The Digital Reserve is structured to provide the infrastructure for increased on-chain liquidity and institutional microfinance; disrupting a $100 Billion dollar market that is growing greater than 15% per year. This includes a strategy to move from centralized development to decentralization. The Digital Reserve Network (“The Digital Reserve”) is a novel microfinance institution designed to produce economic gain for stakeholders and a sustainable model for increasing financial inclusion. The Digital Reserve is a pseudo-anonymous peer to peer network secured by a fee-based Proof of Stake algorithm and quantum resistant cryptographic signatures. This network will utilize a modified Directed Acyclic Graph or GHOST to minimize block times and increase scalability. As a development of the ability for Blockchain networks to establish a distributed consensus based economy, one of the primary advancements will be the Denarii protocol’s utilization of the staked transactions. They will be treated as working assets allocated to users based upon increasingly stringent conditions as the amounts increase. The Denarii protocol will follow parameters established by a dynamic machine learning process that tracks borrowing rates, defaults and overall transactions to normalize the monetary supply to boundary conditions. This includes a strategy to move from centralized development to decentralization.

1. THE DIGITAL RESERVE, P.B.C.
PREPARED BY
The Digital Reserve, P.B.C. Team
WHITEPAPER DRAFT - MARCH 2018

2. LEGAL DISCLAIMER:
All statements contained in this Whitepaper, statements made in press releases
or in any place accessible by the public and oral statements that may be made by
The Digital Reserve, P.B.C. and/or the Distributor or their respective directors,
executive officers or employees acting on behalf of The Digital Reserve, P.B.C. or
the Distributor (as the case may be), that are not statements of historical fact,
constitute “forward-looking statements”. Some of these statements can be
identified by forward-looking terms such as “aim”, “target”, “anticipate”, “believe”,
“could”, “estimate”, “expect”, “if”, “intend”, “may”, “plan”, “possible”, “probable”,
“project”, “should”, “would”, “will” or other similar terms. However, these terms are
not the exclusive means of identifying forward-looking statements. All statements
regarding The Digital Reserve, P.B.C.’s and/or the Distributor’s financial position,
business strategies, plans and prospects and the future prospects of the industry
which The Digital Reserve, P.B.C. and/or the Distributor is in are forward-looking
statements. These forward-looking statements, including but not limited to
statements as to The Digital Reserve, P.B.C.’s and/or the Distributor’s revenue
and profitability, prospects, future plans, other expected industry trends and other
matters discussed in this Whitepaper regarding The Digital Reserve, P.B.C. and/or
the Distributor are matters that are not historic facts, but only predictions.
No Offer of Securities or Registration
This Whitepaper does not constitute a prospectus or offer document of any sort
and is not intended to constitute an offer of securities or a solicitation for
investment in securities in any jurisdiction. No person is bound to enter into any
contract or binding legal commitment and no cryptocurrency or other forms of
payment is to be accepted on the basis of this Whitepaper. Any agreement in
relation to any sale and purchase of tokens (as referred to in this Whitepaper is to
be governed by only the T&Cs of such agreement and no other document. In the
event of any inconsistencies between the T&Cs and this Whitepaper, the former
shall prevail.

3. CONTENTS
5 Digital Reserve Network Overview
4 Project Summary
8 Minters and Borrowers
10 Staking, Transactions, Fees, Propagation
and Solving "Nothing at Stake"
15 Monetary Policy, Issuance, Interest
Rates, Risk Management
24 Long Range, Short Range, Precomputing,
Denial of Service, Sybil and Quantum Attacks
28 References, About the Team, Contact us

4. The Digital Reserve is structured to provide the infrastructure for
increased on-chain liquidity and institutional microfinance; disrupting
a $100 Billion dollar market that is growing greater than 15% per year.
This includes a strategy to move from centralized development to
decentralization. The Digital Reserve Network (“The Digital Reserve”)
is a novel microfinance institution designed to produce economic gain
for stakeholders and a sustainable model for increasing financial
inclusion.
The Digital Reserve is a pseudo-anonymous peer to peer network
secured by a fee-based Proof of Stake algorithm and quantum
resistant cryptographic signatures. This network will utilize a modified
Directed Acyclic Graph or GHOST to minimize block times and
increase scalability. As a development of the ability for Blockchain
networks to establish a distributed consensus based economy, one of
the primary advancements will be the Denarii protocol’s utilization of
the staked transactions. They will be treated as working assets
allocated to users based upon increasingly stringent conditions as the
amounts increase. The Denarii protocol will follow parameters
established by a dynamic machine learning process that tracks
borrowing rates, defaults and overall transactions to normalize the
monetary supply to boundary conditions. This includes a strategy to
move from centralized development to decentralization.

