Examining the Uro Protcol

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Uro: Backed by Millions of Tons of Urea Fertilizer

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June 09, 2014, 11:14:04 AM
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Hi Dev,

I have gone through the protocol. I have a few queries and clarifications about the same.  I would appreciate if you could answer all of them for my benefit and others in the thread.

1.   Article-1: Each member will be backing only an amount of 12,500 MT of Urea. As per the ANN post and website there are only 4 members. Which means there is only 50,000 MT of Urea backed against the current >150,000 supply of UROs.
2.   Article-5: All the instruments of ratification will be deposited with URO foundation. Will these instruments be held by you or in the office of URO foundation of locker of a bank? If yes, where will be the office of URO foundation located or in which country’s bank and in which bank’s locker these ratifications will be deposited for safe custody.
3.   Article-6: This protocol will not be in force until 4 members have approved and ratified this protocol. What if one of the four members you mentioned in the announcement post do not agree to this proposal. This protocol will never come into effect and nobody can use UROs for buying Urea ever. After all the 4 of them have signed, it will take one month for this protocol to be effective, i.e. no one can buy Urea before 9the of July. Please clarify.
4.   Why are names and addresses of any of any member not mentioned in the protocol? After page 2 there is contract of sale directly.
5.   What will be the minimum quantity that a farmer/anyone holding UROs buy? In protocol it is mentioned as 12,500 MT. If a farmer does not need 12,500 MT of urea, why will he buy such a quantity?
6.   Presently, URO can be exchanged for Urea only in the countries where there is a member. People from other countries can only mine and trade URO but cannot exchange the same of Urea. Please clarify.
7.   Arbitration will be done by ICC: Does ICC consider URO as a mode of payment or currency of payment. If not, it will not be possible to seek arbitrage from such organization in the event of dispute. Please clarify.
8.   Article-22: Banking Information: What are the banking charges being discussed here? It looks like a copy paste mistake. What are the confirmation charges. I believe this is used in case of LCs. There is no LC involved here if I am not wrong. Then why the use of banking information here?

There are many tiny other details I have queries for but for now I do not have patience to type so much.

I would appreciate if you could clarify on the above queries and I hope this will answer the queries of many other fellow community members.

Regards,
Change is permanent.

Q & A –

1.   Article-1: Each member will be backing only an amount of 12,500 MT of Urea. [/b]As per the ANN post and website there are only 4 members. Which means there is only 50,000 MT of Urea backed against the current >150,000 supply of UROs.

Actually there is no legal limit to the amount of Urea backing (although a practical limit is imposed by the fact that the supply of Uro is limited – hopefully this gives you a better idea of why we went with 1 million Uro in the first 6 months then 100K per year – it is to allow management of the Urea purchase growth). Article 1 states the Member will supply 12,500 MT Urea to “any”(understand as each if that makes things clearer for you) purchaser. There is no limit to the amount of Urea available. If you have 1 Million Uro then you can purchase 1 Million MT Urea by making 80 separate purchase orders (which conveniently fits on 80 ships – more on this below).

2.   Article-5: All the instruments of ratification will be deposited with URO foundation. Will these instruments be held by you or in the office of URO foundation of locker of a bank? If yes, where will be the office of URO foundation located or in which country’s bank and in which bank’s locker these ratifications will be deposited for safe custody.

The signed instruments of ratification will be electronically published to the public for all to see and make copies of. The hash values of the these electronic instruments will be timestamp verified on to the Bitcoin blockchain viahttp://www.proofofexistence.com/ (a service we are porting to the Uro blockchain as well – and of course the first application would be to store hashes of these documents).

The electronic instruments will be backed up on 10 different cloud storage services and physical media including services operated by Google, Microsoft, Amazon, Digital Ocean, Backblaze, Ninefold, MEGA, Apple, Firedrive and most of these backups will be publicly available. The actual paper originals will be stored securely but we do not have permission from the Foundation board to reveal any more details regarding the physical storage at this time.

Once the Protocol is ratified by a Member, there is no way (under the terms of the protocol) for the Member to leave without a full public announcement by the Foundation via twitter and on the official website – and that will only take effect after 60 days at least (because that is how long it takes to amend the protocol to allow for this – without an amendment the Uro Protocol currently requires Members to stay ratified for the next 10 years).

