Table of Contents

$PMO is the official Fan Token of Palermo Football Club (hereinafter referred to as “Palermo Football Club” or the “Team”). It is a permissionless, blockchain-based crypto-asset that follows the CAP-20 token standard and is issued by Fan Token Management AG (“FTM”, the “Issuer”, or the “Offeror”) (previously Socios Technologies AG) in partnership with Palermo Football Club.

$PMO is primarily intended to provide fans with access to exclusive experiences and rewards directly linked to fan engagement activities. It provides an IP-driven utility experience, enabling holders to interact with the Team in meaningful ways. Token holders may benefit from a range of Web3 utilities, including access to decentralised applications (“dApps”) and the ability to collect NFTs and digital collectibles. In addition, $PMO may provide access to more traditional benefits such as participation in binding and non-binding surveys related to the Team, hospitality and ticketing privileges, discounts on official products, exclusive signed merchandise and real-life experiences (e.g., Meet & Greets, museum and stadium tours or stadium announcer experience), subject to availability and eligibility. $PMO token holders may also have access to unique money-can’t-buy opportunities and immersive digital experiences designed to deepen fan interaction with the Team.

For the avoidance of doubt, access to token-gated features, functionalities, and rewards is not guaranteed and may vary over time. Such benefits are contingent upon holding $PMO Fan Token following the public offer and will be subject to eligibility criteria, availability, and platform-specific conditions, always at the discretion of the Issuer or the operator of the ‘Socios.com’ utility platform (hereinafter the “Platform”), or based on instructions from the Team.

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Key information about the public offer are the following:

• Total offer amount: 10,000 $PMO offered to the public x amount of $CHZ equivalent to USD $0.10 per $PMO = Amount of $CHZ equivalent to USD 1,000.
• Total number of $PMO tokens offered to the public: 10,000 $PMO.
• Subscription period: i) 2026-10-20 at 14:00 CEST to 2026-10-20 at 17:00 CEST or ii) until all offered $PMO are sold, whichever occurs first.
• Minimum subscription goal: Not applicable.
• Maximum subscription goal: USD 1,000
• Issue price: USD $0.10 worth of $CHZ tokens per $PMO token.
• Subscription fees (if any): 0.
• Target holders of tokens: The public offer is exclusively targeted to retail investors with special emphasis on football fans and members of the Chiliz Chain ecosystem community.
• Crypto-Assets Service Provider (CASP) responsible for placing the token (if any) post-offering: Socios Europe Services Limited (“SES”).
• Form of placement: Without a firm commitment basis.

FTM is the issuer of Fan Tokens. Fan Tokens are crypto-assets minted on the Chiliz Chain under the CAP-20 token standard. Fan Tokens are issued by FTM in partnership with global sports brands and are directly associated with the intellectual property of such sport brands.

The Chiliz Group Limited is the sole shareholder of FTM, with its main role being that of a holding company. It is a registered entity in Malta under the number C 77290. It does not undertake any specific commercial or business activities, other than having been the original issuer of the $CHZ token.

Over the past three years, FTM has continued its trajectory toward financial stability, driven by disciplined cost management, new commercial partnerships, and operational improvements. Following a difficult 2023 marked by a significant net loss amid challenging market conditions, FTM's financial performance improved steadily in 2024 and then improved markedly in 2025. In 2025, the Company focused on expanding its network of exchange partners to provide greater liquidity for Fan Tokens, pursuing new commercial partnerships, and reducing operating costs, and these efforts are clearly reflected in the year's results:

• Revenue Growth: Revenue increased by approximately 44% from 2024 to 2025, rising from CHF 50.8 million to CHF 73.3 million, reflecting renewed momentum in Fan Token sales and a broader base of liquidity venues.

• Profitability: FTM's net loss narrowed by approximately 87% in 2025, falling from CHF 18.5 million in 2024 to CHF 2.5 million, supported by a substantial improvement in gross result (CHF 22.8 million in 2025 versus CHF 3.4 million in 2024) and continued cost discipline.

As of 2025, FTM has made significant progress toward break-even, leveraging sustained revenue growth, an improved margin profile, and a more resilient business model. Financial and operational performance indicators point to continued progress, underpinned by an expanding exchange network and a tighter cost base.

