*Join our MeetUp group for timely event updates: https://www.meetup.com/Chaintech-Ventures/* The past September was a special and busy one. Thanks to the Consensus Week held from Sep 17, almost all key players and practitioners in this industry have come to Singapore for this carnival. The Chaintech Ventures team took on several challenging missions since the beginning of September. Within 3 weeks of intense combat, we strove to reap victories as follows: 1. We won as the tied 1st runner up in TEDC 2018, the competition organised and hosted by celebrated fund Fenbushi Capital in Shanghai. 2. Among thousands of projects submitted to SWITCH (Singapore Week of Innovation and Technology), our incubated company ROMAD made it into the final round to be presented among the 15 outstanding projects in Demo Asia Summit. We won as the 1st runner up with only a mere difference of 0.4 in score (79.6) comparing to the champion (80). 3. During the glamorous Pitch Fest event on 2019 Sep 22nd, we managed to have 3 of our advised portfolio companies (ROMAD, VeloxChain and SWIPE) enrolled in a selected line of 15 venture projects. In this special episode of our talk, we will share our award-winning compositions from TEDC and Demo Asia with you guys and continue our discussion on markets and most recent insights gained from our on-hand experiences. The ROMAD team is invited as special guests to the event so you could know more about this unique project.

1. Chaintech Ventures
Special Event
Aw ard - Winning C ases 2018
Meet t eam R OMA D
3 O c t 2 0 1 8 , 7 P M
BitTalk Series Episode #3

2. SPECIAL THANKS TO OUR
SUPPORTING PARTIES
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3. RECENT EVENTS & ACCOMPLISHMENTS:
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4. RECENT EVENTS & ACCOMPLISHMENTS:
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5. FundToken Token Economy Design

6. Content
1. Background Analysis
– Pain Points on the Surface
– Real Problems Underlying
– Hidden Problems at Core
2. FundToken Introduction
3. Design Orientation
4. Solution
– Tokenomics
– Governance
– Ecosystem
5. Tokenmetrics
6. Team Profile
7. Partners, Clients and Affiliates
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7. GP (General Partner, who raises capital) and LP (Limited Partner, investors) are the 2 main players in traditional funds.
In this widely adopted model, Investors, Investment managers, and Investees are difficult to realize a frictionless win-win situation.
Pain points on the Surface
❖ GP has difficult raising fund, and LP has big
influence on decision making
❖ Imperfect management fee and performance fee
structures lead to distorted incentives for investment
managers
❖ Evaluation is purely based on end result, which fails
to verify investment managers’ other capabilities
(e.g. management skills, investment incentives and
dedication)
Real Problems Underlying
❖ The conflicts of GP and LP on decision making mainly
exist in extremely immature capital markets (China and
other developing countries), which attributes to
unprofessional practitioners and industry
standards/investors’ lack of trust resulted from
incomplete regulations and difficulty in rights
protection.
❖ Management fee and performance fee is fixed before
Fund creation, which fails to adjust according to
investment performance and market performance.
❖ No appropriate model, benchmark or sufficient data for
Investment Performance Measurement & Allocation in
primary market where the transaction frequency is low,
market value cannot be precise and information is not
public.
Background Analysis
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8. Hidden Problems at Core
❖ Lack of extensive support from third parties to split regulatory, auditing and valuation
responsibilities, which ensures sound operations of capital market, even in decentralized systems.
❖ Investment managers of VC/PE who issue Fundtokens have a huge information asymmetry
advantage, and have sufficient incentives to exploit these advantages (such as market
manipulation). Hence, plain vanilla security token is not able to prevent malicious actions from
GPs/Fund managers
If issues above are not addressed (i.e. build trust and market mechanisms that retain fundamental
values), however perfect token economy design could not apply, because there is no efficient market.
Background Analysis
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9. FundToken is a token issued by investment managers, and circulates in the ecosystem of their
invested projects. The design of Fundtoken is to break the traditional GP-LP structure and
enables excellent investors make independent investment decisions without LPA restriction,
building a stronger win-win relationship between investment managers and entrepreneurs.
Assumptions & Application Scope
Note: Because no token economy design could apply to all kinds of funds at the same time
perfectly, our design is based on general cases。
❖ This token design is aimed for PE/VC funds in immature financial markets of
developing countries, and the investment scope is mainly on VC and other primary
market equity investments.
❖ Tokens are issue by experienced investment managers of PE/VC funds.
❖ Assume Security Token has been preliminarily recognized by the market.
❖ This token design covers limited fund life and unlimited listing period, dominated
by limited fund life.
FundToken Introduction
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10. Innovativeness
Solve the liquidity issue of
equity investment through
Security Token ( which is
programmable), to nurture
behaviors of market
practitioners
Trustlessness
Establish an effective
market through community
consensus & decentralized
autonomous organization
for governance (DAO) &
auditing and improvement
of information flow
Soundness
Ensure protection of rights
& interests and provide
measures of risk
management and price
discovery
Design Principles
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11. Investors
FundToken Issuer:
Fund Manager
Startups
Invested
Fund
Token
Entrust
Buying or
Selling
Invest, Governand Assit
Win-Win
Collaboration
Management
Solution Overview
Track Record
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12. Solution –Tokenomics
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1. Claim on Asset – Define that FundToken represents the net asset value in offering memo and has valid claim on
assets under management upon fund closure/delisting
2. Market Value at Issuance – To simplify, assume investment amount is X, amount of financing is X+a (a is basic
operation cost), basic expected return is Y, then issue tokens at Market Value at Issuance of (X + 𝑌 − a)/(1 + r) 𝑛
(r =
risk premium + market premium + liquidity premium + other applicable discount factors; n = listing period). The market value
of free floating tokens is X + a, and that of reserved tokens is (X + Y − a)/(1 + r) 𝑛
-X.
3. Management Fee and Performance Fee
❖Basic salary and operation cost is paid from amount ‘a’
❖Performance fee of investment managers is restricted from being extracted from funds raised or the exit revenue
of projects. It can only be obtained through selling reserved tokens and receiving based on pre-determined ratio
when performance conditions are met. The remaining cash through selling reserved tokens is used for
reinvestment or investing in money market instruments.
❖Investment managers are to bear the market risk when selling reserved tokens.
❖Part of cashed out performance fee is frozen in an escrow account, and can only be withdrawn when related
projects are exit. If loss occurs in future investment, investment managers should return part of cashed out
performance fee according to claw back terms.
❖Upon fund closure, all remaining reserved tokens are destroyed, and cannot make any claims on asset as other
circulating tokens

