# Flash Protocol Lite Paper

LEGAL DISCLAIMER

PLEASE READ THE ENTIRETY OF THIS "LEGAL DISCLAIMER" SECTION CAREFULLY. NOTHING HEREIN CONSTITUTES LEGAL, FINANCIAL, BUSINESS OR TAX ADVICE AND YOU ARE STRONGLY ADVISED TO CONSULT YOUR OWN LEGAL, FINANCIAL, TAX OR OTHER PROFESSIONAL ADVISOR(S) BEFORE ENGAGING IN ANY ACTIVITY IN CONNECTION HEREWITH. NEITHER FLASH TECHNOLOGY LIMITED (THE COMPANY), ANY OF THE PROJECT CONTRIBUTORS (THE FLASH TEAM) WHO HAVE WORKED ON FLASH PROTOCOL (AS DEFINED HEREIN) OR PROJECT TO DEVELOP FLASH PROTOCOL IN ANY WAY WHATSOEVER, ANY DISTRIBUTOR AND/OR VENDOR OF $FLASH TOKENS (OR SUCH OTHER RE-NAMED OR SUCCESSOR TICKER CODE OR NAME OF SUCH TOKENS) (THE DISTRIBUTOR), NOR ANY SERVICE PROVIDER SHALL BE LIABLE FOR ANY KIND OF DIRECT OR INDIRECT DAMAGE OR LOSS WHATSOEVER WHICH YOU MAY SUFFER IN CONNECTION WITH ACCESSING THE PAPER, DECK OR MATERIAL RELATING TO $FLASH (THE TOKEN DOCUMENTATION) AVAILABLE ON THE WEBSITE AT HTTPS://FLASHPROTOCOL.XYZ/ (THE WEBSITE, INCLUDING ANY SUB-DOMAINS THEREON) OR ANY OTHER WEBSITES OR MATERIALS PUBLISHED OR COMMUNICATED BY THE COMPANY OR ITS REPRESENTATIVES FROM TIME TO TIME.

Project purpose: You agree that you are acquiring $FLASH to participate in Flash Protocol and to obtain services on the ecosystem thereon. The Company, the Distributor and their respective affiliates would develop and contribute to the underlying source code for Flash Protocol. The Company is acting solely as an arms’ length third party in relation to the $FLASH distribution, and not in the capacity as a financial advisor or fiduciary of any person with regard to the distribution of $FLASH.

Nature of the Token Documentation: The Token Documentation is a conceptual paper that articulates some of the main design principles and ideas for the creation of a digital token to be known as $FLASH. The Token Documentation and the Website are intended for general informational purposes only and do not constitute a prospectus, an offer document, an offer of securities, a solicitation for investment, any offer to sell any product, item, or asset (whether digital or otherwise), or any offer to engage in business with any external individual or entity provided in said documentation. The information herein may not be exhaustive and does not imply any element of, or solicit in any way, a legally-binding or contractual relationship. There is no assurance as to the accuracy or completeness of such information and no representation, warranty or undertaking is or purported to be provided as to the accuracy or completeness of such information. Where the Token Documentation or the Website includes information that has been obtained from third party sources, the Company, the Distributor, their respective affiliates and/or the Flash team have not independently verified the accuracy or completeness of such information. Further, you acknowledge that the project development roadmap, platform/network functionality are subject to change and that the Token Documentation or the Website may become outdated as a result; and neither the Company nor the Distributor is under any obligation to update or correct this document in connection therewith.

Validity of Token Documentation and Website: Nothing in the Token Documentation or the Website constitutes any offer by the Company, the Distributor, or the Flash team to sell any $FLASH (as defined herein) 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 contained in the Token Documentation or the Website is or may be relied upon as a promise, representation or undertaking as to the future performance of Flash Protocol. The agreement between the Distributor (or any third party) and you, in relation to any distribution or transfer of $FLASH, is to be governed only by the separate terms and conditions of such agreement.

The information set out in the Token Documentation and the Website is for community discussion only and is not legally binding. No person is bound to enter into any contract or binding legal commitment in relation to the acquisition of $FLASH, and no digital asset or other form of payment is to be accepted on the basis of the Token Documentation or the Website. The agreement for distribution of $FLASH and/or continued holding of $FLASH shall be governed by a separate set of Terms and Conditions or Token Distribution Agreement (as the case may be) setting out the terms of such distribution and/or continued holding of $FLASH (the Terms and Conditions), which shall be separately provided to you or made available on the Website. The Terms and Conditions must be read together with the Token Documentation. In the event of any inconsistencies between the Terms and Conditions and the Token Documentation or the Website, the Terms and Conditions shall prevail.

