THE NEXT STEP IN THE EVOLUTION OF GAMING

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2 THE NEXT STEP IN THE EVOLUTION OF GAMING For decades, legacy video game distribution platforms have struggled to find the balance between the appetites of gamers and the revenue needs of game publishers, while server operators are stuck in the middle. The direction of the gaming industry is dragged around by a small but powerful cabal of centralized publishers. The world around them is changing. We re leading that change. Gamers are constantly weeding through title after title of rushed-tomarket games and public betas before they finally find a game that fits their play style that is high enough quality where they want to keep coming back. The cost of game development is high, and if the game publishers get it wrong, it can often end in costly and sometimes disastrous results. One just needs to remember what happened with Final Fantasy XIV and Duke Nukem Forever as evidence. Small independent game creators are more directly impacted by a lack of funding and must find ways to supply expensive hardware for the infrastructure necessary to keep their online games running. Game server operators are constantly chasing the white rabbit of the consumer s wallet, and with the cost of website upkeep and development time, it seems only the huge centralized corporateowned communities can survive in the end, and even then only with sponsorships from the game publishers themselves. The industry is straining for a better solution to game delivery and realworld gamer interaction. Introducing the distributed gaming platform: Xenio

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6 Abstract The Xenio gaming ecosystem uses distributed computing to solve systemic problems inherent in existing game distribution and asset management systems, in a single distributed peer-to-peer platform. By tokenizing game assets, Xenio allows game publishers to assign digital ownership to a player s character or account by distributing the ownership records to the distributed blockchain database. These utility tokens have intrinsic value based on real markets and can be sold in a crowdfunding environment directly to target market gamers. Decentralized blockchain technology and smart contracts facilitate gamers purchases of in-game items between trusted or anonymous third parties for real money on a trust-agnostic platform, offering a greatly reduced risk of fraud and no counterparty risk. Transparent, immutable data chains allow 3rd party community websites and game server operators to provide their own value-added services based on statistical analysis of both historical and real-time in-game data. No other gaming distribution platform combines all of these services in a single, open-source client using a fully distributed network.

7 What is Xenio? Xenio (pronounced ZEN-ee-yoh ) is a decentralized peer-to-peer gaming distribution platform and token ledger for digital game assets. Building on the distributed computing and smart contract concepts first described in the Ethereum white paper, Xenio runs on our own blockchain, optimized for gaming and which uses a combination of a modified Delegated Proof-of- Stake and Proof-of-Authority consensus protocol we proudly call Proofof-Networking, or PoN. The dedicated blockchain enables optimization of game data distribution without suffering from the bloat and clutter of a shared, generic blockchain. As users of the Xenio system play games and interact with the community, the operators of the game servers that they play on are rewarded for their participation through our PoN cryptocurrency, XNO. Players will naturally gravitate toward higher quality servers and sites, and lower quality servers will gradually disappear from the system. The Xenio platform recognizes these trends, and uses a transparent algorithm to determine which servers qualify for incentive XNO. These rewards, based on a combination of factors including the number of XNO the server operator already holds and the number of connected gamers, encourage server operators to contribute to the ecosystem, encouraging stability, innovation, and creativity. The XNO staked in this way act as a stabilizer for the market, and can be sold or traded as a commodity to players for purchase of in-game or other on-blockchain digital assets. Xenio s Proof-of-Networking technology liberates games from the limits of old distribution platforms Why Do We Need Xenio? Just as the great gaming revolution of the late 1980s moved gaming from centralized arcades to in-home consoles and PC computer systems, the great gaming mobilization of the 2010s started a tremendous swing from the traditional console and PC games into hand held, mobile phonebased games. But mobile game distribution methods utilize centralized walled-garden stores designed to keep development efforts limited to their proprietary platform, and the games produced for mobile devices are not complex or rich enough to be played on a console or PC.

8 In contrast, immersive large-format console and PC games are still a significant portion of the market, and after performing a deep market analysis, we believe the demand for large-format MMO games is set for a significant resurgence in the near future as the cyclical market shifts away from launching birds at pigs back to these immersive worlds. Existing walled-garden mobile game stores are unable to distribute anything other than mobile games, leaving a void in the market for quality gaming experiences. Mobile app stores can t distribute immersive console and PC games, and online game stores can t connect you to mobile games. Xenio can handle them all. There are several existing out-of-game services where gamers can buy in-game items online, but they all have a number of drawbacks: Gamers must trust the server operator with their game login and password, for instance. Using credit cards for these services isn t universally allowed by credit card issuers, because the potential for fraud is very high. Gamers can wait hours or even days for manual item delivery. Sometimes the items gamers want aren t even available. Not all game asset swap sites have the resources to provide exchange services for every game, and fly-by-night outfits are constantly popping up and just as quickly closing up shop. There just isn t a very good way to buy or sell game assets online. Likewise, the existing game distribution companies are all closedsource proprietary walled gardens, owned and managed by the big game publishing cartels. Independent game developers can join, but only if they pay for the privilege and agree to give up 30% to 50% or more of their profits. Additionally, most of these closed systems don t handle the trade of in-game assets, and have limited scalability due to their centralized infrastructure.

