Last Updated: September 15, 2017
This document (the "Term Sheet") describes certain terms of your purchase of tokens (the "WOLK Tokens" or "WOLK") that will be issued by Wolk, Inc. and the Wolk Foundation (collectively, "Wolk") in a token generation event ("Token Generation Event"). U.S. and non-U.S. purchasers or WOLK who buy through the Wolk website will purchase Wolk issued by Wolk Inc. Non-US purchasers who buy through Bitcoin Suisse will purchase WOLK issued by the Wolk Foundation (U.S. purchasers may not buy WOLK through Bitcoin Suisse). By submitting a purchase agreement
for the WOLK ("Purchase Agreement"), you will agree to be bound by the terms and conditions set forth in this Term Sheet, the Purchase Agreement for the WOLK Tokens, the risk factors associated with the WOLK Tokens
("Risk Factors"), and/or any other offering materials provided to you with respect to the Tokens, including, but not limited to, the white paper describing the Tokens and Token Generation Event (available here
) (collectively, the "Offering Materials"). You are solely responsible for familiarizing yourself with the information and terms provided in the Offering Materials, including without limitation the Risk Factors associated with a Token purchase.
What U.S. Securities law issues apply to the Wolk Tokens?
The Tokens are being offered in reliance upon exemptions from the registration requirements of the U.S. Securities Act of 1933 ("Securities Act"). As a result, there are substantial restrictions on the transferability of the Tokens, and there will initially be no public market for the Tokens for U.S. Purchasers. Unless the Tokens are used in a commercial transaction using the Wolk protocols, as discussed below, the Tokens may not be offered, sold or transferred in the United States absent registration or an applicable exemption from the registration requirements. In particular, outside a commercial transaction using the Wolk protocols, the Tokens may not be transferred within the United States or to a "U.S. person" unless such transfer is made to an "accredited investor" in compliance with applicable law, and may only be transferred in a transaction outside the United States to non-U.S. persons, unless and until Wolk reasonably determines and notifies holders that the WOLK Tokens are not securities and freely tradeable. Any transfer made in violation of these restrictions will be void.
What is the purpose of this Term Sheet?
Wolk supports and implements the development of protocols for decentralized data exchange between buyers and sellers of sharable data. Wolk Inc. and the Wolk Foundation are each sponsoring an issuance and release of tokens ("WOLK Tokens" or "WOLK," and the "Token Generation Event") that will allow holders to purchase data using the Wolk protocols, among other things. This term sheet ("Term Sheet") provides additional background on the WOLK Tokens, the Wolk protocols and the Token Generation Event.
What are "WOLK" (or the "WOLK Tokens")?
WOLK is a form of cryptoasset, or virtual currency, that can be used for certain functions related to purchasing and selling data through the protocol sponsored and operated by Wolk. Additional details on WOLK and the system sponsored by Wolk can be found below.
What is "Wolk"?
The Wolk Foundation is Swiss Foundation that supports the development of protocols for decentralized data exchange between buyers and sellers of sharable data.
Wolk Inc. is a for-profit Delaware corporation that develops the Wolk protocols and application programming interfaces (“APIs”) for activities using the Wolk protocols. These APIs are used on the data exchange sponsored by Wolk. Wolk also provides advertising and marketing data services for companies using the protocol. More detailed information on the Wolk entities and the Wolk protocol is available at wolk.com.
What is the "Token Generation Event"?
The Token Generation Event is an opportunity to buy WOLK that will be issued by Wolk Inc. and the Wolk Foundation. The Token Generation Event starts September 18, 2017. More details are provided below under "The Token Generation Event."
Who is issuing and managing WOLK and sponsoring the WOLK Token Generation Event?
Wolk Inc. and the Wolk Foundation are each issuing WOLK and sponsoring Token Generation Events. U.S. and non-U.S. purchasers who buy WOLK through the Wolk website will purchase WOLK issued by Wolk Inc. Non-U.S. purchasers who buy WOLK through Bitcoin Suisse will purchase WOLK issued by the Wolk Foundation (U.S. purchasers may not buy WOLK through Bitcoin Suisse). After purchase, WOLK issued by each entity will be identical and subject to identical term sheets except as otherwise described in this Term Sheet.