Deemed Representations and Warranties: By accessing the Token Documentation or the Website (or any part thereof), you shall be deemed to represent and warrant to the Company, the Distributor, their respective affiliates, and the Flash team as follows:

(a)   in any decision to acquire any $FLASH, you have not relied and shall not rely on any statement set out in the Token Documentation or the Website;

(b)   you shall at your own expense ensure compliance with all laws, regulatory requirements and restrictions applicable to you (as the case may be);

(c)   you acknowledge, understand and agree that $FLASH may have no value, there is no guarantee or representation of value or liquidity for $FLASH, and $FLASH is not an investment product nor is it intended for any speculative investment whatsoever;

(d)   none of the Company, the Distributor, their respective affiliates, and/or the Flash team shall be responsible for or liable for the value of $FLASH, the transferability and/or liquidity of $FLASH and/or the availability of any market for $FLASH through third parties or otherwise; and

(e)   you acknowledge, understand and agree that you are not eligible to participate in the distribution of $FLASH if you are a citizen, national, resident (tax or otherwise), domiciliary and/or green card or permanent visa holder of a geographic area or country (i) where it is likely that the distribution of $FLASH would be construed as the sale of a security (howsoever named), financial service or investment product and/or (ii) where participation in token distributions is prohibited by applicable law, decree, regulation, treaty, or administrative act (including without limitation the United States of America, Canada, and the People's Republic of China); and to this effect you agree to provide all such identity verification document when requested in order for the relevant checks to be carried out.

The Company, the Distributor and the Flash team do not and do not purport to make, and hereby disclaims, all representations, warranties or undertaking to any entity or person (including without limitation warranties as to the accuracy, completeness, timeliness, or reliability of the contents of the Token Documentation or the Website, or any other materials published by the Company or the Distributor). To the maximum extent permitted by law, the Company, the Distributor, their respective affiliates and service providers shall not be liable for any indirect, special, incidental, consequential or other losses of any kind, in tort, contract or otherwise (including, without limitation, any liability arising from default or negligence on the part of any of them, or any loss of revenue, income or profits, and loss of use or data) arising from the use of the Token Documentation or the Website, or any other materials published, or its contents (including without limitation any errors or omissions) or otherwise arising in connection with the same. Prospective acquirors of $FLASH should carefully consider and evaluate all risks and uncertainties (including financial and legal risks and uncertainties) associated with the distribution of $FLASH, the Company, the Distributor and the Flash team.

$FLASH Token: $FLASH are designed to be utilised, and that is the goal of the $FLASH distribution. In particular, it is highlighted that $FLASH:

(a)   does not have any tangible or physical manifestation, and does not have any intrinsic value/pricing (nor does any person make any representation or give any commitment as to its value);

(b)   is non-refundable, not redeemable for any assets of any entity or organisation, and cannot be exchanged for cash (or its equivalent value in any other digital asset) or any payment obligation by the Company, the Distributor or any of their respective affiliates;

(c)   does not represent or confer on the token holder any right of any form with respect to the Company, the Distributor (or any of their respective affiliates), or their revenues or assets, including without limitation any right to receive future dividends, revenue, shares, ownership right or stake, share or security, any voting, distribution, redemption, liquidation, proprietary (including all forms of intellectual property or licence rights), right to receive accounts, financial statements or other financial data, the right to requisition or participate in shareholder meetings, the right to nominate a director, or other financial or legal rights or equivalent rights, or intellectual property rights or any other form of participation in or relating to Flash Protocol, the Company, the Distributor and/or their service providers;

(d)   is not intended to represent any rights under a contract for differences or under any other contract the purpose or intended purpose of which is to secure a profit or avoid a loss;

(e)   is not intended to be a representation of money (including electronic money), payment instrument, security, commodity, bond, debt instrument, unit in a collective investment or managed investment scheme or any other kind of financial instrument or investment;

(f)    is not a loan to the Company, the Distributor or any of their respective affiliates, is not intended to represent a debt owed by the Company, the Distributor or any of their respective affiliates, and there is no expectation of profit nor interest payment; and

(g)   does not provide the token holder with any ownership or other interest in the Company, the Distributor or any of their respective affiliates.

