TOP Network Whitepaper

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TelOS Protocol (TOP): A Decentralized Open Communication Network Whitepaper Version 0.6 Telos Foundation December 2017

TOP Decentralized Open Communication Network Table of Contents 1. Introduction ............................................................................................................... 4 1.1 Background ........................................................................................................................... 5 1.2 Mission Statement .................................................................................................................. 6 2. TOP Overview ............................................................................................................ 8 2.1 Core Values of TOP .............................................................................................................. 9 2.1.1 Distributed Communication Cloud Services ............................................................................ 9 2.1.2 High - Performance Public Blockchain Platform for Real Business ........................................ 9 2.1.3 Open Ecosystem .................................................................................................................... 10 2.2 Token Economics .............................................................................................................. 10 2.3 TOP Architecture Overview .............................................................................................. 12 2.3.1 Network Layer ........................................................................................................................ 12 2.3.2 Service Layer ......................................................................................................................... 12 2.3.3 Interface Layer ....................................................................................................................... 12 2.3.4 Marketplace ............................................................................................................................ 12 2.3.5 Dapp ....................................................................................................................................... 12 3. TOP Chain ................................................................................................................ 13 3.1 TOP Blockchain Architecture ............................................................................................ 15 3.2 Consensus Mechanism .................................................................................................... 21 3.3 Cross-shard & Cross-zone Synchronization ..................................................................... 23 3.4 Smart Contract .................................................................................................................... 23 3.5 Layered Ledgers ............................................................................................................... 24 3.6 Consensus Mechanisms of Service Chains ........................................................................ 25 3.7 Security ............................................................................................................................... 25 4. TOP Network ............................................................................................................ 30 4.1 TOP Communication Services ........................................................................................... 31 4.1.1 TOP RCS Service .................................................................................................................. 31 4.1.2 TOP Proxy Service ................................................................................................................. 31 4.1.3 TOP Streaming Service ......................................................................................................... 32 4.1.4 TOP IoT Service ..................................................................................................................... 33 2

TOP Decentralized Open Communication Network 4.1.5 TOP VoIP Service .................................................................................................................. 33 4.2 TOP Storage Service ........................................................................................................ 34 4.3 TOP DNS Service ............................................................................................................. 34 4.4 TOP Billing Service ........................................................................................................... 34 5. TOP Marketplace ..................................................................................................... 35 5.1 Marketplace Smart Contract ............................................................................................. 35 5.2 Market Order Matching Consensus................................................................................... 36 5.3 Consensus of Market Access .............................................................................................. 36 5.4 Market Stability ................................................................................................................... 37 6. Apps .......................................................................................................................... 38 6.1 Dapps And Typical Cases .................................................................................................... 38 6.1.1 Messaging Apps ..................................................................................................................... 38 6.1.2 VoIP Phone Call ..................................................................................................................... 38 6.1.3 VPN Service ........................................................................................................................... 39 6.1.4 Live Streaming ....................................................................................................................... 39 6.1.5 Social Apps ............................................................................................................................ 39 6.2 Decentralized or Partially-Centralized Apps ........................................................................ 40 6.3 TOP API & SDK ................................................................................................................. 41 6.4 App: Dingtone, CoverMe, SkyVPN, TOP Messenger ........................................................... 41 7. TOP Ecosystem ....................................................................................................... 45 7.1 Ecosystem Participants..................................................................................................... 45 7.2 Build The Ecosystem ........................................................................................................... 47 8. Token Distribution .................................................................................................. 50 9. Team ......................................................................................................................... 51 10. Roadmap .................................................................................................................. 53 11. Governance .............................................................................................................. 54 11.1 Communities ..................................................................................................................... 54 11.2 On-Chain Governance ....................................................................................................... 55 3

TOP Decentralized Open Communication Network 1. Introduction TOP Network is a decentralized open communication network powered by blockchain 4.0 technology. It provides decentralized cloud communication services such as messaging, VoIP, video, streaming, VPN, CDN, IoT data sharing, storage and more. With the API and SDK provided by TOP Network, developers can build communication applications - for instance, messaging apps like WhatsApp and WeChat, VoIP apps like Skype, VPN services like SkyVPN, and live streaming apps, without developing their own communication stacks and deploying their own networks. TOP Network can significantly lower development costs and network costs for developers. Furthermore, all the applications running on TOP Network are interoperable, while apps such as WeChat, WhatsApp and Telegram, built on top of proprietary protocols, are completely isolated from each other. On this decentralized and distributed P2P overlay network, nodes mine TOP tokens by providing communication services to the network instead of through proof of work (POW) mechanism that consumes large amounts of energy. TOP is a high-performance public blockchain platform designed to process massive real-world business on the blockchain. Communication services usually have a huge volume of high-frequent, real-time transactions. For example, a popular messaging app might have approximately 100 billion messages per day(Ref 1), equivalent to one million messages per second. Every transaction needs to be processed on the blockchain in real time. The existing blockchain platforms on the market, such as Ethereum and the so- called blockchain 3.0-powered EOS, cannot handle such a massive volume of transactions. TOP Chain adopts innovative technologies including double lattices to organize transactions, directed acyclic graph structure to organize blocks, two-layered sharding, high-speed concurrent Practical Byzantine Fault Tolerance (PBFT) consensus mechanism, and trusted off-chain processor. The core mission of a blockchain 4.0 platform is to enable the real-world business of any volume or size on the blockchain. The TOP main chain will have the capability to handle several hundred thousand transactions per second (TPS). With the seamless combination of main chain, service chains and off-chain processors, TOP can process millions of business transactions in a second. TOP Token, the native and basic cryptocurrency in the TOP ecosystem, is used for the settlement of communication services on TOP Network and asset transactions on the TOP public blockchain platform. Service nodes on TOP Network mine TOP Tokens by providing communication services, and consensus nodes of TOP blockchain platform mine TOP Tokens by verifying transactions. Moreover, the voting power of a consensus node in PBFT-DPoS consensus mechanism is directly related to the number of TOP Tokens the node holds. In addition to the native TOP Token, any Dapp can issue its own token on TOP through the TRC20 protocol. Therefore, tokens can be created through initial coin offering (ICO) and can be exchanged freely on TOP. Bitcoin revolutionarily kicked off the world of cryptocurrency and Ethereum started a new era of Web 3. However, a brand-new generation of infrastructure is desperately needed to make Web 3 reality. EOS 4

TOP Decentralized Open Communication Network may become a popular general-purpose blockchain platform for Dapps, and IPFS (InterPlanetary File System) is likely to become the decentralized storage infrastructure. TOP Network is aimed to serve as the network infrastructure for communications and social applications in the Web 3 era. 1.1 Background Before the Internet era, people-to-people and device-to-device communication solutions were limited to a few choices, such as short messaging, phone call, telegram and walkie-talkie. After the advent of the Internet, the open, real-time and high-efficient TCP/IP protocol made it possible for people to build brand- new communication applications. Later, broadband Internet was widely adopted, and bandwidth was no longer a bottleneck. With the quick progress in encoding and decoding technology for digital audio and video and the boom in audio/video peripheral devices, means of communication rapidly transformed from text messaging and data sharing to multimedia solutions including VoIP call, video call and video conference. Nowadays, rich multimedia communication has become one of the most critical applications on the Internet. In the era of Mobile Internet, the smartphone is a perfect audio/video/photo device which can access the Internet anytime and anywhere. New communication applications such as mobile messaging and live streaming have become popular. Particularly, messaging apps offer better user experience than traditional phone calls and SMS without charging consumers a fee. Furthermore, taking advantage of the address book on users’ mobile phones, messaging apps have evolved from communication tools to social networks offering communication services. With its massive user base, strong user stickiness and long user engagement time, messaging apps have become a platform with huge traffic and evolved into an independent ecosystem. Today, the era of IoT is around the corner. A massive number of IoT devices need to exchange data and communicate with each other. Also, the high-speed, low-latency 5G mobile Internet is expected to not only facilitate communications but also catalyze the development of new communication applications such as IoT, ultra high definition video and virtual reality (VR). All communication applications are built on a communication network infrastructure. A popular messaging app requires a large number of servers to deliver messages, video, photos and voice calls. Apps for live streaming, VR, and streaming video tend to consume much more bandwidth compared with other apps, therefore demanding more servers and better networks. A robust communication network is absolutely necessary to achieve data exchange among massive IoT devices. Deploying, operating and maintaining a global network requires a profound understanding of the network technology and substantial capital investment to cover the high cost. When the traffic on a communication app increases, the underlying network capacity needs rapid expansion, driving the cost even higher. A good example is Dingtone, a partner with TOP Network. To serve more than 36 million global users, Dingtone has to deploy a large number of communication servers on dozens of global backbone networks and hundreds of edge networks around the world and establish interconnections with telecom operators in almost every country. 5

TOP Decentralized Open Communication Network Communication networks, the infrastructure for communication apps, should be open, secure and interoperable. Privately owned communications networks often have serious security issues as communications between users may be blocked, intercepted, filtered or even leaked, putting user privacy at risk. Private communication networks usually use private communication protocols, making it impossible for communication apps to interconnect with each other. For example, a WeChat user cannot send messages to a WhatsApp user, and vice versa. Using a Communication as a Service (CaaS) is much more affordable compared to deploying in-house communication network. CDN is one of the typical CaaS networks. TOP Network offers a decentralized CaaS network that is cheaper and safer than existing CaaS networks. The emerging blockchain technology and token economics make it possible to build a secure, open and low-cost decentralized communication network. Supported by distributed network technology, TOP Network allows any device (server, computer and CPE) to serve as a node on TOP Network to provide communication services and receive token rewards based on bandwidth contribution or other metrics. Providing communication service on TOP is equivalent to mining tokens. The consensus mechanism at the service level ensures all communication services provided by miners are validated and accurate, while the consensus mechanism on the blockchain level guarantees the integrity and accuracy of booking and settlement. End-to-end encryption ensures that the communication among users cannot be monitored or censored during transmission. Since TOP Network adopts international standard communication protocols such as RCS and RTP/RTCP, apps on TOP are interoperable with any apps that follow the same standard protocols. TOP Network is not owned by any person or centralized organization. It is low-cost, secure and unstoppable. TOP Network, a distributed communication network built and maintained by the community, provides full- stack cloud communication services. TOP Network is designed to be a public communication network infrastructure for any app. 1.2 Mission Statement Our mission is to build a public communication network infrastructure that provides secure, open, and affordable communication services for all apps. TOP will allow app developers to build and deploy communication apps in a simple, easy and low-cost manner. Envisioning an interconnected world, we will enable all communication apps to connect to each other by promoting open communication protocols on TOP Network. In addition, we aim to build TOP Messenger, a blockchain-based, decentralized messaging app with features and functions similar to WhatsApp and WeChat. A social communication app supporting payment in cryptocurrency, TOP Messenger seamlessly integrates into one app an array of functions: social network, community, communication, digital asset management (Wallet), digital currency payment and decentralized cryptocurrency exchange. A secure decentralized app on TOP Network, TOP 6

