https://news.bitcoin.com/venezuelan-sunacrip-tightens-control-on-transactions-made-using-unauthorized-exchanges/https://www.binance.com/en/square/post/2023-09-26-venezuela-extends-reorganization-of-crypto-oversight-body-sunacrip-1211941https://www.forbes.com/sites/digital-assets/2023/04/20/bitcoin-miners-trapped-in-alleged-20-billion-corruption-scheme-in-venezuela/?sh=6b40613c6b65https://drive.proton.me/urls/RXQXWNQ85W#Decentralized Petro (PTD)
Whitepaper V1.0.0 – Private Initiative
Statement of intents
Taking advantage of the new winds in the crypto ecosystem, hoping that future changes tend
towards the deconcentration of crypto-financial services and the decentralization of current systems;
and understanding that technology is a good that the People can use to self-realize, in the exercise
of the fundamental right to self-determination, of free development, with the regulation of
programming in any language being an attack against the most basic freedoms of individuals; I
intend the following:
Yo. That by exercising our right of free association, we together constitute a decentralized
organization, whose governance is stipulated by smart contracts and that guarantees the
right to vote to all participants on the future of the Petro.
ii. Therefore, let us launch a multichain cryptocurrency, in the form of a token, whose value is stipulated
by free supply and demand in decentralized markets.
iii. That this cryptocurrency be called Decentralized Petro, and that its decentralization implies zero
control by any third party, including the decentralized organization, over its minting,
holding, transfer, and any other act that could affect its development.
This is my declaration of intent and I hope that the People will support it, to
First.- Guarantee the future of the Petro, as currency of the Venezuelan People and currency for
international use, without defects, without barriers, without the ability to be sanctioned or broken by
any foreign institution; and ensuring that it is difficult to use as a vehicle to legitimize capital or act as
a means of materializing acts of corruption, being a completely transparent currency.
Second.- Guarantee the right to privacy of individuals, currently in danger due to the proliferation of
CBDCs, which will undoubtedly act as a means of control and coercive against the peoples of the
world.
Third.- Guarantee the right to freedom of individuals, with them having responsibility and possession of
their private keys and therefore, complete sovereignty over their assets.
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Table of ContentsImportant note ................................................ .................................................. ......................................... 2
The Centralized Petro............................................... .................................................. .................................. 3
From a technical point of view, ........................................... .................................................. .............. 3
From a legal point of view,................................................ .................................................. ............. 4
From an economic point of view, ........................................... .................................................. ........ 5
The Decentralized Petro................................................. .................................................. ............................ 8
The Petro System................................................. .................................................. .................................... 8
The PetroDAO ................................................ .................................................. .................................... 10
PetroDAO Features.................................................. .................................................. .10
DAO Constitution.................................................. .................................................. ..............10
The DAO Economic Process.................................................. ................................................12
The Decentralized Petro................................................. .................................................. .................... 13
Exercise of the Right to Vote.................................................. .................................................. ......13
Personalization.................................................. .................................................. ............................14
Staking.................................................. .................................................. ............................................14
Protection.................................................. .................................................. ..................................... fifteen
Meta-Concurrency.................................................. .................................................. .....................fifteen
Forkable.................................................. .................................................. ...................................... fifteen
Characteristics of the Decentralized Petro.................................................. ................................... 16
Summary of the Economic Fundamentals of the Petro ........................................... ............................ 17
Petro Auxiliary Contracts (Without SmartID) ........................................... .................................. twenty
SmartAddress Contract.................................................. .................................................. ..............twenty
PetroTaxes Contract.................................................. .................................................. ...................twenty
SmartChecks Contract.................................................. .................................................. ...............22
TokenChecks Contract.................................................. .................................................. ...............22
Digital Identity in the Petro System ........................................... ................................................ 2. 3
The SmartID Factory Contract.................................................. ................................................ 25
The SmartID Contract.................................................. .................................................. ................... 25
Conclusion................................................. .................................................. ............................................ 29
Important note
THIS DOCUMENT PRESENTS STATEMENTS THAT MAY HURT THE READER'S SENSITIVITY. THIS
DOCUMENT HAS NO POLITICAL ASPIRATIONS, NOR IS IT INTENDED TO BE A DESTRUCTIVE
CRITICISM OF PAST EVENTS. THIS DOCUMENT IS ONLY A THEORETICAL EXPLANATION OF THE
FOUNDATIONS AND OPERATION OF THE DECENTRALIZED PETRO, A PRIVATE INITIATIVE THAT
WAS BORN IN RESPONSE TO THE RECENT EVENTS THAT OCCURRED IN THE BOLIVARIAN
REPUBLIC OF VENEZUELA.