9 Xenio is different. We are a game distribution platform, a real-world game asset exchange, a reliable open access statistics source, and much more, all using a single open source interface built on top of a decentralized back end for global availability and unlimited scalability. And because we re open source, any game can be developed to use the system using our public APIs and SDK libraries. Game stores only sell games. Game item sales websites only buy and sell items. In a single interface, Xenio does both - instantly, safely, and securely. The Xenio Solution What do gamers want? Gamers, as a group, don t mind spending money on games - but they do expect to get a good value for their money. Gamers want premium content for the games where they spend a significant amount of time. They want quality servers with stable uptimes and low latency, but they can t always trust reported simple ping time rates or anonymous ratings on message boards claiming which servers are the best for their location. They want a quality community where they can communicate easily with friends both in and outside of their games. They want to be able to easily and inexpensively trade items with other players without getting ripped off. But most of all, they just want to get gaming! Xenio makes it easy to pay and easy to play What do server operators want? Server operators can spend considerable effort and money setting up gaming servers for themselves and the public, and get very little in return for their generosity.

10 It s difficult to attract and retain gamers to use their server unless they spend a lot on hosting for instances with expensive CPU and RAM capacities, and user loyalty to public servers is non-existent. Server operators have no real incentive to provide these public servers with % uptimes and the custom game rules they set are sometimes esoteric and rarely in demand. Taking time to manage these free servers is on a best effort basis, and not everyone has the time or ambition to keep these servers running at peak efficiency. Monetizing a game server is practically impossible since server operators are effectively cut off of the transaction between the publisher and the end user. They might rely on trying to provide value-added services, but even then it s a continuing struggle to make meaningful amounts of money for the effort. If they do happen to strike gold and become popular, it s very expensive to scale the hardware if their server becomes oversubscribed or overloaded. Server operators want to know that their money and efforts are not going to waste, and if there was a way for them to get paid for it, all the better! What do game developers and publishers want? Game developers and their publishing companies want to promote loyalty to their brands by acquiring and retaining players for the long term with beautiful, compelling gameplay that will sell the most number of titles, subscriptions, and in-game content. They want to operate their games on predictably stable servers that provide a universally fair game experience for the gamer, and predictable long term returns on their development investment. They also want to limit their exposure to risk as much as possible. Licensing schemes can be broken for singlepurchase games, and not all game types can survive on a subscription model, so a simplified license management system is key.

11 Smaller independent developers require substantial support and working capital to ensure their games find an audience, yet they are often overlooked by the publishing houses in favor of less daring work with more guaranteed commercial success. Large publishers must accurately predict market trends to pull this off (or attempt to create the trends, which is nearly impossible to do.) Traditional retail box publishing is even more difficult - fees for packaging, distribution, store buybacks for unsold inventory, etc. eat up 50-60% of gross receipts, and as the publisher, you re still responsible for marketing your own games. Game developers and publishers want an agile solution that enables maximum flexibility with minimal development cost. But when publishers add the expense of running their own server farms on top of the expense of game development, it s no wonder many titles turn to the community to run the servers on their own. And now, with the emerging trend that shifts the revenue stream from larger one-time purchases to smaller subscriptions and in-game purchase models, management of games post-release is becoming more and more complex. Loyalty is becoming even more critical to the bottom line. The problem with gaming today The real problem is that the needs of the gamer, the needs of the server operator, and the needs of the game publishers aren t always aligned. Server operators have no real incentive to provide quality servers. Game publishers are economically sensitive to gamers needs, but the long development lead time for creating premium games often means they are years behind the curve. Gamers...just want to play. Our unified platform provides a solution for everyone Fundamentally, Xenio is being built as a complete ecosystem that realigns the needs of gamers, game developers, and server operators to their shared and mutual benefit.

12 By monetizing their game servers, server operators have a new incentive to minimize lag and ping times, boost CPU, and implement special rules or tournament modes. Gamers benefit from the better quality gaming experience, and game developers benefit from higher brand loyalty. By tokenizing game assets, developers have a new method for enriching their games by creating immersive real-world connections. Gamers benefit from being able to securely trade assets in or out of the game, driving up gamer satisfaction, and server operators receive more compensation due to increased gameplay. By using smart contracts on the Xenio blockchain, developers, gamers, and server operators alike can each create their own advanced interactive token rulesets to create complex IFTTT-style logic affecting game assets. Since token descriptions can be made publicly visible, anyone can read the public information about token state, allowing novel new markets to be created for tokens in any number of ways. Smart contracts can facilitate automatic sorting and ranking systems for any element, enabling features like game leader boards and fair tournament matchmaking, further enriching the game experience and reinforcing brand loyalty. Smart contracts can also be utilized to create private publisher-to-consumer interactions, such as an exclusive game asset exchange that only opens with a non tradable game-specific token. The well-documented smart contract mechanism is easy to manage and extremely flexible. By using the XNO coin, game publishers, server operators, and gamers can all participate on a level playing field with each other. XNO coins on the fair trading platform can be used as payment for purchases within the system, as tournament prizes, or as a value placeholder if a direct asset-to-asset exchange is not practical for a specific use case. By participating in the Proof-of-Networking system, server operators are rewarded for attracting and retaining users on the system, while gamers are rewarded simply for playing their games.

13 Current Market Analysis Mobile games Monetization for mobile games is possible through three channels: Advertising, which accounts for 14% of all mobile gaming revenue. Paid apps, which account for 38% of revenue. Free apps with in-game purchases, accounting for the lion s share at 48% of all mobile app revenue. Some mobile game publishers are famous for intrusive advertisements or pay-to-win schemes, but players find these methods annoying and are increasingly resistant to them. Publishers are having a difficult time finding success with the right balance of providing the free games that players have learned to expect, with quality content and compelling gameplay at the levels needed to encourage players to pay for in-game content. Because they re designed for handheld screens and low-power processors, mobile games are necessarily small in code footprint and easier to develop, making the independent game publisher s barrier to entry low, and bringing games to market very fast. Players can install and start playing a game in a matter of just a few minutes. This ease of access coupled with the industry trend toward free games with inapp purchases means players have become accustomed to disposable games with no perceived intrinsic value at all. They re free, after all, and just as easy to uninstall as they were to install in the first place. As a result, player loyalty to a mobile game is almost non-existent. Fully 25% of all mobile apps are used only once and then deleted, and on average, 80% of all apps are abandoned by the user after 90 days.