The following is a summary of FTM's financial position based on the audited financial statements for the year ended 31 December 2025.

This field does not apply as FTM has been established for the past three years.

$PMO is the official Fan Token of Palermo Football Club, and part of the pioneering Fan Token ecosystem powered by the Platform. This utility-focused crypto-asset is designed to bring fans closer to the Team by offering new ways to engage with the Team and to reward token holders for their engagement via blockchain technology.

$PMO Fan Token is intended to grant holders a variety of exclusive digital and real-world utilities with the potential of expanding to Web3 and DeFi functionalities. $PMO aims to transform passive supporters into active participants in the Team's community and digital ecosystem.

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The $PMO Fan Token project is new and is in its early stages, with key milestones yet to be achieved.

Below is a timeline highlighting key milestones for the token:

• 2026-09-17: Notification of this crypto-asset white paper.
• 2026-10-16: Publication of this crypto-asset white paper.
• 2026-10-20: Beginning of the subscription period.
• 2026-10-20: End of the subscription period.
• 2026-10-27: Beginning of the claim period.
• 2026-11-03: End of the claim period.
• 2026-11-04: Final airdrop for unclaimed $PMO
• 2026-11-04 onwards: Following conclusion of the public offer and distribution of the tokens purchased, FTM will retain control and management over the non-circulating supply of $PMO. Subject to the partnership agreement signed with the Team, the non-circulating supply may be used to: (i) fund utilities and rewards made available to token holders on the Platform; (ii) promote $PMO and associated marketing activations; and (iii) provide liquidity on MiCA-licensed trading platforms and decentralised exchanges (“DEXs”).

The resources allocated to the project primarily consist of non-financial contributions, including the extensive man-hours and expertise provided by the development team of the Issuer/Offeror. Additionally, marketing efforts have been deployed by FTM and Palermo Football Club to drive awareness, foster community engagement, and ensure the successful adoption of the token.

Part of the proceeds will be distributed to the Team as per the terms of the revenue-share mechanisms agreed upon between FTM and the Team. A portion of the proceeds retained by FTM will primarily be allocated to cover partnership fees. Additionally, the funds will be allocated to support the Issuer/Offeror group operational expenses and to ensure ongoing provisioning of utility inventory on the Platform for $PMO.

The public offer aims to grow the Team’s community by fostering engagement with its global fan base, allowing fans to connect with the Team and benefit from a variety of utilities that may be provided to token holders, including on the Platform. This initiative not only strengthens the connection between the Team and its global fanbase but also fosters long-term engagement, rewarding fans for their ongoing commitment. $PMO Fan Token allows token holders to be part of a global community of like-minded fans, highlighting their fan identity within such a community and enhancing their sense of belonging to that community.

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The issue price is determined by the amount of $CHZ tokens equivalent to USD $0.10 and calculated based on the exchange rate for CHZ/USD on the day and time of participation. The offer price has been discretionary determined by the Issuer/Offeror in accordance with the terms of the partnership agreement signed with the Team.

The public offer is only available to registered Socios.com users. The terms and conditions of the platform provide a list of restricted jurisdictions, and therefore, users located in any of the following jurisdictions will not be able to participate in the public offer: Afghanistan, Burundi, Central African Republic, China, Congo, Democratic Republic of the Congo, Cuba, Guinea-Bissau, Iran, Iraq, Korea (DPRK), Lebanon, Libya, Myanmar, Pakistan, Russian Federation, Somalia, South Sudan, Sudan, Syrian Arab Republic, Venezuela (Bolivarian Republic of), Yemen and Zimbabwe.

​​In the events described under section E.15 above, participants will be refunded their $CHZ contributions in full through the following mechanism:

In case of cancellation of the public offer, or if the minimum target subscription is not reached, refunds will be initiated within one (1) business day following announcement of the cancellation of the public offer. Withdrawal requests from EEA-based participants will be initiated immediately and processed once the refund transaction is confirmed on the Chiliz Chain.

The public offer of $PMO shall begin with the opening of the subscription period indicated in this white paper, and end upon the closing of such subscription period. The public offer for $PMO is structured to ensure equal access for all participants. The public offer does not comprise distinct phases, and participation is limited to 10 $PMO tokens per participant during the subscription period.

