Design of the FRT

The Customer instructs VNX to generate an FRT, whereby the FRT should behave at least on a parity basis to a legal tender according to the principles of the market. This minimum parity for the FRT is to be achieved in a market economy by the following steps:

1. Physical gold is in a determinable ratio to a legal tender according to the intraday daily exchange rate. Therefore, physical gold refers to legal tender.

2. The VNX Gold generated by VNX represents co-ownership in physical gold. One VNX Gold token corresponds to 1/1000 co-ownership of a gold bar of 1 kilogram, which corresponds to 1 gram. Therefore, VNX Gold is also in a determinable ratio to a legal tender according to the intraday daily exchange rate of gold. Therefore, VNX Gold also refers to legal tender.

3. The FRT, which will be generated by VNX at request and on behalf of Customers, in turn refers to VNX Gold. This is in such a way that the Customer forms a reserve with VNX with their VNX Gold. This reserve is the basis for the FRT.

The reserve initially consists of VNX Gold and may be replaced or supplemented in the course of VNX's maintenance obligation, in the name of and for the account of VNX. In particular, VNX will hedge the risks relating to the gold price and currency exchange rates’ fluctuations on the relevant futures markets. Therefore, regardless of the gold price and currency exchange rates’ fluctuations, VNX will have sufficient assets in reserve to maintain the FRT value.

Due to the fact that the Customer creates a reserve with his VNX Gold at VNX, which VNX monitors and hedges, an FRT can be generated for the Customer, which refers to legal tender on a parity basis according to the principles of the market. To sum up, VNX ensures that the Customer's FRT are always supported by adequate value of reserves.

However, an FRT holder (other than VNX FRT issuing Customer) has no redemption rights. An FRT holder can therefore only ask for an exchange service from VNX or any other exchange service. VNX, in accordance with the TVTG registration as the TT Exchange Services Provider, provides an exchange service for the exchange of the FRT into fiat or another token. For any exchange service, the token holder will be required to register on the VNX Platform and comply with the AML/KYC requirements.