The WOLK Tokens
What can I do with my WOLK on the Wolk protocol?
Holders of WOLK may purchase data from sellers of that data on the Wolk protocol.
When can I use my WOLK on the Wolk protocol?
It is anticipated that WOLK holders will be able to use the WOLK immediately.
Can I do anything else with my WOLK?
Wolk is designing WOLK and the Wolk protocols so that third parties can use them to develop additional APIs for sharing identity-based data that can be shared publicly. For example, third parties could adapt WOLK and the Wolk protocols to create exchanges for data such as Ethereum addresses, domain names and addresses, license plates, UPC codes, and others, subject to applicable privacy laws. If that occurs, WOLK holders may be able to use WOLK on these other APIs. There is no guarantee, however, that any third party uses of WOLK or the Wolk protocols will develop.
Do WOLK have any relationship to Ethereum or other blockchain systems?
Yes. WOLK is built on the Ethereum blockchain system, using the ERC20 standard as the backbone for many of its functions. ERC20 is a standardized mechanism for exchanges and other forms of smart contracts. The Wolk protocols also use the data storage mechanisms of Swarm.
How many WOLK are initially available?
Wolk will issue and distribute a minimum of 50 million WOLK and a maximum of 200 million WOLK through the Token Generation Event. The exact number of WOLK issued and distributed during the Token Generation event will be determined by the amount purchased.
How much does each WOLK cost?
Each WOLK will initially be priced at .001 Ethereum. In other words, one Ethereum can purchase 1000 WOLK. The current price of Ethereum can be found here
Will the supply of WOLK ever decrease?
Yes. Each time WOLK are transferred from a buyer to a seller of data, up to 10% of the WOLK involved in the transfer will be destroyed, or "burnt."
Will my WOLK increase in value?
We anticipate that WOLK will grow in value based on increasing demand for WOLK, both via the Wolk API and through third party APIs that adopt WOLK, and ongoing burn of WOLK, which is built into the Wolk system. However, there can be no guarantee that WOLK will hold its value or increase in value. Many factors will influence this outcome, some of which are described below under "What risks are involved in WOLK?"
Do WOLK give me other rights, such as profit rights, governance rights, or others?
No. WOLK do not give holders the rights to any of the profits or revenue of the Wolk Foundation, Wolk Inc. or any buyer or seller using the Wolk system. Holders also do not have any right to vote on any aspect of how the Wolk system (or any buyer or seller) is governed.
Will the characteristics of WOLK ever change?
Wolk anticipates that in the future, it may adapt WOLK to particular types of data (for example, there could be specific "address" WOLK Tokens or "gender" WOLK Tokens, and not just standard WOLK). Wolk does not anticipate adding this utility until after its current API proves to be a successful business model or other service providers enter and develop exchanges around the additional ID spaces.
How will Wolk use proceeds of the Token Generation Event?
Wolk will use the proceeds (net of federal and state taxes) for the following purposes: 15% supports liquidity of WOLK directly via purchaseWolk and sellWolk functions in the token contract, which increases and decreases a reserve created for this purposes programmatically 40% will support Wolk Inc.’s engineering, marketing, business development and other operations 45% will support a "Wolk Ecosystem Development Fund," which will support data supplier onboarding and data buyer onboarding by Wolk Inc.
Will additional WOLK be available for purchase in the future?
Although Wolk may sponsor future Token Generation Events, none are currently scheduled. It is anticipated that any future Token Generation Events would support the creation of additional spaces for data exchanged via the Wolk APIs using the Wolk Protocol.
What is Wolk’s purpose in issuing WOLK?
WOLK is integral to the development and operations of the Wolk protocol. (More about this system is available on this website.) In short, Wolk will use WOLK to do the following: Facilitate the process of bidding and setting prices for data sold through the Wolk API, including by incorporating increasingly sophisticated automatic pricing models Allow sellers to monetize data by exchanging WOLK for Ethereum after selling their data to data buyers. Incentivize data scientists to determine data supplier reputation and reliability by creating supplier scores (this utility is discussed further below, under "Can I acquire additional WOLK through the Wolk protocol outside the Token Generation Event?") Allow early purchasers of WOLK to potentially enjoy any appreciation in value The purpose and functions of WOLK are discussed in more detail here in our White Paper on Wolk and the Token Generation Event.