Starting from 2026-10-27 at 17:00 CET, participants’ final $PMO Fan Token allocation will be made available for participants to claim on the Platform via their Socios.com Wallet. Participants will be able to claim their $PMO until 2026-11-03 at 17:00 CET. Upon the expiry of this period, any unclaimed $PMO will be airdropped to participants who did not exercise their right to claim within the claim window.

Not applicable.

To ensure the safeguarding of funds collected during this time-limited public offer, the following arrangements have been set in place for compliance with Article 10(3) point (b) of MiCA:

• Custodian Oversight: $CHZ contributions from EEA-based participants raised during the public offering will be transferred to SES, a CASP authorised by the MFSA in Malta to provide custody services as required under Article 10(3) point (b) of MiCA. SES is responsible for safeguarding $CHZ contributions until the conclusion of the public offer and any refund processes.
• Refund Mechanisms: Participants have the right to withdraw their $CHZ contributions during the subscription period by submitting claims and following the refund mechanism described in Section E.26 - ‘Right of Withdrawal’ of this white paper.

The only accepted payment method is $CHZ tokens. Through the Platform, participants may acquire $CHZ tokens through third-party on-ramp service providers, such as MoonPay, Banxa, and AlchemyPay, amongst others, subject to availability in their jurisdiction. No other payment methods, including fiat currencies or any other cryptocurrencies, are accepted during the public offer.

In case of cancellation of the public offer or exercise of their withdrawal right, participants will be entitled to a refund in kind by delivery of their $CHZ contributions to their Socios.com Wallet in accordance with the procedures set forth in Sections E.16 and E.26 of this white paper.

During the subscription period, participants have the right to withdraw their participation without incurring any fees or costs and without needing to provide any reason. Participants have until the end of the subscription period to withdraw their $CHZ, and no reimbursement claims submitted after this deadline will be processed nor approved in any event. Participants can withdraw their participation from their Socios.com Wallet’s transaction history, where a "Cancel" button will be available next to the relevant transaction entry. Upon selecting this option, participants will be prompted to confirm their cancellation request. Once confirmed, a new transaction entry will appear in the transaction history, confirming the request is being processed. The refund process will be initiated immediately, and the corresponding $CHZ contribution will be returned to the participant’s Socios.com Wallet, with the refund being processed as soon as the relevant transaction is confirmed on the Chiliz Chain. The exact timing of the refund will depend on network conditions, but the process is designed to ensure the fastest possible settlement.

Following the conclusion of the subscription period, $PMO tokens will be made available for participants to claim on their Socios.com Wallet, by interacting with the ‘claim’ function of the smart contract deployed by FTM for the distribution of $PMO and made available to participants on the Platform.

To participate in the public offer, prospective holders must have a registered account on the Platform and set up their Socios.com Wallet to receive $PMO Fan Token. As a non-custodial wallet solution, participants are responsible for securing their wallet credentials, including private keys and recovery phrases, to ensure the safety of their assets.

Not available

The costs are exclusively related to Chiliz Chain network (gas) fees, which are required to process transactions on the Chiliz Chain. However, these gas fees will be subsidised by FTM, meaning that participants will not be required to pay gas fees when purchasing $PMO Fan Token during the public offer, or to claim their $PMO tokens during the claim period. No hidden or imposed fees apply to the subscription for $PMO.

The resources allocated to $PMO public offer are primarily non-financial, encompassing significant man-hours and expertise from the Offeror's development team. These efforts focused on technical development, compliance with applicable laws, and comprehensive project planning to facilitate the token launch. In addition to these resource commitments, certain financial expenditures will also be incurred, including costs related to targeted marketing campaigns and gas fees charged programmatically on the Chiliz Chain.

No conflicts of interest have been identified by FTM in relation to the public offer of $PMO in the EU.

Laws of Switzerland

Subject to mandatory applicable law, any dispute arising out of or in connection with this white paper and all claims in connection with the public offer of $PMO, including the validity, invalidity, breach or termination thereof, shall be exclusively resolved by arbitration in accordance with the Swiss Rules of International Arbitration.