14 The success of a mobile game is highly correlated with large, longterm marketing efforts that most independent publishers cannot afford, and the sheer number of mobile games and their relatively short development time and lack of complexity make market saturation a growing problem for monetization of mobile games. It s hard to find a really good mobile game that you keep coming back to. Traditional console and PC games Traditionally published console and PC games, on the other hand, are slow to market and take enormous capital to develop and maintain. Loyalty to these titles is high because publishers charge up front for the game - which tends to psychologically reinforce the perceived value of the game through the well-known Choice-Supportive Bias mechanism, which states that buyers tend to unconsciously emphasize the perceived value of an item simply by paying for it. In 2009, retail boxed games accounted for 80% of all video and computer game purchases by number of units sold, and digital downloads represented 20% of all units sold. By 2016, that number had practically inverted, and 74% of games were purchased digitally, where only 26% were physical units. And, of course, all mobile games are delivered digitally. The clear and compelling trend is toward digital delivery of games across all platforms. Xenio uses 100% digital delivery and is platform-agnostic. In-game items and services Virtual goods are becoming more popularly traded in marketplaces, but fraud is rampant. It is estimated that for every legitimately purchased digital item in a game, there are 7.5 fraudulent purchases. The statistics are highest in China, where for every legitimate purchase, 273 items are either stolen or paid for by fraudulent means.

15 The incredible incidence of theft and fraud means expensive chargebacks and refunds for game asset publishers, making the legitimate market for in-game items more expensive with costly fees and markups to offset the losses. The obvious result is a lack of trust between legitimate players and the marketplaces where digital items are offered for sale. There is no central arbiter to enforce anti-fraud measures, and the only way for a player to be 100% certain that they are not going to be taken advantage of is to purchase directly from the game publisher. But secondary markets exist for a reason - not all publishers provide direct sales of their digital assets, and others price their items statically, and can t change their prices with market forces. Virtual currency, weapons, maps, and other in-game items are becoming a primary source of direct revenue for publishers. In the mobile space in particular, in-game purchases have far surpassed paid games by revenue. Growth of mobile gaming is still gaining momentum, but the growth of revenue per gamer is slowing as the market nears saturation and more and more games shift to a pay-in-game model. Gamers budgets are being split between more games than ever before. Xenio is designed to be flexible, and caters to both traditional publishing models as well as the current mobile trend. Drawbacks of the existing industry models The legacy distribution model of retail box delivery is expensive for publishers and inconvenient for gamers. While the trend is shifting from retail box delivery to digital download in an attempt to solve those issues, the walled-garden approach adds its own problems. Their exclusivity agreements create segmented markets, and still don t address the lack of game asset exchange. Even the big AAA publishers can t look past their own profit margins to see that the obvious solution is an open platform like Xenio.

16 The Xenio platform s open solution is designed from the ground up to be open to any game publisher, regardless of size, game type, native language, or corporate affiliation, and the flexibility of the technology we are creating means that game publishers are able to build their own rules to suit their business needs. Platforms and Expenditures The percentage of players that bought virtual goods is not evenly diversified by platform and game category. The trend toward free games and paid in-game goods is obvious, and these statistics show a clear indication for the potential for MMO games to capitalize on their popularity in the near term. 58% of players bought digital goods in a free-to-play game. 34% of gamers bought virtual goods in a massively multiplayer online game. 23% bought goods in a social network. 12% bought virtual goods in online PC games. 9% bought goods in an online console game. 9% bought goods inside a casual game. Xenio s Market Advantages Open source Our open source model follows the longstanding trend for distributed systems, which not only promotes trust in the system, but encourages independent game developers to collaborate and contribute to the platform for the benefit of everyone. And best of all - it s free to use.

17 Open statistics The blockchain-based open statistics model can help developers create rules that prevent gamers from cheating their way up to the top of leader boards, and tournament rankings and opponent matchmaking can be shown to be provably fair. Since everyone can see all publiclyexposed statistics, community websites can add usefulness to their utility by processing and presenting game stats in a way that fits their own community structure. Tokens and smart contracts The tokenization of all platform assets is designed for flexibility in utility. Tokens can represent in-game currency or other items and assets, rewards for achievements, out-of-game community website badges, real-world money, messaging elements, game licenses, and so on. Tokens coupled with smart contracts allow real-world markets to exist for these virtualized assets, and complex if-this-then-that programming mechanisms enable automated resolution of cascading conditions, making possible actions like automatic trading of 50 Gold for a Magic Sword directly between two players, for instance. And since tokens are platform-based, not just game-based, brand new scenarios can exist where items and achievements from one game are usable in a completely different game, enabling true universal immersion across titles. If a player is awarded a rare item for one title, the developers may allow that item to be brought into the next installment of the same game franchise, for instance. Even game licenses can be tokenized, giving developers a great deal of flexibility with how they choose to allow paid games to be used on the system. Xenio s custom codebase enables the best features of smart contracts in a dedicated blockchain