TOP Decentralized Open Communication Network Messenger protects users from censorship and data privacy violation. TOP Messenger offers a better user experience in digital currency payment and peer-to-peer exchange compared to the existing apps. Every communication service on TOP Network has a huge potential market size. Taking the VPN business as an example: the global VPN market is projected to reach $106 billion by 2022 ( Ref 2). We expect the value of TOP Token to gain momentum in future thanks to the enormous volume of communication services carried on TOP Network. We are working together with the entire TOP community to achieve a win-win situation that benefits developers, users, token holders and miners. 7

TOP Decentralized Open Communication Network 2. TOP Overview The Telos Protocol, also known as TOP, is specifically designed for the distributed communication network. TOP is a suite of communication service protocols and underlying networking protocols including peer-to-peer (P2P) networking protocol, network sharding protocol, network routing protocol, domain name service (DNS), distributed data synchronization protocol and data transmission encryption protocol. TOP Network, a distributed communication network built on the Telos Protocol, provides distributed cloud communication services. TOP public blockchain platform, also known as TOP Chain, is based on the Telos Protocol as well. TOP Chain is a general-purpose blockchain platform although it is initially designed for bookkeeping and settlement for the communication services on TOP Network. In short, TOP Network provides communication services while TOP Chain supports bookkeeping and settlement for the services. TOP Architecture: 8

TOP Decentralized Open Communication Network TOP is an ecosystem for cloud communication services. Miners, developers, Dapp and end users are the primary participants in the ecosystem. TOP Tokens is the native cryptocurrency for the economic activities on TOP. The underlying infrastructure layer of TOP has four components: 1) TOP Communication Network: a distributed network for cloud communication services. 2) TOP Storage Network: a distributed network for storage service. 3) TOP Chain: a distributed ledger. 4) TOP Off-chain: a trusted off-chain processor. 2.1 Core Values of TOP 2.1.1 Distributed Communication Cloud Services First, TOP is a platform that provides real services instead of only financial settlement. TOP Network offers low cost, secure and interoperable cloud communication services on the blockchain, including messaging, calling, video, CDN, VPN, streaming, IoT data sharing, storage and more. Any app can access the network via TOP API or SDK. The TOP decentralized communication network is built and run by the global community. Any person or organization can contribute servers, storage and bandwidth to the network. No individual or organization controls the network and no middleman profits from the cloud communication services. Community members typically contribute idle resources, such as a spare server in a data center, to the network. End users can also contribute their devices to the network. The marginal cost of those spare resources is close to zero. Fully automated and self-administered, the network requires no manual operation or maintenance. As a result, the cost of TOP Network is far lower than that of private networks or in-house networks TOP SDK provides a full set of frameworks for communication apps development. Modules in the SDK include audio and video signal processing, codec, special effect, network IO, customizable user interface templates and so on. The entire SDK is open-source so developers can modify the SDK freely to meet their specific needs, significantly lowering costs and shorten the development process. By adopting end-to-end encryption technology for data transmitted on the network, TOP secures every user’s privacy against data interception and censorship. In a nutshell, the core values of TOP Network are decentralization, low cost, security, privacy protection and interoperability. 2.1.2 High - Performance Public Blockchain Platform for Real Business Bookkeeping and settlement of the cloud communication services on TOP Network require a distributed ledger and smart contract platform. Communication services generate extremely high volumes of transactions and a typical transaction carries a small amount of value. In fact, many real-world businesses such as gaming and social networking have similar situations. Currently, all the existing public blockchain 9

TOP Decentralized Open Communication Network platforms cannot handle transactions of such high volumes at a reasonable cost. The TOP blockchain platform is designed to tackle the challenge with an innovative three-layer chain architecture that consists of the main chain, multiple service chains and trusted off-chain processors. Powered by innovative blockchain technologies such as two-layer lattices for transaction organization, two-layer sharding for consensus network, high-speed Practical Byzantine Fault Tolerance (PBFT) consensus mechanism, TOP can process several hundred thousand of transactions per second (TPS) and offer instant confirmation of transactions and zero transactions fees. TOP is specially designed to process on the blockchain the real- world businesses of any complexity, volume and size. 2.1.3 Open Ecosystem TOP is not just a platform, but an open ecosystem where miners, Dapps, developers, end users and communities work together. Each player can benefit from the ecosystem. For instance, developers can use the open-source modules provided by TOP developer community as building blocks for their apps. End users receive token rewards for their use of Dapps. Miners earn tokens for contributing resources and services to the system. 2.2 Token Economics TOP Token is the currency that connects all the parties of the TOP ecosystem. The token economics shall drive the economic growth in the TOP ecosystem. Since TOP actually has two independent and interconnected platforms - TOP Network for cloud communication services and TOP public blockchain platform, there exists two separate but interconnected token economies: one for cloud communication services the other for the public blockchain platform. 1) Service Fee of Communication Services The distributed cloud communication services offered by TOP Network are not free. The owner of the Dapp (that is, the Dapp developer) needs to pay the miners who provide the actual communication services based on the workload and the settled price. For example, assuming the settled price of VPN service is 1 TOP Token/1GB data, a VPN app (the developer) needs to pay 0.5 TOP Token to the nodes providing the VPN service after a VPN user consumes 0.5GB data. In the real world, each service session usually involves multiple nodes (in the case of VPN service, a VPN session requires at least 4 nodes to participate), and the service fee should be allocated among all the participating nodes according to certain metrics. If a Dapp is completely decentralized and owned by no one, then it is the end users of the Dapp who should pay the miners directly. However, such a situation is rare. 2) Market Pricing Mechanism for Communication Services TOP Network is not owned or operated by any organization. Therefore, the prices of services on TOP Network are not defined by a central pricing authority. Instead, TOP Marketplace, a decentralized market realized through smart contracts, connects Dapps with miners and matches their ask prices and bids. The Marketplace allows miners to submit their quotations and Dapps to make inquiries. It 10

TOP Decentralized Open Communication Network then automatically matches Dapps and service nodes according to price, service quality and other factors, and creates contracts for the matched parties. 3) Token Mining The consensus nodes on the main chain can mine TOP Tokens by verifying transactions and producing blocks. Half of the remaining minable tokens are available to be mined every four years, which means 4.75% of the tokens can be mined each year in the first four years, then 2.375% per year in the second four years, and so on. 4) Token Issuing and Burning Some communication cloud services on TOP Network should be free. For instance, it is counterproductive and meaningless to charge a service fee for messaging service, because the cost of charging a fee to a single message on the blockchain ledger far exceeds the cost of delivering the message itself. However, nodes providing messaging service still need to be rewarded. In addition, some nodes on the TOP main chain such as Edge nodes and Advanced nodes do not participate in the mining process and cannot benefit from mining, but they deserve incentives in a certain way. To incentivize the nodes that do not benefit from mining or service fees, TOP automatically issues 1% to 2% of TOP tokens each year to reward those nodes based on their contributions to the ecosystem. TOP blockchain platform does not charge transaction fees (i.e., gas fee) for general transactions, but it does require payments for certain types of transactions or resources including high-value transactions, high-frequency transactions, account registration and the deployment of smart contracts. The tokens received from these fees are not used to reward nodes, but instead are burned to offset the additional tokens issued each year, keeping the total number of tokens in the system flat or a little bit lower in the system. 5) Deposit and Benefits Holding a certain amount of deposit is a basic requirement for a device (a server, computer or CPE) to join TOP Network as a communication service provider (service node) or a consensus node on the main chain. TOP adopts delegated proof of stake combined with PBFT-DPoS consensus algorithm. A node holding a larger deposit is more likely to be selected as the consensus node in a shard. Similarly, a service node has better chances to be selected by the Marketplace to serve Dapps if it has larger deposits. A Dapp also needs to hold deposit to access TOP Network. Although messaging service is free, a messaging Dapp should have enough deposit to be eligible to utilize the service. Deploying smart contracts, reserving RAM and even sending a payment all requires a deposit. Deposit means benefit or privilege, which is the core of the token economics. As the ecosystem grows, more tokens are deposited, reducing the total number of tokens in circulation. Deposit requirement can also reduce spam and DDoS attack efficiently. 6) User Contribution and Token Rewards End users in the TOP ecosystem can receive token rewards for their use of Dapps and their contribution to the ecosystem. Dapps can design benefit policies to reward users for holding tokens. 11

TOP Decentralized Open Communication Network For example, after holding a certain number of tokens for a certain period, users may get extra benefits such as special discounts or access to special functions and services on the Dapps. 2.3 TOP Architecture Overview 2.3.1 Network Layer The network layer, the physical infrastructure layer of TOP, is a P2P network provided and maintained by miners. It has three sub-networks. 1) TOP Chain consists of a main chain and multiple service chains. It provides ledger, payment service and cryptocurrency for the TOP ecosystem. 2) TOP off-chain is a processor and ledger that stores and processes business data off the chain in a trustworthy manner to reduce the workload and frequency of data processing on the blockchain ledgers. 3) TOP Network consists of two parts: TOP Communication Network, a distributed network for communication service, and TOP Storage Network, a distributed network for storage service. 2.3.2 Service Layer TOP Network provides distributed cloud communication services and distributed storage services. TOP Chain offers payment service, smart contracts and other on-chain services. 2.3.3 Interface Layer TOP Network provides communication services for Dapp through its APIs and SDKs. TOP Network also provides cross-chain bridges to export its communication services to other blockchain platforms. 2.3.4 Marketplace TOP Marketplace, a decentralized market built on smart contracts, allows miners to register their services and offer quotations and enables Dapps to submit queries and choose service providers that meet their specific requirements. 2.3.5 Dapp Dapp is an application built and deployed on TOP. Since TOP has two platforms - distributed cloud communication platform and a public blockchain platform, Dapps on TOP fall under two categories: 1) Apps using distributed cloud communication services provided by TOP 2) Apps only interacting with smart contracts deployed on TOP Chain 12

