Our Ecosystem Detailed: 2 Blockchains Explained

Posted by TaelPay on 6/12/19 4:02 PM


Tael is on the verge of a new phase focused on adoption, sales, and real-world usage. For you, as a Tael (ticker: WABI) token holder, it is important to know how Tael & the Tael Ecosystem each play their part in the ecosystem, and how our real-world sales and our partnerships impact you.

This article covers the two blockchains utilized by Tael & the Tael Ecosystem.

Our Ecosystem: Two Blockchains Explained

A deeper look into the workings of the Tael Ecosystem

Tael is a loyalty point token inside the Tael Ecosystem

Tael Ecosystem & Tael: two sides of the same coin



Why two different blockchains?

The Tael token, which you as crypto enthusiast hold, works on the Ethereum blockchain, allowing easy integration into exchanges and giving token holders ample storage options, like any other ERC-20 token out there.

Due to Chinese regulations and capital controls, loyalty points or tokens used in marketplaces may not be directly traded on an exchange. This is to prevent potential capital flowing out of China unsupervised and unregulated. In order to comply with these rules & regulations, we have, for legal reasons, created a loyalty point which is 1:1 connected with the Tael token.

These loyalty points are called Shijifen points (石积分).

Consumers can exchange Tael tokens into Shijifen, but it’s not possible to exchange Shijifen back into Tael for the same legal reasons stated above. This has important implications on how the business model, as well as the demand/supply relationship, works for Tael.

Shijifen loyalty points operate on their own blockchain, based on Hyperledger code. Due to the need of creating a new loyalty point, we’ve been able to fine-tune this specific blockchain for its exact use case.

The way it works, is quite simple:
Since Tael tokens and Shijifen loyalty points are 1:1 interconnected, they mimic each others behaviour. This means that as soon as someone in China receives Shijifen from a purchase, a scan, or any other action in the ecosystem, Tael tokens are actually being spent/locked on the back-end. This unique system has given us the opportunity to use different blockchains, each optimized for their purpose.

In short:

  • Shijifen are the loyalty points used in China and are not exchange-traded;
  • Tael tokens are used in the rest of the world and are exchange-traded;
  • Shijifen tokens are connected with Tael tokens on a 1:1 basis
    (How this relationship influences the supply and demand for Tael tokens will be explained in a future article);
  • Consumers can turn Taels into Shijifen but can not freely turn Shijifen into Taels.

In order to comply with China regulations, Shijifen loyalty points can be used in the Tael Ecosystem marketplace and cannot be redeemed or sold for USD.

However, each time a Shijifen is sent to a consumer, a corresponding quantity of Tael tokens is taken from the circulating supply and locked, until said consumer chooses to redeem these tokens.

Upon redeeming their Shijifen loyalty points, the Tael tokens will be released again.

Here is a comparison table between Tael and Shijifen (石积分).

The differences between Tael tokens and Shijifen tokens

Tael & Shijifen comparison table


Shijifen on the Tael Ecosystem blockchain.

As mentioned earlier, Shijifen loyalty points run on a separate blockchain. This blockchain is called the Tael Ecosystem blockchain and is based on Hyperledger Fabric technology. It is what is known as a “Permissioned” blockchain.

This blockchain architecture is what allows us to maintain a one-on-one relationship between Tael tokens and Shijifen loyalty points whilst adhering to Chinese governmental rules and regulations.

Hyperledger Fabric is designed and created by IBM. Companies such as Golden State Foods, McCormick and Co., Nestlé, Tyson Foods, JD.com, Wal-Mart Stores Inc., already make use of this blockchain technology for their trial efforts with regards to food source tracking.

Aside from the regulatory reasons as to why Shijifen loyalty points are run on Hyperledger Fabric, the Hyperledger additionally offers several advantages over the usage of the Ethereum blockchain for the tracking of goods:

  • Higher number of Transactions per Second (TPS):
    the Hyperledger blockchain is able to process ±3500 TPS whereas Ethereum is only able to process ±15 TPS. If the influx of transactions is too high for the network to process, the performance will decrease significantly. For example, during the ‘Cryptokitties’ hype in 2017, the Ethereum blockchain became overloaded with transactions which heavily & negatively affected its network throughput and raised transaction costs significantly.

  • Transaction speed on Tael Ecosystem blockchain:
    Consumers will not have to wait for transactions to confirm (normally at least 5 seconds on Ethereum depending on network load) as transactions on Tael Ecosystem blockchain are nearly instantaneous.

