SQOOT Pure — Inventory, Fulfillment & Dillon Gage Integration (Architecture)

Owner: Jay (Founder) · Entity: Fortress Gold Inc. dba SQOOT Pure · Created: June 3, 2026 Companion to: “Coin Purchase Design and Requirements” + “Gold Gift Card and GoldWise Teardown.” This is the core technical piece: how fractional buying is backed by real coins, and how Dillon Gage (DG) fits.

0. The settled architecture (one line)

Buy whole coins from Dillon Gage (price-locked) → hold thin inventory → sell fractions off your own backed ledger → reorder a coin when sold down → ship whole coins on delivery.

Fractionalization is SQOOT’s software, not DG’s. DG supplies two things only: whole-unit metal and a live price feed.

1. Why this model (and not just-in-time)

JIT — buying the customer’s exact fraction from the supplier on each order — does not work, because: - DG sells in whole units (whole coins/bars) with minimum order sizes; there is no “sell me $100 of fractional gold” path. - DG’s FizTrade API is for live quotes and locking whole-unit orders — not micro-fulfillment. - A $100 (≈0.04 oz) order can’t be passed through to any wholesale dealer economically.

Therefore SQOOT must hold inventory and fractionalize internally. This is a requirement, not a preference.

2. The backing invariant (never break this)

Σ (all customer fractional oz) ≤ Σ (physical oz SQOOT holds in vault)

Every fraction sold is backed 1:1 by real metal. The system must refuse a sale that would breach this. This is the trust + compliance foundation (allocated, not an IOU).

3. Data model

coins — physical inventory (whole units)

id              uuid
size            enum (tenth, half, one)      -- 1/10, 1/2, 1 oz
oz              numeric                       -- 0.1 / 0.5 / 1.0
cost_basis_usd  numeric                       -- what SQOOT paid DG (price-locked)
dg_order_id     text                          -- FizTrade order reference
oz_allocated    numeric default 0             -- sum of fractions sold against this coin
status          enum (open, sold_out, delivered, in_transit)
vault_ref       text                          -- IDS/Brink's bar/lot reference
created_at, updated_at

holdings — what each customer owns

id              uuid
user_id         uuid
oz              numeric                       -- total fractional oz owned
updated_at
-- invariant: SUM(holdings.oz) <= SUM(coins.oz where status in open,sold_out)

orders — every buy/sell/gift event (immutable ledger)

id              uuid
user_id         uuid
type            enum (buy, sell, gift_buy, gift_redeem, deliver)
amount_usd      numeric                       -- e.g. 100.00
spot_at_txn     numeric                       -- live spot used
oz              numeric                       -- oz bought/sold
spread_usd      numeric                       -- SQOOT margin captured
coin_ids        uuid[]                        -- which inventory coin(s) this drew against
created_at

reorders — DG replenishment POs

id, size, qty, dg_quote_id, locked_price_usd, status (quoted, placed, received), created_at

4. Allocation engine (the buy flow)

When a customer buys $amount: 1. Get live spot from FizTrade. 2. gross_oz = amount / spot 3. Apply spread/fee → net_oz = (amount − fee) / spot (see §6). 4. Check invariant — is there ≥ net_oz unallocated in inventory? - If yes → allocate against the current open coin(s); roll to the next open coin if one fills. - If no → block or queue the sale and fire a reorder (§5). (Never oversell.) 5. Write orders row, increment holdings.oz, increment coins.oz_allocated. 6. If a coin’s oz_allocated >= oz → set status = sold_out and trigger reorder.

5. Replenishment (the “buy another coin” rule)

Trigger: when available inventory (Σ coins.oz − Σ coins.oz_allocated) drops below a threshold (e.g., < 0.2 oz open, or the open coin crosses ~90%).
Action: call FizTrade → lock a price on the next whole coin → place the order → on receipt, insert a new coins row with cost_basis_usd = locked price, status = open.
Rolling model: keep just ~1 open coin per size in play; replenish as each sells out. Minimal capital, bounded price risk.
Tuning: raise the buffer (hold 2 coins) if demand is spiky so you never block a sale.

6. Pricing & spread (how you stay safe + make margin)

customer_price_per_oz = live_spot × (1 + spread)
spread covers:  DG dealer premium  +  price-movement buffer  +  SQOOT margin

Customer always buys at live spot + spread (transparent, GoldWise-style — not a hidden 5–10% premium).
Your cost basis is the price-locked DG purchase. Margin = what customers pay above your blended cost.
Price risk = the unsold portion of a held coin if spot falls before it sells down. Bounded because inventory is thin (~1 coin). The spread buffer absorbs normal moves.
Smaller coins (1/10 oz) carry a higher premium from DG → higher spread, same as the coin spec.

7. Delivery / redemption

A customer cannot take physical delivery of a fraction.
They accumulate fractions across buys until they reach a whole deliverable unit (e.g., 1.0 oz, or the smallest coin you ship).
On delivery request: verify they hold ≥ the unit, debit that unit from holdings.oz, mark a physical coins row in_transit → delivered, ship the coin (from inventory or a fresh DG order), update inventory.
Below a whole unit → they can only hold or sell back.

8. Dillon Gage’s exact role

DG provides	SQOOT builds
Whole-unit metal (coins/bars, min order sizes)	The fractional ledger (holdings, orders)
FizTrade API — live quotes + price-lock on orders	The allocation engine (fractions → coins)
IDS depository — allocated, insured, audited vault	The reorder logic + inventory state
Settlement of whole-unit purchases	Backing invariant enforcement + reconciliation

DG does not do: per-customer fractional fulfillment, your customer ledger, or your pricing to end-users.

9. Reconciliation (daily)

Physical: pull IDS/DG vault holdings (oz on hand).
Logical: Σ holdings.oz + unsold buffer.
These must match within tolerance. Any drift → alert, freeze new sales until resolved.
Tie cost basis (DG invoices) to the GL under Fortress Gold Inc. (per finance rules).

10. Compliance hooks (carry over)

KYC/AML before allocating gold to any owner (buyer or gift recipient).
Funds safeguarding — customer cash segregated until converted to metal.
Allocated, not pooled-IOU — market the 1:1 backing; reconciliation proves it.
Records retention + reporting thresholds per the FinCEN dealer program.

11. Open decisions

Hold-inventory vs JIT → decided: hold (rolling ~1 coin), because DG sells whole units only.
Buffer depth — 1 coin vs 2 per size (depends on demand spikiness).
Spread % per size (set with live DG premiums).
Smallest deliverable unit (1/10 oz coin? 1 oz?).
Confirm FizTrade API access + IDS vault terms with your DG rep.
Whether gift cards draw against the same inventory pool (recommended: yes, one pool).

v1 — June 3, 2026. Confirms the inventory/fractional model; DG = whole-unit supply + FizTrade price feed + IDS vault.