TOP Decentralized Open Communication Network 3. TOP Chain Most public blockchain platforms on the market today are designed for value transfer or financial transactions instead of for supporting real-world businesses that involve far more complex logic and workflow. In addition, many businesses require complicated data structures and generate a large amount of data and high-volume transactions. Communication service is a typical example of real-world businesses that have to process high-volume service transactions instantly. It is super challenging for a blockchain to settle such an enormous volume of business in real time, a task that none of the existing blockchain platforms can handle. The ultimate processing capability of a blockchain, in terms of transactions per second (TPS), is constrained by the network bandwidth between nodes despite the application of Vertical Scale-Up or Horizontal Scale-Out strategy. The network throughput between nodes in the permissionless public Internet is limited in practice. To mitigate the scalability issue, some blockchain platforms such as EOS attempt to use a few permission-based nodes to execute consensus algorithms on behalf of the entire network, which compromises the principle of decentralization on the blockchain. As a general-purpose blockchain platform starting from supporting communication and social networking services, TOP is specifically designed to handle complex real-world businesses on the blockchain. To process complicated, high-volume business data, TOP needs to address the following key issues: 1) Capability to support complex business logic on the blockchain As real-world businesses have their unique business logic and different business data structures, it is impractical for a single blockchain to accommodate all the businesses. Instead, TOP is designed to be pluggable so that new businesses can easily move to a blockchain. 2) Capability to process and store large amounts of data Many businesses generate large amounts of data, and usually not all of these data should be processed and stored on the blockchains. On TOP blockchain platform, most business data are processed and stored by off-chain processors in a trusted manner. Only the aggregated data are uploaded to the blockchains. 3) Capability to process huge volumes of transactions Although off-chain processors can process large amounts of business data, the volume of business transactions submitted to blockchains can still be enormous. For example, the cloud communication services on TOP Network are expected to generate tens of thousands of transactions every second in its early stage. Thus, a single chain on TOP blockchain platform should be able to handle at least tens of thousands of transactions per second. 4) Instant confirmation of transactions Most real-world business settlements need to be completed in real time to ensure a positive user experience. TOP blockchain platform uses unit lattice (i.e., transaction lattice) data structure 13

TOP Decentralized Open Communication Network organize transactions and employs PBFT-DPoS consensus mechanism to validate transactions. These techniques allow TOP to settle transactions promptly. 5) Zero transaction fees For the real-world businesses, especially communication services, the settlement price of each service transaction can be very low. Should a blockchain be used as a value transfer platform for such businesses, the platform shall not charge any transaction fee. Otherwise, it would be uneconomical for a business to be deployed and settled on the blockchain. 6) Secure and flexible smart contracts Implementing complex business logic requires powerful smart contracts. Smart contracts built on Turing complete languages are flexible but may be vulnerable to cyber attacks. TOP blockchain platform supports both Turing complete and non-Turing complete smart contracts that serve different purposes, providing flexible and secure smart contracts to accommodate various use cases. TOP Blockchain Platform Architecture: The TOP blockchain platform is a three-layer architecture: one main chain, multiple service chains, and off-chain processors. The main chain manages the initialization, registration and discovery of service 14

TOP Decentralized Open Communication Network chains and provides account management, chain clock and address space for service chains. The main chain does not rely on service chains or participant in the transaction processing on any service chain. Instead, the main chain is only responsible for the financial settlement. Since different types of businesses have unique business logic and could generate transactions of different volume and data structures, a service chain is designed to process a specific type of business and can choose any consensus mechanism and data structure. For instance, on TOP Network, VPN service is processed on the Proxy Service Chain, while CDN service is processed on the CDN Service Chain. To add a new type of business to the ecosystem, TOP creates on demand a new service chain tailored to the customized consensus mechanism and the specific business workflow. The off-chain processors handle and store business data on the off-chain network to reduce the amount and frequency of data processed and stored on the chain. TOP blockchain platform offers two types of smart contracts: Platform Contract for asset transaction and Service Contract for cloud communication services. Platform Contract and Service Contract are executed separately in the isolated virtual machine (VM) environments, a method that ensures both flexibility and security. By taking advantage of both directed acyclic graph (DAG) data structure and block data structure, TOP Chain uses unit lattice structure to organize transactions and block lattice structure to synchronize account states. This dual lattice architecture is one of the key technologies to achieve fast confirmation of transactions and efficient cross-shard and cross-zone state synchronization. Compared to other DAG- based public blockchain platforms, TOP Chain is far more decentralized and therefore much safer and faster. 3.1 TOP Blockchain Architecture So far, the processing capacity of any existing blockchain platform is too low compared with that of most centralized systems. Worse still, the transaction confirmation process on the existing blockchain platforms is also very slow. As a result, the blockchain platforms available on the market can hardly be used to process real businesses except for limited, experimental financial applications. Nowadays, blockchain platforms powered by new-generation technology are emerging, many of which attempt to find unique ways to improve transaction processing capacity significantly. One method is to improve the efficiency of the consensus mechanism. Besides that, the following two strategies can also improve the transaction processing capacity of public blockchains: 1) Vertical Scale-Up The vertical scale-up strategy requires each node to have powerful computing power, large throughput bandwidth and huge memory. As all individual nodes have sufficient processing capacity, the entire system can process a large number of transactions. However, in a completely permissionless network, nodes vary in their computing power and network bandwidth capacity, making it difficult for all nodes to meet the same high requirements. Thus, the vertical scale-up strategy mainly exists on the permissioned networks or federated blockchains where only a few 15

TOP Decentralized Open Communication Network high-performance nodes participate in the consensus process. A typical example is EOS, a semi- decentralized blockchain platform. Blockchains based on the permissioned networks achieve high scalability but sacrifice decentralization, violating the principle of blockchain for distributed computing and inevitably hurting their trustability. Moreover, the consensus networks on such blockchains, less secure and more vulnerable to cyber attacks compared with those on the utterly decentralized blockchain, can be shut down by the government easily in the name of law enforcement. 2) Horizontal Scale-Out Sharding is the principal technique used in the horizontal scale-out strategies. The consensus network is divided into several groups, and consensus nodes in each group can verify and confirm transactions in parallel. If the number of shards is carefully calibrated, sharding can improve blockchain performance effectively. However, when the number of shards reaches a certain point, the number of cross-shard transactions increases significantly so the processing capacity of the entire system stops improving. Some blockchain projects claim in their whitepapers that they can support infinite sharding, which is impossible to realize. The ultimate processing capacity achieved with the horizontal scale-out strategy is limited by the network bandwidth throughput of the individual nodes located at the top level of all shards, or root nodes. When TPS of the blockchain reaches 10,000, the network bandwidth throughput of a root node exceeds 50Mbps. In order for the system to achieve 100,000 TPS, each root node has to meet the bandwidth requirement of over 500Mbps, which could be tough to achieve in a purely permissionless network, which any node can join and leave at any time. As a strong advocate of distributed computing, we firmly believe that a real blockchain platform must operate on the permissionless networks. We construct TOP Chain on a completely permissionless network. By adopting layered network structure and two-layer sharding technique on the consensus network, TOP Chain can achieve performance comparable to the permission- based networks. TOP Blockchain Architecture: 16

TOP Decentralized Open Communication Network 3.1.1 Layered Consensus Network The consensus network of TOP Chain consists of three layers - Edge Network that provides access points for clients, Routing Network that synchronizes transactions and states across zones and shards, and Core Network that executes the actual consensus process for transactions. 17

TOP Decentralized Open Communication Network 3.1.1.1 Edge Network Edge Network, the only entrance for clients (apps or users) to access TOP Chain, consists of a collection of Edge Nodes. Edge Nodes relay messages and transactions without performing any transaction consensus. Edge Nodes don’t keep a complete ledger or generate any transaction. The primary purpose of the Edge Network is to protect Routing Network and Core Network. 3.1.1.2 Routing Network Routing Network, comprised of Advanced Nodes, routes transactions from the Edge Network to the Core Network, where transactions are verified. Although it does not take part in the consensus process or generate new transactions, the Routing Network adds an additional layer of transaction security by auditing transactions confirmed by the Core. Advanced Nodes on the Routing Network also manage shards and synchronize account state across the shards. 18

TOP Decentralized Open Communication Network 3.1.1.3 Core Network Core Network, the consensus network of the TOP Chain, is divided into multiple zones and shards. The whole TOP system is partitioned into several zones, and then each zone is dynamically divided into multiple shards. Each shard validates and executes consensus on separate sets of transactions concurrently. In this way, the two-layer sharding network can process large volumes of transactions as a whole. Nodes on the Core Network, referred to as Core Nodes, are elected according to their stake on TOP. Then, a certain number of Core Nodes are randomly selected by a verifiable random function (VRF) algorithm to form the consensus overlay network in each shard. Those nodes on the consensus networks are named as consensus nodes. For security reasons, the number of nodes in each shard should reach a certain threshold, for instance, at least 21 consensus nodes and at least nine backup nodes. The consensus nodes in a shard perform PBFT consensus algorithm on all transactions submitted to the corresponding shard. 3.1.2 Core Objects 3.1.2.1 Account A user account can be considered as an address on the chain. An account is a set of data object containing state information and logic, including account balance (Balance), data properties (Property), and Actions for each data property. The account balance can also be treated as a special data property. An action could be a system-level function or a smart contract deployed by the account owner. The data object and its processing logic in an account can be easily and flexibly extended with new properties and customized actions. 3.1.2.2 Property A property of an account is a user-defined data object, which is a key-value pair. The key is an arbitrary string whose value can be any of the data types such as Integer, String, List, Hashmap and so on. Account balance, a special property, exists when the account is generated. 3.1.2.3 Action An action provides flexible logical processing capabilities for a property. An action can be a built-in system function such as Hash and Vote, or a user-defined smart contract. Users can trigger an action by sending a transaction or a message. 3.1.2.4 Message A message is an instruction that initiates an action on a property of an account. Data attached to a message contain property, action, input parameters and output parameters. For security purposes, a message cannot alter the account balance. 19

TOP Decentralized Open Communication Network A message is a special kind of transaction. An account sending high-frequency messages is subject to flow control and has to pay gas fees, or the account owner may be forced to perform proof of work (POW). 3.1.2.5 Transaction A transaction refers to an instruction that initiates an asset transfer from one account to another. A transaction can also contain an action that will be triggered when the transaction is being processed. 3.1.2.6 Unit Lattice A transaction or a message may change the value of a certain property and consequently the state of the account. Each transaction or message applied to an account is called a transaction record or a unit. When TOP Chain stores the units of an account, each unit is linked to the previous unit. All the past events on the account as well as the latest status of all its properties can be retrieved through the process of navigating all the units of an account from the beginning unit (that is, the initial state of all properties when the account is created) to the last unit. Essentially, all units of an account are linked to form a tiny chain, named as a unit chain. The collection of unit chains of all accounts in a shard is called a unit lattice. As the data structure of a unit chain shows, the last unit contains all the information that proves the validity of the final state values of all properties in an account. As a result, the unit chain can be safely pruned to keep only the last unit. TOP Chain can prune all unit chains in a shard in real time without affecting the whole system, significantly reducing the footprint of the entire blockchain. Unit Lattice Account #1 Account #N Balance Transaction Action Balance Transaction Action Balance Transaction Action Balance Transaction Action Balance Transaction Action Balance Transaction Action Balance Transaction Action Balance Transaction Action Most recent Balance Transaction Action 20

