StarWORKS Whitepaper 5.0

Important Notice

This Whitepaper is issued by StarWORKS to explain the framework and design of its business. It is current as of its date and it is not anticipated that it will be amended or reissued unless there has been a significant change in the implementation and commercialization of the StarWORKS Ecosystem herein described. This Whitepaper is not an offering memorandum. Separate disclosure will be provided in the event of any offerings.

This Whitepaper is not a contract. Statements about the intentions and undertakings of StarWORKS and StarWORLD do not confer legal rights.

For additional important notices about this Whitepaper, see the section of this Whitepaper entitled “Legal Status of this Whitepaper.” By using this Whitepaper for any purpose, you are confirming that you have read, understood, accepted, and agreed with the statements set out in that section.

Abstract

Starworks Group Ltd and its affiliates (StarWORKS) have created and are continuing to develop an integrated Ecosystem for the Tourism, Hospitality and Entertainment Sectors from StarWORKS’ base in Bali, Indonesia. This Whitepaper addresses the function of and the interrelation among three types of Tokens used by the Ecosystem.

StarPOINTS, reward points awarded for spending at Participating Merchants or as Membership promotions and benefits, are difficult to maintain on the Blockchain because of small and frequent transactions. StarWORKS utilizes its proprietary Proof of Stake Authority consensus algorithm, allowing StarPOINTS to be transferred to a Member's StarWALLET in under 3 seconds and without significant gas fees—though a minimal fee is technically required for transaction execution. Because we operate on our own blockchain, we cover the gas fees for our members.

StarIGTs are StarWORKS Income Generating Tokens, offered with a range of privileges and benefits. StarIGTs represent ownership of products, demonstrating how Non-Fungible Token (NFT) technology can be applied to showcase fractional ownership for members who invest in the business through StarIGTs. However, in some projects, StarIGTs may be issued as a series of fungible tokens, while income calculation and ownership representation continue to rely on Non-Fungible Token (NFT) technology, which ensures that each token remains unique and distinct. The terms and conditions of each StarIGT are attached using Smart Contracts. Benefits conferred by StarIGTs may include a stake in the cash flow generated by a particular asset or business in the StarWORKS Ecosystem. This will create a sense of ownership among Members, ultimately encouraging the entire Ecosystem to be operated and developed in the interests of StarWORLD Club and its Members.

STARX Tokens, the native currency of the Starworks Ecosystem, is a true cryptocurrency that does not confer direct or indirect rights to the capital, income, assets or governance of StarWORKS. StarWORKS will instigate the development of a liquid secondary market for STARX Tokens so that they will form a bridge between the financial markets and the StarWORKS Ecosystem. StarWORKS will always facilitate the Exchange of StarPOINTS and StarIGTs into STARX Tokens at market prices, and will always dedicate a portion of any funds raised to support and promote the STARX Tokens secondary market. The supply of STARX Tokens is strictly controlled through a deflationary policy and binding limitations on the release of STARX Tokens from StarWORKS Treasury.

StarPOINTS, StarIGTs and STARX Tokens (collectively, StarTOKENS) are supported by 2 key technologies: StarCHAIN, the proprietary Blockchain technology of StarWORKS; and StarWALLET, the exclusive way for Members to hold StarPOINTS and StarIGTs. StarWALLET is easy to install and use, and is compatible with the Ethereum Virtual Machine (EVM), allowing it to hold various cryptocurrencies. This means that any tokens or cryptocurrencies built on EVM-compatible blockchains can be stored in StarWALLET.

Objectives and Design

StarWORKS and its predecessor entities have been operating in the Tourism, Hospitality and Entertainment Sectors in Bali, Indonesia for over 20 years. StarWORKS is integrating its businesses with Blockchain technology and other cutting-edge technologies including Artificial Intelligence, Virtual Reality and Big Data.

The StarWORKS Ecosystem consists of:

• Starworks Group Ltd and its technology and digital services subsidiaries including StarLABS and StarMEX.
• The StarWORLD Club and its Tourism, Hospitality and Entertainment Sector businesses including StarHOSPITALITY, StarTRAVELLER, StarVADER and StarDOME.
• StarPOINTS, StarIGTs and STARX Tokens, and the StarPOINTS Rewards Program.
• StarCHAIN and StarWALLET, StarLABS proprietary technologies.
• Participating Merchants who offer StarPOINTS or host tokens on StarCHAIN.

StarWORKS Ecosystem

The Tokens of the StarWORKS Ecosystem consist of:

• StarPOINTS – Reward points awarded for spending at StarWORLD outlets and other Participating Merchants, or issued as benefits or promotions to Members and potential customers.
• StarIGTs – Income Generating Tokens which offer a range of privileges and benefits, such as a stake in the cash flow generated by a particular asset or business in the StarWORKS Ecosystem.
• STARX Tokens – The native currency of the StarWORKS Ecosystem.

The StarWORKS Ecosystem has been designed to maximize the benefits of cutting- edge technology in the Tourism, Hospitality and Entertainment Sectors and to prepare for and anticipate the development of new technologies as they become ready for adoption. In order to achieve this, a number of issues have been addressed, whose solutions are embedded in the fundamental architecture of the Ecosystem.

Web 3.0 and Blockchain advances make it possible to create a Membership organization that maximizes the Members’ sense of community, and allows the delivery of personalized and highly targeted marketing messages, offers and promotions. These results can now be achieved through the creation of a platform open to Participating Merchants, allowing the emergence of network effects reaching beyond the supporting businesses owned by StarWORLD.

A key element of any such Membership organization is to reward Members when they use the facilities and benefits of the club. Existing loyalty programs are problematic for a number of reasons that can now be addressed by offering Blockchain-based reward points.

However, maintaining rewards programs on the blockchain can be costly due to the small and frequent transactions involved. StarWORKS addresses this challenge with its proprietary Proof of Stake and Authority consensus protocol, allowing StarPOINTS to be transferred to a Member's StarWALLET in under 3 seconds and with minimal gas fees applicable to either the member or the participating merchant. The rationale for each feature of the StarPOINTS Rewards Program is detailed below in the 'Rewards Program' section.

One of the challenges in establishing a rich and attractive Membership program is to offer Membership benefits adapted to the commitment level and spending power of the Members. Technology now permits Membership benefits to be personalized almost without limit.

StarWORKS has therefore created StarIGTs, which serve as blockchain-based evidence of participation, capable of representing a wide range of benefits. Each StarIGT is backed by NFT technology, specifying ownership and uniquely representing a share of the business asset or project in which the member has invested. Additionally, each StarIGT is linked to a smart contract that outlines the benefits conferred to its holder.

The types of StarIGTs and their features are discussed below in “Real-World Asset Tokens.”

To take full advantage of the flexibility offered by the ability to own and transfer StarPOINTS and StarIGTs on the Blockchain, there must be a type of StarTOKEN that can readily be sold for cash or cryptocurrency on a liquid secondary market, and StarPOINTS and StarIGTs should be readily exchangeable into this type of StarTOKEN.

STARX Tokens have therefore been created to form a bridge between StarPOINTS and StarIGTs, and the global economy. STARX Tokens are a true cryptocurrency that does not confer direct or indirect rights to the capital, income, assets or governance of StarWORKS or the StarWORLD Club.

The supply of STARX Tokens is controlled by the STARX Token Liquidity Policy, a legally binding policy that limits the release of STARX Tokens from the StarWORKS Treasury, requires periodic Burning of STARX Tokens purchased in the market, and requires StarWORKS to establish a Liquidity Reserve to support the STARX Token market under certain circumstances. The details of and rationale for this Policy is discussed below in “STARX Tokenomics.”

StarWORKS foresees the day when the Blockchain will be used on an everyday basis in our personal and business lives. Blockchain technology makes it practical to offer benefits to each customer that are specifically tailored to the interests of that customer. The StarWORKS Ecosystem is a platform that will accelerate personal and business wealth, health, growth and excitement.

StarWORKS believes that with its 20 years of experience in Bali’s Tourism, Entertainment and Hospitality Sectors, together with its experience and depth of staffing in digital technology, it is well positioned to become an industry leader and profit from being an early market adopter.

