🌟Retailers’ Workflow
The retailers can interact with the InRewards system in two ways: Via InRewards Operator, which carries out all necessary operations and administers the sales and purchases of tokens. Working through the operator, retailers have the opportunity to make payments in cryptocurrency and conduct settlements in fiat currencies. The accounting and financial documents, if necessary, will be provided by the operator. Buy the InRewards tokens directly on the open market, or through a Smart Contract that maintains the liquidity of the INV in the market.
Option 1. Working with the system through the InRewards operator
Since a lot of retailers are not quite ready to work with cryptocurrency exchanges directly, operations will be handled through the InRewards’ operator company. It will provide the retailers with the ability to transact in cryptocurrency and use the platform’s loyalty features with the view towards enabling them to use distributed ledger technologies to improve their products and to promote the adoption of InRewards tokens. The operator will offer extended support, design new tools for the retail industry, and provide legal, tax and accounting counseling to the clients.
Mechanics of rewards payment through the InRewards operator
After a customer makes a purchase with their InRewards tokens, the InRewards plug-in installed by the retailer sends the InRewards operator an inquiry, “Rewards Request”. The inquiry also contains the e-mail address of the customer (or other ID), or their wallet address.
If the InRewards operator receives the wallet address, the system transfers the tokens from its stock to this wallet. If the address is unknown, the operator creates a new account, transfers the tokens there, and the customer receives a notification with the details of the created wallet. Using the link, the customer installs the web or mobile InRewards Wallet, and can transact with it, or choose to transfer their tokens to their other wallet.
After the completion of the operation, the InRewards Network operator produces a bill in fiat currency in the address of the retailer for the amount which the operator spent on the transaction.
Payments for purchases through the InRewards operator
In the event a customer makes a purchase in full, or in part, using InRewards tokens, the retailer sends a request through API for the sale of the InRewards tokens.
In response to the request, the InRewards Network operator returns the wallet account number and the amount in fiat currency, which will be paid for the given amount of tokens. 3. After receiving the tokens, the operator transfers the fiat money to the retailer. Using the current infrastructure of Ethereum, the transaction processing can take up to 1 minute. After the release of the Raiden Network and Lightning Network protocols, the transaction will be settled in a matter of seconds.
Maintenance of fiat and cryptocurrencies reserves at the InRewards operator
The InRewards operator needs to maintain a minimum reserve of INV, fiat currencies, and ETH tokens and will convert the collected during ICO cryptocurrencies into fiat at its own discretion, if required for the performance of the InRewards Network project.
To prevent any sharp fluctuations of the INV’ tokens rate, a liquidity smart contract will be created on the basis of Bancor.Formula.
For the maintenance of the necessary level of INV reserve, the InRewards operator buys or sells INV at the open market, or through the liquidity smart contract.
For the maintenance of the necessary level of fiat currencies or ETH, the InRewards Network operator at its own discretion buys or sells fiat currencies at the open market for INV
Option 2. Direct transactions
InRewards is a decentralized system. Retailers can make operations with the purchase and sale of INV independently, without the InRewards operator.
The retailer creates its crypto-wallet designed for the payment of rewards and the receiving of tokens for purchases from the customer.
The retailer makes all necessary transactions of purchases and sales of tokens and fiat currency on the open market, and/or with the liquidity smart contract provided by InRewards Network.
Liquidity smart contract
InRewards Tokens are designed to appreciate over the course of time. Crypto assets markets can be volatile, and the market price of INV can depend on the general market conditions and expectations. Since INV’ main purpose is the means of payment, it is important that the token’s rate against crypto or fiat currencies does not change rapidly and has liquidity at all times. In order to provide for this liquidity and mollify the market fluctuations, a Bancor Formula (a product of Bprotocol Foundation ) based smart contract will be created. It will allow for the buying and selling of INV and will also be used to increase the market demand and supply when the token rate fluctuations leave a certain corridor.
The special liquidity smart contract will hold a reserve of tokens of the InRewards system and means. Anyone will be able to buy or sell INV simply by sending ETH to the contract’s address. This solution is able to provide for the liquidity of tokens and solves the problem of a "double coincidence of wants", when a buyer and a seller have to match the time and place for the transaction to occur. A liquidity smart contract always acts, as one of the parties either selling or buying. The contract also abides by efficient market rules: upon the selling of the asset, the price goes down, and upon the buying of the asset, the price goes up, therefore the liquidity smart contract changes the market price of the asset, available to the transaction, depending on the transaction’s amount. Therefore, the liquidity for any party interested in buying or selling INV will be provided for at all times.
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