TOP Decentralized Open Communication Network 3.1.2.7 Block Lattice On TOP Chain, each shard periodically packs the last units of all the updated accounts in the shard to form blocks and then submits the blocks to the Routing Network. The set of all these blocks within a zone is called a block lattice. The block is the basic data structure for cross-shard synchronization and block lattice for cross-zone synchronization. Block Lattice Account Space 1-M Account Space B1-Bn Last Unit Account 1 Last Unit Account B1 Block #1 Block #1 Last Unit Account 2 Last Unit Account B2 Last Unit Account M Last Unit Account Bn Last Unit Account 1 Last Unit Account B1 Block #2 Block #2 Last Unit Account 2 Last Unit Account B2 Last Unit Account M Last Unit Account Bn Last Unit Account 1 Last Unit Account B1 Block #3 Block #3 Last Unit Account 2 Last Unit Account B2 Last Unit Account M Last Unit Account Bn Most recent 3.2 Consensus Mechanism TOP Chain uses PBFT-DPoS (practical byzantine fault tolerance with delegated proof of stake) consensus mechanism specially designed to support real businesses on the blockchain. In the traditional DPoS consensus mechanism, consensus nodes are selected based solely on their stake, or the size of their assets, leading to the the-rich-get-richer situation. The stake defined on TOP Chain, called Comprehensive Stake, combines multiple factors including asset stake, accumulated reputation, computing power and so on. TOP uses a VRF algorithm to elect the final consensus nodes among nodes with the highest comprehensive stake. The consensus nodes execute PBFT algorithm to validate transactions and produce blocks. The consensus mechanism protects the security and integrity of TOP Chain. 21

TOP Decentralized Open Communication Network 3.2.1 Definition of Comprehensive Stake The comprehensive stake defined by TOP includes the following four factors: 1) Computing Power of a Node To join the consensus network in TOP, a node needs to meet the basic computing power requirements. The proof of work (PoW) algorithm adopted by TOP is a variant of the Scrypt, which demands a node to have high throughput input/output (IO) and large memory. In addition, the PoW algorithm is highly anti-ASIC. 2) Network Capability of a Node The proof-of-bandwidth (PoB) consensus mechanism evaluates and measures the network capacity of a node. The PoB algorithm first randomly picks a batch of evaluating nodes from the candidate node pool and then instructs them to test the network bandwidth of the target nodes. 3) Asset Stake of a Node The asset stake refers to the number of TOP Tokens locked up for a certain period the node holds in its account. The tokens shall meet the minimum lock-up period requirement. 4) Reputation of a Node The reputation of a node measures its accumulated contributions to the system since it joins the network. More specifically, a node's reputation is the sum of the tokens that it has mined from the ecosystem, an epitome of its work history in the network. If a node conducts malicious activities that result in deposit forfeiture, its reputation will be negative. 3.2.2 Admission to Consensus Network To become a consensus node, a node first needs to join the candidate node pool. To be admitted into the candidate node pool, the node should meet specific requirements on its computing power, network capacity, asset stake and work reputation. After staying in the pool for a certain period, the node may be elected as a consensus node. 3.2.3 Sharding When the consensus network is sharded, a VRF algorithm first generates a random seed for sharding based on the historical information about the past shards, and then an improved FTS (follow-the-satoshi) algorithm randomly selects nodes from the node pool to form shards. In general, nodes with higher Comprehensive Stake are more likely to be selected to form shards. 3.2.4 Consensus Within each shard, consensus nodes use a PBFT algorithm to execute the consensus process on transactions. A transaction is confirmed after it obtains signatures from at least 2/3 of the consensus 22

TOP Decentralized Open Communication Network nodes in a shard and gets approval from an advanced node on the Routing Network, which audits the transaction submitted by the shard. 3.3 Cross-Shard & Cross-Zone Synchronization TOP chain uses block lattices to perform transaction synchronization among shards inside a zone. Each shard periodically packs into blocks the latest state information about all the changed accounts and passes the blocks on to other shards in the same zone, keeping all shards in one zone synchronized in terms of the account state. TOP Chain performs cross-zone synchronization similarly. Each zone generates blocks containing the latest state information on all the changed accounts and exchanges the blocks with other zones, synchronizing account state across all zones. 3.4 Smart Contract To ensure the smart contracts deployed on TOP Chain are flexible and secure, TOP offers two types of smart contracts - Platform Contracts and Service Contracts, which operates on independent and isolated virtual machines (VMs). More specifically, Platform contracts run on the Platform VM, while service contracts run on the Service VM designed for the service chains. TOP Chain employs a special virtual machine called Core VM to run built-in core functions that provide basic core functions such as Signature, Vote, Lock, Deposit, Transfer and more. These core functions are Turing complete and therefore very powerful and flexible. 3.4.1 Platform Contract A platform contract is deployed on the main chain to manage assets. Platform contracts are written in a Stack-based, non-Turing complete scripting language to ensure security and enforceability. However, platform contracts are allowed to call powerful core functions in Core VM. As a result, even though platform contracts are based on non-Turing complete language, they can still implement flexible functions with the help of the core functions in Core VM. 3.4.2 Service Contract A service contract is a smart contract deployed on a service chain to perform specific business logic. Service contracts can be written in Turing complete languages and thus can realize complex, flexible business logic. For security reasons, service contracts cannot directly change the financial assets in accounts. The virtual machine to execute service contracts is implemented in WebAssembly (WASM) and it supports various high-level languages including C, C++, JAVA, and JavaScript. Additionally, the virtual machine for service contracts provides features for efficient development, debugging and operation. 23

TOP Decentralized Open Communication Network 3.5 Layered Ledgers Transactions are processed in three separate layers of distributed ledgers so that a massive number of transactions generated from the communication services can be settled on TOP Network. The diagram below shows how the transactions of a VPN Session are processed: 1) Service Logs A service log contains detailed records of the services a business has used and could involve any set of business data that a distributed ledger needs to store. For example, when user A sends 10 messages to user B, 10 separate records are generated in the service log for user A, each containing details of one message. The service log could be gigantic when the volume of a service business is huge, especially for service businesses that provide services such as messaging, VPN (billed based on 512KB data blocks) and phone calls. The service log must be retained for billing and clearance purposes, but writing the entire log into the blockchain is unnecessary and impractical due to the log’s size and volume. Instead, service logs are generated by an off-chain processor and written into a decentralized storage provided by the TOP Storage subsystem. Validators randomly select and verify service logs on a regular basis to ensure the data in the logs are intact and accurate. The service log can be permanently saved in the TOP Storage. The owners of the service logs, typically Dapps, need to pay TOP Tokens to the nodes offering storage services. When the service log is no longer needed, a Dapp can request TOP to delete it. 2) Service Transactions A service transaction is a billing record submitted to the blockchain for the purpose of business settlement. To reduce the number of transactions the blockchain needs to process, an off-chain processor can merge multiple service records containing identical billing information into a single service transaction. For example, when user A sends 100 messages to user B, these messages are aggregated into a single service transaction that requests settlement for all the messages in one 24

TOP Decentralized Open Communication Network transaction. Although a service transaction does not include detailed information on each service record, it does contain index information that can locate the corresponding service log. Service transactions of a specific type of service are written into the service chain corresponding to the service type. For instance, the service transactions created by VPN will be written into the Proxy Service Chain. 3) Service Payments A service payment is a financial transaction that requests settlement of payment after the completion of a service session. Service payments are processed on the main chain. 3.6 Consensus Mechanisms of Service Chains TOP Chain is designed to support multiple consensus mechanisms as different types of business have different logic and workflows. TOP Chain allows each service chain to adopt its unique consensus mechanism to meet its business processing needs. 1) RCS Service Chain uses Proof-of-Delivery to reach consensus on message delivery. 2) Proxy Service Chain uses Proof-of-Bandwidth to reach consensus on network bandwidth consumed by users. 3) VoIP Service Chain uses Proof-of-Calltime to reach consensus on call duration. 4) Storage Service Chain uses Proof-of-Storage to reach consensus on storage space and time. 5) CDN Service Chain uses Proof-of-Bandwidth to reach consensus on bandwidth consumption. 3.7 Security 3.7.1 Transaction Flooding & DDoS In DDoS attacks, attackers may send a large number of transactions from accounts under their control to flood the whole system and thwart legitimate transaction processing. Such attacks seem possible as TOP Chain does not charge fees for general transactions, making it costless for attackers to submit a large number of transactions. TOP Chain has implemented several anti-attack strategies. It can be very expensive for an attacker to launch attacks by sending high volumes of transactions. 3.7.1.1 Fees for High-value or High-frequency Transactions TOP Chain does not charge fees for general transactions but requires payments for high-frequency or high-value transactions. A transaction is considered as high-value if its value exceeds the limit determined by the on-chain governance mechanism. TOP Chain may reject high-frequency transactions without gas fees according to its flow control policy. 25

TOP Decentralized Open Communication Network 3.7.1.2 Minimum Deposit An account must hold a minimum number of TOP tokens before it is allowed to create and submit a transaction to TOP Chain. This requirement significantly increases the cost for an attacker to generate a large number of accounts and subsequently send a large volume of transactions in order to launch an attack. 3.7.1.3 Flow Control on Transactions 1) Minimum Transaction Interval The minimum interval between two consecutive transactions under the same account, denoted as Wt, increases as the transaction frequency (Sx) increases. The waiting time between the first transaction and the second is denoted as W1 ms. The interval between the second and the third, denoted as W2, is W1 * (N+1)/N + Rand(x), and so on. Edge nodes reject high-frequency transactions submitted from accounts without a gas fee. 2) PoW Requirement Real users can increase transaction frequency by providing the proof of work (PoW) in each transaction they submit. The PoW is the Hash Puzzle calculated based on the information on the header of the last transaction. If each transaction contains PoW, the account can generate transactions at a fixed interval determined by the consensus of on-chain governance. 3.7.1.4 Additional Flow Control If an attacker somehow bypasses the flow control imposed by the Edge Network, some high-frequency transactions may get into the consensus network. The consensus nodes use information in the unit lattice to calculate the frequency of transactions initiated by a sender. When the transaction frequency exceeds the allowed threshold, the transactions in question will be rejected. 3.7.1.5 Locked Asset The new asset received from a transaction will be locked for a certain period, during which the asset cannot be transferred. The lock-up period, a parameter set by the system, depends on the value of the asset. Assets with higher value have longer lock-up time, which prevents circular transfer attacks and protects the safety of high-value transactions. 3.7.2 Sybil Attack In Sybil attacks, attackers attempt to create or control hundreds or thousands of nodes to sabotage the security of the consensus network. The following measures can prevent Sybil attacks. 26