Notwithstanding the $FLASH distribution, users have no economic or legal right over or beneficial interest in the assets of the Company, the Distributor, or any of their affiliates after the token distribution.

For the avoidance of doubt, neither the Company nor the Distributor deals in, or is in the business of buying or selling any virtual asset or digital payment token (including $FLASH). Any sale or distribution of tokens would be performed during a restricted initial period solely for the purpose of obtaining project development funds, raising market/brand awareness, as well as community building and social engagement; this is not conducted with any element of repetitiveness or regularity which would constitute a business.

To the extent a secondary market or exchange for trading $FLASH does develop, it would be run and operated wholly independently of the Company, the Distributor, the distribution of $FLASH and Flash Protocol. Neither the Company nor the Distributor will create such secondary markets nor will either entity act as an exchange for $FLASH.

Informational purposes only: The information set out herein is only conceptual, and describes the future development goals for Flash Protocol to be developed. In particular, the project roadmap in the Token Documentation is being shared in order to outline some of the plans of the Flash team, and is provided solely for INFORMATIONAL PURPOSES and does not constitute any binding commitment. Please do not rely on this information in deciding whether to participate in the token distribution because ultimately, the development, release, and timing of any products, features or functionality remains at the sole discretion of the Company, the Distributor or their respective affiliates, and is subject to change. Further, the Token Documentation or the Website may be amended or replaced from time to time. There are no obligations to update the Token Documentation or the Website, or to provide recipients with access to any information beyond what is provided herein.

Regulatory approval: No regulatory authority has examined or approved, whether formally or informally, any of the information set out in the Token Documentation or the Website. No such action or assurance has been or will be taken under the laws, regulatory requirements or rules of any jurisdiction. The publication, distribution or dissemination of the Token Documentation or the Website does not imply that the applicable laws, regulatory requirements or rules have been complied with.

Cautionary Note on forward-looking statements: All statements contained herein, statements made in press releases or in any place accessible by the public and oral statements that may be made by the Company, the Distributor and/or the Flash team, may constitute forward-looking statements (including statements regarding the intent, belief or current expectations with respect to market conditions, business strategy and plans, financial condition, specific provisions and risk management practices). You are cautioned not to place undue reliance on these forward-looking statements given that these statements involve known and unknown risks, uncertainties and other factors that may cause the actual future results to be materially different from that described by such forward-looking statements, and no independent third party has reviewed the reasonableness of any such statements or assumptions. These forward-looking statements are applicable only as of the date indicated in the Token Documentation, and the Company, the Distributor as well as the Flash team expressly disclaim any responsibility (whether express or implied) to release any revisions to these forward-looking statements to reflect events after such date.

References to companies and platforms: The use of any company and/or platform names or trademarks herein (save for those which relate to the Company, the Distributor or their respective affiliates) does not imply any affiliation with, or endorsement by, any third party. References in the Token Documentation or the Website to specific companies and platforms are for illustrative purposes only.

English language: The Token Documentation and the Website may be translated into a language other than English for reference purpose only and in the event of conflict or ambiguity between the English language version and translated versions of the Token Documentation or the Website, the English language versions shall prevail. You acknowledge that you have read and understood the English language version of the Token Documentation and the Website.

No Distribution: No part of the Token Documentation or the Website is to be copied, reproduced, distributed or disseminated in any way without the prior written consent of the Company or the Distributor. By attending any presentation on this Token Documentation or by accepting any hard or soft copy of the Token Documentation, you agree to be bound by the foregoing limitations.

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## Flash Protocol Lite Paper

Flash Protocol Lite Paper

### 1. Introduction to the Flash Protocol

The Foundation: Lightning Network and Taproot

Lightning Network: The innovative Lightning Network employs a system of payment channels secured by the Bitcoin blockchain, providing a scalable solution for rapid and cost-efficient microtransactions. This layer significantly mitigates Bitcoin's scalability issues and lays the groundwork for a range of advanced applications.

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Taproot Assets: Building on the recent Taproot upgrade, Taproot Assets introduce a sophisticated protocol for asset issuance on the Bitcoin blockchain. By using Bitcoin-native assets represented in UTXOs and leveraging the Lightning Network's capacity for swift and low-cost transactions, Taproot Assets optimize the blockchain’s utility while minimizing its on-chain presence by offloading metadata storage.

