# 4.1 Business model

1xBinary is an innovative peer-to-peer platform for financial derivatives trading, using Ethereum smart contracts. Binary options will serve as the primary derivatives to begin with. Later on, other more complex instruments will be integrated.

Unlike trading the traditional binary options, 1xBinary users place bets against each other. This is the only platform, where as much as 85% of funds are distributed among traders, who make correct assumptions. Besides, they are forming a large common pool of liquidity for each underlying asset in order to maximize users‟ gain.&#x20;

Powered by Ethereum smart contracts, 1xBinary brings undisputable transparency, fair conduct and auditable results to the Binary Options trading. 15% is the platform’s commission income.

&#x20;All operations in the system are performed in the SBT Ethereum tokens of the ERC-20 standard with a stable value of $1.00.

&#x20;COMMON POOL OF LIQUIDITY&#x20;

For each trading pair all kinds of brokers will be brought together to form one common pool of liquidity, instead of making multiple tiny ones. This business model lets brokers work jointly, as a single unit, yet doesn’t require transferring their users elsewhere.

&#x20;This is possible due to all bets being placed with SBT Ethereum tokens and then kept in the Ethereum blockchain system. All transactions are public and available for verification at any time. No one, including the platform providers, can alter the process.

&#x20;Thus, forming a common pool of liquidity by using Ethereum smart contracts, will finally eliminate the need in trusting each other throughout the process and makes manipulations impossible, while maintaining high liquidity for each trading pair.

&#x20;DISTRIBUTION OF THE COMMON POOL

&#x20;The 1xBinary platform earns on commissions from each transaction (bet). The commission is 15%. The distribution of this commission income is presented below.&#x20;

▸ 85% of the turnover will form the reward fund for traders. These funds will be paid out to traders automatically, once each round is over.&#x20;

▸ 2.5% of the total platform commissions will be distributed among the holders of 1xBinary tokens, accordingly to the number of tokens they own.&#x20;

▸ 2.0% will be granted to the brokers, connected to our platform. Payments for the referrals will be deducted from broker’s commission.&#x20;

▸ 2% will go to the permanent contributions to the project’s development fund. A year after the commercial launch, the project should break even.

▸ 8% of the platform’s commissions will be transferred to the reserve fund. Its regular refill (from each transaction) will cover unexpected costs, if they arise.

![](https://992940973-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FyYxif7u0GuIZYuA7JLYX%2Fuploads%2FnjNcxRfXJLMfPuOwjSnT%2Fimage.png?alt=media\&token=ed31d8a5-842b-4794-b18d-161e6cfb3fb2)

ECONOMIC SUSTAINABILITY OF THE BUSINESS MODEL

&#x20;1xBinary business model is designed to minimize the risks of operational loss, for any number of brokers and platform users, regardless of the nature of the events and outcomes which users are betting on.&#x20;

The commission model for generating income at minimal costs provides flexibility to adjust the balance sheet regardless of the platform’s turnover.&#x20;

CHANNELS FOR USER ATTRACTION AND PLATFORM GROWTH&#x20;

The following channels will be used for user attraction to the platforms of their own brokers:&#x20;

▹ Telegram chatbots&#x20;

▹ Banner advertising&#x20;

▹ Google

&#x20;▹ Advertising on specialized forums&#x20;

▹ Facebook&#x20;

▹ Twitter&#x20;

▹ Referral program

&#x20;Third-party brokers will have access to the entire set of tools for user engagement. Each new user of our broker is a new user of the platform, too, as it is increasing the commission income of both platforms. It is a win-win approach. In the end, we expect the vast majority of users to get involved through the third-party brokers. Their management will allow launching a big number of the platform samples that will yet be offering the same trading pairs and intervals, as well as work with one common pool of liquidity.
