📢 SCO Digital Exchange Announcement on Adjustments to the Flywheel Mechanism Returns and Optimization of Withdrawal Quota Rules for China Art Financial Stock

(Effective from January 4, 2026)

Dear SCO Users,

As the CAT Flywheel ecosystem continues to expand, the platform’s user base, trading volume, and agent network have grown steadily. To ensure the long-term sustainability of the ecosystem, the stability of the trading system, and the security of user assets, SCO Digital Exchange will implement a unified optimization and upgrade to the flywheel mechanism return structure and withdrawal quota rules.

This adjustment is not a temporary measure, but a key step within the platform’s established development roadmap. The relevant matters are hereby explained as follows:

I. Early-Bird Phase of the Flywheel Mechanism Is Coming to an End

During the initial launch of the flywheel mechanism, the platform established an “Early-Bird Phase” to incentivize the first group of users participating in ecosystem development.

During the Early-Bird Phase:

• Users enjoyed the platform’s highest incentive standards

• The flywheel mechanism offered a daily return of 1.5%

• All returns generated during the Early-Bird Phase have been fully locked

👉 All returns obtained during the Early-Bird Phase will not be affected by any subsequent rule adjustments. Users may rest assured.

II. Why Are Returns and Rules Being Adjusted?

The platform needs to establish a more robust balance among return incentives, trading depth, and capital security, in order to support the long-term development of the CAT ecosystem.

III. Adjustment Details of Flywheel Mechanism Returns and Release Rules

Effective from January 4, 2026, the flywheel mechanism will undergo the following unified adjustments:

🔧 Flywheel Mechanism Parameter Adjustments

• Daily Return:
  Adjusted from 1.5% to 1%

• Daily Release Ratio:
  Adjusted from 0.3% to 0.2667%

• Number of Trades Required for Release:
  Maintained at 15 trades, unchanged

• Transaction Fee Rate:
  Maintained at 0.2%, unchanged

All the above adjustments will take effect automatically via the system, and users are not required to perform any additional actions.

IV. Synchronized Optimization of Withdrawal Rules Following Return Adjustments

On the basis of a more stable return structure, the platform has simultaneously introduced a dynamic withdrawal quota unlocking mechanism, aimed at regulating the relationship between capital flows and real trading activity.

The withdrawal quota consists of two components:

1️⃣ Base Withdrawal Quota (Not Affected by Trading Activity)

Base Withdrawal Quota = Cumulative Deposit Amount × 1.5

When a user’s cumulative withdrawal amount ≤ base withdrawal quota,
and the current withdrawal amount ≤ available account balance,

👉 Withdrawals can be processed normally without restriction.

2️⃣ Trading Withdrawal Quota (Used to Unlock Excess Amounts)

When a user’s cumulative withdrawal amount exceeds the base withdrawal quota:

• The excess portion must be unlocked through the trading withdrawal quota

• The trading withdrawal quota is linked to new trading volume generated under the agent umbrella

V. Calculation Logic of the Trading Withdrawal Quota (Full Transparency)

1️⃣ Trading Withdrawal Quota Formula

Trading Withdrawal Quota = Newly Added Agent-Umbrella Trading Volume × Transaction Fee Rate

Current transaction fee rate: 0.1%

2️⃣ Calculation of Newly Added Agent-Umbrella Trading Volume

Newly Added Agent-Umbrella Trading Volume
= Today’s agent-umbrella trading volume − F

If today’s agent-umbrella trading volume is 0
→ The newly added agent-umbrella trading volume from the previous day will be used

When the newly added trading volume ≥ 0
→ The corresponding trading withdrawal quota is unlocked

When the newly added trading volume < 0
→ Only the base withdrawal quota is retained

3️⃣ Explanation of Relevant Parameters

Initial Trading Volume (P)
P = Cumulative deposit amount ÷ Transaction fee rate × 1.5

Compound Trading Volume (F)
F = P × (1 + r)^n

Where:

• r (Return Rate): 1%
  = Number of releases (15) × (Release ratio − Transaction fee rate × 2)

• n (Number of periods):
  Withdrawal date − Date of last deposit

VI. User Rights Protection Statement

✅ Returns obtained during the Early-Bird Phase are not affected
✅ Existing lock-up, unlocking, and trading functions are not affected
✅ User asset security and account usage are not affected
✅ All rules are executed automatically by the system and are fully transparent

VII. Subsequent Ecosystem Benefit Arrangements

Following the adjustment of the return structure, SCO Digital Exchange will periodically introduce:

• Benefit programs

• Wealth management products

• Incentive tasks

• Limited-time yield enhancements

• Special reward campaigns

Specific rules will be announced separately through subsequent announcements.

This announcement is released by the China Art Financial (1572.HK) stock token
on SCO Digital Exchange (SCO Digital Exchange).

SCO Digital Exchange consistently upholds:

• Security as the top priority

• Transparent rules

• Long-term sustainability

Thank you for your understanding and support of SCO. Let us work together to promote the steady development of the global RWA flywheel ecosystem.

SCO Digital Exchange
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