’s strategy and activities. The Risk Management Support team consists of a

number of functional experts covering the various categories of enterprise risk and supports by increasing

theunderstandingoftheenterpriseriskprofileandcontinuouslyworkingtoimprovetheenterpriserisk

management framework.


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MustangChain will deploy its risk management as an integral part of its business planning and

performance review cycle. MustangChain will design a risk and control policy to provide reasonable

assurance that objectives are met by integrating management control into the daily operations, by

ensuring compliance with legal requirements, and safeguarding the integrity of the ecosystem technology,

financialreporting,anditsrelateddisclosure.Thisframeworkwillalsocontributesto

1) Well-informed decision making on strategy and objective-setting.

2) Increasedefficiencyofitscoreprocesses.

3) Successful delivery of change.

4) Greater assurance to all its stakeholders to deliver reliable, trusted products, and services relevant

for the equine industry.

9.2 Internal integrity risks

The CAF aims to establish an open and transparent environment. Any corruptive behavior shall be met

with severe consequences and potentially civil and/or administrative sanctions. The CAF will establish

special auditing and reporting channels as well as a whistle-blower policy and welcome all community

members to participate in the management, supervision, and execution of our whistle-blower program.

Aninternalauditorwillreportdirectlytoseniormanagement.Thisauditorwillperformdifferenttypes

of audits. For example, a department-level audit includes reviewing how MustangChain performs in

compliance with all established policies and procedures, including accounting controls. As part of an audit,

anauditormightreviewfinancialtransactions,datapoints,andMustangChainrecordstoensurethatall

dataorfinancialexpenseisaccompaniedbysufficientsourcedocumentation.

MustangChain needs a set of operating procedures, or internal controls, to ensure that the raw materials

andfinishedgoodsacquiredbyitsemployeesrepresentthebestuseoffinancialresources,suchasbeing

The five principles of COSO ERM framework.


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costefficient.Bycreatingapurchasingdepartmentwithdifferentpurchasingagentsandrequiringeach

department to complete a purchase requisition and have it reviewed by an agent before goods can be

purchased, the organization sets up its purchasing agents as auditors. These agents monitor and control

department-level spending.

9.3 IT risk framework

Because MustangChain’s primary processes are all IT related, MustangChain has also chosen to

incorporateCOBITasathoroughlyrecognizedguidelinetoensurequality,controlandreliabilityof

informationsystems.COBITcontrolmodelguaranteestheintegrityoftheinformationsystem,andis

designed to be a supportive tool for managers, and allows bridging the crucial gap between technical

issues,businessrisks,andcontrolrequirements.COBITalignsandfitsintheCOSOERMframeworksince

itisbasedonthesameprinciplesandconceptsofriskandriskmanagement,butitspecificallyfocusedon

thegovernanceandmanagementofenterpriseIT.MustangChainwillusetheCOBITmodeltotranslateits

stakeholders’needsintospecific,actionableandcustomizedorganizationalgoals,andcascadingitdownto

IT-relatedgoalsandenablinggoals,balancingbetweenbenefitsrealization,riskoptimization,andresource

optimization.

Setting up a closed/controlled access infrastructure, also requires a centralized information administration

system that may be damaged, disrupted (including the provision of services to customers), or shut down

due to (cyber) attacks by hackers, computer viruses, or other malware. In addition, breaches in security

couldresultinthemisappropriation,destructionorunauthorizeddisclosureofconfidentialinformation

(including intellectual property) or personal data belonging to MustangChain or our stakeholders.

Abreachinsecurityof,orasignificantdisruptionin,ourinformationtechnologysystemsorviolationof

dataprivacylawscouldadverselyaffectMustangChain’sreputationandbrand.MustangChainwillseta

strengthened security governance, thus increasing the ability to detect, respond to, and close incidents.

9.4 Compliance risks

MustangChain’s brand image and reputation would be adversely impacted by non-compliance with various

local regulations and data protection. Because of MustangChain global presence to regional and local

regulatoryrules,changestowhichmayaffecttherealizationofbusinessopportunitiesinthecountriesin

which MustangChain operates. Also the increasing importance of data privacy laws may impact the way

MustangChain can conduct business.


