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Whitepaper (v2.0)

This paper is for informational purposes only. The distribution agreement provided upon any token

purchase will be a legally binding agreement between the purchaser and BuildingBits Holdings, LLC. Any

purchased tokens will remain subject to specific terms and conditions outlined in the distribution agreement.

This whitepaper and any related materials are provided in English. Any translation is for reference purposes

only and is not certified by any person. If there is any inconsistency between a translation and the English

version of this whitepaper, the English version prevails.

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Table of Contents

Table of Contents

BuildingBits - Goals and Purpose 2

Real Estate Market Description 5

Target Market 9

Competitive Landscape 10

Capital Flow and Revenue Model 12

Financial Projections 13

Exit Strategy 14

Token Offerings and Business Development 14

BuildingBits Hybrid Blockchain Platform 22

Platform Architecture 24

Corporate Token Offering and Disbursement 24

Property Token Offering and Disbursement 27

Real Estate Tokenization Process 28

Settlement Token Disbursement and Redemption Process 30

Reward Token Utilization Process 31

Secondary Real Estate Marketplace 32

Token Specifications 34

Platform Software Architecture 35

Timeline of Releases 36

Team 37

Advisors 40

Conclusion 42

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BuildingBits - Goals and Purpose

The company’s mission is to create a leading global real estate platform linking property owners and real

estate investors, with a primary focus on income-producing commercial real estate. The platform will be

geared at individual non-accredited investors, allowing an underserved class of investors to have access to

the same real estate investment opportunities as wealthy investors and large financial institutions.

BuildingBits intends to provide users with a unique ability to use and trade tokens that represent shares of

companies, which in turn directly own individual commercial real estate properties.

Introduction

Building Bits Holdings, LLC (hereafter BuildingBits) is located in Portland, OR (USA) and was established

in 2016. BuildingBits plans to compete in the real estate crowdfunding market, a subset of the overall

crowdfunding industry. Our goal is to create a commercial real estate crowdfunding platform that targets a

wide range of retail and institutional investors, with a primary focus on individual non-accredited investors.

We also aim to create an industry-first secondary market trading platform to provide instant liquidity for

investors.

BuildingBits envisions a future where non-accredited investors have access to the same investment

opportunities as financial institutions and wealthy individuals. The rise of cryptocurrency markets,

blockchain protocols, and regulatory changes in the US have created a situation where this dream can

become a reality. With the proliferation and subsequent regulation of crowdfunding initiatives in the US,

Main Street investors can now participate in potentially groundbreaking projects, and small private

companies can now legally solicit investment capital from the public. Cryptocurrencies and the blockchains

that encode them now enable these investments to be bought and sold instantly, as well as traded on a peer-

to-peer (P2P) basis.

The BuildingBits brand stands for all of the following – financial inclusion, access, stability,

democratization, economic independence, intelligence, creativity, consistency, and dependability!

BuildingBits intends to destroy the barriers to economic freedom and level the financial playing field.

Joining the BuildingBits ecosystem will provide investors with a sense of belonging, that they are part of a

select group who are made powerful by banding together and making smart choices.

Problem

Non-accredited investors, particularly young people, have a significant challenge ahead of them: they desire

to build wealth, save for retirement, augment their existing lifestyle, and generally take greater control over

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their financial future. They care much less about long-term capital gains and much more about monthly

cash flow that they could use to pay their bills or improve their lifestyle.

However, non-accredited investors are currently cut off from many of the investment opportunities that

have been proven to yield sustained returns and recurring cash flow over time. Many young people desire

to enter the real estate market, but for most the only real estate investment they are likely to make is in their

own home. As such, they are effectively barred from taking advantage of the significant capital gains and

recurring income stream provided by real estate investments.

Many unsophisticated investors have their discretionary income and liquid reserves held in savings

accounts, or in retirement accounts consisting of stocks, or a mixture of stocks and bonds. Publicly traded

securities, such as stocks listed on the New York Stock Exchange or NASDAQ, have three substantial

drawbacks:

● They are highly volatile and unpredictable. When shares of a publicly traded company are sold,

they may be worth much less than when they were purchased.

● Unless an investor owns dividend paying stocks, their portfolio will not provide a recurring income

stream. This is precisely what a lower income investor needs to augment his/her existing income.

● Returns from the S&P 500 over the last several decades have been lower than those from the

commercial real estate sector, as shown in the graph below, and this trend is likely to continue into

the future.

Figure 1: Comparison between S&P returns and average returns on real estate over time.1

1 “FTSE NAREIT US Real Estate Index.” Nareit, 29 August 2018, https://www.reit.com/data-

research/reit-indexes/real-time-index-returns/ftse-nareit-us.

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Investors in real estate and non-publicly traded REITs face a significant liquidity problem. Their

investments are not liquid as a platform that facilitates instant P2P trading between investors does not

currently exist. Those similar platforms that do exist are typically closed off to non-accredited investors as

they do not possess the minimum level of capital, annual income, or net worth required to participate in

these platforms.

Many real estate crowdfunding platforms are currently in operation, but these platforms do not give

investors the liquidity they need to freely buy and sell their real estate shares. Investors in these platforms

are only allowed to redeem a portion of their shares at a deep discount, and only after a certain period of

time or not at all in many cases. Thus, investors take a significant penalty in the process. Fees can vary

widely across the platforms currently in operation, and investors must place their full trust in the company

that their investments will remain secure and managed properly. Other large investment houses (e.g.,

Vanguard and Blackrock) offer investments in REIT funds and alleviate the liquidity problem somewhat,

but their business model does not enable P2P trading, and they charge significant fees for facilitating

liquidation. But most importantly, these large and reputable investment firms do not offer non-accredited

investors an opportunity to invest just a small amount of money into a specific building, something that

might be leased to a certain type of tenant or be in the investor’s home town. That is also the primary

problem with real estate crowdfunding platforms in general – they function in much the same way as REITs.

Investors contribute their money to a pool of capital, which is then invested in a pool of properties that are

selected by the managers of the fund or that of the platform, rather than the individual investors placing

their capital. Investors do not have the freedom to build their own real estate portfolio from these properties,

and they are forced to own shares in the most and least desirable properties simultaneously. These

crowdfunding platforms have the same liquidity problem as private REITs or individual real estate

investments.

This inaccessibility to the real estate market and the periodic cash flow it offers, as well as the problem of

liquidity involved in traditional real estate investments, creates impetus for a new technological solution

that enables an underserved base of individual investors to participate in real estate investing.

Solution

Before BuildingBits, no other company would allow non-accredited investors to invest directly into specific

commercial real estate assets and earn recurring income from that investment. Having access to an asset

class that has traditionally been reserved only for the wealthy few is, in and of itself, a major breakthrough.

Being able to make an investment into assets, selected by "small" individual investors with as little as $1000

(and eventually much less) will disrupt and democratize the entire industry.

Non-accredited investors need a P2P trading platform that facilitates the purchase and liquidation of these

real estate investments. Combining the crowdfunding model with a P2P trading platform gives users the

liquidity they need to quickly enter and exit the real estate market as they see fit. This gives individual

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investors the ability to collect recurring returns from real estate that are normally relegated to the wealthy

few and to financial institutions.

BuildingBits is poised to become the leading global company with a secondary real estate marketplace

allowing those small shares (what we call “bits”) of real estate to be traded, thereby allowing investors to

quickly access their holdings and turn them into cash in case of an emergency. Investors will not have to

worry about day-to-day management of their assets.

Encoding these investments on a blockchain in the form of tokens provides security and facilitates instant

transfer of wealth between investors. Transparency is central to any blockchain solution, and all actions

within the ecosystem can be instantly audited by internal or external parties.