Rewards Program

The StarPOINTS Rewards Program is used to engage customers and inspire customer program loyalty. It is supported by the global distributed StarCHAIN ledger, which makes it easy to award and Redeem StarPOINTS and track transactions and balances. StarPOINTS can be Redeemed to cover all or any part of any purchase at a participating Merchant, and can be Exchanged for STARX Tokens directly on the StarWALLET, or sold for cash through StarMEX, StarWORKS’ agent for StarTokens transactions.

Existing Loyalty or Rewards Programs

The global system of loyalty programs is fragmented and ineffective. While the most visible loyalty or reward programs are offered by airlines, hotel chains, supermarkets and coffee shops, merchants in almost every retail sector (and many B2B service providers as well) offer some sort of loyalty rewards, and most people belong to many such programs.

In most reward programs, accumulated points can be redeemed only for an entire purchase, through prior arrangement, and on specific products. If the opportunity never arises, the points may expire unused. The difficulty of the redemption process and blackout periods and other restrictions on redemptions are frustrating to consumers. Most focus their attention on just a few programs and ignore the rest.

For merchants, issued and unredeemed loyalty points are booked as a balance sheet liability. A significant portion of all loyalty points issued will never be redeemed, but all of them must be carried as a liability unless and until they expire, creating an uncertainty about future income and reducing the book value of the business.

Maintaining a conventional loyalty program is also an administrative burden for merchants. Detailed records must be kept because of the liability it represents and in order to validate redemptions, but little useful marketing information is generated. The goal of customer engagement often is not achieved despite the cost of the program.

One of the perceived advantages of many existing loyalty programs, ironically, is that rewards are seldom redeemed. Merchants do not wish to extend benefits to customers who are not quantifiably loyal, so they deliberately make redemption difficult. They do not wish the rewards they issue to be redeemed for cash or spent elsewhere, feeling that this is a subsidy for disloyal customers, and an incentive to patronize other outlets.

Merchants may also treat customers as second class citizens when they redeem loyalty rewards, imposing limitations on seat or room selection, blackout periods, or limits on the overall supply made available for redemptions. Merchants who do this are trying to reduce the opportunity cost and administrative burden of loyalty reward redemptions, but in doing so they lose some of the goodwill that the program could have generated.

The StarPOINTS Rewards Program

Blockchain technology presents an opportunity to solve these problems. It is widely reported that Blockchain technology represents the future of loyalty reward programs.1 This is because of the ease of issue and redemption offered by Blockchain-based reward points, as well as the capability of such programs to gather data and tailor marketing messages and promotions.

StarPOINTS are issued to customers as a reward for spending at Participating Merchants. In consultation with StarWORKS, each Merchant fixes a base StarPOINTS award rate before promotions, special offers and premium Member discounts. As an example, StarHOSPITALITY Club Merchants award StarPOINTS as a cashback in a range 5 to 25%, based on the Membership Level held.

As all StarPOINTS transactions are recorded on the Blockchain, balances are tracked and reports are generated automatically on the Merchant’s Dashboard. StarWORKS takes responsibility for maintaining the system and producing useful data for Participating Merchants. The Merchant benefits from spending less administrative time, while achieving greater customer engagement, compared with traditional loyalty programs.

StarWALLET – StarWALLET operates with a 'tap and go' system for StarPOINTS rewards. Each member is required to install StarWALLET as a Progressive Web App (PWA) on their browser or download it to their phone. Once the app is installed, members must register and create an account to access the StarPOINTS program. With every purchase, StarPOINTS are sent to the customer's StarWALLET app at the point of sale (POS).

Every customer who is already a member of StarPOINTS on the StarWALLET app is invited to join the StarHOSPITALITY Club, a business and social organization primarily owned and managed for the benefit of its members. To become a member, customers simply fill out an online form, upload an official photo identification, and agree to the StarHOSPITALITY Club Terms & Conditions.

Everyone who has installed the StarWALLET App can earn StarPOINTS and Redeem them at Participating Merchants, and may receive special offers, advertising and announcements on their StarWALLETS. Those who register and become Members can use their StarWALLETS not only for StarPOINTS transactions, but for holding and transacting in StarIGTs and STARX Tokens, the other 2 types of StarTokens.

The StarWALLET can be used to receive StarPOINTS as rewards, to Redeem them at the POS of any Participating Merchant, and to store and track accumulated StarPOINTS.

In the future, Members can also purchase StarPOINTS using cash or credit card through StarWALLET’s Application Programming Interface (API) with PayPal or other payment gateways. Any number of StarPOINTS can be used toward any purchase at any Participating Merchant. There is no requirement to accumulate a minimum number of StarPOINTS before they can be used.

Technical Discussion

Reference Currency – The conversion rate was selected because it is approximately equal to 1 US Dollar. As tourism is a cross-border industry, global consumers often evaluate value in terms of US Dollars.

Since the launch of StarPOINTS in Bali, a renowned tourist destination, it has significantly changed how participating merchants manage their rewards programs. The seamless process of earning and redeeming points has been well received in the hospitality sector. Each StarPOINT is valued at IDR 15,000 for merchants purchasing from StarWORKS. The exchange value for food, drinks, or services can be determined by the outlets according to the merchants' terms.

However, STARXP Tokens are not IDR-denominated. Rather, the IDR is the Reference Currency, meaning if the Merchant’s functional currency is not IDR, the exchange rate between IDR and the Merchant’s functional currency (say, the US Dollar) is used as a reference for determining the number of StarPOINTS to be awarded or Redeemed.

When more of the Participating Merchants in the StarWORKS Ecosystem are operating outside of Indonesia, StarWORKS expects to change the StarPOINTS Reference Currency to one which is considered an international measure of value. Any such change will be announced to Members and will take effect across the Ecosystem.

StarPOINTS Have Real Value – The StarPOINTS Rewards Program will not appeal to merchants who wish to minimize the cost of their reward program by ensuring that most loyalty rewards are never redeemed. On the contrary, StarWORKS expects that a substantial majority of all StarPOINTS will be redeemed, and Participating Merchants should anticipate this in their marketing and pricing strategies.

StarWORKS believes that market trends support the rise and eventual dominance of rewards programs that are easily redeemable, including redemption at multiple merchants and redemption for cash. Loyalty rewards that can only be redeemed for a purchase at the issuing merchant will rapidly become a thing of the past.

Over the coming years, Blockchain technology will make it easier and more common for ownership of all asset types, including rights to discounts and rebates, to be tracked and held securely. Merchants who do not offer this advance to their customers will increasingly be perceived as lacking in care and commitment toward their customers. Negative customer reactions to conventional loyalty program redemption options and processes will only increase as other merchants begin adopting more useful and valuable rewards programs.

StarWORKS also believes that giving something of real value to all customers, regardless of their demonstrated loyalty, is good business. Customers will perceive the concern shown toward them as an advance commitment by the merchant, which is more likely to be reciprocated with loyalty.

Customer Engagement Opportunities – Information generated by the StarPOINTS Rewards Program can be used by Merchants to enhance customer engagement, such as by offering and announcing sales and discounts through the StarWALLET. The most loyal Customers will be known to the Merchant and can be singled out for additional discounts or special offers.

One of the banes of the Tourism, Hospitality and Entertainment sectors is what are known as “comps.” Merchants show appreciation of regular customers by treating them to free drinks, meals, spa treatments and room nights. This is often done haphazardly and may completely erase the profitability of some large customers. Shareholders and managers may comp friends who are not key customers, causing irritation to other stakeholders.

With an orderly and data-rich rewards program, comps may be controlled by bringing them under the umbrella of the rewards program. Good customers will know they are receiving the same proportionate rewards points as everyone else, plus discounts and promotions extended to them through the StarWALLET with appropriate corporate approvals.

Accounting and Balance of Payments – When reward points are recognized as equivalent to cash, the value of the award is a set off or rebate to revenue, also recorded as a reduction of StarPOINTS inventory on the Merchant’s balance sheet. In a typical loyalty program, the entire revenue is the sale price of the Merchant’s product or service, and the award is booked separately as a contingent liability.

Knowing the cost of loyalty rewards is booked immediately, Merchants will consider this as part of the cost when prices are set. As noted above, customers will appreciate rewards that are actually valuable and useful. Their willingness to pay a premium for this benefit could cover the cost of the rewards program.