TOP Decentralized Open Communication Network 3.7.2.1 Minimum Deposit Requirement Each node needs to have an independent account and make a minimum deposit in the account before joining the consensus network. Minimum deposit requirements are different for edge nodes, core nodes and advanced nodes. The more important the role of a node, the higher the minimum deposit the node has to put down. As a result, it is costly for an attacker to create and own many nodes to launch an attack. 3.7.2.2 Admission Requirement and Random Sharding A node needs to pass a capacity test using the Proof-of-Capacity algorithm before joining the network. A node should meet specific requirements on network bandwidth and CPU power if it intends to become a candidate node for the consensus network. The DPoS algorithm, based on the comprehensive stake, requires an attacker to accumulate a large sum of assets and stay in the system for a long period before launching an attack. These methods significantly increase the cost of an attack. Moreover, TOP Chain uses VRF to randomly select nodes to form a shard from the candidate node pool, reducing the probability of malicious collusion among nodes. 3.7.3 Penny-Spend Attack In penny-spend attacks, attackers send an enormous number of low-value transactions to a large number of accounts, preventing the system from processing legitimate transactions and wasting storage space in consensus nodes. The restrictions on high-frequency transactions and the minimum deposit requirement mentioned above can prevent most penny-spend attacks. In addition, transactions are stored in the unit lattices, where old transaction data in accounts can be pruned in real time as the system processes new transactions, significantly reducing the storage space for accounts and making it unlikely for penny-spend attacks to exhaust the storage space in nodes. 3.7.4 Attack on Single Shard In attacks targeting at single shard, attackers try to locate a shard in which a specific transaction occurs and then attempt to launch DDoS attacks on the shard, modify transactions or create fake transactions. TOP Chain prevents such attacks with the following measures: 3.7.4.1 Edge Network The Edge Network separates users and clients from the Core Network so that they can not directly connect to the Core Network to retrieve account and transaction information on consensus nodes. 27

TOP Decentralized Open Communication Network 3.7.4.2 Random Sharding The VRF algorithm randomly and dynamically selects consensus nodes to form shards. Shards dynamically rotate to serve different sets of account spaces. When validating transactions, each shard dynamically selects its PBFT leader. Such three-layer dynamic randomness makes it difficult for attackers to identify in advance the specific shard and node processing a specific transaction, minimizing the chance of malicious nodes colluding in advance and launching DDoS attacks on a specific node. 3.7.4.3 Double Auditing In order for a transaction to be confirmed, the transaction is first validated in a shard through the consensus (i.e., PBFT) mechanism, and then it will be further audited and signed by an advanced node in the Routing Network. An advanced node is selected dynamically at the transaction level, so, the attacker cannot anticipate which node will be responsible for auditing the transaction. In this way, malicious nodes in a shard, if any, cannot deceive the system into accepting fake transactions. 3.7.4.4 Shard Merge When a shard suffers a DDoS attack, its surviving nodes are so few that the shard cannot work securely. The attacked shard will automatically be merged into another shard to form a larger shard. 3.7.5 Double-Spend Attack TOP Chain organizes transactions into the unit lattices, where transactions initiated by an account are stored on a chain dedicated to the account. Therefore, transactions of an account will form its own micro chain. Each valid transaction of an account contains a unique nonce that monotonically increases as well as the hash value of the previous transaction that the system has confirmed. In addition, when a transaction is verified, the account balance is updated in real time, allowing each consensus node to discover and reject double-spend transactions immediately. 3.7.6 Smart Contract & EVM TOP Chain offers two types of smart contracts, namely Platform Contract and Service Contract, which are executed on independent and isolated virtual machines. Platform contracts, written in non-Turing complete scripting languages, handle account assets on the main chain. In comparison, service contracts are written in Turing complete languages and thus very flexible. However, service contracts are restricted to running on the independent service chains, which protects the main chain from asset losses caused by the loopholes in service contracts. 3.7.7 Single Node Attack In single node attacks, malicious nodes tamper with transactions or refuse to process transactions. However, even if one-third of the consensus nodes in a shard are malicious, the PBFT consensus 28

TOP Decentralized Open Communication Network algorithm can still guarantee that the remaining honest nodes execute the consensus process for transactions. Nodes that fail to process transactions in time are replaced by backup nodes. After the consensus nodes verify a transaction, the transaction needs to be audited and signed by an advanced node before getting the final confirmation, which allows advanced nodes to discover malicious nodes in a shard. The system selects advanced nodes randomly at the transaction level, making it impossible for consensus nodes to identify in advance the audit-conducting advanced node and preventing malicious collusion between advanced nodes and consensus nodes. 3.7.8 Replay Transaction Attack In a replay transaction attack, an attacker intercepts transaction packets on the transport layer in the operating system and saves the transactions for replay later. This attack is a variant of DDoS and double- spend attacks. TOP Chain prevents replay transaction attacks with the following strategies. 1) Each account has a monotonically incremental nonce to identify every transaction. Transactions with the same nounce initiated by one account will be rejected. 2) Each submitted transaction needs to contain the hash value of the latest valid transaction in the account. All transactions in the same account are organized into a unit lattice in chronological order of creation, which allows consensus nodes to determine easily whether an incoming transaction is a duplicate. 29

TOP Decentralized Open Communication Network 4. TOP Network As a decentralized open communication network, TOP Network provides a comprehensive suite of cloud communication services such as messaging, calling, video, VPN, CDN, live streaming, and IoT data sharing. It also offers decentralized storage service and user-generated content (UGC) management solutions and plans to develop new decentralized services such as distributed databases. Applications connect to TOP Network via its API and SDK for low-cost, secure and high-quality communication services. All applications on TOP Network are interoperable thanks to the adoption of open communication protocols. TOP Network, an open, transparent and automated platform without middlemen, provides a decentralized marketplace where service providers can reach the global market. TOP Network, a decentralized network, is free from the control of any government, operator or other organization and able to prevent user privacy violation and data breach. The end-to-end encryption technology ensures no one can intercept communication content on TOP Network. TOP Network Architecture: App VoIP Messaging Video Call VPN Live Streaming Social App App App App App App Choose Service Provider Interface API SDK Market Service VoIP RCS Proxy Streaming IoT DNS Storage UGC Miners Service Network Providers P2P Communication Network P2P Storage Network and Ledger Nodes TOP Network offers the following services: 30

TOP Decentralized Open Communication Network 4.1 TOP Communication Services TOP Network offers an array of network communication and telecommunication services, which can support any functions that a communication application requires. 4.1.1 TOP RCS Service TOP RCS (Rich Communication Service) offers the following services: • One-to-one Chat • Group Chat • Internet Call • Video Call • Walkie Talkie • Content Sharing • File Transfer • Presence • Others Developers can easily utilize TOP RCS to build a powerful messaging app similar to WeChat or WhatsApp. Since TOP RCS is based on the international standard protocol, all communication apps using TOP RCS are interoperable. On the contrary, WeChat, WhatsApp and Telegram cannot interact with each other as they are confined to their own private, incompatible protocols. TOP RCS implements end-to-end encryption with Double Ratchet algorithm. TOP uses X3DH algorithm to safely manage and exchange secret keys and encrypt data with AES 256 algorithm. Messaging apps supported by TOP RCS are highly secured and able to protect user privacy. No centralized third party can censor content or block users on TOP Network. TOP RCS Service adopts Proof-of-Delivery consensus algorithm to verify the workload of nodes that provide messaging services and uses Proof-of-Calltime consensus mechanism regarding the calling service. 4.1.2 TOP Proxy Service TOP Proxy Service provides a proxy overlay network for users to connect to the Internet, which is also known as Virtual Private Network (VPN) service. The proxy overlay network on TOP Network consists of a proxy server group and a relay server group. An individual server can act as both a proxy and a relay server. Below is the process of users accessing the Internet with TOP Proxy Service: 31

TOP Decentralized Open Communication Network 1) A user requests VPN service from TOP. 2) TOP Proxy Service randomly selects three relay servers and one proxy server. 3) The user connects to one of the relay servers, which is further connected to the proxy server through the other two relay servers. 4) The proxy server is connected to the Internet. TOP Proxy Service protects users' online security and anonymity and offers strong anti-blocking capability by adopting a series of techniques listed below. 1) The selection of three relay servers and one proxy server for each session is random. 2) Each server knows only the next server it is connected to instead of the entire transmission path. 3) Data is encrypted by each server and decrypted only by the next server. 4) Data is obfuscated by the client SDK and each relay server so that attackers cannot identify traffic patterns. 5) Traffic is split and passed on to the two intermediary relay servers so that neither of them has access to the entire traffic. TOP Proxy Service utilizes Proof-of-Bandwidth (PoB) consensus mechanism to verify the workload of each relay server and proxy server. 4.1.3 TOP Streaming Service TOP Steaming Service offers streaming media service and live streaming service. A P2P content distribution network (CDN) is built within TOP Network, via which TOP Network delivers videos to the audience. The CDN service developed by TOP costs much less compared with conventional CDN services, reducing bandwidth expenses significantly for developers. TOP Streaming Service supports standard HLS and HTTPS protocols. It is very easy and simple for apps to access TOP Streaming Service. 32

TOP Decentralized Open Communication Network TOP Streaming Service adopts Poof-of-Bandwidth (PoB) consensus mechanism to verify the workload of each streaming server. 4.1.4 TOP IoT Service TOP IoT Service provides standard communication protocols for IoT devices to interconnect and interact with each other. TOP IoT also offers SDK for IoT devices to convert their private protocols to standard protocols. TOP Network provides a secure public infrastructure network for a massive number of IoT devices to exchange and store data. TOP, an ecosystem of IoT, supports a variety of IoT device-related services including registration, discovery, remote call, settlement and payment. 4.1.5 TOP VoIP Service TOP VoIP Service provides PSTN telephony service, which enables users to make calls over the Internet to cell phones and landline phones. For VoIP calls, voice signals are carried on the Internet before reaching the PSTN network, allowing VoIP call providers to offer lower rates compared to traditional phone calls. The rate gap between VoIP calls and traditional calls is especially huge for International calls. TOP Network is an open communication network and it is entirely permissionless. Any voice termination providers from small voice aggregators to large carriers can join TOP Network to become a voice service provider. Without middlemen taking a share of on the service fees, TOP VoIP Service offers much lower price and better voice quality. Apps connect to TOP VoIP Service with TOP SDK, which encapsulates Audio Encoding/Decoding, QoS, protocol implementation, etc. TOP VoIP Service adopts Proof-of-Calltime consensus mechanism to verify the workload of VoIP service providers. 33

