In this workshop with BlockToken, they discuss how to invest in cryptocurrencies, what due diligence you should complete before investing and various types of investments as well as current market trends. *this is not financial advice, please be aware of any risks when investing and consult your financial advisors beforehand.

1. Cryptocurrencies and Tokens
Value Drivers and Capital Management
23 October 2018
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2. 1. Overview
2. Market stats
3. Trends and market drivers
4. Token economy value drivers
5. Key features for assessing ICOs/Offerings
6. Tokens vs private equity for startups
7. STO vs Utility tokens
8. Value and capital management for tokens
Contents
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3. 3
Disclaimer
Today’s discussion is for information purposes only
No advice is given and you need to do your own research
Cryptocurrencies and tokens are volatile and evolving assets

4. 4
Overview - three key areas for discussion
Trends and drivers of
token economies
Due diligence on
Token Offerings
Money Management
for ICO/STOs

5. Methods of trading
Three broad methods of trading any asset that applies to cryptocurrencies
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Long-term
fundamentals based
positions
Short-term technical
trading
Arbitrage across
markets and
platforms
We’ll discuss some of the factors
that drive cryptocurrency and
token values

6. How to Trade Crypto
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7. 7
Market performance for select cryptocurrencies

8. Cryptos by largest market cap
8Source: https://coinmarketcap.com

9. Total market of crypto over the past 12 months
9Source: https://coinmarketcap.com/charts/

10. Cryptos are still a relatively small market
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Source:
https://www.marketwatch.com/story/how-big-is-bitcoin-really-this-c
hart-puts-it-all-in-perspective-2017-06-21

11. 11
Market forces and trends
Some conflicting trends in the market at the moment:
➔ Political and economic uncertainty dampening markets
➔ Uncertain regulatory progress and restrictions by some regulators
➔ Liquidation of ETH to Fiat for many completed ICOs
➔ Continued inflow of institutional funds into the crypto space
➔ Uncertainty as to whether crypto has hit bottom
➔ Media reports that target negative news

12. Cryptocurrency underlying fundamentals
Bitcoin
➔ Largest market cap
➔ Used for value transfer
➔ Extensive mining
➔ Challenges with scale
and volume
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Each cryptocurrency has very different factors and utility
affecting its potential long-term value
Ethereum
➔ Largest base for token
offerings
➔ Used for ICO value
transfers
➔ Challenges with scale
and volume
➔ Large pool of
developers
EOS
➔ Emerging competitor
to Ethereum
➔ Fast and scalable
➔ Few token offerings
and DApps
➔ Uncertainty around
governance

13. 13
Token economies
There are some elements that can drive
token economy value
Usage and
adoption of
the token
Dividends
and
Buy-back
schemes
Size and
scalability of
the token
Execution of
the business
plan
Liquidity of
the token

14. Many ICOs have done well since launch
14Source: https://www.icostats.com/roi-since-ico

15. Performance of 20 Latest ICOs - avg. 110%
15Source: https://www.icostats.com/roi-since-ico

16. 16
Due Diligence on Token Offerings
Review the team and check backgrounds against Linkedin
Read the whitepaper and token usage in detail
Research some competitors - both startups and established
Examine escrow and lockups
Set some criteria for building your portfolio - industries, size of offer etc

17. 17
Only some types of ventures are suited to ICOs
Blockchain
protocol
Fintech Transactional Contracts
Global Mass Market Disruptive
Typically they are suited to ventures that meet these criteria:

18. Stage of investment for tokens
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Earlier in an ICO the greater the discounts or bonuses (but may have be
escrowed)
Suggest invest early if you have a long-term view of the venture
Invest later, with no discount escrow if you want to see if the value spikes after
listing (risky and not based on fundamentals of the business)
To invest early you would have to be active and examine ventures at a very
early stage when they appear less polished and less prepared

19. Token Economy Design
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➔ Token offering values, number of tokens and funds required
➔ Use of the tokens and their functionality
➔ The majority of tokens are ERC20 tokens
➔ Token economies can be single tier or multi-tier
➔ Determine whether a token is pure utility (e.g. buying a service) or have
functions like a security (e.g. dividends)
➔ Transfers and transactions within the eco-system

20. 20
Invest in startups - via equity or tokens?
➔ Immediate liquidity and ability to exit the
venture
➔ Larger scale funding (ventures less likely
to run out of cash)
➔ Bigger, platform based ventures
➔ True passive position - don’t need to
spend time with minutes and reports
➔ Limited access to board decisions
➔ Transparency can vary greatly
➔ Just as risky as privately funded
ventures
Tokens
➔ Greater negotiating power for the
investor
➔ Extract better terms via a shareholder
agreement
➔ Greater visibility of financials and
decision making
➔ No liquidity for 3-7 years
➔ Highly restrictive on founders
➔ Sub-scale funding
➔ Just as risky as token economies
➔ Hard to get access to deals
Traditional Equity

21. 21
STOs vs Utility tokens
STOs or Security Token Offerings are becoming more popular
but they may have a very different profile to utility tokens
Utility Tokens Security or Asset Backed Tokens
● Broader audience
● Possibly more liquid
● Faster to market (lower compliance
globally)
● No specific returns to investors
● Lower launch costs (less compliance)
● Fewer investors, more held ‘privately’
● Possibly less liquid
● Slower to launch and high compliance
costs
● May provide returns to investors
(depends on performance)
● Unknown whether a better proposition at
this stage

22. Value and Capital management for ICOs
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Delivering value for the token economy requires an ongoing
effort to create liquidity for the tokens and also to manage the
capital proceeds received
Liquidate a
portion of crypto
into other crypto
or Fiat as it is
raised
Pay suppliers in
ETH or other
crypto where
possible
Execute the
business plan
and articulate
this to the
market
Get listed on
exchanges (this
can take time)

23. Research validates exchange listing is a key
indicator of project value
"... 83% of the 694 ICOs that don't report capital and don't list on an
exchange are inactive after 120 days. For the 420 ICOs that raise
some capital but don't list, this figure falls to 52%, and for the 440
ICOs that list on an exchange, only 16% are inactive in the fifth
month."
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3Source: Boston College team – Hugo Benedetti and Leonard Kostovetsky

24. 24
Exchanges and Market Making
Token liquidity needs to be actively generated through:
➔ Listing on exchanges,
➔ Activities that promote token holder buying and selling.
Listing on various
exchanges
Ongoing business
announcements and
progress
Liquidity programs
and market makers
Market making can be done
through buy and sell programs
to help liquidity for smaller
token transactions
Ongoing comms and
announcements is a must to
help maintain support and user
activity for the token market

25. 25
OTC - Over the Counter Liquidation of Crypto
➔ Funds raised by most ICOs are in ETH (a little in BTC)
➔ Refers to liquidation (exchange) of ETH into Fiat
➔ Usually conducted by a licenced 3rd party
➔ Fees are approx 1%-3% depending on the size of the transactions
➔ ICOs should consider exchange a portion
(e.g. 20%-50% of received ETH into Fiat to fund operations)
➔ Funds are transferred to a bank account

26. Thank you for attending!
Genson Glier, Token Markets & Distribution
genson@blocktoken.ai
Ivan Mantelli, ICO & Token Advisory
ivan@blocktoken.ai
BlockToken
https://blocktoken.ai
Telegram: @BlockTokenAI
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