Macro Review of Cryptoassets Landscape - July 2018 by David Gogel

Macro Review of Cryptoassets July 2018 - David Gogel
Macro Review of Cryptoassets:
Market Landscape & the Future of Financing
Digital Asset Innovation
June 30, 2018
By David Gogel
Medium Twitter LinkedIn

Disclaimer
● This document is intended for informational purposes only. The views expressed
in this document are not, and should not be construed as, investment advice or
recommendations. Readers of this document should do their own due diligence,
taking into account their specific financial circumstances, investment objectives
and risk tolerance (which are not considered in this document) before investing.
This document is not an offer, nor the solicitation of an offer, to buy or sell any of
the assets mentioned herein.
● Content is based on 2+ years of research and intended to provide a MACRO view
of the industry, which moves at lightning speed; do your own research as some
data may be incomplete or stale. Crypto is experimental, volatile and
speculative. Do not invest anything you are not willing to lose. Past performance
is not indicative of future movements.
● Thank you to the open-source community for all the information. All information
is available online, you just need to know where to search. Where possible, I
have attributed intellectual ownership.
● Thank you to my brother and intellectual partner Michael Gogel for inspiring me
to explore the crypto vortex and help democratize access to knowledge.
2

• FinTech/Crypto entrepreneur/investor
• MBA/BS/BA from Wharton/University of Pennsylvania
• Former Co-President of Wharton FinTech
• Former Corporate Development at LinkedIn
• Former VP at Singapore FinTech Consortium
• Former Corporate Development at AIG
About Me
Hi, I’m David.
I recently graduated from the full-time Wharton MBA program and spent the last 6
weeks documenting many of my learnings from my 2+ year journey down the digital
asset => crypto => blockchain vortex. I spend a lot of time thinking about the way
the crypto industry works, what the future holds, and where we will end up in the
next 10 years, because the technology fascinates me. I am a HODLer (i.e., "Hold On
For Dear Life", long-term focused investor).
I first got into crypto in early 2016 after meeting the co-founder of BitMEX in Hong
Kong and experiencing firsthand the challenges with international payments. After a
short stint at an insurtech incubator in Singapore, I pursued my MBA with the goal
of starting a fintech company. I became Co-President of Wharton FinTech, recorded
several podcasts with startup founders & industry thought leaders, organized crypto
events with partners, participated in the initial planning for the Penn Blockchain
Club, and helped build out the fintech ecosystem on campus. I spent my last few
months of school working on various projects including doing due diligence on ICOs,
developing a quant trading algorithm with a classmate, and exploring the launch of
a tokenized crypto VC/hedge fund. I am currently participating in ConsenSys
Academy’s Summer Developer Program and working towards my next play in the
crypto economy.
As background, I am French / American, born and raised in France, graduated from
the Huntsman Program in International Studies & Business at the University of
Pennsylvania (Wharton / Penn) undergrad in 2012 with a major in Finance and a
minor in Chinese. I worked for 4 years in corporate development @AIG in New York,
Tokyo, and Hong Kong before pursuing my MBA back @Wharton in 2016, where I
focused on entrepreneurship. I spent last summer working in corporate
development @LinkedIn in San Francisco and the fall studying @Wharton's SF
campus where I immersed myself in Silicon Valley and the crypto community.
Thank you for reading! Please reach out!
Overview Landscape
Tech Overview /
Why Now
Process Flow SWOT Risk Analysis
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Sources of Capital Investing Risks
Historical VC
Investment
Investment By Stage
Successful
Companies
M&A / Exits Predictions
Selected Investment
Opportunities
3
Medium Twitter LinkedIn

1) Overview
2) Landscape
3) Summary of Tech / Why now
4) Process Flow
5) SWOT
6) Risk Analysis
7) Cryptoassets Market Trends
8) ICO Trends
9) Investment Thesis: Security Tokens
10)Investment Thesis: Custodian Solutions
11)Investment Thesis: Stablecoins
12)Investment Thesis: Crypto Collectibles
13)Sources of Capital
14)Investing Risks
15)Historical VC Investment
16)Investment By Stage in the Space
17)Successful Companies
18)M&A / Exits
19)Predictions
20)Selected Investment Opportunities
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
4