TOP Decentralized Open Communication Network 4.2 TOP Storage Service TOP Storage Service offers decentralized file-based storage service on TOP Network. It can be considered as the decentralized version of Amazon AWS S3. A file to be stored on TOP Network is segmented and encrypted, and each segment is stored in multiple nodes to ensure data security and reliability. Devices such as servers and computers with spare storage and bandwidth can join TOP Network as nodes to provide storage service and receive rewards in TOP token. Based on TOP Storage Service, TOP UGC Service helps app developers manage user-generated content (UGC) such as photos and videos. UGC management is an essential function of most social apps. TOP RCS Service also employs TOP UGC Service to handle photos and videos shared by users. TOP Storage Service uses Proof-of-Storage consensus mechanism to ensure that files are stably stored in the system. 4.3 TOP DNS Service TOP DNS Service provides a naming system for objects in TOP ecosystem. Human-readable names are assigned to nodes, accounts, smart contracts and Dapps without involving any centralized organization. Each end user has a unique name just like Email address or phone number. Objects are identified and found by their names instead of account addresses, which allows them to make payments more conveniently. 4.4 TOP Billing Service As mentioned before, business data are processed, booked and settled in three-layered ledgers. Payments are settled on the main chain. Multiple service transactions can be aggregated and written on a service chain in the form of a single record. Service logs generated by the off-chain processors are stored in the Service Log Storage, a decentralized database powered by TOP Storage Service. TOP Billing Service enables Dapps to generate detailed billing information such as invoices. To construct a billing statement, TOP Billing Service first locates the aggregated service transaction record on a service chain, and then retrieves from Service Log Storage database the specific service log that corresponds to the index in the aggregated record. Service fees on TOP Network are paid by Dapps to nodes. When a user requests a VPN session, it is the VPN app rather than the user who pays the service fee to proxy servers. Currently, TOP Billing Service does not support Dapps to charge end users, but Dapps can use smart contracts to charge end users based on the billing information generated by TOP Billing Service. 34

TOP Decentralized Open Communication Network 5. TOP Marketplace Cloud communication services on TOP Network are provided by various service providers, who tend to charge different prices. Apps, clients of these service providers, tend to have different requirements regarding the scope and price of services. TOP Marketplace, a decentralized, open marketplace, allows service providers to announce service information and apps to submit requirements. TOP automatically matches offers and bids to reach a deal between service providers and apps. The system creates contracts for paired parties and monitors contract execution. As a decentralized open market, TOP Marketplace ensures the scope, quality and price of services offered by any provider are transparent and consistent for each client. Market Protocol 5.1 Marketplace Smart Contract TOP Marketplace is implemented in a smart contract that lists services, matches ask prices and bids, lock deals and settle payments. 1) The service provider sends an offer to TOP Marketplace with ask price, the scope of service and other information. The offer also includes the amount of deposit the provider is willing to pay. The deposit is frozen once TOP Marketplace accepts the offer. 35

TOP Decentralized Open Communication Network 2) When a Dapp requests a service, the smart contract automatically finds the most suitable provider for the service and locks the deal. 3) A Dapp pays a fee for submitting a request to TOP Marketplace. The tokens, which Dapps use to pay the fee, will be burned. This method prevents the marketplace from being attacked by DDoS and indirectly encourages Dapps to use long-term contracts. 4) When a provider refuses to provide service after a deal is locked, the system confiscates its deposit and voids the tokens. 5.2 Market Order Matching Consensus For each service session, the smart contract that realizes TOP Marketplace creates a list of candidate service providers according to the service scope and bid price required by a Dapp. The system then generates from the candidate list three separate sub-lists sorted respectively by the amount of deposit, the length of service history and credit score. The system randomly picks up the final service provider among the top candidates on the three sub-lists. 5.2.1 Proof-of-Deposit Service providers offering larger deposit rank higher on the candidate sub-list. 5.2.2 Proof-of-Service-Time Service providers with higher credit scores rank higher on the candidate sub-list. 5.2.3 Proof-of-Credit-Score Service providers with longer service history rank higher on the candidate sub-list. The final selection algorithm could be described as: random(topN1(time_list) + topN2(deposit_list) + topN3(credit_list)) In the algorithm, N3 > 2* N2 > 4* N1, which means credit score has the greatest weight, followed by the deposit. In short, the final service providers are selected randomly among candidates that have the highest credit score, the largest deposit and the longest service history. 5.3 Consensus of Market Access To guarantee security and service quality on the network, TOP Marketplace sets up conditions of market access for service providers. A service provider entering the marketplace has to ensure its nodes meet the following standards. 36

TOP Decentralized Open Communication Network 5.3.1 Proof-of-CPU The nodes of a service provider joining TOP Network must meet specific requirements regarding their hash power. 5.3.2 Proof-of-Service Service providers joining TOP Network have to ensure their nodes meet specific service quality criteria. For example, a proxy node needs to prove it has sufficient network bandwidth capability. TOP Network constantly monitors the service quality of each node. 5.3.3 Proof-of-Deposit When a service provider sends an offer to the marketplace, a certain amount of tokens in the provider's account will be frozen as the deposit. 5.3.4 Proof-of-Certification Some communication services provided by TOP are telecom services, such as VoIP calls to PSTN network. A node providing telecom services must present a Class 2 Certificate. TOP system randomly selects a few other nodes to verify the certificate held by the node. 5.4 Market Stability 5.4.1 Market Credit Score TOP Marketplace adopts a decentralized credit rating system to encourage service providers to offer high-quality services. The credit score of a service provider is calculated based on the number of disputed transactions submitted by Dapps. Service providers with higher credit scores have higher chance to be selected. 5.4.2 Price Stability TOP Marketplace adopts a decentralized credit rating system to encourage service providers to offer high-quality services. A service provider’s credit score is determined by the number of disputed transactions submitted by Dapps. Service providers with higher credit scores have more chances to be selected in the marketplace. 37

TOP Decentralized Open Communication Network 6. Apps TOP Network is specially built for communication and social apps. It provides API and SDK for developers to quickly build and deploy their communication apps. With tools offered by TOP, even a small team can easily develop a full-featured messaging app similar to WhatsApp. Developers do not have to worry about the scalability and stability of the communication network when their apps attract millions of users, because TOP Network takes care of those issues for all apps, generating huge cost savings compared with in-house solutions. Developers can thus dedicate their resources to their businesses and leave technology development and network operations to TOP. 6.1 Dapps and Typical Cases Developers can quickly build rich communication applications or integrate communication and social functions into existing apps utilizing the cloud communication services provided by TOP Network. The typical products and use cases listed below are just the tip of the iceberg. 6.1.1 Messaging Apps Messaging, the core function of all social and communication apps, is widely used for person-to-person, man-to-machine and machine-to-machine communication. TOP RCS Service supports functions including one-to-one message, large group message, message receipt, picture message, voice and video message, file transfer, Walkie Talkie, voice call and video call. With TOP RCS Service, developers can quickly build full-featured messaging apps similar to WhatsApp or add messaging features to the existing apps. 6.1.2 VoIP Phone Call In a VoIP call, voice signals are transmitted over the Internet before reaching local telecom operators, a method that generates much lower costs compared with the traditional PSTN call. The rate gap between VoIP calls and traditional calls is huge, especially when it comes to international calls. Boosted by the wide adoption of broadband Internet, VoIP call businesses have been growing rapidly. The global VoIP market is expected to reach $140 billion by 2021 (Ref 4). 38

TOP Decentralized Open Communication Network Traditionally, developers need to sign bilateral agreements with telecom operators or voice gateway providers to offer VoIP service. Furthermore, for global service coverage, developers usually have to work with multiple telecom operators at the same time. Small developers often find it challenging to establish business relationships with telecom operators due to the high barriers to entry. With a decentralized consensus mechanism to verify service providers’ workload and a decentralized marketplace to facilitate deals, TOP VoIP Service creates a transparent platform that all telecom operators and voice gateway providers around the world can join in to serve customers. TOP offers much wider coverage than any single telecom operator. In addition, TOP VoIP Service does not take a share of service providers’ profits like a middleman and therefore can offer much lower rates compared with other networks. 6.1.3 VPN Service VPN is the most secure and effective tool to access the Internet without compromising user privacy. The fast-growing global VPN market is estimated to reach $106 billion by 2022 (Ref 2). TOP Proxy is a decentralized network of proxy servers without any individual or organization controlling the system. Powered by advanced technologies such as random selection of proxy servers, random network routing, traffic obfuscation and data packet encryption, TOP Proxy Service ensures anonymous, secure Internet connection and prevents firewalls from blocking the VPN service. Developers can utilize TOP Proxy Service SDK to build their VPN apps quickly to serve end users. 6.1.4 Live Streaming TOP Streaming Service is designed for developers to build live streaming apps. It addresses the two biggest headaches in the live streaming app development: • Technical hurdles: developers need to have an advanced technical background to build a live streaming app that provides low-latency, high-definition audio and video. TOP Streaming SDK offers a full-stack solution that supports audio/video encoding/decoding, transcoding, filtering, and network transmission. • Bandwidth costs: the bandwidth cost for a live streaming app increases significantly as the app’s user base grows. TOP Network can bring considerable savings to developers with a decentralized CDN service powered by TOP Streaming Service, which is much cheaper than the traditional CDN. 6.1.5 Social Apps For social networking apps, TOP Network can provide various decentralized services such as data storage, UGC management, ID management and communication. TOP allows social apps to issue their unique tokens to build their token economies. 39

TOP Decentralized Open Communication Network 6.2 Decentralized or Partially-Centralized Apps The decentralized TOP Network provides all the core capabilities required for communication and social apps and allows apps to utilize smart contracts to implement additional business logic, enabling developers to build completely decentralized apps on the TOP platform. TOP stores app data such as user information securely on the blockchain and uses end-to-end encryption technology to protect communication content, making it difficult for any individual or organization to block users, censor content or steal user data. A completely decentralized app on TOP is free from security breaches plaguing centralized apps. Developers can choose to use centralized systems along with TOP Network. For example, an app may use a centralized database to manage users and utilize TOP Network for communication and storage solutions. Such an app is semi-decentralized. As an open network, TOP Network provides open protocols and API for developers to integrate TOP seamless with centralized infrast ructure. 40