18 Extensibility The flexibility and extensibility of the Xenio platform is truly revolutionary. Possible future features include the ability for users to rent a preconfigured server of their own from other gamers, and set their own game conditions while getting paid to offset the cost of the rental. Existing games can be integrated into the Xenio platform simply by creating plugins with our tool library. Games can be created where players can leave their full-client PC game at home and play connected mobile-based minigames, sharing items and completing quests that result in rewards on the PC version. The open source nature of the platform and our public APIs and SDKs allow for extended use cases that we can t predict yet. Our model is highly extensible, future-proof, and promotes a high level of community involvement through 3rd party customizations and equal access for specialized and niche games. And everything is visible in one place in the Xenio client dashboard. Built-in multicurrency payment support Because Xenio is based on blockchain technology, it s being built from the ground up to support cryptocurrency transactions. While Bitcoin will be the first currency supported, any number of other currencies can be supported in the future through the decentralized payment system. The Xenio payment gateway makes paying for content with cryptocurrency simple and painless using a plugin for the distributed NVO cryptocurrency exchange. Future 3rd party plugins may allow other payment gateways to interface with the payment system, for instance allowing platform users to transact directly with credit card processing or other payment companies without having to create a full PCI-compliant gateway or deal with merchant accounts. Fundraising Because the Xenio blockchain and smart contract technology is designed for ease of transfers of value, independent game developers

19 can even present their game ideas directly to the community and raise crowdsourced funds right into the Xenio platform. The utility of the XNO coin makes it possible for developers to monetize almost any game asset, offsetting development costs and simplifying their revenue models. Gamers can participate directly in the development of their favorite game franchises, and can be rewarded for early adoption and loyalty using XNO coins. Looking at the Future of the Global Gaming Market There are more than 2 BILLION gamers worldwide and growing The global gaming industry s limited market penetration a decade ago meant there were only 150 million gamers in the world. In 2017 that figure reached an astonishing 2.2 billion gamers - 29% of the global population - and 47% of them, or over 1 billion people, spend money on in-game assets while playing. And they re buying more than ever. A recent survey found that the average gamer spent $87 for virtual goods in 2016, and that figure is growing by 10-15% every year. The Xenio distributed gaming platform is uniquely positioned to completely revolutionize the way games are played. Game market growth is inevitable The gaming industry is showing steady growth, with no slowdown in sight. From a relatively small market cap of USD $4.7B in 1990, gaming industry revenues reached a staggering $101B in 2016, with projected revenue of $128B for 2020.

20 Virtual goods are the next gold rush As the gaming industry is gradually shifting from the traditional Payto-Play model towards Free-to-Play and Freemium models, a host of new possibilities for entertainment, competition, and business have emerged. Free-to-Play games have dominated mobile gaming for several years now, and have altered the consumer perception of value. With the obvious loss of up-front revenue by publishing free games, game developers have shifted their focus to in-game asset sales, and revenue growth for digital asset sales are now far outpacing the growth of paid games. In the US alone, which only accounts for 25% of global gaming market revenue, paid physical game sales have declined 10% each year since 2010, while revenues for digital items for free games has risen an average of 25% each year in the same timespan. Emerging markets such as China are even more aggressive in their growth. The standard of gaming is clearly shifting to free installs and in-game revenue models, and the shift appears to be permanent. The world of gaming is experiencing a fundamental sea change, and Xenio is poised to provide the catalyst of an open platform that will help gaming studios and independent developers realize and deliver that change.

21 How Xenio Works The reader is assumed to have a basic understanding of blockchain technology, which is a prerequisite for understanding the technology of Xenio. The Heart of Xenio: Peer-to-Peer The global Xenio peer-to-peer (P2P) mesh network is the foundation that all aspects of the Xenio ecosystem are built upon. The need for providing offblockchain services was identified early in the conceptualization stages of the Xenio project, and since the P2P model fit well with the Xenio vision of an open gaming platform, every decision that came afterwards included use of the P2P network. The Xenio P2P implementation works behind the scenes to support a growing list of services, including the primary Xenio blockchain, direct end-to-end encrypted chat, video streaming, and other services using a single node identifier. The power behind any distributed system is the number of nodes available to serve content. As with any system designed to serve a number of functions to a broad audience, some services on the Xenio platform may be used less often than others. A legacy client/server setup would necessitate expensive load balancing equipment and complex middleware to maintain availability for less-often used services. But by using the same primary Xenio P2P network that all other nodes connect to, Xenio nodes may selectively turn services on and off without reducing the availability of edge case services to other nodes. Even the smallest service benefits from the strength of the entire network. The Xenio blockchain Building on the P2P model, Xenio employs a dedicated gaming-optimized blockchain with a custom consensus protocol based on a combination of Delegated Proof-of-Stake and Proof-of-Authority that we call Proof-of- Networking, or PoN. The Xenio PoN blockchain uses a dual-reward system, with primary blocks running at a fast one block per second rate and 20-minute interval superblocks.