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Innovation through Integration: The Flash Protocol

With the integration of the Lightning Network and Taproot Assets, we proudly unveil the Flash Protocol: A groundbreaking Taproot-enabled framework that facilitates the issuance and exchange of Bitcoin-native assets directly on the Bitcoin blockchain. This protocol positions itself for being the largest Bitcoin native NFT issuance platform powered by Taproot to boost GameFi, AI & Meme culture on Bitcoin.

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Flash Chain: Flash Chain is a layer 1 public chain dedicated for realizing Bitcoin DeFi

FlashVM: FlashVM is a computational engine, built on Flash Chain, which provides infrastructure to facilitate BTCFi functions such as staking, swaps or lending.

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### 2. The Rationale Behind Flash Protocol

The inception of the Flash Protocol is a direct response to Bitcoin's current limitations in processing a high volume of transactions and its nascent stage in functional versatility. This protocol harnesses the efficiency of the Lightning Network and the advanced features of Taproot assets to forge a dynamic Bitcoin native asset platform, revolutionizing asset management and transactions within the Bitcoin ecosystem.

Catalyzing Liquidity in DeFi from Bitcoin

Bitcoin remains the cornerstone of the cryptocurrency market, holding a substantial market cap. In contrast, Ethereum's diverse Layer 2 solutions and decentralized applications have yet to surpass a fraction of Bitcoin's market dominance. Redirecting a portion of Bitcoin's liquidity could significantly amplify the DeFi liquidity pool. The Flash Protocol aspires to channel this untapped potential, thereby infusing Bitcoin's liquidity into the DeFi sector and fostering capital efficiency and expansive growth.

Transforming Bitcoin's Role: From Static to Dynamic

Dubbed as 'digital gold', Bitcoin has been the epitome of value storage. Nonetheless, its architecture inherently limits its capital utilization and adaptability for programmatic functions. The Flash Protocol emerges as the key to enhancing Bitcoin's inherent value, introducing heightened capital efficiency and programmability.

Through this protocol, Bitcoin's dormant capabilities are activated, facilitating versatile asset management and complex financial operations. It marks a pivotal shift for Bitcoin, transitioning from a passive value reserve to an agile player in the DeFi and smart contract arena, augmenting its utility beyond conventional confines.

Addressing the Surge in Blockspace Demand

The growing need for Bitcoin block space, accentuated by phenomena such as the Ordinal inscription surge, calls for a refined transactional framework. The Flash Protocol addresses this demand by focusing on scalability and cost-effectiveness, positioning itself as a strategic solution to current and future blockchain congestion.

### 3. Mission Statement

The Flash Protocol is the largest Bitcoin native NFT issuance platform powered by Taproot. It's committed to boost GameFi, AI & Meme culture on Bitcoin.

Over 1M taproot NFTs have been already minted on Flash Protocol. In order to achieve the above-mentioned mission, several initiatives are underway

Enabling the seamless creation and distribution of Bitcoin-native assets.

Enhancing transactional throughput while minimizing associated costs.

Diversifying the financial operations within the Bitcoin ecosystem, including the issuance and exchange of native assets, and the establishment of Bitcoin-native stablecoins.

Our goal is to unlock Bitcoin's full potential as a cornerstone of the modern financial ecosystem, ensuring it remains at the forefront of the digital asset revolution by providing full support of GameFi, AI and Meme projects on Bitcoin ecosystem.

### 4. Project Information

How It Works: An Overview of the Flash Protocol

The Flash Protocol operates as a sophisticated layer above the Bitcoin blockchain, exploiting the advancements made possible by the Taproot Asset Protocol for the issuance and seamless transfer of assets. Here's a detailed explanation of the mechanism:

In a Bitcoin transaction, the script path is an essential element that defines how the associated funds can be spent in a future transaction. In the context of Taproot, it offers potential solutions to hurdles associated with smart contracts on the Bitcoin network:

Off-chain storage: With Taproot, the script element is not directly stored on the blockchain but rather hashed and stored in a Merkle tree. This significantly reduces the on-chain data footprint, allowing for more complex smart contracts without exceeding the data storage limitations.

Compactness and efficiency: second-layer solutions like the lightning network can handle complex smart contract functionalities off-chain, significantly reducing fees and improving scalability.

This strategic design paves the way for advanced and practical smart contracts on the Bitcoin network, extending its capabilities beyond simple monetary exchanges.