$PMO is a utility-based crypto-asset designed to increase community engagement between the Team and its global fanbase. The token serves as a digital membership credential that enables participants to access token-gated features and exclusive non-financial experiences that may be made available to token holders. Its issuance is linked to the fan engagement strategy of the Team and forms part of a broader initiative to integrate Web3 technology into the fan experience. The functionalities of $PMO Fan Token on the Platform depend on the contractual arrangement with the Team. These functionalities may include, but are not limited to, participation in binding and/or non-binding polls, access to exclusive content/experiences, and rewards mechanisms through the Platform. These features, benefits, and rewards are indicative, not guaranteed, subject to availability, and contingent upon holding $PMO.

$PMO Fan Token holders do not acquire any financial rights, ownership, or entitlements to revenues or intellectual property from the Team, FTM, or their respective affiliates. $PMO does not entitle token holders to participate in any decisions which are ordinarily reserved to corporate bodies or vested in directors and shareholders of either the Team, FTM, or their respective affiliates, nor does it entitle token holders to receive any sort of profits generated by the Team, FTM, or their respective affiliates. In addition, $PMO is not intended to be used as a means of payment or value transfer but is solely intended for fan engagement purposes.

$PMO Fan Token holders may have access to a range of token-gated features, which may be made available through the Socios.com fan engagement and rewards platform or other platforms as may be determined in the future. Following its issuance, additional functionalities may be introduced, further enhancing $PMO Fan Token holder experience, either on the Platform or on any other third party platform, subject to integration of $PMO on such third party platforms. Such features are subject to change and may be added, modified, or removed, upon instructions from the Team or at the discretion of FTM or the operator of the platform on which such features are made available.

$PMO is a fungible crypto-asset issued by FTM under the CAP-20 token standard on the Chiliz Chain, with an initial total supply of 10,000,000 tokens. $PMO can be stored and transferred on the Chiliz Chain and other compatible blockchain networks. $PMO Fan Token holders can use $PMO on the Platform to access exclusive experiences, rewards, and Web3 utilities, enhancing fan engagement with the Team.

FTM does not currently provide any other services.

Rights of the purchasers:

Ownership of $PMO Fan Token is limited to control over the tokens themselves and does not provide any ownership or claim in the Issuer or any related entity, including any rights to shares, assets, revenues, intellectual property, governance, or profit-sharing. Within this framework, purchasers may benefit from certain functionalities and rights associated with the acquisition and use of $PMO, as well as being subject to certain conditions necessary for the proper functioning of the public offer and the ecosystem. These include:

• Purchasers have the right to claim their $PMO allocation based on their $CHZ contribution as determined at the end of the subscription period.
• Purchasers have the right to withdraw their participation and request a full refund of their $CHZ contribution without fees or penalties before the end of the subscription period.
• Purchasers are guaranteed equal access to the public offer, ensuring fairness and preventing over-concentration.
• Purchasers have the right to access specific fan engagement functionalities associated with $PMO Fan Token, as provided on the Platform, along with additional functionalities that may be provided by third parties.
• In the event of public offer cancellation, all participants are entitled to a refund. Upon cancellation of the public offer, $CHZ contributions will be transferred by FTM directly to the participants’ Socios.com Wallet.
• Purchasers have full control over the purchased $PMO tokens, granting them the freedom to hold, trade, sell, transfer, use, or otherwise dispose of their tokens at their discretion.

Purchasers are subject to the following requirements:

Participants can exercise the rights and obligations described in this white paper exclusively through their account on the Platform and the Socios.com Wallet associated with such an account. Participants’ rights in relation to their participation in the public offer, claim of $PMO Fan Token, withdrawal right during the public offer, right to access fan engagement functionalities available for $PMO on the Platform, and right to receive their $CHZ contributions in case of a cancellation of the public offer, can be solely accessed and exercised through the Socios.com Wallet address associated with their account on the Platform and through which participants initially participated in the public offer. These include:

No modifications to the rights and obligations of purchasers are anticipated or planned. The terms of the public offer, including purchasers' rights and obligations, are enforced through the smart contract deployed by FTM and transparently communicated in advance, offering full predictability for all participants. In the event of unforeseen circumstances requiring modifications to purchasers’ rights and obligations, participants will be notified promptly, and any changes will comply with applicable regulatory requirements to protect purchaser interests.