• The crypto market has been dominated by early-adopters and retail investors speculating on future value; in
2017, the industry hit an inflection point: the price run-up expanded interest to the mainstream
• Larger, more regulated, trusted participants are promoting the maturation of the space seeking institutional
capital which has stayed on the sidelines due to lack of secured infrastructure, tools for risk management, as
well as uncertainty around regulation
• While private and consortia blockchains trials spread across industries globally, major successes have yet to
emerge beyond supply chain, cross-border transfers, and trading
~10 years of
innovation & growth
with some challenges
but still early days of
major tech wave
• Cryptonetworks are Internet-based decentralized networks that provide various digital services; they are
powered by a blockchain, an incorruptible digital ledger of economic transactions that can be programmed
to record not just financial transactions but everything of value
• Open cryptonetworks are open-source protocols, software, and communities; growth is driven by large
network effects as Cryptoassets are distributed to participants who are incentivized to promote the network
and build more applications on top of underlying systems, resulting in cryptoasset value appreciation
• Sector is moving from investment to utility phase: best teams deliver on roadmaps where people can use
decentralized tech; new ecosystems are emerging addressing scalability, interoperability, & security issues
Executive Summary (1/2)
Retail investor
dominance;
Institutions slower to
adopt but increasing
interest
Cryptonetworks are
ecosystems
incentivized by
Cryptoassets
Regulatory
uncertainty with
guidance emerging
while self-regulation
is needed
• The Cryptoasset revolution is global but degree of regulation varies significantly (US seeing moderate levels)
• Cryptoassets share properties with currencies, commodities, & securities, making uniform legal classification
challenging: community consensus has emerged along various dimensions (e.g., utility vs. security token)
• Regulators are increasingly scrutinizing the industry - many market actors are working with regulators to
educate them on the tech but more is needed
• While any technology can be used for nefarious purposes, regulators are looking to encourage innovation
and progress but manage for unintended consequences
• Bitcoin was launched in 2009 as a trustless P2P electronic cash system; the crypto market has since
experienced significant growth in size and scope with the rise of ~1600 Cryptoassets (altcoins) in circulation
• Cryptoassets market cap increased 32x in 2017 reaching a record high of $829B in Jan ‘18 before falling by
70% through April; market has experienced a whirlwind of volatility, consolidating at a range of $200-$500B
• Cryptoassets incentivize cryptonetworks which create new business models, enable new applications,
disintermediate current service providers, lower the cost of existing products & services
• Blockchain tech is still in its early days and existing solutions face multiple challenges to mass adoption
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
5

● New financing model: Initial Coin Offerings (ICOs) are displacing public markets and private investments
for fundraising for early-stage companies, the lines between equity financing and ICOs are blurring;
anticipating a world of dApps, investors are supporting infrastructure-building projects
● Fundraising is evolving: companies that might have held public token sales are moving to private rounds
● ICO hubs: While USA, Switzerland, and Singapore have become the main ICO hubs, the UK and Hong
Kong are gaining ground in 2018
● Increasing VC activity: VCs are adapting their business models to increase exposure to the asset class via
equity securities, SAFT agreements, and token investments
● Security Tokens / Platforms: programmable digital securitization of ownership in real-world assets,
subject to securities regulations, will disrupt Wall Street; the landscape is still nascent and will evolve
as regulatory guidance emerges
● Custodian Solutions: banks like JPMorgan, Citigroup, & BNY Mellon act as qualified custodians for
billions of dollars worth of securities; the current state of crypto self-custody remains challenging
● Stablecoins: stablecoins attempt to address the problem of price stability and high volatility, a major
barrier of entry for adoption; the race is on for the best business model
● Crypto Collectibles: the early success of CryptoKitties displayed the potential for users to interact with
scarce digital assets in new and unique ways
Executive Summary (2/2)
Cryptoassets
Market Trends
● The strong are getting stronger: early winners are turning into investors & acquirers
● The race for institutional capital: new products are focused on attracting institutional capital, expanding
adoption beyond retail investors
● Ecosystem development: smart contract platforms are investing to attract applications developers and
building out their ecosystem
● Enterprise blockchain continues to grow: established tech & financial services companies are making
bets on disruptive tech trends
● Increasing regulatory scrutiny & clarity: regulatory guidance is emerging while self-regulation is needed
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
ICO Trends
Investment
Thesis
6