Depending on the tax regulations of the Merchant’s jurisdiction, it may be possible to deduct the amount of StarPOINTS awarded when calculating sales tax or value added tax. If this is achieved, a StarPOINTS Redemption transaction would correspondingly be a sale on which sales tax or value added tax applies. Conversely, if POS tax is paid on the entire sale including the portion attributable to the award of StarPOINTS, subsequent Redemptions will not be taxable.

A Merchant whose awards and Redemptions of StarPOINTS are in equilibrium will receive StarPOINTS into inventory when it Redeems them, and will draw from that inventory when it awards them, without ever having to buy StarPOINTS from StarMEX. The portion of every cash sale that is allocated to StarPOINTS covers the cost incurred when StarPOINTS are Redeemed.

A Merchant that Redeems more StarPOINTS than it awards will realize a balance of payments surplus. Its Redemptions will more than cover the StarPOINTS awarded on purchases, and the resulting accumulation of StarPOINTS can be held as a financial asset, spent at other participating Merchants, or Redeemed at StarMEX.

A Merchant that awards more StarPOINTS than it Redeems effectively generates cash from the sale of StarPOINTS. Not all of this cash is needed to cover the cost of future Redemptions, but it will have to be spent from time to time on replenishing its inventory of StarPOINTS by purchasing them from StarMEX.

If the Reference Currency is not the same as the Merchant’s functional currency, StarPOINTS inventory should be marked to its current value based on the exchange rate between the Reference Currency and the functional currency, potentially generating a forex gain or loss which will be categorized as “Other Income (Expense).”

StarCARD

StarCARD is an extended product offering from StarPOINTS that activates cashless payment systems within concert venues, during festivals and events, and in clubs, restaurants, bars, food courts, and more. From seamless ticketing to purchases, StarCARD is designed to provide a convenient payment experience.

The StarCARD product range includes NFC cards that typically function within restaurants, NFC wristbands for ticketing systems and cashless payments at concerts and events, and NFC card readers to execute transactions. The NFC readers can be integrated with StarPOS, allowing for menu input, transaction recording, and seamless revenue reporting through a linked dashboard.

Cashless Payment Events and Venues – The simplicity of awards and redemptions allows StarPOINTS to offer cashless payment services.

Customers using these services do not need to install the StarWALLET app; instead, they can receive a StarCARD with a newly purchased balance that appears as fiat currency, while the StarPOINTS balance serves as the backend technology. The StarCARD can be acquired, topped up, and/or returned at the StarPOINTS top-up counter. Customers may return the StarCARD after use for a refund, in accordance with the event or venue policy. However, if they choose to keep the StarCARD, its balance can be transferred as StarPOINTS to their StarWALLET for redemption at participating merchants.

Payment by cash and credit card at these events can be cumbersome and slow, causing the customer to miss scheduled performances and other events, or dissuading the customer from spending money altogether. These problems are solved with StarCARD.

Another common use case is venues with a large number of small merchants, such as a shopping mall’s food court or handicrafts center. The StarCARD speeds up transactions, which encourages customers to spend money. The merchants at many of these venues are paying rent equal to a percentage of gross sales. Conversion of these venues to cashless allows the landlord to capture the true amount of revenue being generated by each outlet.

StarMEX

Redemption for Cash – If customers want value for their StarPOINTS without making a purchase at a Participating Merchant, StarPOINTS can be Redeemed for their current value less a fee. The customer’s StarWALLET will offer a choice of StarTokens at published rates. If the customer wishes to receive a fiat or crypto currency other than STARX Tokens, it will be necessary to transact with a dealer.

The StarMEX business of StarWORKS has been established to execute these Redemptions and generate fee revenue. The exchange rate of StarPOINTS for STARX Tokens and selected currencies will be posted by StarMEX. StarMEX aims to generate a gross margin of 15% on customer transactions. Merchants purchasing StarPOINTS inventory for their reward programs are eligible for lower commissions and spreads.

Like any money changer, StarMEX will set exchange rates by reference to its actual costs. The spread between buy and sell will be less for exchange rate pairings which are more liquid. StarMEX may execute an exchange in multiple steps through one or more intermediate currencies and this may involve a spread and a commission on each step. Because the IDR is the Reference Currency of StarPOINTS, the IDR will be an intermediate currency in most cases where the customer requests payment other than in IDR. StarMEX may change posted exchange rates and commissions at any time, and may transact at negotiated exchange rates and commissions which are not posted.

StarWORKS intends to open StarMEX “money changer” branches where there is a concentration of Participating Merchants, and at airports and transportation hubs. Tourists can visit a StarMEX outlet at the airport to redeem their accumulated StarPOINTS on their way out of the country, much as tourists now do to collect VAT refunds.

StarMEX may also offer Redemptions for Members through their StarWALLETs, which will involve the transfer of tokens other than StarTokens to the Member’s StarWALLET, the transfer of proceeds to the Member’s linked bank account, or the use of a third party payment app such as payment gateway.

Adoption

Adoption of StarPOINTS began with its adoption by StarHOSPITALITY outlets and has been extended to several other Merchants in Bali’s Tourism, Hospitality and Entertainment Sectors. StarWORKS intends to extend a degree of product exclusivity to Participating Merchants by limiting the onboarding of Merchants which are in direct competition with the incumbent Participating Merchants.

The addition of Participating Merchants has network effects. As Merchants are added, StarPOINTS become more useful to Members, which increases the number of Members and incentivizes more Merchants to participate. Because the distributed ledger is borderless, the Ecosystem can be seamlessly expanded to other geographic regions without significant marginal cost.

Particularly in the Tourism, Hospitality and Entertainment Sectors, tourists wish to patronize a variety of outlets and will seek out Merchants where the rewards they have already earned, can be spent. Traditional loyalty programs are not effective with tourists, because tourists do not expect to achieve the expected level of loyalty during their visit.

The growth of the StarWORKS Ecosystem is underpinned by an integrated marketing strategy. In addition to other marketing channels, StarWORKS utilizes Affiliate Marketing and incentivizes marketers through the issue of StarTokens. Non-staff Members are also eligible for StarToken incentives for adding Members and Merchants to the Ecosystem.

Real-World Asset Tokens

The second type of tokens issued by StarWORKS is its StarIGT Series, in which “IGT” stands for Income Generating Token. These are Real-World Asset (RWA) tokens that allow Members to participate in a community, project or business, potentially earning StarPOINTS based on the results.

Each StarIGT is linked to a Smart Contract setting out the benefits of owning it. StarIGTs may be issued as a class of fungible tokens, as unique individual Non- Fungible Tokens (NFTs), or as fractional NFTs. StarIGTs will be privately offered only to Accredited Investors.

StarWORKS believes that shared ownership of and participation in unconventional assets will be increasingly common as RWA token adoption spreads throughout the global economy. StarWORKS intends to be at the cutting edge of this trend.

Blockchain technology presents an opportunity to offer Members a wide range of tailored participation in an asset or activity. Examples of StarWORKS assets that may be tokenized by StarIGTs include:

• A particular corporation or other legal entity.
• A particular outlet, such as a StarHOSPITALITY restaurant or StarMEX Money Changer.
• A chain of outlets operating under the same brand name
• A location within an outlet such as a room at a resort, a table at a restaurant, or a private room or seating area at a nightclub.
• A product or category of products offered by an outlet or chain of outlets.
• A product that takes time to produce and will be available in the future, such as whiskey or red wine that is being aged; production from a factory, mine or plantation still under development, or carbon credits to be produced from a conservation project.
• An object or right such as a painting, graphic art, or audio or video recording.

Members, Participating Merchants and StarWORKS affiliates are invited to propose StarIGTs for particular assets, and if the proposal is accepted, a new issue of StarIGTs is minted. The proponent is considered the Sponsor of the new issue, is responsible for performing the obligations of the Smart Contract, and receives a majority of the proceeds from the sale of the StarIGT issue.

The StarIGT may generate earnings, and may entitle the Holder to non-financial benefits, as specified in its Smart Contract. The performance of the asset underlying a StarIGT can be viewed on the Member’s StarWALLET Dashboard. This performance may be shown in real time (for example, whether a table in a nightclub is occupied), or may be updated daily (for example, a restaurant’s sales on the previous day.)

Earnings are payable in StarPOINTS. StarPOINTS earned will be deposited to the Holder’s StarWALLET. In practice, StarIGTs must be held for 30 days (a complete calendar month) to generate income. Income is generated once the StarWORLD merchants submit their revenue reports, at which point the earnings will be distributed to the holders. StarPOINTS can be Redeemed at Participating Merchants or by selling them to StarMEX, just the same as if the StarPOINTS had been earned by spending at a Participating Merchant.