How it works: an overview of FlashVM and Flash Chain

FlashVM’s architecture is broken down to two layers — settlement layer and validator layer. The interoperability between the two is rooted in MAST and Threshold Signatures, a testament to its Bitcoin-native approach, ensuring that users enjoy the essence of Bitcoin DeFi on a layer-1 public chain.

This distinction means that while assets are bridged onto the Flash Chain, they remain within a Bitcoin-native ecosystem, redefining the boundaries of layer classifications in the blockchain space.

FlashVM’s Settlement Layer and its foundation for security and finality of the Bitcoin network, using Bridge Script and MAST as well as Threshold Signatures to create a secure bridge between Bitcoin and the Flash Chain, ensuring that transactions are anchored to the robust security mechanisms of the Bitcoin network.

Below that is the Validator/Sequencer Layer, where transaction computation and indexing occur. The Flash Nodes, which are responsible for computation, process transactions and generate execution traces here, ensuring that transaction data is processed in a timely manner and properly verified by validators. Validators interact with coordinators for transaction proving. This layer is essential for the consensus mechanism of FlashVM, as it underpins the security of the network.

FlashVM

FlashVM introduces smart contract into BTC ecosystem

Anyone can create smart contract so that another person can verify and confirm it’s authentic

In order to make system running, smart contract creator has to stake certain amount of money to build trust

Off-chain computation and On-chain publish for dispute resolution

Executions of smart contracts take place off-chain of Bitcoin mainnet

Computations are only published on-chain when there is suspicion of fraud for dispute resolution

The Transactional Blueprint

Bitcoin Transaction (Tx): The Flash Protocol journey begins with a Bitcoin transaction, tailored to facilitate the generation of Flash Protocol assets, laying the groundwork for our asset issuance protocol.

Dual Pathways - Key Path & Script Path: Our transactions harness both a key path for standard transfers and a Taproot-enabled script path, introducing a new dimension of complex, privacy-centric spending conditions. Such a script path will prevent unauthorized alteration and double-spending.

Flash Protocol Asset Output: We introduce a unique output for Flash Protocol assets, adhering to the Pay-to-Taproot (P2TR) format. This method optimizes block space usage and reinforces transaction privacy.

Network Validation and Asset Transfer

Node Network Validation: Initially, a cadre of node validators will oversee the asset deposit and withdrawal processes based on Threshold Signature mechanism to ensure transaction integrity and bolstering decentralization.

Off-Chain Asset Movement: To alleviate blockchain congestion, Flash Protocol transactions are executed off-chain, with the asset metadata securely stored off-chain and cryptographically anchored to the Bitcoin mainnet.

Payment Processing & Mainnet Reconciliation: Harnessing the efficiency of the Lightning Network, our payment system executes high-speed transactions, subsequently consolidating the results on the Bitcoin mainnet.

The Flash Protocol marries user-friendliness with advanced technology to facilitate a streamlined, decentralized, and secure framework for managing Bitcoin native assets.

Core Features

The Flash Protocol heralds a new era for Bitcoin native assets growth, introducing unprecedented capital efficiency and programmability to the Bitcoin ecosystem.

Taproot Assets Issuance: The protocol empowers the creation of assets through the innovative FlashScript, tailored for permissionless and cost-effective transactions on the Bitcoin blockchain.

Bitcoin Angel Hub: The Angel Hub revolutionizes fund raise by bridging Taproot Assets project builders with vast supporters, creating an optimal gitcoin-like crowdfunding market for Bitcoin native assets.

Bitcoin Native Asset Marketplace: We facilitate Taproot Assets trading through an orderbook-based DEX, setting the stage for the integration of sophisticated DeFi features such as yield farming and liquidity pools.

Bitcoin Native Asset Lending: Introducing a non-custodial lending model, the protocol employs FlashScript to reduce counterparty risk and enhance liquidity for Bitcoin native assets.

Through these strategic initiatives, the Flash Protocol is poised to unlock new dimensions of value within the Bitcoin network, fostering a rich environment for innovation and financial growth.

### 5. Token Guide

Token Utility: Enhancing Ecosystem Value

The native cryptographically-secure fungible protocol token of Flash Protocol (ticker symbol $FLASH) is a transferable representation of attributed governance and utility functions specified in the protocol/code of Flash Protocol - within the Flash Protocol ecosystem, the $FLASH tokens are designed to fulfill multiple pivotal roles, each aimed at enriching the user experience and strengthening the network's robustness.