In addition to these benefits to individual investors, the BuildingBits platform and business model provides

desirable benefits to property owners. The traditional commercial real estate sales channel involves

brokerage firms that charge a 5-6% fee for most property sales in the $1-10 million range (BuildingBits’

target market). For a $5 million property, such a fee can be in excess of a $250k. BuildingBits plans to

charge Sellers a 1.0% fee upon successful disposition of a property to investors. That is likely to yield a

total savings of approximately $200k, an amount that should certainly gain the attention of a potential Seller

and demonstrate substantial value, thereby driving property owners to the BuildingBits Platform and

guaranteeing a supply of inventory.

The BuildingBits platform is also unique in that it can allow a property owner to sell only a part of their

equity, rather than having to sell it in its entirety. The owner can choose to sell any size share by listing the

fraction of equity for sale at the time of listing. Alternatively, the property owner may sell 100% of the asset

and then buy back some shares through the BuildingBits platform. This gives certain sellers who may not

wish to liquidate their equity in its entirety an opportunity to take some of the accumulated appreciation off

the table while still maintaining an equity stake.

Real Estate Market Description

As of the end of 2017, the overall value of the real estate market in the US is estimated at $37.1 trillion.2

The US real estate market alone accounts for approximately 40% of the total value of the global real estate

2 “Total Value of All U.S. Homes: $31.8 Trillion. How Big Is That?” Zillow Research, 28 December 2017,

https://www.zillow.com/research/total-value-homes-31-8-trillion-17763/.

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market.3 Commercial real estate value grew from approximately $6.8 trillion in 2013 to $8.5 trillion at the

end of 2017.4,5,6,7

Figure 2: Total global commercial real estate value as of 2017.

3 Teube, Bert and Hanskumar Bothra. “Real Estate Market Size 2017: Annual Update on the Size of the

Professionally Managed Global Real Estate Investment Market.” MSCI, June 2018,

https://www.msci.com/documents/10199/6fdca931-3405-1073-e7fa-1672aa66f4c2.

4 Ibid.

5 Teube, Bert, Shrenik Shah, and Hariharan G. G. “Real Estate Market Size 2016: Annual Update on the Scale of the

Professionally Managed Global Real Estate Investment Market.” MSCI, June 2017,

https://www.msci.com/documents/10199/8ca227ce-bb56-45e3-985e-650d81f98965.

6 Teube, Bert, Brent McElreath, and Hariharan G. G. “Real Estate Market Size 2015: Annual Update on the Scale of

the Professionally Managed Global Real Estate Investment Market.” MSCI, June 2016,

https://www.msci.com/documents/10199/f703e2a5-e9d0-4f90-b777-f742f72fcf7c.

7 Teube, Bert, and Mark Clacy-Jones. “Real Estate Market Size 2014: Insights into the size of the professionally

managed global real estate market.” MSCI, June 2015, https://www.msci.com/documents/10199/3d4389c0-fd93-

4fc9-ba6c-dcfacd44f255.

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We believe the current economic climate is conducive to favorable performance of real estate. The economy

has come a long way since the Great Recession. In 2009, the unemployment rate spiked up to 10% and the

GDP declined by 2.8%. In order to prevent any further damage, the Federal Reserve lowered the key interest

rate to nearly zero. Since that time, the U.S. economy has made substantial progress toward the Federal

Reserve’s goal of maximum employment and price stability. Enough progress such that in June 2018, the

Federal Reserve moved its target federal funds rate up by 25 basis points, continuing the stable target fund

rate increase that can be noted from the end of 2015. As of June 2018, the Federal target federal funds range

was the highest it has ever been at 1.75% - 2.00%.8

The U.S. economy is essentially at full employment, with the overall unemployment rate at 3.9% as of July

20189, and the unemployment rate among college graduates at a remarkably low 2.1% as of May 201810.

Looking ahead, we believe the growth in GDP will be limited by the absence of excess capacity in the

economy rather than by a lack of demand.

These trends have to be compared against global performance. Foreign direct investment into the U.S.

economy mostly in the form of acquisition of U.S. businesses was $259.6 billion in 2017.11 This demand

for U.S. investors is due to the exceptional performance of American companies, the appetite to acquire

U.S. companies and properties by foreign investors, and the opportunity to shelter assets in a relatively safe

economy during times of tremendous global economic uncertainty and political instability.

The U.S. real estate market has continued its strong and steady recovery post 2008 financial crisis. The

industry has posted positive gains in each of the past five years. The overall market has been growing at an

8 “Open Market Operations.” Monetary Policy, Board of Governors of the Federal Reserve System (U.S.), 13 June

2018, www.federalreserve.gov/monetarypolicy/openmarket.htm.

9 Carvalho, Luisa. “United States Unemployment Rate | 1948-2018 | Data | Chart | Calendar.” United States

Unemployment Rate, Trading Economies, 3 Aug. 2018, tradingeconomics.com/united-states/unemployment-rate.

10 “Unemployment Rate 2.1 Percent for College Grads, 4.3 Percent for High School Grads in April 2018.” The

Economics Daily, U.S. Bureau of Labor Statistics, U.S. Department of Labor, 10 May 2018,

www.bls.gov/opub/ted/2018/unemployment-rate-2-1-percent-for-college-grads-4-3-percent-for-high-school-grads-

in-april-2018.htm?view_full.

11 “New Foreign Direct Investment in the United States: 2017.” U.S. Bureau of Economic Analysis (BEA), U.S.

Department of Commerce, 11 July 2018, 8:30am, www.bea.gov/index.php/news/2018/new-foreign-direct-

investment-united-states-2017.

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annual rate of 3.7% from 2013 to 2018.12 In 2017, the value of the real estate market increased by $1.95

trillion compared to the previous year.13 As of June 2018, CRE has increased in value alongside consumer

spending, reaching $1 trillion in revenue with an annual growth rate of 4% between 2013 and 2018.14

These trends suggest that commercial properties will continue to perform well due to high employment and

consumer sentiment. Midmarket commercial and industrial properties will continue to offer attractive cap

rates. While there may be some contraction in major markets such as Los Angeles, New York, and San

Francisco due to overpriced valuations in the tech sector and restrictions on foreign currency transfers from

China, this is not likely to spill over to the broader market, which may actually experience a boost from this

spillover effect.

Since passage of the Securities Act of 1933, private companies have been prevented from soliciting

investment capital from the general public, and individuals were not allowed to invest in many opportunities

unless they were classified as accredited investors. With the passage of the Jumpstart Our Business Startups

(JOBS) Act in April of 2012, also known as “the crowdfunding bill”, the ban on general solicitation that

prevents entrepreneurs from publicizing their investment opportunities was removed. The Securities and

Exchange Commission finalized the necessary regulations in early 2013, resulting in swift growth of the

crowdfunding industry. Regulation A+ went into effect in June 2015, allowing companies to solicit

investment through securities sales directly to the public.

The global real estate crowdfunding market is expected to continue increasing in value, with total US

crowdfunding estimates ranging from $200 to $225 Billion by 2020, and total global crowdfunding

estimates ranging up to $490 billion by 2020.15 The overall volume of investment in real estate

crowdfunding has grown exponentially from $19.1 Million in 2012 to over $5.5 Billion in 2017, equivalent

12 “Real Estate and Rental and Leasing - US Market Research Report.” Real Estate and Rental and Leasing - US

Market Research Report, IBIS World, www.ibisworld.com/industry-trends/market-research-reports/real-estate-

rental-leasing/.

13 Ramírez, Kelsey. “Value of U.S. Housing Market Climbs to Record $31.8 Trillion.” HousingWire.com, 29 Dec.

2017, www.housingwire.com/articles/42176-value-of-us-housing-market-climbs-to-record-318-trillion.

14 “Commercial Real Estate - US Market Research Report.” IBISWorld, June 2018, www.ibisworld.com/industry-

trends/market-research-reports/real-estate-rental-leasing/commercial-real-estate.html.

15 Swart, Richard. “Crowdfunding Industry Statistics 2015 2016.” Massolution/Crowdsourcing.org 2015CF

Crowdfunding Industry Report, 31 March 2015, http://crowdexpert.com/crowdfunding-industry-statistics/.