TOP Decentralized Open Communication Network 6.3 TOP API & SDK The APIs and SDK kits provided by TOP enable developers to implement various communication apps quickly. • TOP API is a simple set of HTTPS Restful APIs and therefore suitable for Web apps. • TOP SDK provides interfaces for native operating systems - Android, iOS, Mac, Windows and Linux. TOP SDK also provides Media Engines for audio and video encoding/decoding, pre- processing, post-processing and so on. The source code of TOP SDK is open to the community and maintained by the community. 6.4 App: Dingtone, CoverMe, SkyVPN, TOP Messenger Over the past several years, the TOP founding team has successfully developed multiple communication apps including Dingtone, CoverMe and SkyVPN, which have performed excellently in their respective markets. These apps are semi-decentralized: they share the same underlying communication network layer that has a distributed architecture, while they have separate user databases and billing systems. These apps will be moved to the TOP platform upon the roll-out of TOP and become the first Dapps on TOP. Part of the source code for these products will be open to the TOP community to help developers build high-quality decentralized communication apps. 6.4.1 Dingtone Dingtone is a market-leading VoIP app that provides a variety of rich communication functions including VoIP calling, international SMS, cloud phone number, messaging, groups, fax, teleconferencing and more. Its 38 million global users, over 30% of whom are in the United States, generate 1 billion minutes of calling annually. Dingtone has signed bilateral agreements with major telecom operators worldwide, including Tata, BICS, KPN/iBasis and IDT, so that Dingtone phone calls can reach any country or region across the globe. 41

TOP Decentralized Open Communication Network Upon being moved to the TOP platform, Dingtone can bring huge volumes of business quickly to the TOP ecosystem. Dingtone will also fully benefit from the scale of TOP Network and further reduce its infrastructure cost. Dingtone plans to implement a built-in TOP light wallet so that Dingtone users can directly own TOP Tokens. Dingtone has pioneered the business model that allows users to earn points by watching ads and use points to pay for VoIP calls later. Dingtone plans to replace Dingtone point with TOP Token, a strategy expected to bring considerable liquidity to the ecosystem. TOP Token can also increase the user retention rate on Dingtone, as users can unlock premium features or enjoy special rates on Dingtone by holding a certain number of TOP Tokens in the light wallet. 6.4.2 CoverMe CoverMe is the first secure messaging app that has implemented end-to-end encryption technology, which Telegram and WhatsApp later adopted. CoverMe offers other powerful security features such as encrypted phone calls, self-destructed messaging, secure vault, decoy password and more. The app has attracted over 5 million high-end users, mostly iOS users in the United States, who take data security and privacy seriously. 42

TOP Decentralized Open Communication Network After being moved to the TOP platform, CoverMe will become a thoroughly decentralized and serverless app that supports secure, end-to-end encrypted messaging. 6.4.3 SkyVPN Since its launch in 2017, SkyVPN has quickly become a rising star in the VPN market thanks to its fast connection speed and its excellent anti-blocking ability enabled by advanced technologies such as anti- DPI (Deep Packet Inspection), traffic obfuscation and shadow protocol tunnel. SkyVPN has hit 18 million users and is expanding its user base rapidly. SkyVPN clients on Windows and Mac platform can join TOP Network as proxy servers and receive token rewards for their bandwidth contribution to the network, which is a crucial step to construct the community-owned TOP Network. With millions of proxy servers, SkyVPN will have much stronger anti- blocking ability and further protect user anonymity. 43

TOP Decentralized Open Communication Network 6.4.4 TOP Messenger Built entirely on TOP Network, TOP Messenger provides all the functions and features of WeChat, WhatsApp and Skype with a higher level of security and user privacy protection. TOP Messenger can interconnect with any other communication app that adopts the RCS protocol. An open-source, non-profit project developed by the community without the control of any organization, TOP Messenger creates a safe space clear of censorship where every user speaks freely. In comparison, messaging apps including WeChat, WhatsApp and Facebook Messenger, all controlled by Internet giants, confine users to their walled gardens, commercialize users as products, and have considerable power to block, censor and filter any content or user. TOP Messenger WeChat WhatsApp Architecture Decentralized Centralized Centralized Openness Open, interoperable Closed, walled Closed, walled garden garden Security Ene-to-end encrypted Messages can be User information and messaging monitored data are saved in a centralized system Privacy Data is owned by Data may be shared Data may be shared users and leaked and leaked Freedom Complete freedom Censored Facebook can block anything on the platform Cryptocurrency Cryptocurrency wallet, NA NA payment and C2C exchange TOP Messenger, not just a messaging app, offers deep integrated features for cryptocurrency such as cryptocurrency wallet, payment and decentralized exchange. 44

TOP Decentralized Open Communication Network 7. TOP Ecosystem The fundamental goal of TOP Network is to build a public network infrastructure that brings practical value to the society. Using TOP as the underlying infrastructure, developers can build rich communication and social networking apps easily to serve massive users. TOP Token, the native token on TOP Network, brings all participants in TOP together form an ecosystem. All the communication services provided by TOP have huge market size and are expected to generate massive volumes of business and transactions in the ecosystem, thus bringing TOP to its prosperity. 7.1 Ecosystem Participants 7.1.1 Ledger Miners Ledger miners on TOP Chain verify transactions, maintain ledgers and execute smart contracts. Ledger miners mine TOP Tokens by verifying transactions with the PBFT-DPoS consensus algorithm. TOP is a permissionless public blockchain platform, where miners can contribute nodes to the consensus network freely. 45

TOP Decentralized Open Communication Network 7.1.2 Service Miners A service miner is a service provider that contributes nodes to TOP Network to offer various communication services. For instance, if a data center operator attempts to provide proxy services by connecting its 10 servers to TOP Network, this data center operator becomes a service miner. By providing communication services, a service miner earns service fees in the form of TOP Tokens. Assuming that the price for VPN traffic is 1 TOP Token per 1GB data, a VPN user who consumes 1GB data traffic needs to pay 1 token. If this 1GB traffic flows through three relay servers and one proxy server, these four nodes will share the 1 token reward at the end of the VPN session. A node can be a service miner and ledger miner at the same time. This dual-role miner can mine tokens by both verifying transactions and providing communications services. 7.1.3 Developers and Apps The ultimate value of the TOP ecosystem is essentially determined by the number and quality of apps built by developers. High-quality apps with large numbers of users can generate huge volumes of transactions. App developers or end users pay for the communication services they consume. As the service usage grows, service miners earn more service fees and more service miners join the TOP ecosystem. Dingtone, CoverMe and SkyVPN, apps developed by the TOP founding team prior to this project, will be the first apps to run on TOP. With over 50 million existing users, they can immediately bring colossal volumes of business to the TOP ecosystem upon their migration to TOP. 7.1.4 End Users The end users of Dapps is the ultimate source of business growth in the TOP ecosystem. By using functions in the Dapps, end users directly or indirectly generate transactions on TOP. However, in most cases, it is the Dapp developers instead of the end users who pay service miners for communication services. For example, a messaging app built on TOP does not charge end users, but the app developer needs to pay fees to nodes that provide messaging services. End users typically make payments to the developers. As mentioned above, end users contribute to the ecosystem by using Dapps, so Dapps may incentivize end users with token rewards based on their Dapp usage. For instance, when a messaging app user on TOP creates a group chat with 500 other users, this user receives one TOP Token for every 100 hours of total usage generated in this group chat. 46

TOP Decentralized Open Communication Network 7.1.5 Cross - Chain Services One of TOP’s design goals is to offer a public communication network infrastructure. As an utterly open network, TOP is open not only to Dapps but also to other blockchain platforms. TOP provides cross-chain bridges for other blockchain platforms to access the decentralized cloud communication services on TOP. 7.2 Build The Ecosystem TOP, a decentralized blockchain-based communication network infrastructure, carries real business services rather than aims solely at digital currencies. The prosperity of the TOP ecosystem relies heavily on the sufficient business volumes that the Dapps on TOP can generate and sustain. 7.2.1 Port Dingtone, CoverMe and SkyVPN to TOP Dingtone, CoverMe and SkyVPN, created by the founding team of TOP, are expected to be ported to TOP simultaneously during the development of TOP. Upon the launch of TOP, these apps can bring massive volumes of business to TOP immediately: • TOP VoIP Service will carry one billion-minute voice calls generated on Dingtone annually, bringing vast volumes of business to service miners. Service fees will be paid in TOP Tokens instead of fiat currency. Dingtone is also a social messaging app delivering billions of messages monthly. Photos and videos shared by Dingtone users will be saved in TOP Storage, bringing considerable business volume for storage service miners. • CoverMe users are motivated to pay for the premium service with TOP Tokens because cryptocurrency payment can enhance anonymity significantly. With 4 million high-end users, CoverMe can generate large numbers of token holders. Private vault, a function commonly used by CoverMe users, saves private photos, videos and files securely. Once CoverMe is ported to the TOP platform, the private vault will be realized with TOP Storage, creating huge demand for storage service. • SkyVPN, having attracted over 10 million users, generates over 300TB VPN traffic daily. Once SkyVPN is ported to TOP, VPN traffic will be transmitted through TOP Proxy Service, creating huge volumes of business for the proxy service miners. Along with the migration of Dingtone, CoverMe and SkyVPN to TOP, their current business partners will join the TOP platform, bringing many heavyweight partners (i.e., service miners) to the TOP ecosystem immediately: • The servers that Dingtone deploys on 18 Internet backbone networks across the globe will become service miners (or nodes) on TOP Network. • Dingtone's global telecom partners, such as Tata, KPN/iBasis, IDT and BICS, will connect to TOP Network as VoIP service providers. • Data center partners of SkyVPN worldwide will join TOP to provide proxy service. 47