StarTREC Features

All StarIGTs are StarTREC enabled, which means:

TRANSFERABLE – Members are welcome to offer their StarIGTs to other Members, or browse the StarIGTs offered by other Members, on the Club Notice Board, a location within the StarWALLET App. If a notice is of interest to connect with another Member, users can utilize the Over The Counter feature in StarWALLET. Members can also negotiate the price of StarIGTs and facilitate transfers, purchases, or sales within the terms of the OTC. If Members choose to finalize a transfer, tokens are automatically exchanged between StarWALLETs once the transaction is executed by the system.

The Club Notice Board is an informal and slow method for Transferring StarIGTs, and is not an Exchange. For Members who wish to participate in a more active and automated trading market for StarIGTs, StarWORKS or Members may list an issue or class of StarIGTs on a Decentralized Exchange (DEX) such as PancakeSwap.² When the listing is by StarWORKS, it will impose a “tax” on DEX transactions, as discussed in more detail below in the context of STARX Token DEX listings.

The price of the listed StarIGTs is directly and automatically affected by the last transaction on the DEX, by operation of an algorithm such as Uniswap’s Constant Product Market Maker Algorithm.³ Members are encouraged to watch for arbitrage opportunities by checking the price of their StarIGTs on the DEX.

REDEEMABLE – All StarIGTs come with a perpetual Money-Back Guarantee. At any time, the Holder can transfer their StarIGTs to StarMEX against a number of StarPOINTS equal to the original sale price minus a Redemption Fee, currently equal to 15%. StarPOINTS may as always be Redeemed at Participating Merchants or converted into cash or crypto by StarMEX.

EXCHANGEABLE – StarMEX will always maintain an open offer to all Holders to exchange their StarIGTs for StarPOINTS or for STARX Tokens. StarMEX management is allowed to fix the exchange rate at a level they see fit, and to change it as often as they wish, just like the posted exchange rates of their money changer business. StarMEX’s posted rates either will be visible to all Members on StarWALLET, as in the case of fungible StarIGTs with many Holders, or posted privately only to the Holders, as in the case of NFT StarIGTs. StarMEX may, but is not required to, post StarIGT-to-StarIGT exchange rates.

CONVERTIBLE – Each StarIGT is Convertible at any time into a number of STARX Tokens which is fixed at the time of issue. This gives every StarIGT Holder, in addition to the benefits offered by the Sponsor, the opportunity to benefit contingent upon the achievement of a predetermined price target in the STARX Token market.

The issues of StarIGTs currently on offer are Convertible at a rate of US$2 and US$5 of original issue price for one STARX Token. For example, a StarIGT originally offered by the Sponsor or Underwriter for US$100 is Convertible into 50 or 20 STARX Tokens.

The STARX Token price will have to appreciate considerably before the value of STARX Tokens received will exceed the original purchase price of the StarIGT. StarIGT Holders are encouraged to monitor the price of STARX Tokens so they will know when their StarIGTs are “in the money.”

The STARX Tokens into which every StarIGT is Convertible are issued and held in reserve fund Wallets by StarWORKS as a Treasury Account for transfer to the StarIGT Holder in the event of Conversion. These STARX Tokens are purchased at the time the StarIGTs are issued, using a portion of the StarIGT sale proceeds, thus providing an additional source of demand for STARX Tokens, and assuring the StarIGT Holder that the underlying STARX Tokens will be available when called upon.

If a StarIGT is Converted into STARX Tokens, it is considered to have been acquired by StarWORKS, because the STARX Tokens were supplied by StarWORKS. The StarIGT therefore remains outstanding but is owned by StarWORKS, and the Sponsor must provide the same benefits to StarWORKS which it previously provided to the Holder.

StarIGT (SWC) Token Holders Own StarWORLD Club

The soon to be launched SWC Tokens holders will be the beneficiaries of the Starworld Club Ltd, the intended 50% shareholder of Starworks Group Ltd. The benefits, via a staking process of the SWC Club’s investments, are considered to be allocable among the Members in proportion to the aggregate value of the SWC Tokens they hold.

Starworld Club Ltd, a Seychelles International Business Company or IBC (StarWORLD Club), is a holding company for StarWORKS Group Ltd’s investments. StarWORLD Club is also a Seychelles IBC, which is the holding company for StarWORKS technology businesses including StarLABS and StarMEX.

The current Board of Directors of StarWORLD Club Ltd also serves as the Board of Directors of Starworks Group Ltd. The Board may be supplemented by one or more representatives of the Members in the future.

Pending the establishment of the planned structure, the existing shareholders have agreed that half of all shares owned by each shareholder in Starworks Group Ltd are held on behalf of the StarWORLD Club Members.

StarIGT (SHC) Token Holders Own StarHOSPITALITY Club

The SHC Tokens are planned to launch later in October 2024. The SHC Token holders are the beneficiaries of StarHOSPITALITY Club Ltd, the intended 50% shareholder of Star Hospitality Group Ltd. The benefits, via a staking process of the SHC Club’s investments, are considered to be allocable among the Members in proportion to the aggregate value of the SWC Tokens they hold.

StarHOSPITALITY Club Ltd, a Seychelles International Business Company or IBC (StarHOSPITALITY Club), is a holding company for StarHOSPITALITY Group Ltd’s investments. StarHOSPITALITY Club is also a Seychelles IBC, which is the holding company for the Red Ruby Nightclub, The Social Seminyak, Rosalita’s Cantina and Bali Island Villas & Spa operations all located in Bali, Indonesia.

The current Board of Directors of StarHOSPITALITY Club Ltd also serves as the Board of Directors of Star Hospitality Group Ltd. The Board may be supplemented by one or more representatives of the Members in the future.

Pending the establishment of the planned structure, the existing shareholders have agreed that half of all shares owned by each shareholder in Star Hospitality Group Ltd are held on behalf of the StarHOSPITALITY Club Members.

StarHOSPITALITY has agreed in the Smart Contract to award StarPOINTS of its payable accounting net cash flow to SHC Token Holders. PT Star Hospitality Management is granted full management control under a Management Contract. In addition, Token Holders are eligible for VIP treatment at StarHOSPITALITY outlets depending on the number of StarIGTs owned.

The total issue minted is 15 billion SHC Tokens. The StarIGTs and StarPOINTS benefits are only allocable to a total 5 billion SHC Tokens which must be Staked. Benefits are distributed monthly and the Tokens must be Staked throughout the entire calendar month period to be eligible for the benefit.

The Issue price of the SHC Token is US$0.01 (1₵), so that the total issue size is US$150 million. The SHC Tokens have all been minted, and the 5 billion Tokens to be staked (IGTs) remain under the ownership of the Underwriter, StarWORKS Group Ltd. until acquired.

StarWORKS intends to list a portion of the SHC Tokens as a pairing with USDT on the PancakeSwap DEX, and in support of this listing will fund and lock a Liquidity Pool. StarWORKS will implement a 10% “tax” on every DEX transaction as a development fee, though this rate may be flexible. The distribution of this tax will be detailed in the document attached to the launch of the SHC Token on DEX.

Besides the DEX listing, StarWORKS will set a portion of the gross sale proceeds of all SHC Tokens for use as a secondary market Repurchase Fund. Any offers by the Repurchase Fund will be posted on the Club Notice Board and identified as such. The Repurchase Fund can be spent at any time, but an offer must be posted (and filled, if accepted) if the highest posted offer is less than the original Issue price of the SHC Tokens.

The legal responsibility of StarWORKS to support the secondary market for SHC Tokens is limited to the amount of the Repurchase Fund. StarWORKS makes no representation or undertaking as to the effectiveness or ultimate result of any market support activities.

Staked SHC Token Holders benefit from a Dividend Blocking Covenant providing that dividends may not be distributed to Shareholders unless all obligations to Token Holders are fully satisfied and an amount has been set aside which is sufficient to purchase enough StarPOINTS to cover the next 3 months of projected distributions.