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Upon conclusion of the public offer, it is expected that $PMO Fan Tokens will become tradable on DEXs. Token holders can interact with such third-party DEXs by connecting their Socios.com Wallet or any other non-custodial wallet which is compatible with any blockchain network on which $PMO Fan Token can be stored and transferred. FTM further reserves the right to seek admission to trading of $PMO on MiCA-compliant trading platforms.

No lock-up period in place. Tokens may be freely traded and therefore unlocked immediately upon distribution of the $PMO to participants.

At the protocol level, $PMO token contract does not implement any supply adjustment mechanisms that may affect the total supply of $PMO. Nevertheless, FTM reserves the right to periodically deploy and/or promote mint-and-burn activities that may increase or decrease the total supply of $PMO. Token holders may access full disclosure regarding such initiatives, including, but not limited to, previous mint and burn transactions, and current circulating supply, via the official Fan Token ecosystem website accessible at https://www.fantokens.com/. For clarity purposes, mint-and-burn activities are not permanent and may be activated, stopped, modified, resumed, or otherwise permanently suspended at the sole discretion of FTM.

This field does not apply, as G.14 is false

This field does not apply, as G.16 is false

Laws of Switzerland

Subject to mandatory applicable law, any dispute arising out of or in connection with this white paper and all claims in connection with the $PMO Fan Token including the validity, invalidity, breach, or termination thereof, shall be exclusively resolved by arbitration in accordance with the Swiss Rules of International Arbitration.

The Chiliz Chain is the distributed ledger technology used for the issuance, storage, and transfer of $PMO. It is a public, EVM-compatible Layer 1 blockchain forked from BNB Smart Chain, which is itself a derivative of Go-Ethereum. $PMO is issued on the Chiliz Chain as a CAP-20 fungible token. The Chiliz Chain's core system contracts, including those governing staking, governance, and upgrade mechanisms, are fully audited. See H.9 for audit details.

Token Standard

$PMO is issued under the CAP-20 token standard, the Chiliz Chain's native fungible token standard, functionally equivalent to Ethereum's ERC-20. CAP-20 enforces 18 decimal places, which means that on-chain balances, transfer amounts, and 10,000,000 are denominated in the token’s smallest unit rather than as whole integers. $PMO implements the standard CAP-20 interface for transfers, approvals, allowances, and supply queries.

Transaction Standards

Since the Dragon8 hard fork in June 2024, Chiliz Chain supports the following transaction standards:

• EIP-2718 (Typed Transaction Envelope): defines a typed transaction format enabling multiple transaction types to coexist on the same network.
• EIP-1559 (Fee Market): enables type-2 transactions with a protocol-defined base fee and an optional priority fee paid to validators.
• EIP-155 (Replay Protection): transactions are signed with the Chiliz Chain Mainnet Chain ID of 88888, preventing cross-chain replay attacks.

Execution Environment

The $PMO token contract is compiled for the Shanghai-equivalent EVM target introduced with the Dragon8 upgrade. The Shanghai specification includes improvements covering warm coinbase access, the push zero opcode, and initcode size limits. This ensures full compatibility with standard Solidity development, testing, and auditing tooling across the Ethereum ecosystem.

Client Interface Standards

Implementation and Architecture

$PMO does not implement its own consensus mechanism. All $PMO transactions executed within the Chiliz Chain's base layer achieve finality once included in blocks that reach the relevant commitment level. Settlement, ordering, and data availability are determined entirely by the Chiliz Chain's validator set. $PMO inherits those security and availability guarantees.

At the network level, the Chiliz Chain employs a gas-based fee model denominated in $CHZ. Since the Dragon8 hard fork, the network supports EIP-1559-style type-2 transactions with a dynamically adjusted base fee. The base fee is burned at the protocol level, applying deflationary pressure to $CHZ supply. Priority fees are distributed to validators and delegators and are not burned.

Block rewards, comprising both newly minted $CHZ from the inflationary supply introduced by Dragon8 and collected priority fees, are allocated as follows:

• 65% to active validators and their delegators, distributed in proportion to staked amounts after the validator's commission is applied.
• 10% to the Community Vault, $CHZ liquidity pools, and shared-security restaking rewards.
• 25% to the Ecosystem and Operational Distribution pool, funding ongoing development, marketing, and operational expenses of the Chiliz Chain.

Not applicable

Three categories of audit are relevant to $PMO.