$FLASH is a functional multi-utility token which will be used as the medium of exchange between participants on Flash Protocol in a decentralised manner. The goal of introducing $FLASH is to provide a convenient and secure mode of payment and settlement between participants who interact within the ecosystem on Flash Protocol without any intermediaries such as centralised third party entity/institution/credit. It is not, and not intended to be, a medium of exchange accepted by the public (or a section of the public) as payment for goods or services or for the discharge of a debt; nor is it designed or intended to be used by any person as payment for any goods or services whatsoever that are not exclusively provided by the issuer. $FLASH does not in any way represent any shareholding, ownership, participation, right, title, or interest in the Company, the Distributor, their respective affiliates, or any other company, enterprise or undertaking, nor will $FLASH entitle token holders to any promise of fees, dividends, revenue, profits or investment returns, and are not intended to constitute securities in the British Virgin Islands, Singapore or any relevant jurisdiction. $FLASH may only be utilised on Flash Protocol, and ownership of the same carries no rights, express or implied, other than the right to use $FLASH as a means to enable usage of and interaction within Flash Protocol. The secondary market pricing of $FLASH is not dependent on the effort of the Flash team, and there is no token functionality or scheme designed to control or manipulate such secondary pricing.

For the avoidance of doubt, neither the Company nor the Distributor deals in, or is in the business of buying or selling any virtual asset or digital payment token (including $FLASH). Any sale or distribution of tokens would be performed during a restricted initial period solely for the purpose of obtaining project development funds, raising market/brand awareness, as well as community building and social engagement; this is not conducted with any element of repetitiveness or regularity which would constitute a business.

Further, $FLASH provides the economic incentives which will be distributed to encourage users to exert efforts towards contribution and participation in the ecosystem on Flash Protocol, thereby creating a mutually beneficial system where every participant is fairly compensated for its efforts. $FLASH is an integral and indispensable part of Flash Protocol, because without $FLASH, there would be no incentive for users to expend resources to participate in activities or provide services for the benefit of the entire ecosystem on Flash Protocol. Given that additional $FLASH will be awarded to a user based only on its actual usage, activity and efforts made on Flash Protocol and/or proportionate to the frequency and volume of transactions, users of Flash Protocol and/or holders of $FLASH which did not actively participate will not receive any $FLASH incentives.

Gas fee: As the native platform currency, $FLASH would be used for payment of gas fee payment on the native Flash Chain.

Active user incentives: The protocol would encourage active users to participate in the protocol by allows users to earn a share of $FLASH from the rewards pool, for example by transacting on the platform, participating in marketing/promotional activities, engaging in governance. To create a sustainable system, the rewards pool would be replenished with the protocol's transaction fee revenues – this system encourages token utility and ensures a harmonious alignment of interests across the network.

Node Incentive: The Flash itself is simply a blockchain-based protocol which does not provide any computing resources, so nodes are the backbone of the decentralized infrastructure which maintains the network. To bolster network integrity and performance, $FLASH serves as rewards for nodes that sustain and secure the payment gateway and flash protocol framework.

Angel Hub Quota: $FLASH unlock privileged access to oversize allocation of third party projects looking to launch in the Flash ecosystem. To encourage token usage, interested applicants would be allocated quota based on their respective token stake, promoting sustained engagement and network evolution.

Token Spending for Asset Issuance: For every Taproot assets issuance, the issuer would need to pay a certain amount of $FLASH.

Fee Discount: Active users benefit from a transaction fee discount when staking $FLASH. This incentive reduces the cost burden of frequent interactions within the protocol, enhancing user retention and transaction volume.

DAO Governance: Token staking also carries governance privileges. Stakeholders can wield influence over protocol decisions, from policy shifts to feature implementations, ensuring the protocol evolves in concert with community interests.

Tokenomics: Strategic Allocation Framework

The token distribution model is meticulously crafted to sustain the long-term viability and growth of the Flash Protocol:

Validator Reserve: 20% is reserved for validator incentive

Foundation: 20% of the tokens support the foundational layer of the Flash Protocol, backing its operational and structural integrity

Team: 15% is earmarked for the team, rewarding the architects and builders of the protocol, with a vested interest in the protocol's success.

DeFi Reserve: 12.5% is reserved for DeFi liquidity pools, ensuring the protocol can maintain a healthy level of liquidity to facilitate seamless transactions.