6. The Denarii Protocol
There are three important accounts that the Denarii
Protocol governs: general pseudo anonymous accounts/
wallets, smart accounts and secured accounts through
identity authentication.
Denarii Wallet

7. Denarii Vault
Denarii ID

8. DRN leverages a groundbreaking cost-
based Proof-of-Stake implementation that
promotes economic activity while
mitigating the pervasive "nothing at stake"
vulnerability.
John has been working a steady job for the past 6 years. He is
listening to the news and hears that the price of his cable and milk is
going up by 3% because of inflation. He then looks at his savings
account and realizes he is only getting a .05% return. He decides this
is unacceptable. He then hears about the Digital Reserve. It is
registered with the proper authorities and currently has great returns
because it cuts out the bank while providing microfinance
opportunities to the disadvantaged. John realizes that this idea
sounds really good. To be able to make a better return while also
helping others. It is ideal. He decides to load the software on his
tablet and buys some denarii on an exchange. Then he decides to
stake 5% from his personal savings. A month later he checks on the
progress of his accounts and realizes that he has had a 1.5% return
in 1 month. This is 3x greater than what he received throughout the
year.
He sees a message in his account from one of the borrowers
thanking him for helping them be able to make feed their children
while they were preparing to start their new job. He realizes, he is
part of something new and important. He decides to move some
more money to the Digital Reserve Network because it is worth it.

9. DRN leverages a groundbreaking cost-
based Proof-of-Stake implementation that
promotes economic activity while
mitigating the pervasive "nothing at stake"
vulnerability.
Janus has been unemployed for 3 weeks since the factory she
worked at closed. Her childhood friend tells her that he wants to
make her a business partner in his new design business. He sends
Janus all the materials, but they won't get paid until the order is
filled. Janus doesn’t have any credit history and has three children to
feed. She can’t wait until the order is filled. She then sees a sign on
the bus about the Digital Reserve, loans for those who need them the
most.
She decides to check the app store on her phones and finds the app
in her language. She signs up and authenticates her account. 10
minutes later she borrows 5 denarii with a payback period of 3
weeks, more than enough time to get her orders filled. She then sees
there is a search feature and finds a local market that takes denarii.
There is also a message below that provides instructions for how to
exchange denarii for cash if necessary. She buys some rice, eggs
and beans and walks home. 3 weeks later she pays back the loan,
leaves a message and gets a notification that her credit rank has
increased and short video on ways others use their Denarii. She then
realizes, that she can use the Digital Reserve to buy additional
materials while building her credit.

10. Current Blockchain networks are transactional systems secured
by cryptographic proofs and design incentives governed by
consensus. These transactional system typically take the form of
Proof of Work or Proof of Stake. Proof of Work is a computational
sound and energy intensive method for securing the network.
Thus, for a number of environmental, economic, and efficiency
reasons Proof-of Stake design implementations have come to be
seen as the way of the future. However, the self-referential nature
of Blockchain protocols creates obstacles in many initial proof of
stake implementations. The Digital Reserve Network Architecture
aims to resolve a number of the major challenges proof of stake
protocols by addressing clearly defined issues throughout this
white paper