TOP Decentralized Open Communication Network 7.2.2 Developer Incentive Program The TOP ecosystem can continue to flourish only if developers port to or build on TOP a large number of high-quality apps. In TOP's token distribution program, a certain number of tokens are allocated to reward early developers. Telos Foundation plans to reward developers with tokens as initial incentives for joining the TOP ecosystem. Meanwhile, the foundation plans to subsidize service fees paid by developers. All the incentive tokens are locked in a smart contract and intended for service fee payment only. 7.2.3 User Incentive Program Users are the ultimate consumers of various services in the TOP ecosystem. TOP cannot generate constant business without the end consumers’ continuous app usage. Users in the TOP ecosystem belong to Dapps, so only app developers can decide how to reward their users. Here is a typical user reward case among an array of incentive mechanisms: 1) An app developer issues a new token on the TOP platform (supposing it’s called App Token). 2) The app rewards users based on their app usage. For example, a user gets one App Token after using the app for a certain period. 3) By holding a certain amount of App Tokens, users can unlock certain premium features in the app. Dingtone and SkyVPN, as the very first Dapps onTOP, will implement user incentive plans. For example, Dingtone's users will be incentivized in the following ways: 1) A user will be rewarded with TOP Tokens for inviting friends to join Dingtone, who generates continuous usage within Dingtone. 2) A user will get reward tokens for creating a large group chat which generates a certain amount of usage. 7.2.4 Service Miner Incentive Plan Unlike miners on Bitcoin and Ethereum, TOP's service miners cannot mine tokens by calculating hash functions but need to provide communication services to earn service fees. Dapps rely on service miners to realize high-quality functions. TOP Network cannot offer high-quality service without a sufficient number of service miners. Besides communication service fees, service miners can get additional incentives. In TOP Token distribution plan, some tokens are reserved as extra incentives for service miners. Service miners get extra incentives in the following three ways: 48

TOP Decentralized Open Communication Network 1) Initial Incentive for Miners to Join the Ecosystem In the early-stage development of the TOP ecosystem, Telos Foundation will reward service miners with a certain amount of tokens when they join TOP. These tokens are locked in a smart contract until the miners have earned a certain amount of service fees and provided sufficient services for over 12 months. 2) Bonus Service Fees In the early-stage development of the TOP ecosystem, Telos Foundation will give bonus service fee to a service miner when the volume of its accumulated service hits a certain threshold. Miners can use bonus tokens only as deposits but cannot withdraw them. 3) Incentive for Advanced Service Nodes Advanced service nodes play a much bigger role than normal service nodes on TOP Network. Advanced service nodes also provide many services, such as offline message storage service, without charging fees. TOP issues additional 0.7%-1% of tokens per year to reward advanced service nodes. 49

TOP Decentralized Open Communication Network 8. Token Distribution TOP plans to issue 20 billion TOP Tokens using ERC20 standard on Ethereum. After the launch of TOP mainnet, the ERC20-based tokens will be mapped to the native tokens on TOP. Token Distribution: • Team – 15% of Tokens • Foundation – 15% of Tokens • Contributors – 22% of Tokens • Mining – 38% of Tokens • Business Partners, Marketing, Advisors – 10% of Tokens 50

TOP Decentralized Open Communication Network 9. Team Over 20 years ago, the core members on TOP's founding team built the WebEx product, a well-known Web conference service. They all have strong background in network communications, network security and cloud computing. The team also successfully developed three outstanding communication apps: Dingtone, CoverMe and SkyVPN. Core Team Steve Wei CEO Co-founder Steve is a successful serial entrepreneur. A founding employee at WebEx, Steve held multiple key positions at WebEx from 1996 to 2003. In 2004, he founded Cenwave Communications, a video conferencing software company successfully sold to Huawei in 2010. In 2012, Steve founded Dingtone, which operates apps including Dingtone, CoverMe and SkyVPN that altogether have attracted over 50 million users. Steve earned his bachelor’s degree at Tsinghua University. Noah Wang CMO & BD Co-founder Noah has extensive experiences in investment, accounting and auditing. Noah served as the U.S. West Coast Regional Head at Starr Strategic Holding, the founding shareholder of AIG, overseeing investment management and cross-border mergers and acquisitions. Before Starr, Noah worked for PwC and ICBC. He is a charter member of HYSTA and the Alumni Relations Chair of Young Executive Board at Cheung Kong Graduate School of Business. Noah received an MBA degree from Yale University. He is a CFA charterholder, a CPA and a Mensa International member. Kelven Yang Chief Architect Co-founder A full stack developer and the first developer at WebEx, Kelven designed the technical framework of WebEx and contributed the most source code of WebEx communication server. He joined Cloud.com as a principal engineer in 2009. Kelven co-founded Dingtone in 2012 and served as the chief architect. Peter Wei 51

TOP Decentralized Open Communication Network VP of Engineers Co-founder Peter Wei was one of the founding employees at WebEx holding multiple important development positions from 1996 to 2002. Peter later served as the development director, principal architect and other crucial R&D roles at Fortinet and Trend Micro. Peter is a senior cybersecurity expert holding 33 patents in the field. Since 2015, Peter has served as VP of Engineering at Dingtone. Taylor Wei VP of Platform Co-founder Taylor joined WebEx in 2001 and served as one of the key developers of WebEx Mobile. Taylor co- founded Dingtone in 2012 and served as VP of Platform. Taylor is a senior network communication architect and cryptography expert. He designed the security architecture of CoverMe, an end-to-end encrypted messaging app, long before Telegram and WhatsApp implemented end-to-end message encryption. 52

TOP Decentralized Open Communication Network 10. Roadmap 53

TOP Decentralized Open Communication Network 11. Governance 11.1 Communities 11.1.1 Telos Foundation Telos Foundation is an independent non-profit organization based in Singapore. Currently, Telos Foundation, the operating entity of TOP, oversees TOP’s technical development, marketing and governance. The long-term mission of Telos Foundation is to become a democratic governance body serving all participants in the TOP ecosystem. Operation transparency is the paramount principle of Telos Foundation. The foundation will regularly release budgets, financial reports and operation plans to the community. Major decisions will be disclosed to the community in advance to solicit comments. The decision-making body in Telos Foundation is the executive committee, its members including directors of the foundation, CEO and community representatives. Major matters, such as annual budget, large expenditure and strategic plan, need the committee’s approval. The CEO directs the daily operation of the foundation. The standard committee under Telos Foundation formulates standards and rules in the TOP ecosystem. The standard committee sets up multiple working groups focused respectively on issues including security, community incentivization and community feedback. Standard committee members are elected by the community. 11.1.2 Community Board The community board is the legislative body responsible for on-chain governance, whose members are elected by the community based on DPoS algorithm. The board votes on the standards, rules and draft laws. A draft law endorsed by over 50% of board members becomes law. The community board has only legislative power, while Telos Foundation is responsible for the enforcement of standards, rules, and laws. Telos Foundation organizes the election of the community board members. If needed, the foundation can request the community to re-elect the community board. 54

TOP Decentralized Open Communication Network 11.2 On-Chain Governance 11.2.1 On-Chain Governance Protocols The on-chain governance of TOP is performed by a variety of modules such as version control, sharding management and incentive mechanisms. Each module is assigned an account whose properties are intended to store parameters. When the community board reaches an agreement on new parameters of a specific module, each node will obtain the upgraded parameter values automatically by querying the corresponding account. Thus, the parameter upgrade of the entire chain can be realized automatically. 11.2.2 The Governance Process Each working group under the standard committee collects feedbacks from the community and submits them to the committee. The standard committee then votes on the submitted proposals. The drafts endorsed by over 50% of committee members will be signed by Telos Foundation and submitted to the community board for on-chain voting, which is implemented through a smart contract. A draft that receives over 50% of the votes by the board will become a formal resolution on TOP Chain. 11.2.3 Software Upgrades for Nodes If the resolution approved by the community board requires nodes to upgrade their software, the nodes will automatically download the latest software package upon notification and complete the upgrade automatically after confirming the legitimacy of the downloaded software package. 55

TOP Decentralized Open Communication Network 12. References [1] Number of mobile messages sent through WhatsApp as of 2nd quarter 2017 https://www.statista.com/statistics/258743/daily-mobile-message-volume-of-whatsapp-messenger/. [2] Global Virtual Private Network Market Virtual Private Network (VPN) Market Expected to Reach USD 106 Billion by 2022 at a CAGR of 13% - Market Research Future. [3] Skype Daily Usage Skype users make up to 3 billion minutes of calls each day in 2018 - Microsoft. [4] Global VoIP Services Market Global VoIP Services Market Poised to Surge from USD 83 Billion in 2015 to USD 140 Billion by 2021 – MarketResearchStore.com [5] Global VoIP Services Market The global A2P SMS market, with a valuation of US$62.01 bn in 2017, will exhibit a healthy 4.2% CAGR from 2017 and 2025 and rise to a valuation of US$86.53 bn by 2025 – TransparencyMarketResearch.com [6] ECC-Elliptic-curve cryptography Elliptic-curve cryptography (ECC) is an approach to public-key cryptography based on the algebraic structure of elliptic curves over finite fields. ECC requires smaller keys compared to non-ECC cryptography. [7] X25519- Elliptic curve Diffie–Hellman (ECDH) A state-of-the-art Diffie-Hellman function by Daniel J. Bernstein. [8] Ed25519 - EdDSA signature scheme using SHA-512/256 and Curve25519 Ed25519 signatures are elliptic-curve signatures, carefully engineered at several levels of design and implementation to achieve very high speeds without compromising security. 56

TOP Decentralized Open Communication Network [9] EdDSA - Edwards-curve Digital Signature Algorithm A digital signature scheme using a variant of signature based on Twisted Edwards curves. It was developed by Daniel J. Bernstein, Niels Duif, Tanja Lange, Peter Schwabe, and Bo-Yin Yang. [10] The Double Ratchet algorithm The Double Ratchet algorithm is used by two parties to exchange encrypted messages based on a shared secret key. It is called double ratchet because it combines a Diffie-Hellman key exchange ratchet with a symmetric-key ratchet. [11] Signal & WhatsApp End-to-End Encryption Protocol [12] DSR - The Dynamic Source Routing protocol The Dynamic Source Routing protocol (DSR) is a simple and efficient routing protocol designed specifically for use in multi-hop wireless ad hoc networks of mobile nodes. [13] QoS, Quality –Based-Routing Quality of Service Based Routing- Petri Aukia, Nixu Oy A Framework for Overlay QoS Routing - Dragos Ilie and Adrian Popescu Dept. of Telecommunication Systems Blekinge Institute of Technology Karlskrona, Sweden DHT-based Hypercube Routing - Jos´e I. Alvarez-Hamelin1? , Aline C. Viana2 , and Marcelo D. de Amorim3 [14] Kademlia - A peer-to-peer information system based on the XOR metric [15] H-P2PSIP: Interconnection of P2PSIP domains for global multimedia services based on a hierarchical DHT overlay network [16] Byzantine fault tolerance (BFT) The dependability of a fault-tolerant computer system, particularly distributed computing systems. [17] EOS.IO, EOS.IO technical white paper [18] PolkaDot, Multi-chain framework 57

TOP Decentralized Open Communication Network [19] Probabilistic Lightening [20] The BitcoinLightening Network: Scabable Off-Chain Instant Payments 58