Halborn's Chiliz Chain Core Contracts

• Object: Core Chiliz Chain smart contracts used at mainnet launch, including the staking contract, governance contract, and bridge contract.
• Findings: Minor risks were identified, with no indication of unresolved high-severity issues at launch.
• Remediation: The necessary fixes were implemented before the 2023 mainnet launch. The contracts remain subject to further audits when upgraded.

CertiK's Governance and Core Contracts

• Object: Smart contracts underpinning Chiliz governance and the core V2 contracts, including the V2 Genesis Contracts and related upgradeable components, as well as the on-chain vote token implementation reviewed under the Chiliz project on CertiK Skynet.
• Findings: No critical issues. Several major centralisation-type findings, plus medium, minor, and informational issues, all marked as acknowledged.
• Remediation: The identified issues have been addressed.

Halborn's Chiliz Bridge Smart-Contract Audit

The following risks specifically relate to the execution of the public offering of the $PMO Fan Token:

Offer delay, suspension, or cancellation

There is a risk that the public offer may be delayed, suspended, or cancelled due to technical, operational regulatory or commercial circumstances, including, for example, uncertainties related to the partnership agreement or other commercial dependencies. Such events may result in reputational damage to the project. In the event of public offer cancellation, all participants are entitled to a refund.

Distribution delay from network congestion

The distribution of $PMO may be subject to delays caused by congestion on the underlying blockchain network. High transaction volumes or limited block capacity may result in slower processing times, leading to delays in the completion of distribution.

Short subscription window

The subscription period runs from 2026-10-20 at 14:00 CEST to 2026-10-20 at 17:00 CEST. Retail investors across different time zones may have limited opportunity to review this white paper in full or perform due diligence to make a fully informed participation decision within this window.

The following risks specifically relate to FTM as the Issuer of $PMO:

Regulatory compliance risks

Issuers of crypto-assets must adhere to a wide array of regulatory requirements across different jurisdictions. Non-compliance can result in fines, sanctions, or the prohibition of the crypto-asset offering, impacting its viability and market acceptance.

The following risks specifically relate to $PMO as a crypto-asset:

The following risks specifically relate to the implementation of $PMO as a project:

Partnership dependency

The token functionalities associated with $PMO are contingent on the partnership agreement between FTM and the Team. If this agreement expires without renewal, is terminated early, or if either party fails to perform its obligations, $PMO may partially or fully lose its token functionalities, materially reducing its value. There is no guarantee that the partnership will be renewed on equivalent or any terms.

Team performance and reputational exposure

The desirability of $PMO is directly tied to fan interest in the Team. Events adversely affecting the Team, including deterioration in sporting performance, financial difficulties, governance failures, or reputational harm, could reduce fan engagement and materially affect demand for and the value of $PMO.

Functionality non-delivery

The features, benefits, rewards, and experiences described in this white paper are indicative and subject to availability, eligibility, and platform-specific conditions. There is no contractual guarantee to token holders that any specific utility will be available at any given time. Features may be modified, reduced, or removed at the discretion of FTM, the Platform operator, or the Team.

Platform operational dependency

$PMO utilities are delivered through platform(s) designated by FTM and the Team from time to time, currently including the Socios.com platform. Any discontinuation, material disruption, or modification of the designated platform, or any failure by FTM to maintain an operational delivery environment, could limit or eliminate token holders' access to $PMO‘s features.

Insufficient funding

The following risks specifically relate to the underlying blockchain technology used for the primary issuance, storage, and transfer of $PMO:

Blockchain dependency risks

$PMO is built on the Chiliz Chain, making it inherently reliant on the stability, security, and long-term operation of the underlying blockchain. Any disruptions, protocol upgrades, or governance decisions on the Chiliz Chain could potentially impact the token’s functionality, transaction speed, and overall ecosystem integration. Changes to gas fees, validator incentives, or consensus mechanisms may also influence transaction costs and adoption.

Smart contract risks

Despite thorough testing and audits, smart contracts are susceptible to vulnerabilities such as logic errors, reentrancy attacks, or integer overflows. If an exploit is discovered in $PMO token’s contract, it could lead to financial losses, token theft, or unintended behaviors.