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10. Roadmap

ThefirstmissionofMustangChainistorecordasmanyequinesontheplatformaspossibleviatheSVS

system, so that the industry is safeguarded against fraud and trust is established across all stakeholders.

However, the overarching mission is to advance the equine industry as a whole and build a global

community where all horse enthusiasts can meet to connect, trade, examine, exchange, or learn. In order

to achieve its ambitious goals, MustangChain will need to be proactive on the global market. A successful

global rollout can however only be executed by implementing a phased, modular strategy, with clear and

concrete milestones. MustangChain has set priorities that will allow it to realize its mission as soon as

possible.

Describedbelowarethemilestoneswhichhavealreadybeenachievedoridentifiedforthenearandlong

term.

2017: 1) Researchforwhitepapercommences;fieldresearch,investigationofcurrentissuesintheequine

industry, and examination of technical feasibilities.

2) Primaryindustrydifficultiesidentifiedandreviewedbythecoreteam.

Q1 2018 1) MustangChainopensitsofficeinNijmegen.

2) MustangChain team forms; developers, equine experts and professionals, government policy

advisors, equestrian federation liaisons, marketing and sales experts, lawyers, auditors, and

governance agents.

3) MustangChain presents key stakeholders the technical and business solutions.

4) MustangChainpresentskeystakeholderstheSealedVerificationSystem(SVS);NFC-to-

blockchain, microchip, and iris scan solution.

5) Strategic partnership working in collaboration with the VeChain Foundation begins.

Q2 2018 1) MustangChain agrees on business and technical proposals with the VeChain Foundation.

2) VeChain Foundation announces MustangChain to the public.

3) MustangChain publishes the whitepaper.

4) Core team expands adding IT and development leads, project managers, and

advisory board members.


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Q3 2018 1) Publication of the technical documentation.

2) The public Token Manifestation Event launches on the VeChain Thor platform.

Q4 2018 1) MustangChainreceivesfinalindustryfeedbackontheapplicationPoC(ProofofConcept).

2) FirstofficialMustangChainmeetuponatobeannouncedlocation.

3) Openingasecondofficeinatobeannouncedcountry.

Q1 2019 1) MustangChain releases the application for key stakeholders that are authorized to

write to the MustangChain.

Q2 2019 1) MustangChainreleasestheofficialappforAndroidandiOSwiththe‘Authentication

andVerification’feature.

2) MustangChain releases the feature in which users can identify themselves and make a

horse registration request.

Q3 2019 1) The CAF adds CECIL token wallet functionality to the applications.

2) Publication for third party participation including technical guidelines and a developer kit.

3) Exploration of the validity of NB-IoT chip solution with equine leaders begins.

Q4 2019 1) ThefirstpilotusinganNB-IOTchipsolutionconcludes,thedatacollectedisanalyzedand

interpreted.

Q1 2020 1) MustangChain in collaboration with the CAF will initiate the development of community driven

Dapps on the platform.

2) MustangChain and CAF releases the Auction Hall and X-Ray Dapp on the platform

Q2 2020 1) ThefirstpilotusinganNB-IOTchipsolutionconcludes,thedatacollectedisanalyzedand

interpreted.

2) CAF releases the Data Analytics Dapp on the platform.


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11. Corporate social responsibility

MustangChain will transform the equine industry by providing transparency through blockchain

technology. However, our mission to ensure the wellbeing of horses does not stop there. Through the

corporate social responsibility policy, MustangChain will pursue appropriate ethics and help building a

better world by:

1) Looking out for the wellbeing and care of equines during their life in a broad sense;

2) Protecting our environment by pursuing environmentally sustainable practices.

PartofMustangChain’seffortwillbeaimedatcharityworkthatsupportsthewellbeingofhorsesaround

theglobethroughdonationsinknowledgeandfundingasMustangChainisanon-profitorganization.

The community around MustangChain will be encouraged to bring forth charity foundations they deem

essential for helping equines in need.


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12. Team and advisors

AllMustangChainteammemberssharethesamevisionandmissiontocreatethefirstglobalizedand

decentralized horse information platform and tracking system.