22 The Xenio system keeps track of ownership of any kind of digital asset that exists in a game through the use of tokens as recorded in the blockchain ledger. Digital game assets, such as a sword, a stack of gold coins, a container of fuel, or whatever the game presents as a tokenized asset can be stored on the blockchain. Any time an asset is created, moved, or destroyed, the blockchain is updated within a second, and the entire distributed system is immediately made aware of the change. The Xenio blockchain client is run primarily on game servers, but anyone who wishes to run a full network node may help the network by installing a node of their own. Due to the public nature of the blockchain, all ownership data can be made publicly visible, enabling open, sortable statistical analyses for features such as leader boards, contests, tournaments, matchmaking, and achievements in a provably fair way. Blockchain features Runs on an open source highly modified code fork of go-ethereum with a new consuensus protocol Open source blockchain daemon code written in Golang 1-second primary blocks with classical staking for connected clients, and 20-minute superblocks for game server stake rewards based on Proof-of-Networking All full nodes are eligible for transaction fee rewards on primary blocks All game server nodes are eligible for stake rewards on superblocks using a Masternode model Superblock staking reward formula is based on the number of connected players times the number of coins staked on the server, as a percentage of all other servers shares. The number of new coins minted per block also varies with the current difficulty level All Xenio clients will initially run as full nodes, with light clients planned for a future release A plugin system to allow 3rd party integration for extensibility

23 Xenio client software The Xenio client software is being developed from the ground up for use on multiple platforms using a shared GNU-licensed code base. It is designed with versatility and portability in mind, and is written in.net with Cocoa #, Mono, and Xamarin, and utilizes the well-supported Nethereum libraries. Windows and Mac clients will be supported immediately, with a Linux client, Android, and Apple ios light clients planned for future releases. The open-source nature of Xenio exposes the Xenio client methods to the whole of the.net community, allowing developers to create specialized Xenio system interfaces in their own applications. Security isn t an afterthought in the Xenio system; it is built into the underlying technology on a fundamental level. Client key management is handled offline for ease of account creation, meaning no server needs to be trusted in order to perform basic operations on the system such as address management, transaction preparation, message signing, or client access. Server access is managed by each distributed server, so there are no centralized account databases to hack into, while the distributed blockchain nodes use a well-established consensus mechanism to ensure high assurance of data integrity and authenticity. The Xenio platform is built so that there are no centralized servers that need to be trusted for the system to work. User features Using a single login across all titles, the Xenio client game management system grants gamers access to a library of available games where users can purchase and download game titles, view their portfolio of free or licensed games, and launch games directly from the client interface.

24 A server browser shows a list of available servers for each game, sorted by ping times or other specified metrics such as available character slots, number of connected users, game type or special rules, etc., allowing the gamer to choose their optimal server based on the independently verifiable metrics stored in the blockchain. A built-in server feedback and ratings system further enhances the game management experience. Watching live streaming games will also be built right into the Xenio client for games that support streaming - users will be able to watch games as they are being played by their friends, guildmates, top professional gamers, or even tournaments, at any time. The asset exchange interface connects gamers to one of the most promising features of Xenio - buying and selling in-game assets and tokens from the game publishers, or even directly from other gamers without counterparty risk. The account management section allows users to send and receive funds in the form of XNO, and the full transaction history is available to the user at any time. Friend management, chat, tech support, and Guild and Community management options will be built right into the Xenio client for simplicity. Even social media connectors are possible with 3rd party plugins. Xenio Server features The Xenio Server software is designed for remote game server management, and includes all of the functionality of the gaming client as well as direct access to server statistics, game management, real time server stats such as CPU and RAM loads, number of connected users, or other data the game daemon might expose, all using standardized secure channels to the hosted game daemon s RPC stack. The game management functions allow a server operator to spin up a hosted instance of a game daemon, enter the connection information such as IP address, port, and other game lobby information to the client, which then connects and broadcasts the availability of the server to the Xenio network immediately.

25 Additional functionality includes token and subtoken creation, token distribution, smart contract management, marketplace controls for setting prices and descriptions, and other similar controls designed to take place all within a single interface. Future functionality can be expanded with 3rd party or custom plugins. After system launch, APIs will be made available for RPC/IPC, WebSocket, WebHooks, and Web3, with support for future technologies as they are developed. Game developers can use existing publicly-available libraries for Ethereum PHP, Nethereum, Web3.js, EthereumJ, and cppethereum to create their own interfaces directly to the Xenio platform. The Xenio gaming coin: XNO Xenio Coin will be submitted to several Bitcoin-space exchanges for inclusion in their trading platforms as a benefit to the gaming community as a whole. XNO is not a security, nor is it intended to be, and we confer no ownership rights nor do we make any promises of profit in any way by means of its possession. XNO is strictly a utility coin meant for trading digital assets within the Xenio ecosystem. As such, it has no intrinsic value apart from the utility value on the Xenio platform, but we expect the buying and selling of XNO on various exchanges to give it a market value equivalent to its utility. We expect the open market will value the coin appropriately with the adoption of the Xenio gaming platform, so as more game publishers and gamers adopt the platform, the ratio of XNO per user will shrink, making them rarer and more valuable across the system. The server staking process that runs under the PoN system also temporarily removes additional coins from circulation during the staking process, further stabilizing the in-platform economy. XNO are not generated during the 1-second Delegated Proof-of-Stake blocks, but since transactions on the Xenio system do require small fees to reduce the rate of spam transactions on the system, these blocks provide small rewards from those transaction fees. These 1-second block rewards are distributed to all connected nodes.

26 The 20-minute Proof-of-Networking superblocks that reward game servers mint new XNO at the initial rate of 200 newly minted coins per superblock. The genesis block will create 70 million XNO. 60 million will be distributed to the crowdsale participants immediately after the crowdsale, and 10 million will be held for the development team, to be paid out over several years as an incentive to continue working on the project on a long term basis. The total number of XNO able to be minted has not been determined at this time, but we do not currently intend to leave it open ended. A market analysis after the launch of the platform will allow us to determine the best cap and rate of reduction to ensure a stable market for the foreseeable future for the benefit of the overall project. The exchange The Xenio Exchange is one of the primary functions of the Xenio platform, along with game distribution and server management. Any token created on the platform that is marked as exchangeable can be traded on the exchange, either for other tokens or for XNOs. For security and durability, the exchange runs on the distributed blockchain, which means there is no centralized place for game assets or XNO to be stolen from. The Xenio API also allows 3rd party developers to create plugins directly to the exchange, so games can even use Xenio as their in-game auction house, and community websites can create their own custom out-of-game interface as well, skinned to match their look and feel. Game statistics Publicly visible server statistics, viewable on the blockchain, allow users to find the best connections for their selected game based on any number of criteria: location, ping times and latency, number of active users, and even a ratings system is possible with the creation of rating tokens. In areas where it is legal, developers or 3rd parties could even create wagering systems based on tournaments or verifiably fair games.