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to a compound annual growth rate of 210% per year.16 BuildingBits has an opportunity to capture significant

market share as investors become more familiar with crowdfunding as a viable alternative to traditional

investments.

Given the increase in US crowdfunding and the market share of professionally managed real estate, there

is a unique opportunity to fuse these models, allowing non-accredited investors to claim their share of the

US real estate market through the crowdfunding model.

Target Market

BuildingBits’ primary target demographic is Millennials, defined by researchers as those born between

1982 and 2004. This generation has played a key role in driving change in the financial services industry,

in essence helping to create the market in which BuildingBits will compete.

The Company's primary target customer is an individual who is a non-accredited investor in their late

twenties to late forties (Millennials and Gen X).17 These individuals will likely be familiar with

crowdfunding, and they may have explored real estate crowdfunding in the past. They may have also

participated in crowdfunding, such as a Kickstarter or Indiegogo campaign.

A secondary target customer within this demographic is defined by Goldman Sachs as HENRY’s (High

Earning Not Rich Yet). These individuals are likely between the ages of 25 and 45, likely earn more than

$100,000 annually, and tend to have $500,000 or more in investable assets. These individuals tend to be

early adopters of technology and are likely familiar with crowdfunding. These investors may own a home,

which is the largest real estate investment they have made to date.

This overall target market will likely be new to the commercial real estate industry. The Company's target

customers will not necessarily be experienced or astute investors. They may be investing in commercial

real estate for the very first time. While this group is not immediately as lucrative as accredited investors,

they represent a significant growth opportunity and will likely outpace existing accredited investors as the

millennial generation grows their wealth.

In April 2016, the U.S. Census Bureau estimated that Millennials in the U.S. (numbering 75.6 Million)

surpassed Baby Boomers (numbering 74.9 Million) as America’s largest generation. This demographic

16 “5 Real Estate Crowdfunding Stats That Will Make You Invest.” Bricksave, 25 May 2017,

https://www.bricksave.com/news/5real-estate-crowdfunding-stats-to-make-you-invest/.

17 Gen X is defined as individuals born between 1965 until 1980 according to Pew Research Center Demographics.

http://www.pewresearch.org/methodology/demographic-research/definitions/.

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accounts for roughly one-quarter of the U.S. population. The number of Millennials is expected to peak at

81 Million by 2036 before it begins declining. Millennial purchasing power is expected to increase to $1.4

Trillion by 2020.

This type of target customer is considered low-hanging

fruit for BuildingBits. Their participation as investors

shows that they have the income and investment

wherewithal to understand, engage, and derive value

from commercial real estate investments. In addition, if

these individuals are searching online, they are likely

aware of recent technological advances in

cryptocurrencies, blockchain, and crowdfunding.18

The unique structure of the BuildingBits platform is

likely to appeal to our target demographic. Our target

market will have access to a lucrative class of

investments from which they have been barred in the

past. They will have the ability to manage their

investments as they see fit, thanks to the liquidity

provided by our business model and the ability to

customize their real estate portfolio. Finally, they will

have the ability to support not only individual companies

with which they feel a meaningful connection or that they

view as socially responsible, but also the buildings that

such companies occupy, paying rent directly to the

investors who selected the LLC shares that correspond to

their buildings of choice.

Competitive Landscape

The drawbacks of traditional real estate crowdfunding platforms are their lack of liquidity, the inability to

customize a portfolio, and lack of access for non-accredited investors. Moving to a fully compliant

blockchain-based platform addresses all of these problems for our target market. Currently, there are some

other notable companies that are poised to compete with BuildingBits in the decentralized real estate

18 Fry, Richard. “Millennials Overtake Baby Boomers as the largest generation”. Pew Research Institute, April

2016, http://www.pewresearch.org/fact-tank/2016/04/25/millennials-overtake-baby-boomers/.

Figure 3: Projected population by

generation in the US (in Millions).10

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crowdfunding market. These other companies are either still developing their core platform, or they are not focused on serving the same market,

allowing BuildingBits to differentiate itself from these competitors. A comparison between BuildingBits and its competitors in the decentralized real

estate crowdfunding market is shown in Table 1.

Table 1. Comparison between blockchain-based real estate crowdfunding platforms.

As shown in Table 1, BuildingBits is the only blockchain-based real estate crowdfunding platform that is focused on providing US commercial real

estate investment opportunities to non-accredited US investors while satisfying all the demands of our target market. Other platforms (e.g., Propy,

I-House, and Brickblock) do not have a finished product and are at a disadvantage compared to BuildingBits, especially in the commercial real estate

market. The closest competitor is Slice, which has many of the same features and is in the same development stage as BuildingBits. However,

BuildingBits has differentiated itself as Slice does not intend to focus on offering investment opportunities for non-accredited investors. BuildingBits

is also the only company in the list that has registered its tokenized corporate equity as a US security.

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BuildingBits also enjoys significant advantages over its traditional real estate crowdfunding competitors.

BuildingBits offers greater liquidity than all of its traditional competitors and is one of only three platforms

that allows non-accredited US investors to participate. Based on the above comparison in both areas, one

can see that BuildingBits holds a significant advantage over many of its competitors in the crowdfunding

commercial real estate market and has clear points of differentiation.

Capital Flow and Revenue Model

The long-term success of BuildingBits is primarily dependent on the Company's ability to deliver

consistent, tangible, and quantifiable value to its key stakeholders. BuildingBits will collect revenue from

rental payments by occupants of commercial properties. Individual investors in properties and BuildingBits

are entitled to a pro rata share of this income stream (less expenses). In return for managing the properties

and the secondary real estate marketplace, BuildingBits will deduct a 0.75% management fee on the value

of each property. Figure 4 below shows how capital flows from investors to commercial properties, as well

as how revenue is shared between BuildingBits and investors.

Figure 4: Flow of capital between investors, BuildingBits, and properties.

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All investment properties will be managed exclusively by the Management Team or Manager(s), which

will have exclusive authority to purchase and sell each and every asset. Consequently, the Management

Team will have the right to sell each piece of property and will set the terms and conditions by which each

piece of property will be transacted. Because investors own shares of any property that is liquidated,

proceeds from the sale of a property will be disbursed to investors once the sale has completed.

Financial Projections

The Company’s goal is to raise approximately $25 million of equity from the crowd of investors, which

would be deployed into the acquisition of the crowd selected investment properties in the first year of

operations. The Company estimates it will spend continuously on aggressively expanding its investor base

and, therefore, Net Income is expected to run from a pre-tax net loss of $1,216,000 in year one, up to a net

gain of $554,000 in Year 2. From there, the Company expects to see rapid efficiencies of scale and produce

steady net earnings growth of up to $49 Million by Year 6.

The Company’s goal is to reach 15,000 active investors, acquire $293 Million in assets under management

by the end of Year 2, and become cash-flow neutral by the end of that year and profitable in the following

year. The table below shows the Company’s financial projections up to Year 6.

Table 2. Financial projections over the next 6 years.

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Exit Strategy

All tokens representing equity in BuildingBits Holdings, LLC that were purchased during STO must be

held by investors for 12 months. After 12 months have passed, the tokens will become tradable on major

cryptocurrency exchanges. Tokens representing equity in a BuildingBits SPV are considered unrestricted

securities and may be traded immediately on the secondary market, or on other exchanges that will support

these tokens.

Token Offerings and Business Development

Business development is divided into the following phases:

Phase I – This phase is focused on developing the BuildingBits technology platform and

ecosystem. This phase is now complete, with additional features being added daily.

Phase II – Investors will have the opportunity to purchase tokenized shares in BuildingBits

Holdings, LLC, the Company that owns the technology platform and offers a marketplace for

individual buildings and tokenized assets.