The Token Generation Event
What are the dates of the Token Generation Event?
September 18, 2017 through the earlier of October 17, 2017 or the date when the maximum number of WOLK (200 million) is sold.
Who can purchase WOLK in the Token Generation Event?
In general, anyone holding Ether in an Ethereum wallet, subject to certain restrictions. U.S. purchasers must be accredited investors as defined under the Securities Act. Wolk reserves the right to restrict purchases to residents of certain US states, and currently residents of New York are not permitted to purchase WOLK.
Non-US participants may purchase WOLK subject to Wolk's determination that the purchase complies with applicable law in their local jurisdictions. Note that Wolk may be required to use Know Your Customer ("KYC") practices for your participation and may use third party services for these practices. U.S. and non-U.S. purchaser who buy WOLK through the Wolk website will receive WOLK issued by Wolk Inc. Non-U.S. purchasers who buy WOLK through Bitcoin Suisse will receive WOLK issued by the Wolk Foundation (U.S. purchasers may not buy WOLK through Bitcoin Suisse). Wolk Inc. is allowing for a small number of USD-based purchases, which will be finalized at the end of the Token Generation Event.
Does Wolk recommend that I purchase WOLK?
No. Each potential purchaser should carefully review the Offering Materials for WOLK Tokens to determine whether the Tokens are appropriate purchases for that individual.
Can I view the code for the WOLK Token Contract?
The final WOLK Token Contract will be available on Github at https://github.com/wolktoken/token
How do I purchase WOLK in the Token Generation Event?
Before you purchase WOLK through the Wolk website, you will need to hold Ethereum in an Ethereum wallet. Other cryptocurrencies will need to be exchanged for Ethereum to obtain WOLK. Individuals who purchase WOLK will be required to execute a purchase agreement and will send their request to a "WOLK Token Contract Address," which was published on wolk.com on September 10, 2017.
Purchases through Bitcoin Suisse will be made using Bitcoin Suisse's sale process, which is described here
How will WOLK be delivered to me?
WOLK will be delivered to the Ethereum address that you use to participate in the Token Generation Event, either specified in your purchase agreement on Wolk's web site or in Bitcoin Suisse's platform. Your total WOLK can be verified publicly on the Ethereum blockchain or by using services such as Etherscan.io.
Is there a minimum purchase of WOLK?
What happens if Wolk does not sell at least 50,000,000 WOLK by the end of the Token Generation Event?
If the aggregate amount of WOLK sold does not exceed 50,000,000 WOLK by October 17, 2017, then purchasers will receive all paid funds back and no Tokens will be issued.
If I submit a purchase agreement for WOLK, is it guaranteed that I will purchase WOLK?
No. Wolk reserves the right to reject any purchase of Tokens at its sole discretion. In addition, if the aggregate amount of WOLK sold does not exceed 50,000,000 WOLK by October 17, 2017, then purchasers will receive all paid funds back and no Tokens will be issued.
Will I be charged any fees when I purchase WOLK?
Yes. As with any transaction in Ethereum, you will incur a transaction fee determined by the gas used and a gas price you specify to conduct the transaction using Ethereum. This fee will be paid to miners on the Ethereum system. WOLK does not pay or receive any fees based on your purchase of WOLK.
Holding and Using WOLK
How will I keep track of how many WOLK I own and how much they are worth?
Your Ethereum wallet can be used to keep track of your WOLK balance. The wolk.com website will display the Ethereum to WOLK exchange rate internal to the smart contract.
How is the value of WOLK determined?
After the Token Generation Event, Wolk Inc. will generate an internal exchange rate based on activity on the Wolk protocol related to purchases of data, sales of data, and exchanges between WOLK and Ethereum (as described below). This exchange rate will be designed for Wolk to maintain a fixed reserve of Ethereum representing 15% of the total value of existing WOLK at all times. The reserve will be used to provide liquidity for holders of WOLK through exchanges for Ethereum (as also described below).
Will I receive reports on my WOLK?
No. However, token balances can be checked on the public blockchain as described above.