Nearly 10 years after the launch of Bitcoin, the cryptoasset
market has experienced significant growth in size & scope
Aggregate cryptoasset market capitalization & volume (Bitcoin + Altcoins)
US$B
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: www.coinmarketcap.com, https://coin.dance/stats, data as of June 30, 2018
Cryptoassets market cap reached a record high of $829B in Jan 2018 before falling by 70% to $250B in April;
market has experienced a whirlwind of volatility, consolidating at a range of $200-$500B
7
-70%
Crash2017 Gain:
+3,200%
2H 2017 market gains driven by the rise of altcoins, with ~1600 crypto-assets now in circulation
Bitcoin + Altcoins cryptocurrency market capitalization
US$B
Market Cap = $255B
24H Vol = $13.6B
Bitcoin Market Cap = $109B
24H Vol = $4.3B
Altcoins Market Cap = $146B
24H Vol = $9.3B

The rapid growth of the value of a Bitcoin has created
enormous wealth for early adopters
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: https://coin.dance/stats, data as of June 30, 2018
8
6/30/2018
1 BTC = $6,367 per USD

Market
Cap
Rank January 1, 2014 January 1, 2015 January 1, 2016 January 1, 2017 January 1, 2018 June 30, 2018
1
$9B $4B $7B $16B $230B $106B
2
$595M $758M $203M $698M $89B $44B
3
$214M $123M $153M $237M $73B $18B
4
$109M $96M $71M $213M $43B $12B
5
$97M $41M $20M $188M $19B $7B
6
$52M $24M $15M $123M $13B $5B
7
$39M $20M $10M $78M $9B $4B
8
$27M $18M $9M $45M $6B $3B
9
$25M $18M $8M $41M $5B $3B
10
$8M $13M $7M $39M $5B $3B
top 10 $10 billion $5 billion $7 billion $17 billion $492 billion $205 billion
Bitcoin has remained the most valued cryptoasset,
while top 10 have varied over time
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Protoshares PTS
$0-$99 million
$100-$499
million
$500-$999 million $1-$9.9 billion $10-$99 billion >$100 billion
Legend
Source: coinmarketcap.com, data as of June 28, 2018
9

$326 $136 $130 $49 $30 $20 $18 $16 $15 $15
10
1H 2018 correction: down from all-time high but the
market has experienced booms and busts before
Source: CryptoCompare, Macrobond, Bloomberg, Morgan Stanley Research
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Bitcoin
Bear Market
is
Nothing New
Tracking Peaks &
Troughs from
Nasdaq in 2000
30/6/2018 Price
% Decline from
All Time High
Top 10
Cryptoassets price
declined 70%
from All Time High
in 1H 2018
All Time High
Market Cap US$B

Potential Adoption
Low # of users
11
Why Bitcoin? Programmable Money
Source: chart modified from medium https://medium.com/@pierre_rochard/bitcoin-investment-theses-part-1-e97670b5389b
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Summary
Bitcoin is a blockchain-based peer-to-peer electronic
cash system allowing online payments to be sent directly
from one party to another without going through a
centralized financial institution. It was invented by
anonymous individual(s) Satoshi Nakamoto and released
as open-source software in 2009.
Key Advantages
• 25+ million wallet users
• First mover, market leader, pioneered new asset
class
• Decentralized, trustless, censorship-resistant, secure
• Scarce: finite-supply of 21M bitcoin
• Operational on global scale with active dev teams
• Traded on regulated futures markets (CBOE/CME)
• Regulated as a commodity by CFTC
Key Disadvantages
• Resource intensive resulting in high fees
• Limited scalability
• Limited interoperability
• Limited programmability
• Divided community = slow network upgrade process
• Increased competition from alternative stores of
value and / or mediums of exchange
• High volatility
Full money substitute =
Store of Value +
Medium of Exchange +
Unit of account
Collateral asset
Digital gold standard
“Store of Value”
International remittances
Machine-to-machine / IOT
Retail
payments
Micro
payments
Tax evasion
Institutional
settlement
FOMO buyers
Money
laundering
Ponzi scheme
High value payments
Speculative trading
Macro hedge
Uncorrelated returns
International
timelocking
Destroyed Coins
Holders of last resort
Potential Use Cases - Investment Theses Matrix
Seizure resistance
Long
Holding
Period
Short
Holding
Period
Potential Adoption
High # of users

Bitcoin’s dominance has declined at the expense of altcoins
which now account for ~57% of total market cap
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: www.coinmarketcap.com, coin.dance, data as of June 30, 2018
12
50%
Market cap breakdown by top Cryptoassets
2017 was an inflection point for altcoins
Other Alts
60%
80%
40%
20%
0%
100%
Jan’14 Jan’15 Jan’16 Jan’17 Jan’18
Other Alts
Market cap breakdown as of 6/30/2018
$255 Billion