Phase III – Investors will have the opportunity to purchase tokens in companies that own individual

buildings.

BuildingBits will be conducting a number of token offerings for interested investors. Each offering will

allow investors to own corporate shares of BuildingBits or own shares in companies owning commercial

properties. Each token offering corresponds to a separate phase of business development.

The following tokens are required to operate within the BuildingBits ecosystem:

Corporate Token (ERC2019 security token) – Offered for sale during Phase II. Each token

represents an equity share in BuildingBits Holdings LLC. Stored on the Ethereum Mainnet20.

Investors who purchase these tokens do not own any real estate directly, but instead own a piece of

the entire BuildingBits ecosystem.

19 ERC20 is an Ethereum technical standard used to integrate tokens with smart contracts on the Ethereum

blockchain. 20 The Ethereum Mainnet is the primary portion of the blockchain network wherein token transactions take place on

a distributed ledger.

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Reward Token (ERC20 utility token) – AirDropped to investors participating in Phase II. These

tokens are used to access discounts and special features within the BuildingBits platform. Reward

Tokens are to stored in an investor’s ERC20 compatible wallet on the Ethereum Mainnet.

Property Token (ERC20 security token with associated ERC721 utility token21) – Offered for

sale during Phase III. These tokens represent shares in companies that own real estate assets. The

ERC20 token is stored on the Ethereum Mainnet, and the associated ERC721 token is stored on the

Company’s private Consortium Chain22.

Settlement Token (ERC20 utility token) – Used to pay dividends to owners of property tokens.

These can be used to purchase Property Tokens in new real estate properties or in existing

properties on the secondary real estate marketplace. These tokens are stable, will not be tradable

on another exchange, and are exchangeable for a fixed amount of fiat. Stored on the Ethereum

Mainnet.

Phase I: Platform Development

The main goal of this phase is to create a platform which allows individual investors to choose and invest

in an individual commercial real estate property and receive recurring rental income. The platform has been

developed and has launched. Phase I of business development has concluded and the company is preparing

to move to Phase II.

21 ERC721 is another Ethereum technical standard that defines a set of behaviors and events that involve the

movment, ownership, and information regarding non-fungible items. 22 BuildingBits will deploy a privately-owned side-chain that interfaces with the Ethereum Mainnet.

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Figure 5: High-level platform architecture (Phase I).

Figure 6: Screenshot of a property summary on the BuildingBits web platform.

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Figure 7: BuildingBits investment portal.

Figure 8: Browsing new properties on the BuildingBits web platform.

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Phase II: Corporate Token Offering

BuildingBits will conduct a Security Token Offering (STO) during Phase II. Investors will have an

opportunity to purchase Corporate Tokens that represent preferred equity in BuildingBits Holdings LLC.

Tokens generated during this STO will be encoded on the Ethereum blockchain due to its clear advantages

over other blockchain protocols:

● Market acceptance - Ethereum is the most popular platform for token offerings.

● Easy to invest - Most crypto wallets and tokens are encoded on the Ethereum blockchain. This

makes the token sale event much more accessible for potential investors.

● ERC20 token standard - This is the most popular token standard and is supported by numerous

crypto wallets. Moreover, ERC20 tokens are readily accepted by crypto exchanges from a technical

perspective, thus providing liquidity to investors.

● Massive blockchain - The Ethereum public network is supported by more than 50,000 nodes and

is one of the most stable blockchain platforms in the world.

Corporate Tokens will be stored on the Ethereum Mainnet in investor wallets. Investors must have an

ERC20 compatible wallet to receive their tokens. Deployment and distribution of these security tokens will

be supported by an appropriate BuildingBits smart contract.

This offering will be conducted through a Reg. D/Reg. S securities registration exemption. As such, these

tokens are considered restricted securities and may not be traded during the first year of ownership. Every

interested investor must pass a KYC/AML process and may need to provide proof of accreditation in order

to be eligible to participate in this STO.

Variable value Yes

Tradable on crypto-exchanges Yes

Tradable p2p Yes

Access to BuildingBits Platform Yes

Fractional Trading Yes

Available worldwide Yes

Managed and exchanged via BuildingBits Wallet Yes

Table 3. Main characteristics of BuildingBits Corporate Tokens

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Token type ERC20

Fees Ethereum Gas

Max supply 40 million

Tokenized equity 10%

Timed/tiered discounts Yes

Vesting period 3 years

Accepted contributions Fiat, BTC, ETH, LTC

Table 4. Corporate Token offering details

BuildingBits will encode 10% of Company equity as Corporate Tokens. Of the 40 million Corporate Tokens

that will be created, 34 million (85%) Corporate Tokens will be offered for sale to investors, and the

remaining 6 million (15%) will be used to provide employee options, cover broker commissions, and

compensate advisors. Figure 9 below shows the distribution of Corporate Tokens.

Figure 9: Distribution of Corporate Tokens.

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Reward Tokens

Also, as an additional incentive, users that have purchased Corporate Tokens during Phase II will be able

to use their Reward Tokens to access special features on the BuildingBits platform. Each Reward Token is

an ERC20 token that is stored on the Ethereum Mainnet. These tokens are only usable within the

BuildingBits ecosystem and entitle their holders to discounted fees (including, but not limited to, exit fees

and trading fees) when they purchase shares of investment properties during Phase III and early access to

future Corporate Token sales at a discounted price.

Each Corporate Token holder will receive ERC20 Reward Tokens through an AirDrop. These tokens will

be stored in an ERC20 compatible wallet on the Ethereum Mainnet. Currently, these utility tokens will not

be tradable on an outside exchange and only provide benefits to owners of Corporate Tokens. These tokens

are non-transferrable and only exist within the BuildingBits platform.

Once an investor has redeemed their Reward Tokens, an appropriate burning smart contract will burn them

in order to remove them from circulation.

Phase III: Property Token Offering

Property Tokens are ERC20 standard tokens that represent a share of ownership in a BuildingBits SPV

(Special Purpose Vehicle), which is a company that owns a real estate asset. Property Tokens will be

tradable within the BuildingBits secondary real estate marketplace when it becomes available. BuildingBits

will also work to have these tokens listed for trade on external exchanges.

Property Tokens will be offered for sale to investors during Phase III. Investors will have an opportunity to

invest in real estate assets through a BuildingBits SPV, which is a separately registered legal entity and will

be qualified with the SEC under Reg. A+ and/or Reg. CF. Once the hard/soft capitalization is reached, the

BuildingBits SPV will invest the proceeds from each offering in the chosen real estate assets and tokenize

those properties. Investors will own a share of their chosen properties at 1 to 1 parity with respect to the

invested funds (both crypto and fiat). These STOs allow BuildingBits to develop its own real estate

marketplace using blockchain technology.

BuildingBits Holdings, LLC will develop its own private Consortium Chain as a sidechain of the Ethereum

Mainnet by deploying its own nodes. Developing this sidechain will support transaction execution and the

platform’s overall operational flow without the need to charge additional gas23 fees to users. Only a single

node needs to be deployed initially, and more nodes can be deployed later as transaction volumes and

23 Gas is the price required to successfully execute a transaction or contract on the Ethereum blockchain. ERC20

tokens have significantly lower gas fees than ERC721 tokens.

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required storage capacities increase. To keep the platform more secure, the company will develop an

anchoring feature that allows BuildingBits’ transaction hashes to be written in the Ethereum Mainnet as a

data back-up solution.

Each ERC20 Property Token will have an associated ERC721 standard token that will be deployed on the

BuildingBits Consortium Chain. These tokens will be only used for the platform’s internal requirements

and will not reside in an investor’s wallet. These tokens are simply internal utility tokens that are not

tradable on crypto exchanges. This is a unique token standard that allows the company to store value (in

our case - real estate documentation) and unique owner ID(s) related to a particular real estate asset(s). A

user’s ownership information will be hashed and stored on the Consortium Chain using this token standard.