Private sale: 13% of the tokens are allocated to fundraising efforts, including the private sale round and public sale round. It provides the capital necessary to fuel the initial and ongoing development of the protocol.

Ecosystem Development: 9.5% is dedicated to marketing and strategic ecosystem initiatives, essential for user acquisition and sustainable ecosystem growth.

Advisors: 5% is set aside for advisors, acknowledging their critical role in providing guidance and strategic insights.

Public sale: 2% is set aside for launching Flash protocol project up for public to purchase FLASH tokens

Liquidity provision: 1.5% is set aside for market making

Airdrop: 1.5% is set aside for airdrop to early adoptors of Flash Protocol to reward them for their support.

This token allocation is structured to balance immediate operational needs with long-term strategic growth, ensuring the Flash Protocol remains a dynamic and responsive player in the evolving DeFi landscape.

### 6. Roadmap

The Flash Protocol's strategic deployment and expansion of decentralized financial services are plotted out in our comprehensive roadmap. Spanning several quarters, the roadmap outlines key phases and milestones that will solidify the protocol's position as a revolutionary force in the Bitcoin ecosystem.

Q1 2024: BTC Angel Hub V1

BTC Angel Hub V2: Advancing from the initial offering, the Angel Hub V2 will incorporate more sophisticated features, such as quadratic match funding, enhancing the fundraising landscape and supporting innovative project financing.

Flash Chain Testnet: Flash chain testnet will go live by Q1 2024 and some initial technical integration with bridge or security infrastructure is underway as well

Q2 2024: Orderbook-based DEX

Orderbook-based DEX: The Flash Protocol will launch an orderbook-based DEX specifically for trading Taproot Assets, optimizing asset exchange with a focus on transparency and efficiency.

Flash Chain Mainnet: Flash chain mainnet will go live by Q2 2024 with full features such as BTCFi up and running on Flash Chain. On top of it, ecosystem projects such as lending protocol or DEX will also be rolled out by then

Q3 2024: Deposit/Withdrawal Decentralized

Decentralization of Deposit & Withdrawal: The deposit and withdrawal process will undergo full decentralization, marking a critical step in enhancing user autonomy and security within the Flash Protocol ecosystem.

Q4 2024: Decentralized Trading & Lending

Decentralized Trading & Lending: Trading and lending computations will transition to a decentralized model, coordinated by distributed nodes operating with consensus. This phase emphasizes our commitment to a trustless financial environment.

Q1 2025: Universe Decentralized

Censorship-Resistant Asset Issuance: Moving into 2025, the Flash Protocol will focus on achieving a decentralized universe, ensuring that asset issuance is censorship-resistant and aligned with the ethos of decentralization.

Q2 2025: Open Taproot Assets Smart Contract Platform

Smart Contract Platform Launch: The final milestone on the current roadmap is the launch of an open decentralized smart contract platform for developers. This platform will empower the developer community to build and deploy applications on the Flash Protocol, leveraging the capabilities of Taproot Assets.

Protocol Architecture: Gradual Transition to Full Decentralization

Our architectural evolution will be characterized by a gradual yet decisive transition towards complete decentralization. Initially adopting a semi-centralized framework, our protocol will progressively distribute control, beginning with the decentralization of the on-and-off ramp gateway from Bitcoin mainnet.

Phase 1: The decentralization process will commence with the diversification of validators securing the Flash daemons, broadening the security base of the deposit and withdrawal process (on-and-off ramp) from Bitcoin mainnet.

Phase 2: Subsequently, these validators will assume responsibility for the computational operations and the execution of the business logic inherent to the functionality components.

Phase 3: Culminating the process, the protocol will open up as a Taproot asset smart contract platform. This will be an open invitation to the community, encouraging participation in smart contract development for Taproot assets.

Our final objective is to maximally empower the Taproot assets protocol, fostering a symbiotic environment that benefits all stakeholders within the ecosystem.

