As we’re working on the design and development of the features defined in the original GRAFT white paper, we are monitoring industry trends, listening to the community, and constantly looking for new ways to enhance and extend functionality of GRAFT network and its applications. Currently, we are in a process of refining several sections of the white paper, adding new features that will help GRAFT become an even more comfortable place for both merchants and buyers. In order to do that, we are designing two very important ingredients: a payout tokens and a real-time decentralized exchange. These two new features will enable optimal flow of funds, either crypto or fiat between GRAFT users on both sides of retail payment transaction.

We will publish information about those new elements of GRAFT ecosystem in this blog, in two different posts, before it goes to the next version of the white paper. The first article below describes payout tokens, and the second one, which will be published soon, will describe real-time DEX using atomic swaps on network of GRAFT supernodes. The product roadmap will be also updated along with the publication of the updated white paper.

GRAFT MERCHANT TOKEN PLATFORM:

INTRODUCING PAYOUT TOKEN

Although recent version of the GRAFT white paper provides pretty detailed definition of merchant token concept, it does not contain (yet) some important details which are described in this article. In addition, we introduce a concept of payout token – a special type of a merchant token that will be used to facilitate merchant payouts in local fiat currency.
Before we move to payout token definition, let’s refresh our memories to recollect the concept of a GRAFT merchant token, which is a foundation of GRAFT payout token. Here is the definition from the GRAFT white paper:

In addition to fast and inexpensive transactions, merchants place high value on customer loyalty and branding. This functionality will be enabled by the token layer of the GRAFT currency. The token represents domain (merchant) specific GRAFT use, and offers smart contract-backed functionality like loyalty point accumulation and use, reward points, sale discounts, spending discounts, competitor discounts, coupons and store credit.
Merchant token is a predefined smart contract that allows creating a private token that belongs to its owner. Unlike some other smart contracts and token platforms, creation of GRAFT merchant token does not require any programming and can be done by anyone.

Note that merchant tokens are not equivalent to “open” smart contracts: we do not try to build another Ethereum platform. Unlike Ethereum-like smart contracts that can be unpredictably customized through programming, flexibility of merchant tokens is limited to their necessary features, which makes them simple and inexpensive but powerful tool accessible to a merchant of any size – from individuals and small businesses to large retail chains. In addition, the main features of each particular merchant token type will be supported by supernode DAPI and GRAFT wallet and point of sale apps. Thus, those features are going to be available for merchants and buyers “out of the box”.

STABLE VALUE

Since Graft tokens (GRFT) are tradable, when they are used for merchant payouts directly, volatility may become a problem. We cannot ignore the fact that many merchants would like to be able to accept cryptocurrencies but prefer to get paid in their local fiat currency. This is their reality: merchants still need to pay for restocking, utility bills, and employee salaries in fiat. At the same time, they don’t want to be involved in cryptocurrency exchange business, and they need to be isolated from the financial details of the crypto business. In order to finally fill the gap and connect the two worlds – cryptocurrency transactions and fiat currency merchant operations – we have created a concept of a payout token, which represents a local currency and can be transacted on GRAFT blockchain in real time using the supernode tier of the blockchain. Payout token is based on GRAFT merchant token technology, similar to gift, rewards, and other merchant token types.

Underwriting

The main goal for creating payout token is providing an easy and reliable way for merchants to get paid in stable local fiat currencies while avoiding usage of centralized payment processors. Payout tokens are issued and maintained by responsible token underwriters (such as banks). When someone (payout broker, for example) is buying payout tokens from the token underwriter, the company generates a necessary amount of tokens and transfers them to the buyer in exchange to an equivalent amount of fiat currency. When someone (merchant or payout broker on behalf of merchant) is selling payout tokens back to the token underwriter, the company destroys the tokens and pays an equivalent amount of local fiat currency to the seller. Thus, payout token is always backed by sufficient amount of fiat currency, and its price always remains the same and equals to the corresponding fiat currency float. For example, 100 USDG can be always bought or sold for US$100.
Payout tokens will be issued by licensed token underwriters only in exchange to equal amounts of fiat currency. Furthermore, the rights to handle particular payout tokens can be delegated (licensed) to local commercial banks or even national governments. At this point, we’re open to partnership inquiries from financial institutions interested in underwriting payout tokens tied to the local currency. Please email info @ graft.network or contact us through other means if you represent an organization that wants to get involved.

##Details
VChain name for all payout tokens is always “GRAFT”. Each payout token subtype matches a particular local fiat currency. For example, GRAFT.USDG token (ticker: USDG) matches US dollar.
Payout Token Naming Format

GRAFT.[Currency Ticker]G

Examples:

GRAFT.USDG
GRAFT.EURG

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