New users will be able to enter the BuildingBits platform and invest into their chosen real estate assets by

purchasing Property Tokens from other users. They can also participate in new offerings as they become

available on the platform. Each new offering will require the minting24 of new Property Tokens and their

associated ERC721 tokens.

Settlement Tokens

Dividends to users will be paid in ERC20 utility tokens. Each token represents a fixed amount of fiat, and

a user can redeem these tokens for their share of fiat dividends at any time. Alternatively, users may use

these tokens to reinvest in a new property or purchase shares in an existing property from another user

through the secondary real estate marketplace. Using these tokens in this way prevents the need for

repetitive bank transfers between BuildingBits and a user.

Users can also receive new Settlement Tokens through the BuildingBits platform and use them to purchase

Property Tokens. A user will receive new Settlement Tokens when they deposit fiat onto the platform.

Because these tokens are redeemable for an equivalent amount of fiat, these tokens do not have a market

price and function in the same way as a stable coin25. Creating tokens in this way allows a user’s dividends

to be encoded on the Ethereum blockchain while simultaneously ensuring that dividends do not fluctuate

in value.

Whenever a BuildingBits SPV receives revenue from a commercial property, new Settlement Tokens will

be minted and distributed to a user’s wallet. Upon redemption for an equivalent amount of fiat, these tokens

24 “Minting” refers to the process of creating new tokens under certain conditions. In this case, new Property Tokens

are created whenever a new property is offered for sale to investors. 25 “Stable coins” are coins or tokens that are only tradable for a fixed amount of fiat. Contrary to typical

cryptocurrencies, the value of a stable coin does not fluctuate.

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will be burned and removed from circulation. These tokens are only usable within the BuildingBits platform

and will not be tradable on outside exchanges.

BuildingBits Hybrid Blockchain Platform

Users interact with the system through the Company web platform (DApp26). Users can freely transact

public tokens between each other on the Ethereum Mainnet, and users must pay their own gas fees. Users

can also exchange Corporate Tokens on exchanges that list BuildingBits Coins with the same gas fees.

Exchanges may charge their own transaction fees.

To reduce transaction fees and increase transaction throughput,27 BuildingBits is developing a hybrid

blockchain solution that combines the Ethereum public blockchain with a private Consortium Chain. This

reduces transaction costs when trading Property Tokens. Any node on the Ethereum Mainnet that executes

a transaction involving a BuildingBits ERC20 token charge fees (gas). However, users will never have to

pay fees for any ERC721 transactions processed through the Consortium Chain.

Communication between the Ethereum Mainnet and the Consortium Chain is implemented using a Gateway

Node (see Figure 10). Using the Gateway Node to read balances on a user’s public wallet allows the

platform to mirror transactions to a user’s BuildingBits wallet on the Ethereum Mainnet. This allows any

smart contract stored on the Consortium Chain to query a user’s wallet. This also allows a user of the

BuildingBits platform to transfer the associated ERC721 tokens directly to a smart contract stored on the

Consortium Chain in order to trigger various events within the ecosystem.

Figure 10 shows how the Ethereum Mainnet and the Consortium Chain make use of the Gateway Node for

communication.

26 DApp stands for “distributed application” and refers to any application capable of interacting with a blockchain.

In this case, the BuildingBits DApp is the web platform that sends and receives information from the Ethereum

Mainnet and the Consortium Chain. 27 The Ethereum blockchain can provide transaction speeds up to 20-25 transactions per second.

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Figure 10: Ethereum Mainnet and Consortium Chain communication architecture.

Whenever a Property Token is traded on an external exchange, the ownership information encoded in the

associated ERC721 token must be changed to match the new owner of the Property Token. The new owner

must login to the DApp and transfer their purchased Property Tokens to their BuildingBits wallet address.

This forces the platform to trigger the BB SC to read the user’s wallet address and prior transactions.

The BB SC accesses the Ethereum Mainnet via the Gateway Node notes the transfer of Property Tokens

and obtains the new ownership. This is allowed by implementing a Plasma Cash28 payment gateway on the

Gateway Node. Plasma Cash is a unique ownership solution; the protocol creates a unique token on the

Ethereum Mainnet that mirrors transactions in ERC20 property tokens. This creates a record of all

ownership changes for a user’s Property Tokens. The BuildingBits Smart Contract (BB SC) can then access

records of all ownership changes by reading the user’s Plasma Cash token and update ownership changes

in the ERC721 token as necessary.

Figure 11 shows how this process is implemented across an external exchange, Ethereum Mainnet, and

Consortium Chain.

28 Plasma Cash is a unique scalability solution for the Ethereum blockchain. It allows ownership changes in specific

tokens to be tracked and verified without reading the entire blockchain. This significantly reduces processing time.

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Figure 11: Property Token ownership transfer process.

Platform Architecture

Corporate Token Offering and Disbursement

Users that invest into the platform will receive Corporate Tokens representing equity shares in BuildingBits

Holdings, LLC. This security token offering (STO) for Corporate Tokens will be conducted using the

ERC20 standard on the Ethereum blockchain. Figure 12 shows how a user will interact with the BB SC via

the DApp.

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Figure 12: Corporate Token Generation Event.

Investors wishing to purchase Corporate Tokens must first pass a KYC/AML process29. All required

documentation must be uploaded through the DApp. After KYC/AML verification, the investor will be

allowed to purchase tokens using either fiat or cryptocurrency.

Investing with Crypto: If an investor chooses to purchase Corporate Tokens using a cryptocurrency, they

must send coins to the BuildingBits corporate wallet address using their native wallet application.

BuildingBits will exchange all received cryptocurrency for fiat on a crypto exchange. BuildingBits will

then deposit the fiat in its corporate bank account.

Investing with Fiat: If an investor wishes to purchase Corporate Tokens with fiat, BuildingBits will initiate

an ACH or wire transfer from the investor’s bank account to either the corporate bank account or to an

independent 3rd party escrow account.

29 “KYC/AML” refers to Know Your Customer and Anti-Money Laundering practices. These checks involve

collecting certain identifying information from investors.

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Once BuildingBits confirms the fiat transfer was successful, the BB SC is pinged regarding successful

transfer of funds. Purchase documentation is stored in the BB SC as a hash value, and the original files are

stored on an internal data server (“BB data storage” in Figure 10).

The BB SC will execute the Token Generation Event (TGE) once an eligible investor purchases Corporate

Tokens during STO. Similar to Corporate Tokens, Reward Tokens are also developed on the Ethereum

blockchain and are generated under their own smart contract. Reward Tokens are minted and disbursed

only after the Corporate Tokens are purchased and generated. Disbursement of Corporate Tokens and

Reward Tokens follows the process outlined below:

Figure 13: Corporate Token and Reward Token disbursement.

When the STO ends, the BuildingBits Reward Smart Contract listens to the BB SC and to the BB data

storage. Based on the number of Corporate Tokens the investor purchased, the BuildingBits Reward Smart

Contract mints Reward Tokens. Corporate Tokens and Reward Tokens are disbursed to a wallet address

that is linked to an investor’s DApp. Investors automatically receive confirmation via the DApp when they

receive their Reward Tokens. If a user chooses, they can transfer their tokens to their personal ERC20

compatible wallet.

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Property Token Offering and Disbursement

An STO for tokenizing real estate assets will be conducted during Phase III. Sale and disbursement of

ERC20 Property Tokens will be supported by deploying ERC721 standard tokens. Each Property Token

represents a share of a BuildingBits SPV and entitles the owner to periodic dividends from commercial

properties. ERC20 Property Tokens will be deployed on the Ethereum Mainnet, and the associated ERC721

token will be encoded on the private Consortium Chain.

Figure 14: Property Token offering and disbursement.

Each investor that wishes to purchase Property Tokens must pass the same KYC/AML process as users that

purchased Corporate Tokens. After KYC/AML verification, the investor will be allowed to purchase tokens

with either fiat or cryptocurrency.