27 Xenio s Value Proposition Platform value to gamers By cutting out the distribution middleman, the cost of games should go down proportionally as the cost to developers decreases. We estimate desktop games could see a 25-30% reduction in price due to these cost savings without impacting the revenue to developers, meaning gamers will have more money to spend on games and in-game assets. Platform value to game developers Developers and publishers should see an increase in revenue on two fronts: First, revenue from game distribution may increase by as much as 10-15% based on the added spending power of gamers being able to afford more games due to lower overall prices. At the same time, as revenues from in-game items continue on their established growth trend lines across the industry, the integrated token marketplace of the Xenio platform should provide additional revenue streams for tokenized game assets, especially as platform loyalty increases with the positive feedback growth of the network. Platform value to server operators Server operators are rewarded for providing services to the network, meaning they can finally monetize their love of gaming. Additionally, as the Xenio network grows, gamers aggregate demand for coins should grow as well. At the same time, as server operators stake coins by creating blockchain Masternodes attached to game servers, they are automatically rewarded with additional coins. This staking process removes some coins from circulation, making them more scarce across the system at the same time that demand for the coins is growing. Note: We make no specific claim to the market value of the Xenio Coins themselves, as we have created the coins strictly for their utility on the Xenio platform. Since the coins are not pegged to a specific money value, their market price may increase or decrease due to market forces that we cannot control.

28 Xenio s Strategy to Encourage Platform Adoption Our unique platform actually pays server hosts to provide the best multiplayer gaming experience possible, through a combination of mechanisms first developed by advanced cryptocurrencies called Delegated Proof-of-Stake, along with Proof-of-Authority. Delegated Proof-of-Stake works by paying people who hold on to, or stake, these digital coins in a virtual wallet with the promise not to spend them for a specific duration. After that duration elapses, a fee is paid to the staking wallet, and a new staking period can begin. This effectively keeps the coins out of circulation for the duration of the stake, causing them to be artificially scarce and therefore increasing their value for the entire virtual economy. It s a process similar to the function banks perform by paying interest to savings accounts and CODs. Proof-of-Authority works by the network explicitly authorizing a set of nodes which are initially run by the project developers to ensure valid blocks are created while the network is still small and growing. Only authorized nodes can create new blocks. Our custom combination of Delegated Proof-of-Stake and Proof-of- Authority is called Proof-of-Networking, or PoN, where game hosts provide proof that gamers are using their system through a proprietary mechanism incorporated into the Xenio client software. Gamers tend to play on hosts that give them the best experience, and through the PoN algorithm, quality game servers will be rewarded for participating in the network, fostering competition between servers and providing a better experience for all gamers. As more gamers find that the better quality servers are on the Xenio platform, we expect that many will migrate exclusively to Xenio to play their games. And where the gamers go, so follow the game hosts. Additionally, since PC gamers tend to have expensive computers with powerful processors and video cards, they can choose to use their systems to help the Xenio network by staking coins, potentially getting paid to play games.

29 Xenio is completely open source, and our custom decentralized gaming-optimized blockchain and distributed P2P network fosters trust through transparency in the platform. Importantly, Xenio does not run on the generic Ethereum network. This means the Xenio ecosystem is not polluted by non-gaming data like smart contracts for Bitcoin futures or distributed web applications or any of the other generic-utility things on the legacy network. Instead, Xenio is a self-contained high-speed global network dedicated to gaming from the very beginning. This means we have the unique ability to target the gaming industry directly using the best of the emerging cryptocurrency, blockchain, and smart contract technologies. Postlaunch marketing efforts will focus on these benefits to attract gamers. We are planning on developing our own game as both a proof-ofconcept and as a standalone MMORPG - our marketing for this game will bring users to the platform and give other game publishers free exposure to the Xenio game user base. As more gamers come online, publishers get direct access to them for their own games, and as more games come online, more gamers will join the system, creating a positive feedback loop of platform adoption growth. Finally, we will encourage adoption from game publishers via direct payments through our Proof-of-Networking consensus protocol. This benefits all types of game publishers, ranging from the independent group of friends writing their first MUD game to the AAA-level top-tier FPS gaming franchises. Since gamers can buy games directly from the Xenio distributed marketplace using automated smart contracts, publishers can get paid directly without fear of fraudulent chargebacks or the cost of payment processor fees. The Xenio platform provides unique benefits to gamers, publishers, and server operators all in a unified ecosystem.