  • Privacy:
    the Hyperledger blockchain allows for improved privacy as sensitive commercial information can be encrypted. At the same time, public nodes ensure this information can not be changed retrospectively.

  • Adaptability and compliance:
    the Hyperledger-based blockchain allows for more control and customizability by Tael Ecosystem itself. This means that complying with local legislation becomes easier, which in turn improves the ease of adoption of the technology itself.

  • Costs:
    use of the Hyperledger is free of charge for the consumer. As such, no loyalty points need to be used as ‘gas’ in order to allow for a transaction to happen.

Explanation of Nodes:
Nodes are given to vetted long-term believers and trustworthy partners in the form of a Masternodes or EnterpriseNode.

Masternodes keep a copy of the Tael Ecosystem blockchain, which is the blockchain that captures all the transactions and ‘touches’ (i.e. the scanning of a Tael Ecosystem smart label) made in connection with Tael Ecosystem products.

Masternodes hold a secure and encrypted version of this blockchain and both need to keep a certain amount of Tael tokens in their wallet.

The main difference between these two types of nodes is that TrustNodes are run by people or organizations with proven credibility, whereas Masternodes are run by large, long-term Tael holders.

EnterpriseNodes have the same task of keeping a copy of the blockchain, but will only be run by long-term partners that add value to our ecosystem. An EnterpriseNode has the additional purpose of getting our partners involved with the Tael Ecosystem blockchain by uploading their own data and greatly benefiting from the data generated as the product moves along the supply chain to the end-consumer. In doing so, these companies have the ability to read certain transactions on the blockchain and even add information to it. To facilitate this process, EnterpriseNodes don’t need to hold Tael.


Example of what happens on the back-end upon consumer purchase.

For this example, we will assume a product costs $20, 10% is given back to the consumer in loyalty points, and Tael tokens are at a value of $0.50.

Mrs. Wang purchases a product for $20 on the Tael Ecosystem marketplace. When she verifies its authenticity after the purchase, she is rewarded with 10% of the purchasing price in Shijifen loyalty points.

Since she paid $20, this means she received $2 worth of Tael tokens. Since the price of Tael tokens is currently $0.50, 4 Tael tokens are bought off the exchange at market rate and locked. At the same time, since Tael tokens are 1:1 connected with Shijifen loyalty points, 4 Shijifen loyalty points are released to Mrs. Wang, which are credited to her Shijifen loyalty point wallet.

Upon Mrs. Wang’s next purchase, which can be at any given time, she pays only $18 for the same $20 USD product and redeems her 4 Shijifen loyalty points (assuming she wants to use up all of her points which is not always the case). Her loyalty points total $2 since Tael tokens are still at $0.50, completing her $20 purchase.

How consumers are rewarded with shijifen tokens whilst making purchases on the Tael Ecosystem ecommerce platform
A visual representation of the aforementioned example, with different numbers

Upon redeeming her Shijifen loyalty points, they become locked once again. At the same time, the corresponding Tael tokens are released and instantly sold at market price.

Since Mrs. Wang has just purchased a new product; she ‘touches’ (scans) the product and receives Shijifen again, which indirectly buys new Tael tokens off the exchange and locks them again.

Through this process, Mrs. Wang has turned into an indirect holder of Tael tokens. If Mrs. Wang decides not to use Tael Ecosystem ever again, she will keep ownership of her Shijifen loyalty points and therefore the corresponding Tael tokens shall remain locked indefinitely. This means that as soon as a new user enters the Tael Ecosystem, they are indirectly converted into Tael holders. This creates a net buy pressure for Tael tokens, as not all customers will end up using all of their Shijifen tokens.

The time difference between receiving the Shijifen tokens and redeeming them also reduces tokens supply. Each particular user reduces it temporarily, but it’s a constant reduction on the system/collective level as the ecosystem grows.

Throughout Mrs. Wang’s consumer cycle, she did not need to deal with any technical complexities, nor does she need to know the 1:1 relationship between Tael tokens and Shijifen. She may see her freely gotten Shijifen loyalty points increase or decrease in monetary value over time. This change in price gamifies her shopping experience and increases interaction with the Tael Ecosystem app and its products. Thus further increasing the likelihood of repeat sales.

Increasing sales through proven demand attracts more products to the Tael Ecosystem marketplace, attracting more consumers, and creating a positive virtuous circle.

And all of that… by touching to authenticate.

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This is episode two in a series of articles regarding the ecosystem:
1. The Business Model
2. Two Blockchains Explained
3. Actors in the Ecosystem
4. Demand & Supply


Topics: Blockchain, Ecosystem

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