16. π
ȳ

28. Aristotle. (1905). Aristotle's Politics. Oxford :Clarendon Press,
Davies, G. (2010). History of money. University of Wales Press.
Aizenman, Nurith (2016) You Asked, We Answer: Can Microloans lift Women out of Poverty. NPR.
Hermes. N; Lensik, (2011) Microfinance: Its Impact, Outreach and Sustainability
Dunford, C. (2006). Evidence of microfinance’s contribution to achieving the millennium development goals.
Freedom from Hunger. http://microfinancegateway.org/files/35795_file_Evidence_on_MDGs_Dunford.pdf
Littlefield, E., Morduch, J., & Hashemi, S. (2003). Is microfinance an effective strategy to reach the Millennium
Development Goals? CGAP Focus Note 24, Washington DC: CGAP.
United Nations Department of Economic and Social Affairs. (2008). The Millennium Development Goals Report,
United Nations. Retrieved at May 13, 2009, from the website temoa : Open Educational Resources (OER) Portal at
http://www.temoa.info/node/18070
Rhyne, E., & Otero, E. (2006). Microfinance through the next decade: Visioning the who, what, where, when and how.
Paper commissioned by the Global Microcredit Summit 2006, Boston MA: ACCION International.
Friedman, M. (1989). Quantity theory of money. In Money (pp. 1-40). Palgrave Macmillan UK.
Fisher, I. (1909). A Practical Method of Estimating the Velocity of Circulation of Money. Journal of the Royal
Statistical Society, 72(3), 604-618. doi:10.2307/2340360
Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system.
Taylor, M. B. (2013, September). Bitcoin and the age of bespoke silicon. In Proceedings of the 2013 International
Conference on Compilers, Architectures and Synthesis for Embedded Systems (p. 16). IEEE Press.
Bitfury Group. (2015). Proof of Stake versus Proof of Work White Paper
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Not Chains. IACR Cryptology ePrint Archive, 2013(881).
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Conference on Financial Cryptography and Data Security (pp. 528-547). Springer, Berlin, Heidelberg.
Buchmann, J., Dahmen, E., & Hülsing, A. (2011). XMSS-a practical forward secure signature scheme based on
minimal security assumptions. Post-Quantum Cryptography, 117-129.

29. Hülsing, A. (2013). W-OTS+-Shorter Signatures for Hash-Based Signature Schemes. Africacrypt, 7918, 173-188.
Peterson. J (2017, April 20). The Case for a Quantum Resistant Ledger. Medium. Retrieved from
https://medium.com/the-quantum-resis,tant-ledger/the-investment-thesis-for-a-quantum-resistant-ledger-
9d335f8cf9ef
Peterson. J (2017, June 16). Preparing for a Post Quantum World: Blockchain and Technology. Medium. Retrieved
from https://medium.com/the-quantum-resistant-ledger/preparing-for-a-post-quantum-world-blockchain-and-
technology-3fb4af6e88bb
Decker, C., & Wattenhofer, R. (2013, September). Information propagation in the bitcoin network. In Peer-to-Peer
Computing (P2P), 2013 IEEE Thirteenth International Conference on (pp. 1-10). IEEE.
Rotemberg, J. J., & Woodford, M. (1997). An optimization-based econometric framework for the evaluation of
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Holland.
Ledgerwood, Joanna. Microfinance handbook: an institutional and financial perspective. Washington, DC, World
Bank, 2002.

30. The Digital Reserve, P.B.C. is a public benefit corporation
whose purpose is to research, design, develop, and
distribute software, hardware, and funds to support the
goal of financial inclusion.
Jomari Peterson
Co-Founder @ QRL
Blockchain
PhD Candidate @
Carnegie Mellon
MBA @ Howard
University
Joshua Rittenberg
3+ Years Corporate and
IP Law @ Kramer Levin
JD @ Fordham Law
BA @ University of
Pennsylvania
Emmanuel Johnson
Fulbright Scholar
Comp. Sci. PhD Candidate
@ Univ. Southern
California
MS in Robotics @
Birmingham University
Troy Wiipongwii
MA in Statistics and
Public Policy @ William
and Mary
BAS in Applied
Science/Mathematics
@SNHU
Founder @DebtLESS
Amina Emenena
MS in Systems
Engineering @ Johns
Hopkins
BS in Comp. Sci. @
Alabama A&M
Software Test
Engineer @Northrop
Grumman
Questions? Contact Us at
Info@thedigitalreserve.org