3.   Article-6: This protocol will not be in force until 4 members have approved and ratified this protocol. What if one of the four members you mentioned in the announcement post do not agree to this proposal. This protocol will never come into effect and nobody can use UROs for buying Urea ever. After all the 4 of them have signed, it will take one month for this protocol to be effective, i.e. no one can buy Urea before 9the of July. Please clarify.

The four members that will be signing have already been named. The Foundation had a meeting with all members attending on Friday and confirmed all 4 members are signing. You would just have to wait for the instruments to be published – speculation of whether it will happen or not is a waste of time and energy. Regarding the 30 days before the protocol comes into effect – as you one can imagine, it takes time for things to happen in large corporations – staff needs to be trained, procedures put in place, infrastructure setup – these things cannot happen overnight. 30 days is a very reasonable amount of time to setup a business to accept form of payment that operates using completely different software then the existing SWIFT system.

4.   Why are names and addresses of any of any member not mentioned in the protocol? After page 2 there is contract of sale directly.

The Uro Protocol is open to signing by all NIERs that join the Foundation – so it would not be appropriate to put any company details on there. The instruments of ratification are what binds companies to the protocol.

The contract of sale has gaps that are to be filled in when the actual order is placed. These gaps are filled with the correct values for each specific order

5.   What will be the minimum quantity that a farmer/anyone holding UROs buy? In protocol it is mentioned as 12,500 MT. If a farmer does not need 12,500 MT of urea, why will he buy such a quantity?

The reason that there is a minimum order of 12,500 MT from the Members is that this is the amount which fills a typical cargo ship – because the Urea is to be delivered in bulk form (i.e. poured straight into the cavity of the ship) this is the only economical way to do it – any amount less and the purchaser will just be wasting their transport capabilities – which is not environmentally friendly. Another reason is that, in international Urea trading – nobody does deals less then 12,500 MT.

Understand that the Uro Protocol is the baseline that underpins Uro’s refence value – it is not (by itself) the ultimate end solution – The Foundation will setting infrastructure with local wholesalers (already under negotiation) so that smaller quantities of Urea can be purchased with Uro – in this case it will be the wholesalers not the NIERs supplying Urea to the purchaser – obviously the wholesaler still has to obtain their Urea supply from an international trader – likely a NIER – and here is where the solution comes full circle.

With the wholesalers – we know that some will be accepting orders in the 200 MT range – and we striving to find new partners that will supply even lower quantities – there is much to be done in the coming months – there is a 1 year plan we have in place and a 3 year plan is already in draft form.

6.   Presently, URO can be exchanged for Urea only in the countries where there is a member. People from other countries can only mine and trade URO but cannot exchange the same of Urea. Please clarify.

This is not true – nothing stops any individual or company from ordering from overseas suppliers – its just convenient to have someone to contact in your home nation – but not necessary. Plus, more members will come on board in the coming months – many Urea traders will understand the benefits of Uro once they see it – we will seek nations that do not yet have representation aggressively

7.   Arbitration will be done by ICC: Does ICC consider URO as a mode of payment or currency of payment. If not, it will not be possible to seek arbitrage from such organization in the event of dispute. Please clarify.

The ICC does arbitration – which is to do with getting both parties to agree on something via a set of mediation rules and procedures. The ICC does not need its own opinions and regulations on what are valid currencies. Because Uro does not suffer from bank delays or blockages, any issues that arise therefore will be to do with delivery or product specifications – which again the ICC are not experts in either – the ICC court is just their to make rulings on what are fair solutions to problems – the parties to the contract have to suggest and compromise on each other solutions together with the ICC arbitrator.

8.   Article-22: Banking Information: What are the banking charges being discussed here? It looks like a copy paste mistake. What are the confirmation charges. I believe this is used in case of LCs. There is no LC involved here if I am not wrong. Then why the use of banking information here?

As far as a Uro transaction goes, there are no expected banking charges. However. if either party decides to use a future payment processor to obtain fiat currencies – this clause protects both parties by making sure the banking charges stay where they belong and do not “bleed” unfairly on to the other party.

Another case where there can be banking charges is when the purchaser wants to order greater quantities – paying part LC and part Uro.

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