Since SHC Tokens have a Dividend Blocking Covenant, any purchase of the entire Sponsor company would require the purchase of the outstanding SHC Tokens. Therefore, a party wishing to purchase all of the outstanding SHC Tokens may contact the Board of Directors of StarHOSPITALITY and will be allowed to make an offer to all SHC Token Holders through StarWALLET. If the Holders of a majority of SHC Tokens, disregarding Tokens owned by StarWORKS or the Sponsor, agree to this offer, all Holders are bound by the majority will and the sale will be executed automatically through StarWALLET.

Other Planned StarIGTs

Besides the SHC and SWC Tokens, StarWORKS is planning several other StarIGT initiatives:

Connoisseurs Club – As the highest status level within the StarHOSPITALITY Club Membership StarWORKS plans to open, on behalf of these Members, a facility in Northern Ireland where whiskey will be aged and visitors will be welcome. Upon completion of the planned maturity period of 12 to 25 years, whiskey will be bottled under the Connoisseurs Club brand.

Connoisseurs Club will issue StarIGTs that represent Irish whiskey currently being matured in casks. Different classes of Token will represent bottles of whiskey with different maturity periods prior to bottling, and the Tokens will mature and be paid off by the Sponsor when the target maturity period has been achieved.

Forest Edge – StarWORKS has provided technical support and white labeling to Indonesia Conservation Initiative, a consortium that proposes to manage an Indonesian forestry concession named Forest Edge by preserving primary rainforest on part of the area and producing wood pellets for solid fuel power plants on degraded forest land in the other part of the area.

Forest Edge plans to offer 2 classes of StarIGTs to be identified as EcoTokens. Forest Edge EcoTokens (FEET) entitle Token Holders collectively to 75% of any profit distributions by the Project.

Natural Environment EcoTokens (NEET) are a class of NFTs that each represent the carbon sequestered in and biodiversity of a particular land area 100 m2 in size.

StarVADER - StarWORKS plans to tokenize its mascot “StarVADER” as a form of NFT compatible lifelike character. Developers of Video, IVR and Games will have access to open-source StarLABS material to compete and offer works to StarLABS as part of a remote technology participation project.

StarDOME – StarWORLD plans to open a hemispherical entertainment facility called StarDOME in which guests will be treated to a total immersion VR program while socializing with their friends. Content will be produced by StarWORKS and will be available for licensing to other dome venues. Members who subscribe for StarDOME StarIGT Holders will have an opportunity to participate in special events and share in the revenue.

STARX Tokenomics

STARX Tokens are the native currency of the StarWORKS ecosystem which waere initially built on the Ethereum ERC-777 standard. To better serve decentralized exchanges (DEX), STARX is migrating to the Binance Smart Chain (BSC) with the BEP-20 standard. The smart contract is undergoing a Certik audit, and once it passes, STARX will be listed on PancakeSwap, with plans to expand to other DEX platforms in the future.

As part of its Multi Chain strategy, STARX will also be built on StarCHAIN initially, paving the way for future integration with additional blockchains. While STARX can be traded on both centralized and decentralized exchanges, the ecosystem’s products, like StarPOINTS and StarIGTS, will remain exclusive to the StarWORKS ecosystem, creating a seamless bridge between the platform and broader financial markets.

The objectives of StarWORKS are to develop a liquid STARX Token secondary market, and to see STARX Tokens appreciate in value over time. This value increase in STARX Tokens should be traceable back to increases in the value of StarWORKS and its Ecosystem. STARX Token appreciation not only rewards STARX Token Holders, it also reduces StarWORKS’s effective cost of capital, thus enhancing the competitiveness of StarWORKS and leading to further increases in the value of STARX Tokens.

Because STARX Tokens are a cryptocurrency which does not confer any rights over the capital, income, assets or governance of StarWORKS, their value is not inherently linked to the value of StarWORKS’s business. To create this linkage, it is necessary for StarWORKS to adopt policies that affect the supply and demand of STARX Tokens.

StarWORKS has minted a total STARX Token supply of 1 Billion Tokens and is the Holder in its Treasury of the reserve supply (currently approximately 875 Million Tokens)⁴ that has not yet been Issued to third parties. This puts StarWORKS in a position to affect the supply and demand of STARX Tokens going forward.

Token Distribution

All of the STARX Tokens have been minted and no further additions to supply are possible. Over the long term, StarWORKS intends to make use of these Tokens by allocating 35% to Public Sale, 5% to Reserves, 40% to Ecosystem Development, and 20% to Marketing, Community, and Airdrops.⁵

Public Sale (35%) – The Public Sale allocation aims to raise capital for the development, operations and expansion of the business, and to provide funding for the Liquidity Pool as required for STARX Tokens to be DEX-listed.

STARX Tokens issued upon Redemption, Exchange or Conversion of StarIGTs are counted toward the Public Sale allocation because the antecedent StarIGTs were sold for fundraising purposes. ⁶

Reserves (5%) - Starworks has incorporated a Redemption, Exchange, Convertible option into holders of a selected minted and released StarIGTs where a StarIGT Token can be converted to STARX at a fixed determined rate declared and confirmed in the smart contract governing the token. Starworks has set aside in a special declared Wallet, STARX Tokens allocated for a Provision for redemption under future projects.

Ecosystem Development (40%) – he Ecosystem Development allocation is intended to foster the development of the StarWORKS Ecosystem. To stay at the forefront of Blockchain infrastructure, it is important to fund partnerships, team incentives, recruiting and other initiatives that enhance the team’s capabilities and our technology’s competitive advantage.

All Tokens granted under this allocation will be Restricted and unable to be sold or transferred until March 31, 2025, after which 60 Million STARX Tokens will be released in each successive 12-month period. ⁷

Marketing, Community and Airdrops (20%) – For both liquidity and price appreciation to be achieved, it is necessary to have both widespread holdings of STARX Tokens and solid community support. This will be achieved by placing 250 Million STARX Tokens free or at discount prices8 to groups or communities such as:

• Current StarToken Holders meeting particular criteria.
• Users of a similar or related platform whose interest suggests an affinity to StarWORLD Club and StarWALLET.
• Participants or contest winners who complete tasks or meet challenges devised to increase engagement.
• Attendees of events hosted in partnership with third parties with similar communities.
• Social impact partners and their community members, such as the Forest Edge project for rainforest conservation and reforestation.

There are no plans to Restrict STARX Tokens distributed pursuant to this allocation. All Tokens issued will be freely tradable upon release.

STARX Token Liquidity Policy

Because StarWORKS is holding in its own Treasury a large majority of all STARX Tokens in existence, the supply of STARX Tokens in the market will be, more than anything else, a function of StarWORKS policy. The management of STARX Token supply will be far more effective, and will accomplish the desired results with less effort, if the STARX Token supply policy of StarWORKS is both transparent and credible.

Therefore, StarWORKS has adopted a policy, referred to as the STARX Token Liquidity Policy, governing the supply of STARX Tokens in the market. This policy is publicly announced, and is legally binding because it is set out in contractual undertakings by StarWORKS in favor of StarWORLD Club Members and of StarIGTs Holders. The STARX Token Liquidity Policy has two principal pillars:

• Buyback & Burn Policy – Once all STARX Token held against the redeeming function of StarIGTs have been exhausted, StarWORKS will spend from its prior year’s Net Cash Flow on the purchase of STARX Tokens on the Club Notice Board or a recognized cryptocurrency exchange, followed by the burning of the Tokens purchased.
• Net New Supply Policy – StarWORKS has set overall restrictions and transparency requirements on the net new supply of STARX Tokens. All possible STARX Token Issues are divided into 8 Categories and each one has its own applicable rule.

The following Table sets out the full text of the STARX Token Liquidity Policy:

STARX Token Liquidity Policy Table

The Buyback & Burn Policy

Central banks hate deflation, mainly because deflation makes the principal amount of debt more valuable when it is repaid than it was when it was borrowed. ⁹ StarWORKS and its Members, by contrast, want the value of STARX Tokens to go up, which is considered deflation because prices expressed in STARX Tokens go down. To achieve this, we will do the opposite of what central banks do, which is to have a shrinking money supply.