Investing with Crypto: If an investor chooses to purchase Corporate Tokens using a cryptocurrency, they

must send coins to the BuildingBits corporate wallet address using their native wallet application.

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BuildingBits will exchange all received cryptocurrency for fiat on a crypto exchange. BuildingBits will

then deposit the fiat in its corporate bank account.

Investing with Fiat: If an investor wishes to purchase Property Tokens with fiat, BuildingBits will initiate

an ACH or wire transfer from the investor’s bank account to either the corporate bank account or to an

independent 3rd party escrow account.

Once BuildingBits confirms the fiat transfer was successful, the BB SC is pinged regarding successful

transfer of funds. Purchase documentation is stored in the BB SC as a hash value, and the original files are

stored on an internal data server (“BB data storage” in Figure 5).

When the STO ends, the BB SC mints new Property Tokens and associated ERC721 tokens. Property

Tokens are disbursed to a wallet address that is linked to an investor’s DApp. The associated ERC721 is

encoded in a separate wallet address on the Ethereum Mainnet. Investors automatically receive

confirmation via the DApp regarding completion of the real estate purchase and regarding receipt of their

Property Tokens. If a user chooses, they can transfer their Property Tokens to their personal ERC20

compatible wallet. ERC721 tokens are not transferrable off of the Consortium Chain.

Real Estate Tokenization Process

Real estate assets will be tokenized by minting Property Tokens and their associated ERC721 tokens

whenever a new property is financed through an STO. Property Tokens are standard ERC20 tokens, while

an ERC721 token functions like a container that stores proof of ownership for real estate investors. Each

investor is assigned a unique Owner_ID, and a real estate property is linked to a user through their

Owner_ID.

One should note that it is possible to develop a similar ERC721 tokenization process on the Ethereum public

blockchain. This would create huge operational costs because the ERC721 token standard requires

significant computational power. Each computation on the Ethereum blockchain requires fees (known as

“gas”); moving the computations required for ERC721 tokens to the private Consortium Chain removes the

requirements for users to pay transaction fees whenever they trade Property Tokens.

After conducting each STO for Property Tokens, the BB SC listens and verifies all required data regarding

an investor’s ownership of some particular property and mints an ERC721 token based on the verified

information. This token is stored on the Consortium Chain in a private wallet. This token is not transferrable,

and the information encoded in this token standard cannot be modified without an investor’s approval (i.e.,

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cryptographic signature30). As soon as an investor has been assigned an ERC721 token, they will receive

notification via the DApp. The overall tokenization process is shown in Figure 15.

Figure 15: Real estate tokenization process.

When a Property Token STO ends, the BB SC on the private Consortium Chain listens to BB data storage

regarding their purchase of Property Tokens and the associated properties. The BB SC then creates a wallet

for an investor on the Consortium Chain. The BB SC then mints an ERC721 token with a unique Owner_ID

that stores all information regarding the investor’s ownership and the real estate asset. The new ERC721

token is stored on the Consortium Chain in the investor’s wallet. The investor is notified of the successful

transaction and tokenization through the DApp.

30 A cryptographic signature is generated using a private key. A private key functions just like a PIN number for a

debit card and is used to secure all cryptocurrency wallets.

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Settlement Token Disbursement and Redemption Process

Property Token holders are entitled to periodic cash flows from their properties. However, distributing

dividends to Property Token holders using repetitive fiat transfers can become expensive due to transaction

fees charge by banks. Therefore, dividends will be paid to investors using ERC20 Settlement Tokens. This

process is supported by the BB SC deployed on the Ethereum public blockchain.

Settlement Tokens will only be minted at the time dividends are accrued by the BuildingBits platform, and

a Property Token holder’s pro rata share will be transferred to their wallet. A Property Token holder can

exchange their Settlement Tokens for an equivalent amount of fiat on a recurring schedule. This is handled

through the BuildingBits web platform. Each Settlement Token can be redeemed for a fixed amount of fiat

(USD), and this exchange rate will never change. Once a Settlement Token is exchanged for fiat with

BuildingBits, the token will be burnt.

Figure 16: Settlement Token disbursement process.

Settlement Token disbursement is conducted via the following process:

1. The BB SC queries each investor’s wallet for the number of Property Tokens.

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2. At the same time, the BB SC listens to the BuildingBits bank account and BB data storage regarding

cash flow generated by real estate.

3. Based on this information, the BB SC mints ERC20 Settlement Tokens and sends them to an

investor’s wallet.

4. The investor can decide whether to convert their Settlement Tokens into fiat or use them towards

the purchase of new Property Tokens. This will follow one of the following three processes:

a. If the investor decides to use their Settlement Tokens to purchase Property Tokens from

another user, the Settlement Tokens will be transferred to the seller as a form of payment

upon completion of a purchase. The seller of the Property Tokens can then choose to use

the Settlement Tokens as they wish.

b. If the investor decides to use their Settlement Tokens to purchase ownership in a new

property, the Settlement Tokens will be burned once the new Property Tokens are

purchased. The Settlement Tokens will be redeemed for an equivalent portion of their

investment in Property Tokens.

c. If the investor decides to redeem their Settlement Tokens for fiat, the Settlement Tokens

will be burned and an equivalent amount of fiat will be transferred to the investor’s bank

account.

Reward Token Utilization Process

Users wishing to redeem their Reward Tokens received during the Property Token TGE will receive

additional discounts when investing in new commercial properties. These tokens may also be used to access

discounted fees on the BuildingBits secondary real estate marketplace.

Reward Token holders submit their redemption requests via the DApp on the BuildingBits platform. Upon

submitting a redemption request, the DApp sends a user’s Reward Tokens to the BuildingBits Reward

Smart Contract. The BuildingBits Reward Smart Contract verifies the validity of these utility tokens by

checking against data in BB data storage.

When the reward tokens are verified, the BuildingBits Reward Smart Contract pings the BB SC for special

discounts for that particular user. The BB Reward SC sends the applicable reward data to the BB SC, and

the BB Reward SC burns the redeemed Reward Tokens. The user receives final confirmation via the DApp,

and the appropriate reward or discount is applied to the user’s next purchase of Property Tokens or

Corporate Tokens.

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Figure 17: Reward Token redemption process.

Secondary Real Estate Marketplace

BuildingBits is building its own decentralized marketplace for real estate assets. This will enable users to

trade their Property Tokens in a distributed and secure manner with full transparency. Users can enter the

secondary real estate marketplace using the BuildingBits DApp. Both fiat and/or crypto can be used to

purchase Property Tokens on the secondary real estate marketplace.

The BuildingBits platform matches sellers and buyers automatically, just as is the case on a typical

cryptocurrency exchange. This provides transparency and equal rights to all BuildingBits users. The BB

SC also checks the availability of funds in a buyer’s wallet and executes a transaction after receiving

confirmation. This is implemented with multi-signature transactions that require two out of three signatures

to send/receive payments.

Upon completion of a sale, the BB SC automatically encodes the Buyer’s ownership information in the

ERC721 token. In return, the Seller receives Settlement Tokens that can be exchanged for fiat at a fixed

exchange rate, just as is the case for Settlement Tokens. The Seller could convert these utility tokens to fiat

or withdraw them at any time.

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When the Buyer has their new ERC721 token assigned to their private Consortium wallet, they could verify

their ownership with the BB data storage or by querying the blockchain at any time. Transaction history

will be stored in a hash value in the BB SC on the Ethereum public blockchain using the SHA-256 hash

function. A duplicate of this information is stored in BB data storage.

Figure 18: Secondary real estate marketplace architecture.