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### RISKS

Flash Protocol is currently in the initial development stages and there are a variety of unforeseeable risks. You acknowledge and agree that there are numerous risks associated with acquiring $FLASH, holding $FLASH, and using $FLASH for participation in Flash Protocol. In the worst scenario, this could lead to the loss of all or part of $FLASH held. IF YOU DECIDE TO ACQUIRE $FLASH OR PARTICIPATE IN FLASH PROTOCOL, YOU EXPRESSLY ACKNOWLEDGE, ACCEPT AND ASSUME THE FOLLOWING RISKS:

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■ Uncertain Regulations and Enforcement Actions: The regulatory status of Flash Protocol, $FLASH and distributed ledger technology is unclear or unsettled in many jurisdictions. The regulation of digital assets has become a primary target of regulation in all major countries in the world. It is impossible to predict how, when or whether regulatory agencies may apply existing regulations or create new regulations with respect to such technology and its applications, including $FLASH and/or Flash Protocol. Regulatory actions could negatively impact $FLASH and/or Flash Protocol in various ways. The Company, the Distributor (or their respective affiliates) may cease operations in a jurisdiction in the event that regulatory actions, or changes to law or regulation, make it illegal to operate in such jurisdiction, or commercially undesirable to obtain the necessary regulatory approval(s) to operate in such jurisdiction. After consulting with a wide range of legal advisors to mitigate the legal risks as much as possible, the Company and Distributor have worked with the specialist blockchain department at GS Legal LLC and obtained a legal opinion on the token distribution, and will be conducting business in accordance with the prevailing market practice.

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■ Inadequate disclosure of information: As at the date hereof, Flash Protocol is still under development and its design concepts, consensus mechanisms, algorithms, codes, and other technical details and parameters may be constantly and frequently updated and changed. Although this material contains the most current information relating to Flash Protocol, it is not absolutely complete and may still be adjusted and updated by the Flash team from time to time. The Flash team has neither the ability nor obligation to keep holders of $FLASH informed of every detail (including development progress and expected milestones) regarding the project to develop Flash Protocol, hence insufficient information disclosure is inevitable and reasonable.

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■ Competitors: Various types of decentralised applications, games and networks are emerging at a rapid rate, and the industry is increasingly competitive. It is possible that alternative networks could be established that utilise the same or similar code and protocol underlying $FLASH and/or Flash Protocol and attempt to re-create similar facilities. Flash Protocol may be required to compete with these alternative networks, which could negatively impact $FLASH and/or Flash Protocol.

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■ Failure to develop: There is the risk that the development of Flash Protocol will not be executed or implemented as planned, for a variety of reasons, including without limitation the event of a decline in the prices of any digital asset, virtual currency or $FLASH, unforeseen technical difficulties, and shortage of development funds for activities.

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■ Security weaknesses: Hackers or other malicious groups or organisations may attempt to interfere with $FLASH and/or Flash Protocol in a variety of ways, including, but not limited to, malware attacks, denial of service attacks, consensus-based attacks, Sybil attacks, smurfing and spoofing. Furthermore, there is a risk that a third party or a member of the Company, the Distributor or their respective affiliates may intentionally or unintentionally introduce weaknesses into the core infrastructure of $FLASH and/or Flash Protocol, which could negatively affect $FLASH and/or Flash Protocol. Further, the future of cryptography and security innovations are highly unpredictable and advances in cryptography, or technical advances (including without limitation development of quantum computing), could present unknown risks to $FLASH and/or Flash Protocol by rendering ineffective the cryptographic consensus mechanism that underpins that blockchain protocol.

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■ Risk of Dissolution: Start-up companies such as the Company, the Distributor or their affiliates involve a high degree of risk. Financial and operating risks confronting start-up companies are significant, and the aforementioned entities are not immune to these. Start-up companies often experience unexpected problems in the areas of product development, marketing, financing, and general management, among others, which frequently cannot be solved. It is possible that, due to any number of reasons, including, but not limited to, an unfavourable fluctuation in the value of cryptographic and fiat currencies, decrease in the utility of $FLASH due to negative adoption of Flash Protocol, the failure of commercial relationships, or intellectual property ownership related challenges, Flash Protocol may no longer be viable to operate and the Company, the Distributor or their affiliates may be dissolved.

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■ Other risks: In addition, the potential risks briefly mentioned above are not exhaustive and there are other risks (as more particularly set out in the Terms and Conditions) associated with your participation in Flash Protocol, as well as acquisition of, holding and use of $FLASH, including those that the Company or the Distributor cannot anticipate. Such risks may further materialise as unanticipated variations or combinations of the aforementioned risks. You should conduct full due diligence on the Company, the Distributor, their respective affiliates, and the Flash team, as well as understand the overall framework, mission and vision for Flash Protocol prior to participating in the same and/or acquiring $FLASH.

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