Summary
Ethereum is an open-source blockchain-based distributed
computing platform and operating system allowing users to
create a range of applications and smart contracts. Ether is a
cryptocurrency used as payment for any transactions occurring
on the Ethereum network. It was invented by Vitalik Buterin in
2013 and went live in 2015.
Key Advantages
• 35+ million unique wallets
• Second mover building off limitations of Bitcoin
• Offers a Turing-complete programming environment which
can execute smart contracts
• Vitalik / ConsenSys guiding active development community
• Leading platform for enterprise adoption and dApps
• Unlikely to be regulated as a security (SEC)
Key Disadvantages
• Limited scalability
• Limited interoperability
• Increased competition from other smart contract platforms
• ICO funding overhang
13
Why Ethereum? Distributed Computing
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: https://media.consensys.net/get-to-know-the-47-projects-that-make-up-the-consensys-mesh-478b7d3028c1
50+ projects in the ConsenSys mesh show scope of
active development activity

14
Among 1600 Cryptoassets,
3 MegaCryptoassets have reached a market cap >$50B,
12 DecaCryptoassets have reached a market cap >$10B
Source: coinmarketcap.com, data as of June 30, 2018, analysis excludes Bitcoin Cash.
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Days since trading launch before market cap reached
CryptoAsset
Market Cap
(USD B)
Launch >$1 billion >$5 billion >$10 billion >$50 billion
$131.3 Jan 3, 2009 1576 1777 1788 3157
$6.9 Apr 28, 2013 221 1679 1689 -
$26.6 Aug 04, 2013 1338 1373 1381 1607
$2.5 Feb 14, 2014 1195 1385 1424 -
$2.6 May 21, 2014 1189 1304 - -
$5.5 Aug 05, 2014 1211 1243 1247 -
$2.3 Apr 01, 2015 769 983 1008 -
$60.5 August 7 2015 219 630 652 858
$3.5 Sep 09, 2016 335 480 493 -
$4.7 Jun 13, 2017 0 174 176 -
$13.1 Jul 01, 2017 148 171 298 -
$3.9 Sep 13, 2017 92 112 114 -
$5.5 Oct 01, 2017 58 76 77 -
Max $131.3 Oct 01, 2017 1576 1777 1788 3157
Average 21 Feb 24, 2015 642 876 862 1874
Median 5 Apr 01, 2015 335 983 830 1607
Min $2.3 Jan 03, 2009 0 76 77 858
Later projects
reached
$1+ billion
valuations
faster

15
Cryptoassets share properties with currencies, commodities, &
securities, making uniform legal classification challenging:
community consensus is emerging along various dimensions
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: http://www.untitled-inc.com/wp-content/uploads/2018/01/TCF-Types-Table-only.png

Average daily BTC/USD change (30 day trailing average)
16
Cryptocurrencies are a new asset class; while volatile, these
assets have low correlation with the rest of the market
365-Day Volatility [%/yr], as of June 7, 2018
Billions USD
Cryptocurrency market volatility 3x higher than traditional financial markets
Cryptoassets have low correlation with traditional financial market (<.2)
365-Day Correlation Matrix, as of June 7, 2018
Pearson correlation coefficient
Source: https://www.sifrdata.com/, www.bitcoinity.org, Morgan Stanley Research
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Bitcoin volatility creates both opportunities and challenges
Bitcoin has low correlation with S&P 500
Trailing 30 day Correlation

Cryptoassets are mostly traded against Asian fiat currencies
but are increasingly traded via other cryptocurrencies
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: Bloomberg 17
CNY
USD
KRW
CNY
JPY
USD
USD
KRW
CNY

Blockchain technology is a distributed ledger that enables a
shift from centralized databases to more decentralized,
robust, fault-tolerant networks
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: Blockgeeks
● Information is controlled by
centralized entity
● High data integrity
● Regulated access
● High speed / accessibility
● No central authority to maintain data
● Data integrity verified through public and private key cryptography
● Data eventually accessible to all participants in the network
● Features of distributed ledgers: consensus formation, peer-to-peer protocols,
cryptographic infrastructure, censorship-resistance
Status Quo:
Centralized Ledgers
Shift powered by Blockchain Technology: Decentralized / Distributed Ledgers
Permissionless Blockchain = Internet Permissioned Blockchain = Intranet
18

