Imas Kurnisy: September 2018

Disrupting the Industry of Fiduciary Services

Nowadays, one of the methods to guarantee that a person’s legacy can have a lasting influence is setting up a trust fund, a special type of legal agreement that provides a trusted third party with the right to hold and spend assets according to a specific goal set by the trust settlor. The trustee services market has not experienced any radical change with the advent of new technology and is still based on centuries-old principles. Currently, it exceeds 20 trillion dollars under management. Although unlike Wills, Trusts allow their Settlors to protect assets from third-party claims and avoid probate, their legal structure is currently incapable of securely incorporating digital assets such as apps, cryptocurrencies and tokens. Moreover, the management fees involved are not affordable for most people, and the range of potential purposes is constrained by the limited expert networks that collaborate with trustees.

The Eternal Trusts protocol combines p rivate and public blockchain technology to make traditional trust funds a thing of the past. The decentralized apps built on ET can serve as an effective, long-lasting financial instrument that will operate autonomously according to a complex asset administration scenario with the ability to add multiple beneficiaries. ET-powered apps can store crypto capital for centuries using the expertise of so-called networks of oracles -- groups of reputable, trusted parties in control of asset administration and rewarded for making optimal decisions. These networks are tasked with managing assets and seeking the best providers capable of performing the fiduciary purposes set by the dApp end users, be it supporting multiple generations of their offspring financially or contributing to a global charitable cause.

PROBLEM STATEMENT: THE TRUST INDUSTRY AND ITS ISSUES

The fiduciary market

A fiduciary is an individual or organization legally responsible for managing assets on behalf of someone else, usually called the beneficiary, or for executing some charitable or non-charitable purpose. The assets must be managed in the best interests of the beneficiary, not for the personal gain of the fiduciary.

The aging population is expected to drive an unprecedented transfer of wealth between generations. According to the Social Welfare Research Institute at Boston College, more than $ 41 trillion of assets will be transferred between generations from 1998 to 2052 in the United States only. This process of wealth transfer is highly complicated and requires collaboration with trustees, lawyers, and estate planning agents to create wills, trust deeds, amendments, to register those documents with authorities and act upon them.

The complicated process of establishing a Traditional Trust

Currently, all fiduciary cases, from the simplest to the most sophisticated require a client to approach a regulated institution and to register their agreement (a will) or incorporate a complex legal infrastructure like a trust. This process consists of many complicated steps: registering a holding company to manage the assets, drafting and signing a trust deed, opening bank accounts, paying the Trustee annually for the trust administration and for bookkeeping, hiring a Trust Enforcer and/or Trust Protector.

Despite the high growth of the industry and the substantial value it provides to the customers, it is far from being affordable to a larger audience and has certain limitations as to how it can be used. Such a structure is not only expensive to incorporate and to administer, but in most cases it also requires an unlimited amount of trust to be given to the Trustee. The Settlors most likely lose control over their assets (which however further acts as a tax shield), they can advise the Trustee as to what should be done with the assets only indirectly, the purposes that are put in the trust deed must be legal, and marketable at the moment.

Fiduciary needs of cryptocurrency holders

As any other people, holders of cryptocurrencies are afraid that their crypto assets will be lost or their potential wasted once they lose legal capacity to control them. Hence, they need a fiduciary mechanism for their crypto capital in order to:

· Avoid probate, protect it from unwarranted redistribution, such as bankruptcy etc., when they lose control over it;

· Manage it and make it grow overtime;

· Spend it to fund their long-term trust purposes, e.g., asset redistribution between generations or funding charities, without their direct participation.

DIY solutions, such as passing private keys from a wallet to a third party or storing “cold wallets” in a vault, tend not to work well because they lack necessary security.

PROPOSED SOLUTION

The ET Protocol

Eternal Trusts is an EOS-based fiduciary crypto protocol. It allows financial service providers to build secure & fast decentralized applications that can integrate collective decision-making into asset administration.

As an open source protocol, Eternal Trusts allows traditional trustees, family offices, and estate planning institutions interested in accepting cryptocurrencies or integrating blockchain into their business processes to offer a brand new model of trusted asset administration to their clients. Eternal Trusts provides a robust and more publicly accessible set of mechanisms based on smart contracts and will cause the proliferation of a new distributed ecosystem of cutting edge fiduciary services, potentially allowing a wide range of people to attain long-term fiduciary purposes that best suit their needs.

THE TOKEN SALE

The Eternal Trusts tokens have been available for potential platform users since March 22, 2018.

Eternal Trust Token is currently based on the Ethereum-based ERC-20 protocol, which is deemed the industry standard. However, we are gradually shifting to EOS.IO smart contract protocol, which provides a more improved set of features for such a hybrid, autonomous, and multi-chain system as Eternal Trusts.

The Eternal Trusts Token is a service token that underlies all business processes of the dApps built on the ET Protocol. The uniqueness of our token is not limited to its internal payments functionality for our platform, neither its smart-contracted ability to pre-program future deals, nor its power to unlock innovations and service development value.

· dApp founders and their clients buy ET tokens with fiat or crypto, or receive them as gifts from other platform participants

· dApp founders become DAO directors, set business model and prices for their services (not less than a minimum specified by the protocol)

· Clients purchase access to the dApp services with ET Tokens

· DAO Directors, Service providers, oracles, and private blockchain node providers all have to hold a predefined amount of tokens to be able to participate in the platform