12.1 Core team

DannyvandeGriend–CEO

OnurYildirim–COO

ShaifBasier–CFO

PascaldeKloe–CTO

DaviddeVriesere–DirectorofPublicAffairs

RobertvanAert–BusinessLawyer

DmitryTryndyk–ITdirector

12.2 Advisors and industry experts

CREAM–PartnerandStrategicAdvisor

SunnyLu–CEOofVeChain

RorieDevine–Technologyexpert

FrankvanLeeuwen–Veterinarianexpert

StephaneSchrickx–Thirdgenerationhorsebreeder

BartBrands–PoliticalLobbyist

PieterVerstraete–InternationalBusinessExpert

BertSchelfhout–BelgiumParliament

Takako–Expertintheequineindustry

CyrusTrafford–Businessconsultant


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Disclaimer

This white paper is solely for informative purposes, and no rights can be derived from it by any third party.

Unlessintentlyspecifiedotherwise,theproductsandinnovationssetoutinthispaperarecurrentlyunder

development and are not currently active. We are pioneering new Blockchain technology in a responsible

manner conscious of and open about the fact that any new technology knows heightened inherent risk.

This includes operational and regulatory compliance risk. Although we have set up robust internal control

structures and other risk mitigating measures, we make no guarantees or representations towards the

successful development or implementation of described technologies and innovations. No one is liable for

the contents of this white paper or any inferences drawn from it, including (but not limited to) relation to

any interactions with MustangChain or the technologies mentioned in this paper. MustangChain disclaims

all liability for any loss or damage of any kind (whether foreseeable or not) which may arise from any

person acting on any information and opinions relating to MustangChain, the MustangChain platform or

the MustangChain ecosystem contained in this white paper or any information which is made available in

connection with any further enquiries, notwithstanding any negligence, default or lack of care.

The properties of the MustangChain approach to blockchain and tokenized community are inherently

risky, require careful examination from both an overarching global, national and local perspective and

are structured and protected through copyright protected proprietary information, IP laws, creative

technologies, interdisciplinary protocols, architectural qualities and tokenized abilities which may not

be understood or clear for untrained professionals. As a result of the inherent dependence on factors

that cannot be disclosed due to use of and reliance on third party protocols, services and proprietary

information, several underlying novel modalities that enhance the preventive, detective and monitoring

controlconfigurationandothersafeguards,cannotbedescribedinfulldetail.TheCAF’sblockchain

solutions ensure high integrity data and solutions which provide the equine communities cutting edge

decentralized technology that is unique and protected through advanced crypto-graphical, user generating

content and other means and tokenized abilities.

This white paper does not constitute or form part of any opinion on and shall not be construed as any

advicetosell,oranysolicitationofanyofferbytheCAF,anentityregisteredunderthelawsofSingapore,

to purchase any tokens nor shall it or any part of it, nor the fact of its presentation, form the basis of, or be

relied upon in connection with, any contract or investment decision. Nothing set forth in this white paper

shallbeunderstoodorinterpretedasadvice(business,financial,legaland/ortax)providedbyusrelating

totheCAF,itsaffiliatesortheCECILtokens,andshouldthereforenotberelieduponasadvice.Youshould

consult with your own advisers prior to purchasing CECIL tokens.

Persons that obtain access to available CECIL tokens, through whatever means possible, acknowledge


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and agree that the CECIL tokens will not be used for purposes of speculation, investment, as some type of

arbitragestrategy,forimmediateresale,otherfinancialpurposesorotherillegalactivities.TheCAFhereby

expressly disclaims its liability and refuse to be liable for any person that obtains access to available

CECILtokensinviolationofanyanti-moneylaundering,counter-terrorismfinancingorotherregulatory

requirements that are imposed in any jurisdiction;

No regulatory authority has examined or approved of any of the information set out in this white

paper. No such action has been or will be taken under the laws, regulatory requirements or rules of any

jurisdiction. The publication, distribution or dissemination of this white paper does not imply that the

applicable laws, regulatory requirements or rules have been complied with.

Blockchain technology allows new forms of interaction and it is possible that certain jurisdictions will

apply existing regulations on, or introduce new regulations addressing, blockchain technology based

applications, which may be contrary to the smart contract of CECIL token and which may, amongst others,

resultinsubstantialmodificationstooursmartcontractand/ortheCECILtoken,includingitstermination

and the loss of access to the available CECIL token.