How do I use WOLK to purchase data?
Data buyers may use Wolk’s API to purchase data with WOLK using the process described here
Will I be charged any fees when I use WOLK?
Yes. Each time WOLK are used to purchase data, Wolk Inc., as service provider to the Wolk system, receives 15% of the value of the purchase as a fee. In addition, Wolk will burn up to 10% of the WOLK in the transaction.
Additional Acquisitions and Liquidity of WOLK
Can I acquire additional WOLK through the Wolk systems outside the Token Generation Event?
Yes. WOLK may be acquired in three ways:
- Selling Data. After the Token Generation Event, sellers of data who use the Wolk API may earn WOLK based on their sales using the process described here.
- Exchanging Ethereum. Ethereum can be exchanged for WOLK by sending Ethereum to the WOLK Token Contract Address and using Wolk’s
purchaseWolk API, as described more fully here. This functionality is made possible by Wolk maintaining an Ethereum reserve representing 15% of the total value of existing WOLK. The WOLK Token smart contracts automatically adjust the exchange rate between Ethereum and WOLK on an ongoing basis to allow liquidity while maintaining this reserve.
- Determining Supplier Reputation. Data scientists may earn WOLK through work determining data seller reputation and reliability. The Wolk Inc. is supporting protocol development that would provide data suppliers reputation scores and scores for their timely and accurate provision of data. Scientists who help generate these scores will be able to earn WOLK. More information on this function will be provided later as this functionality is developed.
Will Wolk exchange my WOLK?
Yes. Holders of WOLK can exchange WOLK for Ethereum through the Wolk protocol, based on Wolk’s Ethereum reserve representing 15% of the total value of existing WOLK. As indicated above, the WOLK Token contract automatically adjusts the exchange rate between Ethereum and WOLK on an ongoing basis to allow liquidity while maintaining this reserve. Exchanges are always possible so long as there is Token supply.
In addition, WOLK may be freely transferable to other holders after the Token Generation Event. Subject to certain important transfer restrictions described below under “Are there restrictions on my ability to transfer my Wolk?”, a holder can sell WOLK to buyers who require WOLK to buy data and to suppliers and to cryptocurrency speculators, among others. All such transactions are verifiable and secured on the public Ethereum blockchain.
Who receives any WOLK I exchange for Ethereum through the Wolk system?
Any WOLK you exchange via the Wolk system will be removed from the token supply and destroyed.
Can I exchange WOLK for other currencies?
It is possible that third-party currency exchanges and/or cryptocurrency wallets will, in the future, allow users to exchange WOLK to and from other currencies, subject to certain important transfer restrictions described below under “Are there restrictions on my ability to transfer my Wolk?”. There can be no guarantee, however, that any such mechanisms will develop.
Are there any restrictions on my ability to transfer my WOLK?
Yes. The Wolk Tokens are being offered in the U.S. in reliance upon exemptions from registration under the Securities Act. Therefore, unless the Tokens are used in a commercial transaction using the Wolk protocols, WOLK may not be transferred within the United States or to a “U.S. person” unless such transfer is made to an “accredited investor,” in compliance with applicable securities laws, and may only be transferred in a transaction outside the United States to non-U.S. persons, unless and until Wolk reasonably determines and notifies holders that the WOLK Tokens are not securities and freely tradeable. Any transfer made in violation of these provisions will be void.
When WOLK are used in commercial transactions using the Wolk protocols, Wolk believes it is reasonable to treat the Tokens as non-securities for purposes of U.S. law. In addition, based on anticipated use of the WOLK and the Wolk protocols, Wolk believes that over time, all the Tokens will reasonably be treated as non-securities for purposes of U.S. law, at which point Wolk will notify holders of the finding and that the WOLK Tokens are freely tradeable. There is no guarantee that this will occur. For more on the regulatory status of WOLK, see the discussion under “Are WOLK registered with any state or federal regulators?”
Are WOLK registered with any state or federal regulators?