13. Case Study 1
Chaintech Fund has launched C Token using Fund Token Protocol. In the offering memo, the following is mentioned:
the hurdle rate of the fund is set at 8%, base Carrier is 20%. To encourage investment manager to out-perform, we
set that for every point of profit above hurdle rate, doubled point will be added into the carrier percentage.
Solution –Tokenomics
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14. Case Study 1
Chaintech Fund has launched C Token using Fund Token Protocol. In the offering memo, the following is mentioned:
the hurdle rate of the fund is set at 8%, base Carrier is 20%. To encourage investment manager to out-perform, we
set that for every point of profit above hurdle rate, doubled point will be added into the carrier percentage.
At the end of an investment cycle (e.g. 2018 Q3), if the investment return is
Scenario 1: below 8%，investment manager is not allowed to sell any reserve token.
Scenario 2: equal to 8%, investment manager could sell a 1 million worth of current market value of reserve tokens,
obtaining 200,000 as performance bonus and deposit it into escrow account, the rest will be reflected on balance
sheet for future use.
Scenario 3: 12%, Investment manager could sell a 1 million worth of current market value of reserve tokens, since
there is 4% profit above the hurdle rate. There will be a performance bonus of 1,000,000*(20%+4%*2)=280,000
deposited into escrow account, the rest of 720,000 balance will be reflected on balance sheet for future use.
Solution –Tokenomics
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15. Due to the nature of venture capital and the primary market, there is no suitable model, benchmark and sufficient market
data to achieve a timely reporting of net asset value. Yet this is what a liquidated secondary market required.
Augur's prediction market mechanism
❖ Using the wisdom of the crowd, to achieve the return of intrinsic values and to obtain additional risk management
measures through an open prediction market: investment strategies are no longer simply limited to one-way trading, but
also include shorting and income lockup through betting in prediction markets – This will further improve market efficiency,
allowing market prices to reflect more accurately on intrinsic values and restrict the possible disruptive behavior of
investment managers and speculators.
* For detailed algorithms, please refer to the Augur’s white paper and Multicoin Capital's analysis of the Augur model
Solution – Governance
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16. Case Study 2
The first half year financial period of Chaintech Fund FY2018 has just ended. The fund released the operating status and
balance sheet of all the invested projects in the current asset allocation on time, and provided compliance and auditing reports
as well as market research reports. How to achieve a valuation that is close to intrinsic NAV?
Solution – Governance
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17. Case Study 2
The first half year financial period of Chaintech Fund FY2018 has just ended. The fund released the operating status and
balance sheet of all the invested projects in the current asset allocation on time, and provided compliance and auditing reports
as well as market research reports. How to achieve a valuation that is close to intrinsic NAV?
The investment manager extracts a fixed amount in the fixed operating cost as bounty for the Net Asset Value assessment
task in the prediction market. Randomly select 50 nodes to provide research reports. Three weeks later when the task expires,
the platform collects 50 research reports and respective NAV/token market price estimates.
All nodes that submit a research report that meets the criteria will receive a fixed award. Exclude the lowest and highest 10%
valuation of the collected results, and take the average and median of the middle 80%. Additional bonus were awarded
proportionally to analysts whose valuation were close to the mean and median.
The 50 research reports and forecasted results were subsequently released on the FundToken platform, allowing all token
holders to bet. Determine a rate based on dynamic supply and demand to form a NAV-based option. Throughout this process,
the participants can hedge against risk based on their own understandings and expectations of the market.
Note: The above is only a simple example. In the specific scenario, each fund needs to be specially customized.
Solution – Governance
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18. Ecosystem Participants
❖ Fund Manager
❖ Startups
Community Communications and Governance
❖ Compliance in Fund Asset Performance Report Disclosure
❖ Prediction Market Opening Periodically
❖ MasterNodes Staking/Voting/Auditing
Win-win situtation for Token Circulation within Ecosystem together with Startup
Token enabled horizontal & vertical integration among portfolio companies
Token based merger & acquisition
Investment Exit Highway
*Further Read: Venture Capital Economics with Public Market Liquidity by Multicoin Capital*
❖ Investors
❖ Analysts
Solution – Ecosystem
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19. FundToken that is still in circulation:
❖ Claim on assets under management
❖ Risk Management & Speculation Tool
❖ Price Discovery
❖ Provision of Liquidity to Late Stage Start-ups
❖ Adding utility extension to security token to drive market adoption for portfolio companies
FundToken that has ended Operation and Trading：
Record of past track record on chain and performance analytics
Reducing Implied Risk Premium & Liquidity Premium
FundToken’s Intrinsic Value
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20. Token Distribution
Fund Size
Determined by GP’s track record in the industry
Purpose
Compliance, Due Diligence, Operation Cost, Manpower
Distribution
Investment, Bountry Program, Community Building, Risk
Compliance
Note：For Reference Only
Token Distribution
Tokenmetrics
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Team, 10%
Investme…
Communi…