Additionally, regulation of proposed activities of the CAF is currently uncertain It may occur that users and/

or user generated activities and abilities on any day in the future may fail to comply with any existing or

future regulatory frameworks so that they may not continue to carry out their proposed activities in certain

jurisdictions.

This white paper, statements made by the CAF’s representatives in press releases and social media

platforms accessible by the public may contain forward-looking-statements which do not relate to

historicalfacts(developments,figures,etc.)andevents.Theseforward-looking-statementsarebased

onanalysis,assumptionsorforecastsoffutureeventsandfigureswhicharenotfinallypredictableor

foreseeable. Such forward-looking-statements are therefore subject to risks, uncertainties and other

factorswhichmaycauseactualfutureresults,performanceorachievementsoftheCAF,itsaffiliates,the

CECILtokenandtheCAF’sfundtobemateriallydifferentfromthatexpected,expressedorimpliedbythe

forward-looking-statements herein. No undue reliance shall be placed on such statements.

Please note that we are under no obligation to update this white paper, the CAF’s website and/or any

information given in connection with this Token Manifestation Event. The white paper may, however, be

subject to change. Any update provided by the CAF will be made voluntarily and in its sole discretion.

TheEnglishlanguagewhitepaperistheprimaryofficialsourceofinformationabouttheproject.The


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website and/or any information given in connection with this Token Manifestation Event. The white paper

may, however, be subject to change. Any update provided by the CAF will be made voluntarily and in its

sole discretion.

TheEnglishlanguagewhitepaperistheprimaryofficialsourceofinformationabouttheproject.The

information contained in the English language white paper may from time to time be translated into

languages such as Chinese, Japanese, Russian and other languages. In the course of such translation

some of the information contained in the English language white paper may be lost, corrupted or

misrepresented. The accuracy of such alternative communications cannot be guaranteed. In the event of

anyconflictsorinconsistenciesbetweensuchtranslationsandtheofficialEnglishlanguagewhitepaper,

the provisions of the English language original document shall prevail.


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References

American Horse Council, 2005 (https://www.ridewithequo.com)

Australian Bureau of Statistics (http://www.abs.gov.au)

Belgian Equistrian Federation (https://www.equibel.be/ and also http://paarden.vlaanderen/nl/themas/De-

Vlaamse-paardenwereld-van-A-tot-Z/Economisch-belang-van-de-Vlaamse-paardensector-2008)

British Equestrian Federation (http://www.bef.co.uk)

Bruinsma,L.,Ding,V.(2010)SecurityofHorseAnimalIdentification&RegistrationinTheNetherlands,

Universiteit van Amsterdam http://www.delaat.net/rp/2009-2010/p15/report.pdf

Dubai International Horse Fair, 2018 (www.dihf.ae/)

English, J.E. (2003). Complete guide for horse business success. Scholargy Custom Publishing, Tempe.

Equine business association (2017). https://www.equinebusinessassociation.com/equine-industry-

statistics/

European Horse Network (www.europeanhorsenetwork.eu)

Evans,V.(2011).2010Canadianequineindustryprofilestudy.Thestateoftheindustry.Ottawa:Equine

Canada.

Evans,V.(2012).Theeconomicsofhorseracingin2010.Ottawa:EquineCanada.

French Horse Connexion (https://www.french-horse-connexion.com/)

German Equestrian Federation, 2015 (www.pferd-aktuell.de)

German Equestrian Federation (2015). A Guide Through the German Equestrian World Equestrian

Sports and Breeding in Germany. Retrieved on 12 March 2018 from

Global Trade Atlas: Global Import/Export Commodity Data (http://www.gtis.com)

Kasin, S. (2015), Equilife, Retrieved 12 March 2018 from http://www.equilifeworld.com/lifestyle/

equestrianism-a-growing-business-in-china/.

Li, Y-N., Cheng, P., Yang, M-M. (2016). Analysis of the situation of equestrian industry in China. 3rd

International Conference on Management Science and Management Innovation 2016 (MSMI 2016).