30 Acknowledging Risks Since the Xenio project is open source and distributed, we are building it from the ground up with maximum transparency. We therefore recognize and acknowledge there are some risks to the success of the project as a whole. By acknowledging those risks, we intend to keep mindful of them in order to reduce the likelihood of realizing them. This is not an exhaustive list, but an example of the mindfulness we exhibit. Failure to communicate progress during project development. While this is not a risk to success of the project itself, we appreciate those who have joined us in the crowdsale, and intend to honor their contributions by maintaining a schedule of regular updates to the community through a dedicated channel, in a manner and method to be determined and announced before the crowdsale is complete. Regulatory issues. The crowdfunding mechanism of the Xenio project is not an offer to sell any security. The coins and tokens generated for the sale do not represent any promise of profit, nor do they represent shares in any company. While the Xenio project code is open source, the structure of the organization that is creating the code is closed. This is similar to how the Wikimedia Foundation operates in relation to the Wikipedia website. We commit to seeking advice from competent professionals whenever regulatory issues are raised, and will only act whenever legal, ethical, and appropriate. We may be advised to form a legal entity to protect the development team and the project as a whole, although we do not currently have plans to do so. Organization of the code The Xenio project will be amiable to pull requests and bug fixes from the community, but the released code will be curated and maintained by the development team until such time as it is appropriate to release control to outside developers. We will strive to maintain the codebase in a professional manner.

31 Feature creep. Many projects, both open and closed source, can fall prey to adding more features before previous features are fully implemented. We commit to follow professional coding and project management standards to ensure timelines and goals are met during the initial development phase of the project. Competition. Competition from established industry players is a possibility. We understand there are rumors that one of the larger walled-garden distributors is interested in an in-game asset marketplace. We believe that our open platform is superior in many aspects to existing models, and we see competition as an impetus to work even harder to bring our vision to the gaming industry quickly and efficiently. Slow platform adoption Adoption by game publishers, server operators, users, and the gaming community in general is vital to the success of the project. After the initial release of the platform, we will reach out to the community for input on how to most efficiently and effectively attract support from all corners of the gaming world. We re going to need the help of our supporters to get this done, but we will be leading the way with our own full-featured MMORPG once the platform is complete. Copyright violations Due to its decentralized nature, anyone can join the Xenio system, and eventually we may end up with users who intend to abuse the system with pirated games or other copyrighted content. We intend to reduce the risk of copyright infringement via integrated smart contracts based on community reporting and consensus that hide or remove games or other items that violate any copyrights.

32 Future Features and Projects We have a lot more in store for the gaming industry than just a gaming ecosystem, but for everything worth building, it s worth building a good foundation. The distributed Xenio platform and our innovative Proof-of-Networking system is the foundation for a number of future features and projects that we have in mind. Some of these features may change as we learn how the platform is used in the real world, and some may never make it off the drawing board. But we are a creative, innovative group, and we expect this list to grow: Ban-by-consensus feature to address any abuses of the Xenio system A rating system via decentralized user-sourced data feed, using the SchellingCoin concept that produces accurate data sets despite partially-blind data sources. Incentivization is used to provide the same data everyone else provides (data sources are incentivized to find the true value, and discouraged from guessing). Smart contract gift cards Multisignature system for developer fundraising projects as a decentralized escrow, to ensure game developers actually deliver the project as promised An automated reward system to encourage active users and industry influencers to try out and play games on the system Smart Contract gaming. Decentralized game logic for running games without daemons, actually running completely within smart contracts. No servers are required to operate the game, making them incredibly fair, provable, and auditable, with the added benefit of lowering the operating cost of providing games.

33 Crowdsale We are excited to bring our vision of the future of gaming to you, and we ask that you consider joining our XNO crowdsale. Please remember that the utilitarian nature of XNO means they are not shares in any company, and the sale of these coins does not represent any promise of a return. These are the actual coins that will be used in the live Xenio ecosystem, and will be usable to buy game assets or to stake in the Proof-of-Networking system. Your purchase will help defray development costs to provide the Xenio platform to the gaming industry. The more we raise in the crowdsale, the faster we can deliver the system to you. Details of the crowdsale are available on our website. For More Information The Xenio platform is truly revolutionary. No existing system provides the united architecture and unified benefits Xenio does, and no other announced project runs on its own blockchain that allows game publishers, developers, and gamers a single place to go where everyone benefits from the entire system at once. Xenio is the only fully open ecosystem. Real-time updates on the progress of the crowdsale, as well as links to a demo client, contact methods, and other important information can be found on our website. Just go to:

34 Glossary AAA A casual term used to describe video games with very high development budgets; the biggest games in the industry API Application Programming Interface; a programming protocol that allows an external application, such as a computer game, to run code on another system or subsystem - for instance, a game played on a computer might use an API connection to a server in order to interact with other players block In blockchain technology as defined originally in Bitcoin, a block is a complete record of one or more discrete transactions, which includes information from the previous record that ensure a continuous chain of records. blockchain A distributed database that records sequential transactions indiscrete digital containers called blocks. First described in 2008 with the invention of Bitcoin. chain Shorthand for blockchain coin A virtual representation of a unit of measure of value on a blockchain. Since Bitcoin was designed to be a store of value, the term coin was used originally to represent that value. Similar to token. consensus A mechanism that decentralized systems use to agree on something without a central authority. Since it is impossible to enforce unanimous decisions in a network where anyone can give any answer to a question, Bitcoin and other blockchain-derived systems often use an algorithm that tries to achieve consensus of the majority of peers in a trustless way. For example, when two simultaneous events take place and a priority is required, once 51% of participants agree which event is more important, consensus has taken place.