Private key management

The security of $PMO holdings depends on the effective management of wallet private keys and recovery phrases. Loss of private keys results in irreversible loss of access to tokens. Theft or unauthorised access to private keys can result in complete loss of funds.

Network security risks

While Chiliz Chain benefits from robust blockchain security, it remains susceptible to network-level attacks such as Sybil attacks, 51% attacks, or DDoS attempts on validators.

Transaction finality

Several measures have been implemented to mitigate the risks associated with the technology used to issue and distribute $PMO:

Offer-related risks

$PMO does not implement its own consensus mechanism. All $PMO transactions executed within the Chiliz Chain's base layer achieve finality once included in blocks that reach the relevant commitment level. Settlement, ordering, and data availability are determined entirely by the Chiliz Chain's validator set. $PMO inherits those security and availability guarantees.

Chiliz Chain uses Proof of Staked Authority (PoSA), a hybrid consensus mechanism that combines Proof-of-Authority-style validator rotation with Proof-of-Stake-based weighting and eligibility. A limited set of Main Validators, each required to bond $CHZ and be approved through on-chain governance, is responsible for proposing and validating blocks. Validator seats are currently capped at 13, subject to on-chain governance. The Parlia consensus engine coordinates block production and interacts with system contracts managing staking, validator-set updates, reward distribution, and penalties for misbehaving or offline validators. Advanced security features including double-sign detection and slashing mechanisms uphold the chain's stability and finality.

Following the Snake8 hard fork in October 2025, block production is assigned via a randomised algorithm weighted by the amount of $CHZ staked on each validator node, replacing the previous equal-rotation model. This rewards validators that attract greater delegator trust and enhances competition within the validator set.

This PoSA design, adapted from BNB Smart Chain, is tuned for short block times averaging approximately three seconds, low transaction fees, and fast practical finality. It operates with a comparatively small validator set and therefore offers a lower degree of permissionless decentralisation than large, fully open validator networks.

At the network level, the Chiliz Chain employs a gas-based fee model denominated in $CHZ. Since the Dragon8 hard fork, the network supports EIP-1559-style type-2 transactions with a dynamically adjusted base fee. The base fee is burned at the protocol level, applying deflationary pressure to $CHZ supply. Priority fees are distributed to validators and delegators and are not burned.

Block rewards, comprising both newly minted $CHZ from the inflationary supply introduced by Dragon8 and collected priority fees, are allocated as follows:

• 65% to active validators and their delegators, distributed in proportion to staked amounts after the validator's commission is applied.
• 10% to the Community Vault, $CHZ liquidity pools, and shared-security restaking rewards.
• 25% to the Ecosystem and Operational Distribution pool, funding ongoing development, marketing, and operational expenses of the Chiliz Chain.

The inflationary $CHZ supply follows a programmatic decay schedule introduced by Dragon8, beginning at an annual rate of 8.8% and declining over time toward a long-term steady rate, providing predictable and transparent monetary policy for the network.

Validators that fail to comply with protocol rules, such as double-signing or repeated downtime, may be jailed and partially slashed, with a proportion of their staked $CHZ burned. This mechanism incentivises honest behaviour and high uptime across the validator set.

Since $PMO has not yet been fully implemented at the time of writing the white paper, conservative estimates regarding the expected activity have been made. For the calculation of energy consumptions of the underlying networks, the so-called 'bottom-up' approach is being used. The nodes are considered to be the central factor for the energy consumption of the network. The main determinants for estimating the hardware used within the network are the requirements for operating the client software.

To determine the energy consumption of $PMO, the energy consumption of the Chiliz Chain is calculated first. For the energy consumption of $PMO, a fraction of the energy consumption of the network is attributed to $PMO, which is determined based on the (expected) activity of the crypto-asset within the network. The information regarding the hardware used and the number of participants in the network is based on assumptions that are verified with best effort using empirical data. In general, participants are assumed to be largely economically rational. As a precautionary principle, we make assumptions on the conservative side when in doubt, i.e. making higher estimates for the adverse impacts.

The share of the token within the network is then determined and a corresponding share of the network's energy consumption is attributed to $PMO. Since $PMO has not yet been launched at the time of writing this white paper, estimates are used to determine the share of the token. Other tokens with the same characteristics in terms of technical implementation and structure of the project are selected for this.

Not applicable (see S.10)

Not applicable (see S.10)