Sant,S.v.(2015).VoiceofAmerica.Retrievedon12March2018fromVOANews:

http://www.voanews.com/content/interest-in-equestrian-sports-surges-in-china/2665791.html

The Guardian (2014). https://www.theguardian.com/sustainable-business/corporate-transparency-

honesty-best-policy

World Horse Welfare and Eurogroup for Animals (http://www.worldhorsewelfare.org/)

World Horse Welfare and Eurogroup for Animals (2015) Removing the blinkers: the health and welfare

of European Equidae in 2015. Retrieved on 12 March 2018 from http://www.worldhorsewelfare.org/

Removing-the-Blinkers.

.


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Attachment 1: The impressive size of the equine industry

Europe

TheequineindustryinEuropeisasurprisinglylargemarket.Inadditiontoa$123.6billionmarketturnover

annually, the EU equine industry provides jobs for more than 896,000 people. Currently there are about

7 million horses in the EU, with France, the UK, and Romania housing the largest populations of horses

(World Horse Welfare and Eurogroup for Animals).

Thenumbersspeakforthemselves.TheequineindustryintheUKcontributes$9.89billionayeartothe

UKeconomy.Withabout1millionhorsesintheUK,theindustryhasagrossoutputof$5.37billiona

year. The UK equine industry covers a wide range of goods and services each year, and provides full time

employmentforabout200,000people(BritishEquestrianFederation).InFrance,atotalof$17.3billionof

flowisgeneratedbyequineactivitiesperyear.Thereareabout1millionhorses,34,000horsebreeding

farms and 8,900 equestrian centers. The equine industry provides 180,000 jobs all over. The French

Equestrian is the umbrella organization in France for all sporting and leisure activities involving ponies

and horses and counts 690,000 members. Each year there are around 18,000 horse races, and 100,000

equestrian competitions organized (French Horse Connexion).

Although the English and France equestrian industries are impressively large, when examining other

EUcountries,thefiguresarestillequallyintriguing.Combined,themarketoftophorsesisvaluedat

$4.08billioninBelgiumandthisnumberisgrowingby5%eachyear(BelgianEquestrianFederation).In

the Netherlands, when compared to other sport markets, the value of equestrian sports is only second

to football. Furthermore, the German Equestrian Federation (GEF) is the umbrella organization of

approximately 7,700 commercial riding and driving schools and clubs and 4,000 commercial equestrian

centers. The GEF counts 720,000 members in total, and there were around 3,600 equestrian events held in

Germanyin2012,whichincluded69,000differentcompetitionsand1,480,000starts(GermanEquestrian

Federation, 2015).

In addition to the horses as a commodity, there are also other domains of the equestrian industry which

haveahugeturnoverintheEU.Forexample,breedinghorsesisahighlyprofitablemarketwiththevalue

ofhorsesemenalonecreatinga$2.47billionmarketgloballyin2016.Brussels,Eindhoven,andAachenare

themainglobalcentersforhorsebreeders.InFlanders,Belgiumthereisa$14.83millionmarketturnover

of horse semen alone.

For more information on the equine industry in EU also see European Horse Network.


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China

In China under the condition of sustainable and healthy social and economic development, and per capita

GDP growth, high-end leisure sports are becoming more and more popular. Equestrian is regarded as

high-end leisure sports, the tens of thousands of urban consumption crowd fall in love with the amateur

amusement riding, so it has a wide prospect of market (Li, Cheng, and Yang, 2016). The equine industry in

Chinagenerates$1.58billionandisgrowing40%yearly.

From2010to2017therewasa1500%surgeinthetotalofhorseclubsbringingthecurrenttotalto

around 1400 clubs. This number is expected to rise further as new memberships are growing at a rate

of30%peryear.Moreover,thereisagreatdealofimportofhighqualityhorses,as43%ofthehorsesin

theequestrianclubsarebroughtoverfromoverseas,whichtotalexpenditurewerearound$70million

in 2015. An approximation of 2,000 to 5,000 horses are imported each year (Global Trade Atlas: Global

Import/Export Commodity Data). According to the China Horse Association, there were over 70 national

level competitions and festivals organized in 2017.

Middle East

The Middle East i

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