35 cryptocurrency A virtual digital currency secured by its difficulty to seize due to high levels of encryption. Bitcoin was the first decentralized cryptocurrency, although other descriptions of cryptocurrencies were published as early as the 1990s. Ethereum A technology that enables limited purpose decentralized computing using very strict rules. The Ethereum project uses blockchain technology and has its own scripting language, and allows automatic or semiautomatic processes to happen on its blockchain without having to trust either the service running the program or the service creating the program. It uses tokens to generalize this process, allowing anyone to create and manipulate virtualized assets on the blockchain. game asset Usually a term meaning an in-game virtual item, such as an in-game sword, or in-game currency. Game assets can also be anything that holds either real or virtual value, such as free lives or even license keys. IFTTT If-this-then-that. A programming term that describes a conditional series of events. Epitomized by the free online service ifttt.com that allows any number of functions to be created based on other events, such as sending you an if the temperature of your basement goes below a set amount. MMO/MMORPG Massive Multiplayer Online (role playing) game. A genre of online games that feature immersive worlds where hundreds or thousands of players can interact simultaneously with the environment and each other. PCI Payment Card Industry. The body that sets standards for security and best practices for credit card processing technologies. Compliance is required for merchants to accept credit cards in commerce. Peer-to-Peer (P2P) A network of computers connected to each other instead of to servers PoN Proof-of-Networking. Xenio s underlying blockchain consensus protocol technology that rewards the provision of a valuable service to a 3rd party, as opposed to Proof-of-Work that rewards expensive effort, or Proof-of-Stake that rewards hoarding items of value.

36 PoS/DPoS Delegated Proof-of-Stake. A blockchain technology that rewards users for creating scarcity through removing assets from economic circulation. RPG Role Playing Game. See MMO/MMORPG RPI/RPC Remote Procedure Invocation / Remote Procedure Call. The programming equivalent of one program asking another program to execute some instructions on its behalf. Often used in client/server architectures where the client asks the server to execute a task without the client knowing the actual code that needs to be run. smart contract In an Ethereum-based system, a smart contract is an abstracted method of enforcing agreements between parties in a publicly verifiable way. Smart contracts rely on distributed nodes to run the code so that everyone can verify the outcome is the correct. staking Staking in a blockchain context is the process of setting aside a number of units of value in order to make is artificially scarce, therefore supporting its price. Staking blockchains reward those who stake coins by generating new coins to distribute to the stakers. token A token is a virtual abstract that can be used as a placeholder for anything of value. Tokens are generally different from coins in that coins are part of the blockchain mechanism itself and is distributed by the blockchain code, while tokens can generally be created by anyone and are recorded in transactions on the blockchain. virtual goods Any item of a type that virtually represents something of value. See game asset Xenio Xenio is the name of the project creating a new distributed open gaming platform. It is also the name of the platform itself. XNO The blockchain coin native to the Xenio blockchain. It is analogous to BTC on the Bitcoin blockchain.

37 Final Fantasy and Final Fantasy XIV are registered trademarks of Square Enix Holdings Co., Ltd. Duke Nukem and Duke Nukem Forever are registered trademarks of Gearbox Software, LLC Mac, OSX, Cocoa, and ios are trademarks of Apple Inc., registered in the U.S. and other countries. Android is a trademark of Google Inc Microsoft and.net are registered trademarks of Microsoft Corporation in the United States and/or other countries. Mono is a registered trademark of Novell Inc. in the United States and/or other countries. Wikimedia Foundation and Wikipedia are trademarks of the Wikimedia Foundation and is used with the permission of the Wikimedia Foundation. We are not endorsed by or affiliated with the Wikimedia Foundation All product names, logos, brands, and trademarks are property of their respective owners. All company, product and service names used in this document are for identification purposes only. Use of these names, logos, brands, and trademarks does not imply endorsement or ownership. Nothing contained here is offer to sell or a solicitation of any offer to buy shares or securities in any company. Crowdsale tokens have no intrinsic value and may gain or lose market value after the crowdsale ends. The Xenio crowdsale is not an investment contract and carries with it no promise or guarantee of returns or profit.

38 Epilogue - Xenio: The Game Since well before history ever recorded the first stories of humanity, the visitors have come. Tangible proof of these visits are revealed in the relics that have been found, lost, and found again many times over in the cradles of the ancient world: Egypt, Peru, Mongolia. To the ancients, the Zods were thought to be gods because of the indescribable technology and magic they brought. Now, in 3027, with over 200 billion people alive on earth, the era of technology is at its peak, and humanity itself has now become what the ancients would have considered a race of gods. The line between what is human and what is machine has become almost indistinguishable. The Stings, the elite global military force made up of biomechanical chimeras who barely qualify to be considered as human, are in a frenzied war with the Xens, the relatively small force of people who reject the philosophy of mechanical augmentation and fight to preserve traditional humanity through the protection of the records of history. The Xens reverence of history and study of ancient humanity has reconnected them to the ancient search for the few remaining runes left by the Zods on Earth. These runes, which endow faculties like teleportation and mastery of elements and ancestral weapons, are also used by the Stings by grinding them up into metallic powder and sintering them into their exobodies. But the historical record is incomplete. History tells no stories to the Xens to explain the intentions of the Zods - why they had taught Man magic, shared their technology, or spawned their religions. Both sides of the war search tirelessly for more runes, but the source of their power is unknown. The ancient visitors have come again now. The Zods have begun feeding on humans without discrimination, gaining some unknown magical strength from the release of their life force. The chaotic attacks on both the Xen and the Stings have momentarily interrupted the civil war while humanity regroups in the face of this new Zod invasion. Humanity is at its turning point. The Xen and the Stings must unite against the armies of Lyrus or face annihilation. BOOK I: Xenio, The Runic Wars History of the war between the Xen and the Stings BOOK II: Xenio, The Ascent of the Alliance Lyrus appears, and the Xens and Stings form an alliance BOOK III: Xenio, Apocalypse or Renaissance Ultimate fight of the Alliance against Lyrus, Humans facing their future

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