Besides STARX appreciation, StarWORKS also wants the value of STARX Tokens to be correlated with the enterprise value of StarWORKS. In the equity markets, stock prices are linked to enterprise value by dividend policy and ownership rights. This linkage is actually quite weak, because many companies do not pay dividends, and Holders are unlikely to sell their shares to someone who cares about the shares’ voting rights. But it works anyway. The linkage does not have to be strong; it only needs to be believed. ¹⁰

In modern corporate finance theory, stock buybacks are considered similar to dividends in that both deliver a portion of the company’s cash to its owners. Buybacks leave the underlying enterprise value unaffected (except for the reduction of cash on its balance sheet), while reducing the number of units into which it is divided, thereby increasing the value of one share. The stockholders who sell are those who place the lowest subjective value on owning the shares, increasing the average commitment to buy-and-hold among the remaining population.

As a cryptocurrency, STARX Tokens have no “issuer.” Either paying dividends to STARX Token Holders from StarWORKS profits, or granting STARX Token Holders ownership rights over the business and assets of StarWORKS, would make STARX a utility token instead of a cryptocurrency. However, STARX buybacks by StarWORKS are consistent with STARX’s status as a cryptocurrency.

It has become common for cryptocurrency developers which, like StarWORKS, hold a large supply of tokens in their own treasury, to manage supply by periodically reducing the number of tokens in circulation through buyback-and-burn. ¹¹ Consistent with the principles of DeFi, the transaction that takes tokens out of circulation should be independently verifiable and irreversible.

Any perceived overall value which is reflected in the aggregate market capitalization of a cryptocurrency will be left unaffected by buybacks, while the number of units into which this overall value is divided is reduced, thereby increasing the value of one unit. Buyback-and-burn may also have a positive effect on market sentiment. ¹²

StarWORKS’s Buyback & Burn Policy is that each year starting in 2026, StarWORKS, except for the provision above, will spend 10% of its prior year’s Net Cash Flow on open market buying and burning of STARX Tokens Since. The policy will continue until the number of STARX Tokens is reduced by 50%,¹³ or until the policy is modified or terminated by StarWORKS upon 12 months prior notice to Members. ¹⁴

Since burning tokens will have a greater effect on the market if it is announced and can be anticipated by investors, STARX Tokens will not be burned except pursuant to the Buyback & Burn Policy. ¹⁵ The amount of the Buyback & Burn in each year will be announced no later than April 30 of that year, together with the release of financial statements. ¹⁶

StarWORKS has opted to base the size of the Buyback & Burn on its own net Cash Flow instead of its accounting net income for two reasons. First, it is crucial that StarWORKS operations must generate actual cash flow, and not just unrealized net income, to fund the Buyback & Burn Policy. Second, accounting standards may change over time, and such a change might cause variations or a dramatic change in the scope of the Buyback & Burn. If accounting standards require Treasury Tokens to be marked to market, for example, StarWORKS net income could vary widely in a way not directly related to the performance of the business, or in a way that does not generate cash flow. ¹⁷

The Net New Supply Policy

Even with the Buyback & Burn Policy, the addition of new STARX supply into the market must be limited, and must be perceived by the market to be limited effectively, in order for STARX Tokens to appreciate in the market.

The approach of the Net New Supply Policy is to limit the rate at which Tokens can be added to the money supply. Most cryptocurrency developers only limit the total number of tokens that will be released for various purposes over an indefinite period of time. StarWORKS expects that limiting the rate of Issue will be a more effective way of imparting confidence to the market than describing an overall allocation of the token supply, to be achieved over a period of many years.

As outlined in the Net New Supply Policy, STARX Token Issues fall into 8 Categories. The manner of restriction of each of these Categories is set out in detail in the Policy above, and is summarized below.

Sources of New STARX Token Supply

The Repurchase Fund is a key concept in the Net New Supply Policy, as 6 of the 8 Categories of STARX Token Issue may lead to a contribution to this fund. The purpose of the Repurchase Fund is to support the secondary STARX Token market in any downturn by providing funding to maintain the price of STARX Tokens at or above a certain Floor Price. This price is US$0.10c until the end of 2025, after which the Floor Price increases by 40% in each succeeding calendar year. ¹⁸

DEX Transaction Fees

StarWORKS intends to list STARX Tokens on one or more DEXs. The Liquidity Pool is locked in for an extended period at the time of listing, so DEX listings are not particularly relevant to the STARX Token Liquidity Policy, and it has been determined not to restrict them.

The party initiating a DEX listing is entitled to collect a fee or “tax” on any transaction using the party’s Liquidity Pool. In conjunction with these listings, StarWORKS has decided to impose a tax of up to 10% on DEX transactions; this rate will be flexible and communicated to the community and holders. StarWORKS will allocate this revenue as follows:

Liquidity Pool (4%) – This 4% charge, or 4/10 of the tax, will be added to the Liquidity Pool which will tend to reduce trading volatility by reducing the effect of single trades on the DEX pricing algorithm.

Social Donation - (2%) – A 2% charge, or 2/10 of the tax, will be donated to an appropriate cause that has the support of the community. StarWORKS current preference is to support our partner’s Forest Edge project.

Ecosystem Development and Developer (4%) – The remaining 4% charge, or 4/10 of the tax, will be invested in the development of the StarWORKS Ecosystem, with an allocation to R&D to explore new features and services, and an allocation for the pursuit of strategic partnerships and collaborations.

The allocation of tax distribution may change over time, based on mutual decisions made by developers and the community.

Technology

The technology of the StarWORKS Ecosystem has been developed in-house by StarLABS. Technologies directly supporting the Token and Blockchain programs of StarWORKS consist of StarWORKS Token technology, StarCHAIN technology and StarWALLET technology.

StarWORKS Token Technology

The Tokens of the StarWORKS Ecosystem consist of STARX Tokens, the native currency of the Ecosystem; STARXP Tokens representing StarPOINTS loyalty rewards; and StarIGTs, Membership tokens which in turn consist of StarMOTs, StarIGTs and StarEOTs.

The StarTokens have been minted by Starworks Global Pte Ltd, a StarWORKS company incorporated in Singapore, and are transferred to the relevant StarWORKS business entity before being issued or sold to the end user or acquirer.

STARX Tokens – STARX Tokens are the native currency of the StarWORKS Ecosystem, and form a bridge between STARXP Tokens and StarIGTs and the rest of the financial economy. Members who wish to receive cash from StarWORKS for their StarPOINTS or StarIGTs must first convert them into STARX Tokens, which are exchange-listed and can be sold or exchanged, or held as a cryptocurrency investment.

STARX Tokens were developed based on the Ethereum Blockchain ERC-777 Token Standard, and 1 Billion Tokens were minted in 2019 with the smart contract address 0xC4e8A9D47000Ab8E59c7031e311762c68215e467. STARX Tokens were initially Issued to angel and seed investors who provided the development capital to help develop the StarWORKS Ecosystem to its current state of readiness. There are approximately 125 million STARX Tokens held by individuals and corporate investors.

STARX Tokens were listed on the LATOKEN Exchange in the fourth quarter of 2021 after an Initial Exchange Offering (IEO), and were listed for a short period on the Coinstore Exchange in the second quarter of 2022. STARX Token transactions can be validated either on the Ethereum Blockchain (www.etherscan.io).

StarPOINTS – StarPOINTS are utility tokens used as rewards, the cashless payment backend system and are the token of the StarPOINTS Rewards Program. StarPOINTS are also used as rewards to transaction Validators in the StarCHAIN network, and as distributions to Members who hold StarIGTs.

StarPOINTS were developed based on the StarCHAIN Blockchain with 1 Trillion Tokens minted as STARXP Tokens on July 6, 2022. The first STARXP Token transaction was the transfer of 10,000 Tokens to a Merchant on November 10, 2022. Because StarPOINTS are internal to the StarWORKS Ecosystem, all transactions in StarPOINTS are executed on StarCHAIN (www.starchainscan.io).

Merchants initially receive a supply of StarPOINTS on consignment and payment may not be due unless and until the StarPOINTS are transacted.

StarIGTs – StarIGTs are utility tokens representing StarWORLD Club Membership and have a range of specific functions and features. Each StarIGT has a Smart Contract attached that executes its terms as well as Dashboard information for Members that is specific to their particular StarIGTs.

StarIGTs were developed based on the StarCHAIN Blockchain with 100 Billion Tokens minted on July 6, 2022. The first StarIGT transaction was the issue of 1,500 StarIGTs to a customer on July 8, 2022.