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The Centralized Petro
The Petro, as it was initially conceptualized, began its existence with important flaws and errors that the
Decentralized Petro will correct.
From a technical point of view,
The Petro was first a token on NEM. Said Token did not present any type of scalable characteristics. Additionally,
transaction costs had to be paid in the native cryptocurrency, not Petros. For this reason, and given the failure of
the initial project, the development team decided to migrate to its own blockchain, in order to:
to. That the transactional costs were paid in Petros.
b. That the Petro could be completely controlled by the State (both the nodes and the private
keys of the EOA (Externally Owned Account or “wallet”)).
To do this, the development team chose to clone the DASH blockchain, a cryptocurrency whose
(at that time) main flag was to guarantee the privacy of blockchain users through transactional
mixing, through a “PrivateSend” function.
This new blockchain presented certain challenges that were unlikely to be overcome by SUNACRIP:
First, the Petro could not be scalable under any possible conception. A blockchain like DASH, on
which the Petro is based, only has the capacity to process approximately 1,080,000 transactions per
day. This means that, if it had been used as a transactional mechanism by the Venezuelan People, it
would have needed a parallel transactional layer to be able to scale, in this specific case centralized
(unlike Ethereum), that is, a centralized application with a database on which to interact that would
have a more efficient scheme than those of the Petro blockchain. This is, for example, the PetroApp
or the Patria System.
This means therefore that the creation of a blockchain like Petro's for a purpose like the one Petro
had is clearly inefficient, and that it was designed by a team that really had no experience in
blockchain design.
Second, that although the transactional costs were paid in Petros, this could have been designed in the
same way on other blockchains through the use of meta-transactions, without the State losing power over
the Petro through the configuration of “Ownable” smart contracts; that is, with administrator permissions
or roles.
The Petro could have been configured, in the same way it exists now, without the need to have
its own blockchain, making it infinitely more scalable, robust and resilient, which supports the
fact that the Petro was designed by a team that really had no experience in this.
Third, maintaining its own blockchain on which it could not be developed prevented an increase in the
usability of the Petro and the possession of incentive schemes for users. In addition to this, in order to
make the Petro an international currency, they had to either tokenize (package the Petro for use on other
blockchains) or ask permission from international exchanges for its use as a medium of exchange.
These events would never have been allowed due to the consensus scheme of the Petro blockchain.
Although the consensus, according to its whitepaper, was a mixture of PoS (Proof-of-Stake) and PoW
(Proof-of-Work), the ownership of the nodes was actually exclusive to the State, which implies that the
blockchain of the Petro actually had a PoA (Proof-of-Authority) consensus mechanism, typical of a private-
chain. That means:
• The Petro development team could prevent the transactionality of certain wallets without
restriction.
• The Petro development team could allow or prevent the creation of EOA, creating schemes to
maintain all the private keys of the individuals in the ecosystem.
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• The Petro development team could give concessions for the payment of network commissions.
• The Petro development team could fork the Petro whenever they wanted, including
restarting the blockchain without the need to consult users or allow users to continue with
the original blockchain (since they do not have access to it).
• The Petro team could, at any time, turn off the validator nodes and render the blockchain
unusable.
And this is what happened:
• Operations were effectively restricted to many Petro users, without giving any reason
for this.
• Nobody had the private keys to their wallets, so the accounts were really property of
the State, not individuals.
• The Petro team restarted the blockchain on May 5, 2020, without giving further explanation about
this event, creating inconsistencies at the database level of the authorized exchanges in the
country (users were urged to renew the address of their wallets ). This made global news, terribly
damaging the poor reputation that the Petro had.
• There were different instances where the Petro blockchain was unusable and the users
themselves reported it on different social networks.
These technical aspects prevented global cryptoasset exchanges from even being able to present
technical arguments to regulators for their inclusion in centralized platforms. Ignoring the
regulatory aspects, how could a Binance have accepted the Petro as an asset within the platform if i.
He was not going to have effective custody of the assets, ii. It could generate panic and reputational
risk due to interruptions in the Petro network, iii. Couldn't you take action before a possible reset or
hardfork of the Petro? The risk was too high to even consider.
For all this, the Petro blockchain really was a propaganda element. The most logical thing from a
technological point of view is that centralization does not require blockchains, because these are
much more inefficient than a common database and are only used to provide security layers to
computational schemes. That is, the blockchain only makes sense if you require decentralized
schemes. A centralized currency is much more effective if it is built on a common database.
