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Simplified White Paper 2024
5 min read
Plutus provides a bank-like app with a loyalty rewards Debit Card, allowing customers to earn rewards in “Pluton (PLU).” These tokenised loyalty rewards can be swapped for real-world use, including card top-ups for spending at any store, travel discounts, and other lucrative benefits at 50+ Perk Partners.
Plutus was created to solve two main issues: the lack of support from banks and merchants for using web3 technologies in everyday life, and the limited value provided by traditional loyalty reward systems.
Bitcoin was created to be the world’s first decentralised currency, that anyone could mint on their laptop and spend in store. However, due to technical limitations and challenges with merchant adoption, this vision never fully took off. The same goes for loyalty rewards and everyday banking using Web3 features.
We noticed these gaps almost a decade ago and decided to build a platform to solve these issues. Plutus allows you to use a debit card to convert crypto for spending at merchants and revolutionised the rewards card industry with tokenised rewards.
Traditional rewards cards often feel like gimmicks and lack real value. Many loyalty programmes come with restrictions, such as limited store use or capped benefits, making them hard to use effectively. In our 2015 whitepaper, we introduced the first loyalty rewards token for everyday spending. Our system simplifies rewards and offers high value without restrictions, making it a more practical choice for customers.
In 2015, Plutus was conceived to address the lack of real-world utility for Bitcoin and other cryptocurrencies. Danial Daychopan, who had founded the first licensed Bitcoin exchange in the UK that started in 2013 to provide merchant solutions, noticed that major trading platforms like LocalBitcoins and Mt. Gox were not addressing the need for everyday usage of Bitcoin. Although Bitcoin was created as a decentralised currency, it was mainly being used for speculative purposes.
Danial envisioned a way for people to spend Bitcoin at any Visa-enabled merchant without relying on a centralised exchange. He shared this vision in a blog which got circulated on a Bitcoin subreddit, which had just over 10,000 members at the time. The idea gained significant attention soon after, leading to a successful fundraising campaign and the release of a white paper.
Since its inception, Plutus has grown to serve over 125,000 customers, offering rewards worth over £5 million annually and nearly £50 million in total. Our legacy decentralised exchange (PlutusDEX) has facilitated around £20 million in transactions, enabling customers to spend their crypto on everyday purchases. Initially focused on Bitcoin, Plutus pivoted in 2015 after meeting with the Ethereum founding team. Believing in its potential, we were one of the first startups to adopt and utilise ERC20 technology in its infancy. This strategic pivot allowed Plutus to tokenise loyalty rewards and provide real-world value and utility for its customers.
The success of Plutus is due in large part to the dedicated efforts of our team members. Recognising the need for a strong foundation, Danial met Jasper Tay in 2015 through their shared interest in crypto and banking. Their partnership has been a perfect match, and together, they've grown the team to over 50 members across multiple continents. While Danial drives the company’s vision, Jasper oversees governance. Together, their efforts fuel various initiatives that ensure the company’s long-term success.
Our plan is to scale to millions of customers and continue providing lucrative benefits. Plutus intends to anchor PLU’s intrinsic value through a new set of utilities, and provide a timeless self-sustainable reward system.
Our 2015 white paper introduced a reward system with a capped 3% reward rate that decreased as more customers joined, modelled to operate with our 20 million premined rewards pool for several decades at scale. We updated this system in 2019, which has since led to significant growth, but it isn’t scalable to millions of customers worldwide. As we plan to expand into the US and other regions, we need to refine our reward system with new self-funding features and expanded benefits for PLU, including real-world applications. These updates will encourage productive engagement and ensure long-term success.
In 2019, we set low Reward Level requirements to boost demand. As a result, only 7,000 out of over 125,000 cardholders have earned nearly £30 million of the £50 million in rewards issued over the past five years. While this approach has benefited our community, it is not sustainable for scaling to millions of customers and may fail by 2026, as indicated by our financial modeling forecast below.
We plan to introduce self-sustaining features such as FUEL, utilities, and adjusted Reward Level requirements based on the Time Value of Money (TVM) principle for in-app loyalty rewards. These updates are crucial because we haven't aligned the requirements with each Reward Levels' actual value, or ensured long-term sustainability through technical network updates. Similar to how the Bitcoin halving increases mining requirements to maintain sustainability, we have delayed these adjustments for five years due to community demand. This delay has continued to affect the token’s value and appreciation.
Currently, 80% of Reward Level customers continue to earn up to three times their original stack each year while withdrawing their rewards without further engagement, all for just a £9.99 monthly subscription fee.
Although this exceptional opportunity is unmatched across any other industry and would typically be expected to generate high engagement and appreciation, the low requirements and ease of obtaining substantial benefits have led to a diminished regard for the unique advantages of our reward system, ultimately affecting the token’s overall sustainability.
The table below shows the percentage of customers at each Reward Level who have earned back their original PLU stack, or even doubled their original PLU stack.
We are updating our tokenomics to make it easier for customers to access Reward Levels. The updates will include new sub-levels offering additional benefits, a utility dashboard for everyday services, and compounding rewards to boost customer engagement. Our goal is to simplify the system, make it more appealing for long-term use within the app, and enhance the token’s value by rewarding loyal customers with up to a 5x multiplier on continuous stacking and compounding rewards.