No. Wolk believes that because the WOLK are designed to be used for commercial transactions using the Wolk protocols, the WOLK are not securities, futures, swaps, or any similar type of instrument for purposes of U.S. law. However, because a U.S. regulator could disagree with that assessment, Wolk is treating the WOLK purchased in the Token Generation Event as securities for purposes of the Token Generation Event with respect to U.S. investors. Therefore, in compliance with the safe harbor for private offerings in the United States under the Securities Act, Wolk is only allowing non-U.S. persons and U.S. persons who are “accredited investors” to purchase the WOLK in its Token Generation Event. This means that purchasers of WOLK will not be provided the full set of protections that registration or associated regulations under the Securities Act would otherwise give them.
Based on anticipated use of the WOLK and the Wolk protocols, Wolk believes that over time, all the Tokens will reasonably be treated as non-securities for purposes of U.S. law. In particular, Wolk believes that acceptance of the Wolk protocols will mean that WOLK are mainly used for commercial transactions using those protocols, which will cause the Tokens to take on additional characteristics of non-securities. At the point when Wolk believes that this has occurred, it will notify holders of the WOLK Tokens. There is no guarantee that this will occur. In addition, there is no guarantee that a regulator will agree with Wolk’s analysis. If a regulator disagrees, Wolk may need to make significant changes with respect to how the WOLK Tokens are structured, how they are purchased and sold, and other issues, which could greatly increase Wolk’s costs in operating its business. This development could also lead to the termination of WOLK. Further, a regulator could take action against Wolk if it views Wolk and/or the WOLK as out of compliance with law. Any of these outcomes would negatively affect the value of WOLK.
Are WOLK taxable?
Any returns you receive based on appreciation of the Wolk or as a result of transactions on the Wolk system could be taxable. Holders of the coins should discuss these issues with their tax advisers.
Can I use WOLK on any other platforms?
As discussed above, Wolk is designing the WOLK to initially facilitate its consumer data exchange API. However, third parties could also build APIs based on the Wolk Protocol. There is no guarantee that any third parties will develop alternative uses of WOLK or the Wolk Protocol
What risks are involved with holding WOLK?
There is no guarantee that WOLK will hold their value or increase in value, and you may lose all or some of the money you spend on WOLK. The value and success of WOLK depends on the commercial success of Wolk.
In addition, there is no guarantee that Wolk Inc. or the Wolk Foundation will continue indefinitely as viable companies. The utility and value of WOLK depend on Wolk’s success and support of the Wolk system.
Virtual currency such as WOLK is a new and relatively untested product. There is considerable uncertainty about its long-term viability, which could be affected by a variety of factors, including many market-based factors such economic growth, inflation, and others. In addition, the success of WOLK and other types of virtual currency will depend on whether blockchain and other new technologies related to WOLK turn out to be useful and economically viable. Wolk does not control any of these factors, and therefore may not be able to control the long-term success of WOLK as a feature of the Wolk system, or the ability of WOLK to maintain their value.
Wolk is selling WOLK in the U.S. under an exemption from registration under the Securities Act, and Wolk will not be registered under any U.S. securities or commodities laws. It is possible that a regulator could disagree with Wolk’s position that it is not required to register under those laws. This could lead to significant changes with respect to how WOLK are structured, how they are purchased and sold, and other issues, and would greatly increase Wolk’s costs in creating and facilitating transactions in WOLK. It could lead to the termination of WOLK. Further, a regulator could take action against Wolk if it views WOLK and its offering as a violation of existing law. Any of these outcomes would negatively affect the value of WOLK.
The regulatory risks described above take into consideration U.S. law only. It is anticipated that WOLK will also be sold outside the United States, which could subject Wolk or WOLK to non-U.S. legal requirements, which could be significant. Non-U.S. regulation could lead to the same types of changes and outcomes described above with respect to U.S. regulation, and any of these outcomes would negatively affect the value of WOLK. Because WOLK is built on the Ethereum blockchain and ERC20, it is in part dependent on Ethereum’s effectiveness and success, as well as the success of other blockchain and decentralized data storage systems that are incorporated in to the Wolk protocol. There is no guarantee that any of these systems or their sponsors will continue to exist or be successful, in which case WOLK would need to modify its APIs to adapt to a new way of providing its services. This could lead to disruptions of the Wolk protocol and could negatively affect WOLK, its functionality, and its value. Additional risk disclosures are provided here.