This is why the vast majority of CBDCs are not based on blockchain technology.
From a legal point of view,
the Petro was doomed from the moment of his birth. The use of obfuscation technologies, such as
mixing, has been highly condemned by both regulatory authorities around the world and
government authorities. To understand this, you must first know what mixing is.
A mixing service is a service provided by an individual, company or computer program
(including Smart Contracts), to provide anonymity to the holding or transfer of assets on a
public blockchain. This can be static or dynamic.
Static mixing services are those that use a “blockchain escrow” structure, where a person deposits
the cryptocurrency in question and then withdraws it, after a certain time, to an unidentified wallet.
As many people deposit in the service, and hypothetically only the depositary knows the identity of
the depositor and the creditor of those cryptocurrencies, when the funds are debited from the
service, the identity or link with the depositor is not known.
This last type of service was improved by Tornado Cash, using Zero Knowledge algorithms, where
the depositary no longer needs to know the identities of the depositor or the creditor; which was
sanctioned in 2022 by the Department of the Treasury of the United States of America for having
developed a quasi-perfect technological obfuscation scheme, useful for its implementation in
criminal activities.
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Dynamic mixing services are those that use schemes where cryptocurrencies are transferred anonymously,
through the use of signatures from multiple addresses other than the original one or through the use of Zero
Knowledge algorithms.
The Petro blockchain has the capacity to generate “PrivateSend” transactions, which is a native static
mixing service implemented in the DASH blockchain, this means that the Petro can facilitate the use
of the blockchain for criminal activities, thus The vast majority of centralized international exchanges
would not be able to list it. An example of this has been the massive delisting of coins such as ZCash,
Monero or DASH on exchanges in recent years due to regulatory pressures.
Therefore, it is not unreasonable that regulatory authorities or governments could oppose the use of
Petro due to this, or even sanction it, as the Department of the Treasury of the United States of
America did in Executive Order 13,827, although the latter's claim be, ultimately, harming any type of
transactional capacity or financing on the part of the Government of Venezuela.
In addition to this, legally the Petro was also flawed in its content, given that, for any foreign
regulatory body, the Petro can be considered a security since in its whitepaper the Petro is
defined as a digital currency backed by natural wealth. from Venezuela. On page 2 it says that
the Petro is backed by internationally certified Venezuelan Commodities.
On page 3, it says that -Its price tends to behave in a stable manner, since each issue will be backed
by the basket of Venezuelan Commodities and its capacity and guarantee of immediate exchange for
the riches that comprise it.-
This definition itself is that of an Exchange Traded Commodity, that is, listed debt backed by
one or a basket of raw materials. If the Cryptoactive Treasury or SUNACRIP guaranteed the
support of the Petro, it would serve as a listed security, with additional problems:
• Following the function of the value of the Petro expressed in the whitepaper, the value of the Petro has
been violated on multiple occasions, making it not suitable for trading in regulated markets as a
security. That is, the Petro initially had to have a value of $60, which was achieved by imposing the
appropriate correction factors on each component of the basket to adapt the initial value to that figure,
which was stipulated by the Executive.
From that moment on the whitepaper states - However, from the initial moment, the value of the
Petro will be updated by an index that will be composed of a basket of commodities
representative of the wealth of the Venezuelan subsoil.-. This means that the value of the Petro
should be updated, that is, vary to adjust to said basket, which it does not do.
This calculation inability prevents any agent from listing the asset.
• No international cryptoasset exchange would list the Petro either, as it is foreseeably
considered a security, given that its trading is limited exclusively to Stock Brokerage
Companies and entails very harsh sanctions from the regulatory bodies competent in
the matter.
The aim of this is to clarify that the Petro, for the vast majority (if not all) of the regulatory
authorities, behaves like a security that monetizes Venezuela's raw material reserves. That is,
regulatory authorities abroad perceive it as a way in which the Government of Venezuela can
capitalize by issuing asset-backed debt. For this reason, we believe that Executive Order 13,827
was promulgated, as it is directly concurrent with Executive Order 13,835, which prohibits
transactions by Americans or persons in relation to the United States in any way for the
purchase and sale of debt of the Venezuelan Government or PDVSA, that is, forms of
capitalization.
From an economic point of view,
The Petro was conceptualized in the wrong way.
5
to. The Petro formula is wrong. In principle, the Petro formula was sold as extremely complex.
Actually, the formula is simple. The value of the Petro is the sum of the price of different raw
materials, based on their weight in the portfolio (the percentage in the composition)
to which a correction factor is added, which according to the whitepaper is fixed.