All future issuance of StarIGTs will be in the form of StarMOTs, StarIGTs or StarEOTs, depending on their Smart Contracts. Because StarIGTs are internal to the StarWORKS Ecosystem, all transactions in StarIGTs are executed on StarCHAIN StarCHAIN (www.starchainscan.io).

StarCHAIN Technology

StarCHAIN is the proprietary Blockchain technology of the StarWORKS Ecosystem. The StarCHAIN Blockchain (www.starchainscan.io) has been running without interruption since July 6, 2022, and as of March 1, 2023, 6,604,763 blocks have been processed representing 4,703 individual transactions, with an execution time of Less than 3 Seconds, and use STARX as a gas fee.

StarCHAIN's speed and efficiency, low cost and energy consumption, and decentralized architecture make it an attractive platform for developers and businesses looking to build and deploy new decentralized applications beyond ordinary cryptocurrency trading.

Speed and efficiency are critical to the StarPOINTS Rewards Program because Tokens must be transacted at the point of sale. In pubs, nightclubs and similar establishments, customers often pay separately for each order instead of running a tab. For example, a customer who spends 3 hours at a nightclub and pays for each drink separately might earn US$2.00 of StarPOINTS divided into 4 separate reward transactions. If gas fees or 11-second execution times were involved, the StarPOINTS business model would not work.

StarCHAIN is compatible with Ethereum Virtual Machine (EVM), allowing it to benefit from Ethereum's stability and access to its ecosystem of developers, tools and apps.

Because it is built on Ethereum, StarCHAIN can take advantage of the Ethereum Virtual Machine (EVM), which provides a powerful and flexible platform for building decentralized applications. This enables StarCHAIN to support a wide range of use cases and allows developers to create innovative and scalable applications on the platform.

StarPOINTS and StarIGTs have been launched only on StarCHAIN, while STARX Tokens can be transacted on either StarCHAIN or the incumbent Ethereum Blockchain. StarWORKS does not need to invest in and carry an inventory of Ether to operate StarCHAIN.

Proof of Stake Authority – StarCHAIN is built on a Proof of Stake Authority (PoSA) consensus algorithm, which combines the strengths of Proof of Stake (PoS) and Proof of Authority (PoA) to provide a secure, efficient and scalable platform which is also transparent and decentralized.

In PoS, network participants Stake (lock up) an amount of cryptocurrency, and Validators are selected based on the amount of cryptocurrency they have staked to validate transactions and add them to the Blockchain. In PoA, on the other hand, Validators consist of pre-approved Authorities who validate transactions and create new Blocks.

In StarCHAIN’s PoSA, Validators are selected from among candidates who have been accepted by a majority of incumbent Validators and have Staked STARX Tokens. PoSA ensures that Validators are not only reliable, but also have a vested interest in the network's success.

Blockchain Call System Contracts – The PoSA algorithm is executed using Blockchain Call System Contracts that allocate assignments, rewards and punishments among the participants.

The selection of Validators is managed by the Proposal Contract. It is triggered by a candidate’s submission of a proposal to become a Validator. This proposal is evaluated by active Validators, who are asked to vote on its acceptance. Once the proposal is accepted by more than half of the active Validators, the candidate becomes eligible to be a Validator.

STARX Tokens must then be staked by the eligible candidate. Any participant can Stake STARX Tokens to a qualifying candidate. A Staking participant who is not a Validator or a candidate is referred to as a Delegator. Once the Validator's Staking volume ranks within the top 21, they become an active Validator in the next Block Reset.

If Validators were not required to Stake Tokens, this is referred to as the Nothing- at-Stake issue in which Validators have no incentive to complete Blocks honestly, and are therefore incentivized to engage in double-spending or other malicious behavior.

The ranking and assignment of Validators, stacking and unstacking operations, and distribution of Block rewards are managed by the Validators Contract. Active Validators are chosen based on their current rankings at the end of each Epoch (set of Blocks), when the Blockchain is Reset.

All active Validators take turns generating Blocks. If a Validator misses their turn, the Validators Contract selects a replacement Validator, with the probability of selection based on the size of their Stake and how recently they were last used. If a Validator is selected for the third time in succession, the Validators Contract selects a replacement Validator in the same manner.

This probability-based rotation system ensures that at least half of the active Validators are always running and available, maintaining the stability and security of the Blockchain. The probability factor based on the amount of STARX Tokens Staked means that Validators who hold more STARX Tokens are assigned to process transactions more often, thus incentivizing Validators to Stake more STARX Tokens.

At the successful completion of each Block, the Validators Contract is called, and rewards are allocated. If the Block is not completed successfully, the Punish Contract is called. Punishments may include a reduction in staked tokens or demotion in or removal from the ranking of approved Validators.

Demotion in the list of approved Validators is known as a stacking penalty. Demotion is imposed after 24 infractions, and after 48 infractions a Validator is removed entirely. A Validator who has been removed may still submit a proposal to requalify.

Rewards for Validators are paid in StarPOINTS, and are paid out at the conclusion of each Epoch, rather than at the completion of each Block. Rewards are allocated in proportion to the number of STARX Tokens Staked, rather than in proportion to the number of Blocks completed. Rewards allocated to each Validator are further allocated proportionately to the Delegators who have Staked Tokens for the benefit of the reward-earning Validator.

StarCHAIN Security – StarCHAIN is designed with security as a top priority, protecting the network from potential attacks such as DDoS and Spam.

DDoS (Distributed Denial of Service) attacks are a form of cyber-attack where several hacked systems are utilized to send a huge amount of traffic to a specific target, making the target inaccessible to users. A DDoS attack can potentially be carried out by a malicious actor who wants to disrupt the network or prevent transactions from being processed.

StarCHAIN has security measures to prevent or mitigate the impact of DDoS attacks, including rate limiting, and filtering and traffic management to detect and prevent suspicious traffic from reaching the network. StarCHAIN's decentralized architecture makes it resilient to DDoS attacks, as there is no single point of failure that can be targeted.

Spam attacks refer to attempts to overload a Blockchain network with many low- value or irrelevant transactions. These types of attacks can harm network performance, causing delays and slowdowns.

To prevent Spam attacks on StarCHAIN, irrelevant transactions are filtered out. For example, the system sets restrictions on the size and frequency of transactions. It also requires users to pay a small fee for sending transactions, which deters Spam attacks by making it more expensive to send low-value transactions.

StarWALLET Technology

StarWALLETS are downloaded to the Member’s device from an App Store at no charge. Onboarding of new Members is automated and Member information is forwarded to StarWORKS. Communication among StarWALLETS, Merchants and StarWORKS is through the internet and is fully decentralized.

The functionality of StarWALLET includes the management of the StarPOINTS Rewards Program, payment transfers, promotional offers, StarIGT benefits and real time information, purchases of products and services with StarPOINTS and STARX Tokens, the purchase and sale of STARX Tokens, and the monitoring of all StarToken positions. Since StarWALLET is compatible with the Ethereum Virtual Machine (EVM), it can also store and transact tokens beyond StarTOKENS that are built on EVM-based blockchains.

On the StarWALLET app, Members can receive, transfer, and manage all of their StarTokens. Tokens may be transferred outright, transferred against a simultaneous exchange of other tokens, and frozen or Staked to prevent transfer. The StarWALLET’s history menu monitors transaction history including the award and redemption of StarPOINTS and the receipt of benefits from StarIGTs. The StarWALLET can be used as a marketing tool to extend special offers and send communications and advertisements to Members.

StarWALLET includes a QR Code Scanner, providing an easy method to scan wallet addresses with a public key. Members and Merchants do not need to input each other’s lengthy public keys, allowing transfers with only one click from their smartphones or tablets.

The key feature of StarWALLET is its Tap and Go functionality, which allows Members to purchase products and services seamlessly using StarXP in everyday situations.

Participating Merchants require a working Point of Sale (POS) system to be connected with the StarPOINTS system. Merchant Dashboards and Point of Sale (StarPOS) software and hardware support are available by arrangement with StarLABS. In order for StarPOINTS redeemed to be credited toward the sale price of the products and services purchased, and for StarPOINTS awarded to be debited against the sale price of the products and services purchased, StarLABS provides accounting systems integration assistance to Merchants.

StarWALLET has a real time conversion rates update feature so that Members and Merchants can track crypto prices and calculate transaction amounts based on rapidly changing exchange rates.