Before purchasing Property Tokens, the user must deposit either fiat or a cryptocurrency to their account

on the BuildingBits platform. In case of using fiat, a potential buyer must send fiat to the BuildingBits bank

account. In the case of a cryptocurrency, buyer must send crypto to the BuildingBits corporate wallet via

their wallet application. The Payment gateway then listens to the BuildingBits corporate wallet and the

BuildingBits corporate bank account. When the BuildingBits wallet receives funds, the Payment gateway

will send an appropriate amount of Settlement Tokens to the buyer’s wallet on the Consortium Chain.

Sellers and Buyers place their orders with the secondary marketplace just as they would on a typical

cryptocurrency exchange. The secondary market matches sellers and buyers, and the BB SC checks whether

buyer has adequate funds. When the BB SC confirms availability of funds, the transaction can be executed.

The BB SC removes the seller’s Owner_ID (old ownership) from the ERC721 token and changes ownership

to the new Owner_ID (new ownership). BB SC assigns the ERC721 token to the buyer’s wallet on the

Consortium Chain and sends the appropriate number of Settlement Tokens to the seller.

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The buyer receives notification of the completed transaction through the DApp. The seller now has the

option to immediately redeem their Settlement Tokens with BuildingBits for fiat at a fixed exchange rate.

Alternatively, the seller can use them to purchase other Property Tokens.

Note that Settlement Tokens could also be used to complete a Property Token transaction. This follows the

same process outlined in this section.

Token Specifications

Ethereum-based tokens

ERC20 Corporate Token on Ethereum Mainnet

Corporate Tokens on public Ethereum Mainnet will be used for the following purposes:

1. Public STO for fundraising

2. Listing on public exchanges

3. Direct transactions between users outside BuildingBits platform

ERC20 utility tokens on Ethereum Consortium Chain

All ERC20 utility tokens will be used for the following purposes:

1. Reward Token: Used to receive some discounts and additional benefits inside BuildingBits

platform.

2. Settlement Token: Accounting of revenues generated by real estate assets (ROI) and conversion

of dividends to fiat. Also used to purchase Property Tokens or Corporate Tokens through the

BuildingBits secondary exchange market.

Key features of token economics:

1. Unlimited supply of ERC20 utility tokens inside the Consortium Chain environment.

2. Only usable within the BuildingBits ecosystem, non-transferrable, and not tradable on any external

exchange.

3. Zero fees required for using these ERC20 tokens. Gas will be stored in a company wallet on the

Consortium Chain in order to secure smart contracts from self-DDOS attacks.

ERC721 Tokens on the Consortium Chain

ERC721 tokens on the Consortium Chain are used for the following purposes:

1. Each investor in Property Tokens will be assigned a particular ERC721 token.

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2. The value of a real estate asset is encoded in the ERC721 token, which will define appropriate

amount of Property Tokens on the Ethereum Mainnet.

3. A user’s Owner_ID is stored in the ERC721 token’s metadata so that it will be impossible to sell

or transfer real estate ownership to another user without the owner’s involvement.

Key token economic features of the ERC721 token:

1. Unlimited deployment of ERC721 tokens with no additional fees.

2. 0 fees for running ERC721 tokens within the Ethereum consortium chain. Gas will be stored in a

company wallet on the Consortium Chain in order to secure smart contracts from self-DDOS

attacks.

Once a token is sold and it is no longer needed, BuidingBits could burn the old ERC721 token by erasing

its metadata and then assign its account number to the last minted ERC721 token. This effectively burns a

sold ERC721 token. The BuidingBits system will subsequently assign a new ERC721 token to the user that

contains the current ownership information.

Platform Software Architecture

Technical description of the platform architecture:

● Front-end of BuildingBits - Java (Jdk1.8.x/Jre1.8.x open source Java libraries - robust, secure and

platform independent; Java script for UI libraries to design the front-end components).

● Front-end of off-chain elements - Java (Java script for UI libraries to design the front-end

components), Django (administration of front-end), Web3.js (communication with Ethereum

blockchain and smart contracts).

● Databases - MongoDB/RocksDB (database management), Apache Kafka (databases and other

systems communication).

● Portfolio storage - MongoDB/RocksDB (database management), Apache Kafka (database and

other system communication).

● Back-end of off-chain elements - Spring (support development stack at each level whether security,

messaging, data handling), Hibernate (ORM tool to map java classes to database tables).

● Communication with 3rd party systems - RESTful API, Docker.

● Every communication channel that is used within our platform (between nodes, data storage, users

DApp, etc.) is encrypted and secured by SSL/TLS certificates. This allows us to establish fully

encrypted channels within our on/off-chain infrastructure.

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Timeline of Releases

Private pre-sale of Corporate Tokens is scheduled to begin on October 1, 2018. Up to 10% (3.4 million)

of available tokens will be sold during the private pre-sale, with the remainder sold in two public sale

phases.

Event Private Pre-Sale

Platform Ethereum Mainnet

Token standard ERC20

Token supply Up to 3.4 million

Start date October 1, 2018

End date November 15, 2018

Price $1 or equivalent in crypto

Accepted cryptocurrencies ETH, BTC, BCH, LTC

Accepted fiat currencies USD

Sale will end at one of this event All tokens sold or sale period ends

Event Public Pre-sale

Platform Ethereum Mainnet

Token standard ERC20

Token supply Up to 6.8 million

Start date November 15, 2018

End date January 15, 2019

Price $1 or equivalent in crypto

Accepted cryptocurrencies ETH, BTC, BCH, LTC

Accepted fiat currencies USD

Sale will end at one of this event All tokens sold or sale period ends

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Event Public Sale

Platform Ethereum Mainnet

Token standard ERC20

Token supply All remaining tokens

Start date January 16, 2019

End date March 1, 2019

Price $1 or equivalent in crypto

Accepted cryptocurrencies ETH, BTC, BCH, LTC

Accepted fiat currencies USD

Sale will end at one of this event All tokens sold or sale period ends

*Availability of tokens will depend upon amount sold during pre-sale

Please contact BuildingBits management for additional discount information.

Team

The top managers of the Company have extensive experience in every aspect of the project, ranging from

real estate investing to asset management, e-commerce marketing, and operations. Together, they have a

combined 98 years of industry experience and 124 years of executive management experience.

Alexander Aginsky - Principal Shareholder, Founder and Chief Executive Officer

Mr. Alexander Aginsky is a Founder, Principal Shareholder, and Chief Executive Officer of BuildingBits.

Mr. Aginsky is a serial entrepreneur, investor, consultant, mentor, and seasoned executive with decades of

experience in private equity, venture capital, and commercial real estate. Prior to founding the company

Mr. Aginsky was the Managing Director of the Portland-based Aginsky Group of Companies (ACG),

which, for over a decade, focused on creating value for its clients (most of which are foreign High Net

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Worth Individuals and mid-market companies in emerging economies) through global arbitrage

opportunities and unique crossborder investment strategies, primarily into commercial real estate structures.

Mr. Aginsky led project teams, which identified and executed investments for the firm’s global clientele of

well-heeled savvy investors across a myriad of asset classes from Private Equity and Venture Capital to

commercial real estate and LBOs. Additionally, Mr. Aginsky’s work with the EB-5 Immigration Investment

Program has been internationally recognized with regular features in various noteworthy publications like

CNBC, Euronews, Reuters, Moscow Times, and many others. Under the leadership of Mr. Aginsky, ACG

has successfully completed a myriad of transactions across multiple asset classes with a value in the nine

figure range. In addition to that, ACG is currently actively managing a multi-million dollar portfolio of

assets (both private companies and commercial real estate) for its global investors and is actively involved

in the development of two major hotels.

Mr. Aginsky received his B.A. in International Affairs from Lewis and Clark College and holds an MBA

degree in International Business Management from Thunderbird, The School of Global Management, and

an Executive Graduate Degree from the Harvard Business School.

Andrei Zverev - Chief Operating Officer, Co-Founder

Mr. Andrei Zverev is a senior-level executive with over 20 years of experience in the financial technology

and payment processing space. Mr. Zverev is also an entrepreneur and advisor having founded and advised

numerous successful start-up companies.