This approach aims to enhance overall productivity, increase appreciation for the system, and create scarcity, ultimately benefiting the entire ecosystem rather than just individual stackers.
This White Paper outlines key updates designed to significantly enhance the longevity of our token and ensure Plutus's ongoing success. Core updates can be found below.
While Ethereum has served Plutus well, there are now alternative blockchain solutions that better support our long-term mission of providing the most rewarding and accessible loyalty rewards. Migrating PLU to a new blockchain will provide several benefits.
Note: As a community-centric company, Plutus values your input. You can recommend the type of blockchain network for hosting PLU by choosing from three options: Layer 1, Layer 2, and Plutus Layer 2. Details are at the end of this article.
In 2016, 20 million PLU tokens were minted, with the majority allocated to the Pluton Rewards Pool. We are shifting to a dynamic supply model where the total supply amounts to only the tokens in circulation.
This means the remaining 13m PLU tokens in the Pluton Rewards Pool will no longer be in use replacing it on a new network with a reduced total supply of approximately 8m tokens that are currently in circulation, further providing scarcity and removing the risk of single point of failure that looms with the current premined total supply.
To scale to millions of customers and keep offering great rewards, we need to build self-sustaining features and limit new tokens from entering circulation. Instead of constantly issuing new tokens, our system removes existing tokens from circulation and recycles them into the Rewards Pool.
This keeps PLU scarce while ensuring the Rewards Pool is always full, allowing Plutus to provide more rewards without minting new tokens in a self-sustaining loop.
The process of recycling PLU back into the Rewards Pool is known as FUEL, and there are three core FUEL initiatives that ensure 100% self-sustainability of Compounding Rewards Yield and up to 50% of Reward and Perk emissions.
Compounding Rewards Yield (CRY%) allows customers to earn up to 10% in compounded rewards by stacking their earned rewards over time or by stacking their total tokens in self-custody wallets they control. These rewards are entirely self-funded through recycled tokens via FUEL. See below for Ernst & Young's Tokenomics Validation Report.
To earn CRY%, unlock a Reward Level with just 1 PLU. Monthly CRY payouts increase with continuous stacking, reaching up to 5 times your original stack annual Reward Levels.
We’re making Reward Levels easier to access, allowing all customers to reach their first level by earning just 1 PLU, which will unlock a 10% reward rate. This upgrade, along with other key improvements, boosts productivity in the app and ensures the long-term sustainability of PLU, providing greater value for loyalty and stability for everyone from the start.
The benefits and value awarded at each reward level surpass the current Reward Level structure and introduce key advantages to boost productivity within the app. Full breakdown here.
Ensuring current stackers are rewarded for their long term participation, they will be prioritised and receive close to 5x the value they currently receive for their stack on our new Reward Levels. The table below compares the minimum value earned monthly for stackers despite Reward Level adjustments.
In addition to our standard Reward Levels, we plan to introduce sub-levels. This means that between each major Reward Level, customers can unlock additional mini uplifts in the benefits they receive. This gamification encourages customers to hold onto their stacked PLU, and continually climb up the Reward Level ladder.
We understand these updates may seem overwhelming. However, our brand refresh will greatly simplify the user experience. Using vibrant colours and dynamic animations inspired by gaming dashboards, customers will find it easier to progress through the levels without needing to grasp every detail. Our intuitive interface will resolve much of the complexity through its interactive features.
Intrinsic value refers to the actual usefulness and guaranteed benefits a token provides to customers. Unlike other cryptocurrencies that can only be exchanged on external markets in a speculative manner (extrinsic value), PLU can be redeemed directly with the issuer (Plutus) for guaranteed, tangible benefits (intrinsic value).
These updates ensure high-value rewards and maintain PLU’s true worth, providing real-world value and reducing dependence on external market conditions. Plutus will expand real-world and in-app utilities for PLU, establishing its true value. Here’s what you can expect.
PLU tokens can be used in several ways, providing real-world value.
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Intrinsic Value: £10 per token.
Use Case: Redeem PLU for Air Miles, which can be used for travel.
Plutus enables customers to swap PLU for selected Air Miles, in partnership with third-party vendors or directly from airlines. This allows customers to redeem tokens for travel savings, providing strong intrinsic value, especially for frequent travellers.
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Intrinsic Value: £10 per token.
Use Case: Redeem PLU for popular gift cards.
As a registered corporate agent, Plutus secures up to 20% discount on gift card orders from API-based vendors while retaining a profit margin. If token redemptions don’t match the token's external value, we cover the shortfall with utility revenue from all other utilities listed that do not add costs.
Offering gift cards with real-world value across a wide range of brands, similar to those available in our highly sought after Perks, we create a permanent anchor for the tokens' intrinsic and redemption value.
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Intrinsic Value: £10 - £150 per token.
Use Case: Redeem PLU for cashback on travel bookings.
As a registered travel agent, Plutus earns a up to 25% commission on bookings. These earnings are given back to customers as cashback incentives, while Plutus retains a profit margin by carefully managing the token redemption process.