StarWALLET has a layered security program using Blockchain for all Token transactions. StarWORKS has incorporated OTP (One Time Password) during registration and optional 2FA (2-Factor Authentication) security upon login.

Supporting Businesses

The StarWORKS Ecosystem is supported by a range of businesses, all of which contribute to the StarWORLD Club Membership experience.

StarLABS

StarLABS has developed the technology used by StarWORKS in-house, and continues to integrate new technologies into the Ecosystem and assist Merchants in their interface with the Ecosystem. Its qualified technology staff have expertise in Blockchain technologies, digital and social media marketing, data mining, hosting services, point-to-point transaction processing, and internet and mobile phone apps, among others.

StarLABS aims to lead in cutting edge technologies such as Blockchain, Artificial Intelligence, Virtual Reality and Big Data, and to develop compelling tools for the Tourism, Entertainment and Hospitality Sectors.

Future expansion of StarLABS is expected to include the establishment of the StarWORKS Academy, and at least one StarLABS Campus outside of Indonesia, allowing StarWORKS to draw upon the unique strengths of each labor market for technology services and specialist skills.

StarMEX

While StarLABS is the developer of StarWORKS technologies, StarMEX is the operator. As such it will provide technological and financial services required by Members, and provide high quality services and consultation to all Participating Merchants and Sponsors.

The immediate role of StarMEX is to offer conversion and redemption of StarPOINTS and StarIGTs, as well as ordinary money changer services for domestic and foreign fiat currency.

StarWORKS intends to open StarMEX “money changer” branches where there is a concentration of participating Merchants, and at airports and transportation hubs. Tourists can visit a StarMEX outlet at the airport to redeem their accumulated StarPOINTS on their way out of the country, much as tourists now do in many countries to collect VAT refunds. StarMEX will also provide redemption for Members through the StarWALLET, either creating a currency balance in the StarWALLET or transferring proceeds to the Member’s linked bank account.

StarMEX also plans to develop a “DeFi” Decentralized Finance platform offering traditional financial services using Blockchain technology. Members may ultimately be able to participate in peer-to-peer transactions directly through StarMEX, without a central bank or exchange exercising control.

DeFi Membership activities within StarMEX are expected to include lending and borrowing against StarTokens, trading or exchanging of StarTokens and other crypto and fiat currencies, and earning StarPOINTS and incentives through becoming a StarWORKS Affiliate.

StarMEX may also provide comprehensive travel insurance that allows StarWORKS to offer the hospitality industry a complete package to both businesses and customers. StarMEX insurance would offer a range of protection such as travel delay, lost or damaged luggage, medical expenses and hospital expenses, all in Blockchain transactions that instantly process policy issues, premium payments and claims.

StarHOSPITALITY

StarHOSPITALITY is the Tourism, Entertainment and Hospitality operating arm of Starworks Group Ltd. It currently owns and operates restaurants and bars, a night club and a villa complex. These outlets have already adopted the StarPOINTS Rewards Program, providing a foundation for the marketing of StarPOINTS to neighboring Merchants.

StarHOSPITALITY will offer virtual online participation in StarWORLD online events and contests, and live streaming from selected entertainment venues. Projects in development include a chain of counter and delivery service restaurants, and StarDOME, a hemispheric shaped entertainment venue which will provide total immersion Virtual Reality in a social setting.

StarWORKS is developing an online booking and reservations platform known as StarTRAVELLER, offering special Member discounts and accepting payment in cryptocurrencies. The platform will allow hotels and resorts to communicate directly with Member guests, and will assist them in creating bespoke offers. Using crypto-economic alignment for the different players within the travel economy, StarWORKS aims to build and maintain a network effect that can dramatically reduce commissions compared with those charged by existing Online Travel Agents (OTAs).

Bali is experiencing an influx of Digital Nomads – remote workers and freelancers who can earn a living anywhere and live where they choose. The Government is now offering residency visas specifically designed for digital nomads.

StarHOSPITALITY will serve this market along with the rest of the resurgent Bali tourism market.

Participating Merchants

Participating Merchants are Merchants who have agreed to issue and redeem StarPOINTS on purchases of their products and services. Participating Merchants are actively joining StarPOINTS as quickly as StarLABS can implement their requirements for POS systems integration and/or full back-office integration.

StarPOINTS will first be extended to the Bali market, particularly local Merchants in the Tourism, Entertainment and Hospitality Sectors, with one or a small number of outlets. Because the distributed ledger is borderless, the Ecosystem can be seamlessly expanded to other geographic regions without significant marginal cost.

The addition of Merchants participating in the StarPOINTS Rewards Program will have network effects, supported by consumer behavior in the Tourism, Entertainment and Hospitality Sectors. Tourists wish to patronize a variety of outlets and will seek out Merchants where rewards already earned can be spent. With more participating Merchants, StarPOINTS become more useful to Members, increasing the number of Members and further incentivizing participation by Merchants.

Beyond the issue and redemption of StarPOINTS, Merchants who recruit premium Members can become StarWORKS Affiliates, earning StarPOINTS and other incentives for their origination. Merchants can also become Sponsors of StarIGTs, receiving sale proceeds and sharing current revenue from their inventory of StarPOINTS.

Legal Status of This Whitepaper

This Whitepaper is issued by StarWORKS to explain the framework and design of its business. It describes the current intentions of StarWORKS as of its effective date and it is not anticipated that this Whitepaper will be amended or reissued unless there has been a significant change in the implementation and commercialization of the StarWORKS Ecosystem herein described. StarWORKS reserves the right to modify or update this Whitepaper and information contained herein, at any time without notice. StarWORKS does not undertake to continue to implement and manage its business in the manner described in this Whitepaper, or to modify or update this Whitepaper in the event of any change in its business.

This Whitepaper does not contain financial, investment, tax or legal advice. You should contact appropriate independent professional advisors before relying or making any commitments or transactions based on the material published in this Whitepaper.

This Whitepaper is not a prospectus and does not constitute an offer to sell, or the solicitation of an offer to buy any StarWORKS Tokens, shares, securities or digital assets. No regulatory authority has examined or approved any of the information set out in this Whitepaper. It does not purport to contain all the information required to evaluate the merits of any investment.

This Whitepaper is not a contract and does not imply any elements of a contractual relationship. Statements about the intentions, promises and undertakings of StarWORKS are descriptive only and do not confer legal rights. Any representations and undertakings on which Members and investors are entitled to rely will be set out in other documents.

StarWORKS and its officers, employees and advisers do not make any representation or warranty as to the accuracy, reliability, or completeness of the information contained in this Whitepaper, or as to the successful development or implementation of any technologies and innovations, or the achievement of any other activities noted in this Whitepaper.

No person is entitled to rely on the contents of this Whitepaper or any inferences drawn from it. StarWORKS and its officers, employees and advisers disclaim all liability for any loss or damage of any kind, including but not limited to indirect, special, incidental, consequential or other losses of any kind, in tort, contract or otherwise (including but not limited to loss of revenue, income or profits, and loss of use or data), which may arise from any person acting on any information and opinions relating to StarWORKS or its Ecosystem contained in this Whitepaper or any information which is made available in connection with any further enquiries, notwithstanding any negligence, default or lack of care.

STARX Tokens are not intended to constitute securities in any jurisdiction and do not confer direct or indirect rights to the capital, income, assets or governance of StarWORKS.

This Whitepaper may contain forward-looking statements and information relating to, among other things, StarWORKS, its business plan and strategy, and its industry. These forward-looking statements are based on the beliefs of, assumptions made by, and information currently available to StarWORKS management. Forward- looking statements include not only factual statements about the future or in the future tense, but also statements about the present state of mind of StarWORKS management, such as statements using the words “believe,” “anticipate,” “intend” and “expect.” These statements reflect management’s current views with respect to future events and are subject to risks and uncertainties that could cause the actual results of StarWORKS to differ materially from those described in the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. StarWORKS does not undertake any obligations to revise or update these forward-looking statements to reflect events or circumstances after such date or to reflect the occurrences of unanticipated events.

This Whitepaper is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of, or located in any state, country or other jurisdiction where such distribution, publication, availability or use are prohibited or in any other manner restricted by applicable laws. You do not have the right to, and should not, buy StarWORKS Tokens if you are a citizen or resident of, or located in any state, country or other jurisdiction where transactions in digital assets are prohibited or in any other manner restricted by applicable laws.