21. ROMAD-Brief Introduction
• A Cybersecurity company based in
Europe which focuses on Next-
Generation Anti-Virus software and
end-point defense technology.
• Successfully launched B2B business
and aiming to target 2C market and
blockchain industry.
• Successfully obtained Horizon 2020
Grant from European Union
• Features: Low CPU & RAM
consumption
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22. ROMAD Tokenomics Design
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Anti-FragilityGrow with
Decentralized
Technologies
Pareto
Improvement
Divide and
Conquer
Close
Attention to
Economic
Factors
Clear
Definition
Scopes

23. 1. Clear Definition of Scopes:
❖ Clear definition of utilities and copes of operations with blockchain integration
❖ Predictable portions of future platform expansion
2. Close Attention to Economic Factors:
❖ Avoid the conflict of interests between different kinds of community members
❖ Ensure a dynamically balanced demand and supply curve
❖ Capture the network value
❖ Stabilize market effects (e.g. token velocity problem)
❖ Encourage positive engagement from participants with good will
3. Divide and Conquer:
❖ Facilitate the business need of each façade one by one
❖ Develop in the fashion of Agile and Scrum to ensure compatibility, coherence and smoothness of token utility expansion
and transition 23
ROMAD Tokenomics Design

24. 4. Pareto Improvement
❖ Multi-stage token development model (different from a roadmap or timeline for a single
product release)
❖ The business nature at each stage is totally different from its previous one, which
unlocks value accordingly
❖ Multi-stage token development model takes care of expectation from token buyers and
provides explicit indicators for valuation
5 . Grow and Mutate along with Decentralized Technologies:
❖ Not limited to deployment on only one public chain, but to dynamically adopt best
practice in the evolving blockchain fields.
6 . Antifragility:
❖ Give the right to each nodes to act on their own discretions to perform community work
❖ In this case, the utilities of token could resume as usual even if the business entity
itself ceases operation
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ROMAD Tokenomics Design

25. RoBust Defense Token (RBDT)
Mechanics
Multi-Stage Token Evolution Model
Stage I: The Token for ROMAD License Distribution (to allow free
download which helps build user base)
Stage II: Monetization of Endpoints/Nodes Big Data (to nurture user
behavior)
Stage III: Software Cloud Testing & Rating + White Hat Bounty
Platform
Stage IV: Token for the Cyber Security Industry
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26. Highlights in Mechanics
Is there a way to deal with the problems of both crypto and
traditional market through blockchain?
The answer is yes. The key is proper use of consensus.
How to create a consensus?
Stage I: Building Personal Adoption
Stage II: Promoting New Behavior
Stage III: Creating Community Awareness
Stage IV: Leveraging on Consensus
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27. Francois Zhang, CAIA FRM CQF
+65 8114 3061
info@chaintech.biz
http://www.chaintech.biz/
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