Before joining the BuildingBits team, Mr. Zverev founded and served as the Managing Director of Pacific

Bridge Ventures, LLC, a real estate investment company. Prior to that, Mr. Zverev was the Founder,

President and CEO at Moneta Express Corp, an international payments and electronic funds transfer

company with offices in the USA and Russia. In 2008, the company was one of the first to introduce a

mobile wallet money transfer platform in the U.S. market.

Prior to that, Mr. Zverev was the founder and Managing Director of Cashoninternet.com, one of the first

fin-tech companies to provide micro loans online. Following the integration of the company’s infrastructure

into Cyphermint, a provider of online payment technology. Mr. Zverev served as Vice-President of

Operations, Director of International Payments Division, and Member of the Executive Committee at

Cyphermint, Inc. from 2001 to 2003. From 1993 to 1999, Mr. Zverev was the VP of Sales and Business

Development at Columbia Financial Group, Inc.

Additionally, Mr. Zverev has advised numerous start-up and midsize companies at Aginsky Consulting

Group and IBC Advisors.

Mr. Zverev received his Bachelor’s Degree in Japanese Studies from the Far Eastern Federal University

(Vladivostok, Russia), and holds Master’s Degree in International Relations from the Fletcher School of

Law and Diplomacy administered by Tufts and Harvard Universities.

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Dmitry Tyomkin, CTO

Mr. Tyomkin is accomplished business and technology executive with over two decades of rich, diverse

experience across multiple industries, including involvement with international collaboration and

outsourcing. Adept at various aspects of modern technology, Mr. Tyomkin has recent hands-on experience

in Cloud Computing, SaaS, Big Data, Data Analysis and Data Science.

Prior to joining Building Bits, Mr. Tyomkin headed business development and technology partnerships for

Sphere Consulting, a leading Chicago Software Services provider.

Prior to that role, Mr. Tyomkin served as a CEO in several spinoffs of Cleveland Biolabs, a biotechnology

startup at Buffalo, NY, focusing on drug development for oncology and infectious diseases. One such

venture, Panacela Labs, raised $12 million to develop advanced treatments for prostate and bladder cancer.

Prior to that appointment, Mr. Tyomkin held various technology and business leadership roles in Telecom,

Insurance, Retail and Quick Service Restaurant industries.

Mr. Tyomkin received his Executive MBA degree with Honors from University of Chicago Booth School

of Business. He also holds M.Sc. degree with Honors from Moscow University of Railway Engineering.

Spencer McCormick, Vice President, Real Estate Service

A career real estate broker, specializing in retail properties has been licensed since 2001 and is the Oregon

Principal Broker and Washington Designated Broker for BuildingBits Real Estate Services. Mr.

McCormick represented retail’s largest Landlords, responsible for a portfolio of properties in excess of

2,000,000 sf. His ability to understand and analyze real estate comes from over a decade representing

national retailers in market entry and expansion location decisions. His experience is completed by years

of investment sales experience specializing in triple net properties. Mr. McCormick has a B.S. degree in

Economics from the University of Oregon in 2001.

Jessica Abel, Vice President, Marketing

Jessica Abel is a respected marketing and product executive with a 25-year track record of delivering results

in the high growth technology sector.

From 1995 – 1998 she served as a Creative Director and Senior Account manager for Communi(k), Inc, an

ad agency servicing Fortune 500 Banks and Brokerage firms. Ms. Abel formed her own agency in 1998,

Beemix, LLC. Her clients included Prudential Insurance, Charles Schwab, TransAmerica, Sygate, MCI

Technologies, and NCD. She scoped, designed, built and launched one of the first CD-ROM based 401(k)

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enrollment tools for Charles Schwab Retirement Investment Services. Her firm also created turn-key train-

the-trainer tools to automate broker education and deployment of new product enrollment vehicles.

A nimble skillset — spanning executive leadership functions through product vision, marketing

communications, new media marketing strategies, as well as both B2B and B2C engagement — makes

Abel uniquely positioned to advise companies and drive strategic growth.

From 2006 – 2017 Jessica focused on acting as a transitional Product and Marketing Executive leading two

high growth e-commerce company through a recapitalization and a subsequent sale over an 8 year period

while driving exponential growth and high margins through new revenue streams and operational

streamlining. She was responsible for sourcing and brokering distribution deals with Fortune 500 internet

media companies contributing to 8 figures in new revenues and channels. Her product marketing

contributions led to the cocreation of one of the first entertainment virtual currency models in 1999, still in

use today.

Ms. Abel’s diverse small company/high growth career has given her a nimble and results based mindset.

She is credited with creating a performance infrastructure that sustained 40% EBITDA during market

downturn (2007-2010).

Zachariah Peterson –Principal Blockchain Researcher

Prior to working with BuildingBits, Zachariah Peterson advised a number of cryptocurrency hedge funds

regarding their management strategies, arbitrage strategies, and potential investments. He also worked as a

managing consultant for blockchain startup companies with a focus on fundamental platform architecture

and business strategy.

He completed his MS and Ph.D. work in Applied Physics at Portland State University and continues to

work with his research group on a number of research projects. His theoretical and experimental research

work has been published in a number of peer-reviewed journals. His research work is focused in blockchain

architecture, stochastics, portfolio management models, and nanotechnology.

Advisors

Dr. Richard Swart – Advisor to the Board

Dr. Richard Swart is a leading crowdfunding industry expert and a founding board member of the

Crowdfunding Professional Association (CfPA) and the Crowdfunding Intermediary Regulatory Advocates

(CIFRA).

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Having served as a research scholar in the Institute for Business & Social Innovation in the Haas School of

Business (University of California Berkeley), he was the University’s resident expert on crowdfunding and

evolving models of alternative finance. He advises the Bill and Melinda Gates Foundation, and works with

several other prominent foundations, think tanks, funds and corporations. He is co-author of Crowdfunding:

The Corporate Era, published in June 2015 by Elliott & Thompson.

Dr. Swart was the lead author and researcher on the World Bank’s report on “Crowdfunding and its

Potential Impact for the Developing World.”

With Crowdfund Capital Advisors, he authored the report, “How Does Crowdfunding Impact Job Creation,

Revenue and Professional Investor Interest?” – the first report that empirically demonstrated

crowdfunding’s effects on job creation and future investments.

He is a former COO of an Internet startup that had a successful exit in 2010. Dr. Swart is a board member

and strategic advisor to firms in the crowdfunding and alternative investing space.

Dr. Swart leverages over 20 years’ experience of proven leadership, academic rigor and an extensive global

network to help educate and mentor firms, policy makers and businesses. He is a highly trusted expert

resource for governments, academics and crowdfunding platforms, and has played a critical role behind-

the-scenes to help drive crowdfunding forward in Washington, DC since the passage of the JOBS Act.

Frank Cespedes – Advisor to the Board

Mr. Cespedes teaches at Harvard Business School. For 12 years, he was Managing Partner at the Center for

Executive Development, a firm that won awards in the United States and in Europe for its work with

Fortune-1000 companies worldwide.

Mr. Cespedes has consulted companies in consumer goods, information technology, professional services,

retailing, telecommunications, and financial services; he has been a Board member of Evenflo, HALO

Industries, GrowthPlay, and a number of start-up firms.

Mr. Cespedes has written for numerous publications including Harvard Business Review, Wall Street

Journal, Sloan Management Review, and is the author of more than 40 case studies, many articles, and six

books on business management.

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Conclusion

In the next several years, BuildingBits is poised to become a dominant commercial real estate crowdfunding

platform, both in the U.S. and worldwide. BuildingBits will accomplish this through its innovative business

model that includes a secondary real estate marketplace.

The Company’s operational and marketing strategies will provide a clear advantage over its competitors.

The Company offers an experienced management team that has a fundamental and proven understanding

of all aspects of the proposed business and a long-standing track record of success in other business

ventures.