Offering cashback on travel bookings across a wide range of spending budget increases engagement and provides a high intrinsic and redemption value.
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Intrinsic Value: £60.86 per token.
Use Case: Redeem PLU for utility-based NFTs that contain affiliate cashback links.
Plutus Cashbacks is an exciting feature that allows customers to redeem and win NFTs containing cashback links. We partner with top brands through third-party affiliates, earning referral fees of up to 25%. This revenue is then passed on to customers as cashback, while Plutus maintains a portion as profit margin.
Offering cashback through affiliates helps keep tokens stable because a diverse selection of brands, and makes it more attractive for people to use their PLU productively. This builds a robust marketplace where they can exchange their NFTs for items they actually need.
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Intrinsic Value: £10 per token.
Use Case: Redeem PLU for branded items.
Customers can redeem PLU for discounts on exclusive, limited-edition Plutus-branded items, available every 3-6 months. The store will offer a diverse range of products, including apparel, accessories, tech gadgets, and premium collectibles, catering to various preferences.
Plutus makes PLU tokens truly useful by letting you redeem them for everyday benefits. Instead of just being a digital asset, PLU tokens can be used for discounts on travel, gift cards, and exclusive items. You can use your tokens to earn AirMiles, get cash back on large travel bookings, buy gift cards at a discount, and more.If there is a bank run on utilities, it will actually have a positive impact on revenue for Plutus. This is because travel bookings and cashbacks at top brands offer a healthy profit margin, while gift cards and miles are provided at highly favorable rates and supported through revenue from other utility sources that incur no additional costs.
The value of PLU tokens comes from these practical uses, offering guaranteed returns you can use in the real world. This makes them more valuable than other digital assets with only speculative value. By providing these rewards, Plutus ensures that PLU tokens are actively used to save money and enjoy real-life benefits.
PlutusSwap is a decentralised exchange (DEX) that allows Plutus customers to swap their PLU rewards for fiat currency and vice versa. Swaps occur directly between customers in a true peer-to-peer fashion on chain, ensuring a decentralised process.
Unlike our previous version, and to ensure a fully decentralised exchange without Plutus acting as a mediator, both currencies involved in the swap must be blockchain-based. To achieve this, Plutus is introducing tokenised deposits.
Tokenised fiat deposits are the world’s first fully backed stable digital currencies, or “stablecoins,”. Unlike traditional stablecoins, which can not be redeemed at the issuer, they are secured by 100% of customers’ deposits held in insured segregated accounts managed by institutions like the Bank of England and similar other regulated financial bodies, and they are redeemable 1-1 at the issuer (Plutus).
Pool & Earn is another avenue for customers to earn rewards. Customers can provide liquidity to PlutusSwap and earn a portion of the transaction fees.
In essence, liquidity providers lock up their fiat money to create a pool of tokenised fiat on PlutusSwap. Customers use this pool to swap assets against and pay transaction fees in the process which are then distributed to the liquidity providers. This creates a seamless way to convert PLU rewards into fiat currency while earning fees for providing liquidity.
The plans outlined above are sourced from the Plutus’ 2024 White Paper released in June. The updates are scoped to be released in increments and completed in 2025.
The initiatives detailed in this blog have been rigorously tested and modelled to support millions of customers while maintaining a supply shock over decades. Ernst & Young (EY), one of the Big Four accounting firms, has provided a validation report having thoroughly analysed and stress-tested our financial model for improvements. Additionally, Haggard’s Crowther, an independent accounting firm, has audited historical customer data within our database as well as on-chain data to verify the soundness of our methodology used in the recent white paper.
Below, you can find documentation from these trusted third parties supporting the white paper plans:
Important Note: As required by Ernst & Young, customers must complete a third-party release letter to read the report as part of their strict compliance and regulatory policies. Please submit a ticket, and we’ll send you their release form to sign before providing you with the official EY report.
These validations ensure that our proposed plans are robust, sustainable, and ready for scalable implementation.
We’re sure the community has many questions, so we will be hosting a live AMA on Twitter this Sunday to help answer them!
We may have answered some of your questions already! Check out our useful FAQ here
As a community-centric company, we believe in empowering our customers to shape our future. The plans outlined in this blog will be subject to community approval. If approved, we aim to release these features incrementally, with full implementation by 2025.
The voting is now officially live and will run until 30th July, 2024. We invite you to review the detailed document outlining all the voting details.
Voting Period:
The Plutus team is confident that the above changes are crucial in providing sustainable rewards. Your participation is crucial to ensure we move forward together, so please cast your vote and help shape the future of Plutus.
Following a successful vote, Plutus will implement the first stage of the white paper on 1st August. This includes updating PLU requirements for Reward Levels to ensure long-term sustainability, backdating CRY% rewards to 1st August for continuous stackers, adding the Chad Reward Level, and introducing Reward Caps tied to Reward Levels. For additional details and how this may impact you, please click here.
What is being released on 1st August 2024?
The remaining White Paper features and utility will be rolled out incrementally, with the goal of completing all listed items in 2025. A more comprehensive roadmap will be available in August.