The key innovation to cryptonetworks is their ability to come
to a consensus on the state of data via economic incentives
not through a centralized authority
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Proof-of Work
(PoW)
Overview Key Features
• Miners work to solve a puzzle consisting of a
mathematical function called a hash
• Participants only accept valid blocks when the block
hash is less than a target number (difficulty)
• Miners repeatedly guess & check hashes and check
against difficulty
• Winners broadcast solution to the network
• Solution includes reward for the miner
• Computationally expensive
• High energy use
• Low transaction volume due to
unknown participants
Blockchains
Proof-of-Stake
(PoS)
• Holders stake currency for chance to determine block
• Block validator randomly selected
• Process favors larger stake holders
• Leased PoS: Token holders lease balances to others,
rewards split among leasers
• Delegated PoS: Balance holders elect block
validators, no sharing of block rewards
• No mining required
• Less computationally expensive
• High energy efficiency
• High transaction volume
Practical Byzantine
Fault Tolerance
(PBFT)
• Guarantees consensus
• Solves PoS vulnerability (nothing at stake attack)
• Tolerates up to 1/3 of nodes failing arbitrarily
Consensus Types
Proof of
Importance
(PoI)
• Variant of PoS where productive network activity,
not just the amount of coins, is rewarded
• Rewards productive actions
19

The fast growth of cryptonetworks is powered by several network
effects wherein an increased number of participants or usage
improves the value of the network for other users
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Overview Challenges
Protocol
Network
Effects
Token
Network
Effects
Monetary
Network
Effects
Security
Network
Effects
• Once a communications or
computational standard is declared
and all nodes can plug into the
network using that protocol
• Building a robust protocol and
developer community who adopts
standards
• Open-source software results in forks
• Aligning incentives to accelerate
both growth of the network and
token appreciation
• Positive feedback loops between
liquidity and value
• Highest hash rate equals the highest
security
• Centralization of miners and hashrate
Source: http://research.turing.capital/blockchain-moats/
• Transparent incentives and governance
structures
• Artificial liquidity
• Low velocity
20

Smart contracts digitally facilitate, verify, or enforce the
negotiation or performance of a contract
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
● Enforcing contracts automatically, trustlessly and impartially, using computer code
● Taking out the middle men in contract construction, execution & enforcement
Smart
Contract
Overview
Source: CB Insights 21

Why now: centralized networks are facing a public trust
backlash around how user data is managed while users want
more control over their digital lives
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
2008 financial crisis caused a loss of trust in financial
institutions as trusted third parties
Need for trust allowed Tech Titans to turn economies
of scale and network effects into de facto monopolies
Regulators want users to have more control over
their digital identities & data
Cyber hacks show the impact
of single points of failure
22

The ecosystem is still early and while the hype is high, the
majority of consumers have yet to adopt the technology
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: Gartner Report
23

Blockchain technology enables the decentralized web 3.0 to
emerge, challenging incumbent web 2.0 businesses
Source: https://medium.com/@matteozago/why-the-net-giants-are-worried-about-the-web-3-0-44b2d3620da5
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
24

But unlike prior version of the web, outsized value may
remain in the protocol layer (Fat Protocol Thesis)
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
25

Cryptonetworks are decentralized networks powered by
blockchains that are built on top of the internet and provide
digital services
Source: Blockgeeks
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
26

Tokens are the internal currency of cryptonetworks and the
incentive mechanism for the networks to properly function
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: https://avc.com/2018/03/slideshow-of-the-week-why-tokens-are-fundamental/
27

Network governance drives success; blockchain protocols
act as monetary policy and mitigate risks that could
fragment the original network value
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
28
Source: https://avc.com/2018/03/slideshow-of-the-week-why-tokens-are-fundamental/

A blockchain is a chain of blocks: on occasion, the chain can
split into two with or without consensus. This is a fork.
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Forks
Overview
● Hardforks: New rule added to the system which isn’t compatible with the existing software
making previously invalid blocks/transactions valid (or vice-versa); two blockchains created
● Softforks: New rules that are backwards compatible, like a software upgrade; only one
blockchain will remain valid as users adopt the update
Bitcoin has experienced many forks...
...resulting in arbitrage opportunities due to
market pricing inefficiencies
Market Cap, US$ B
29
Fork arbitrage

Blockchain technology can provide many advantages over
existing solutions but faces a different set of tradeoffs
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Strengths Weakness
Opportunities Threats
● Efficiency: facilitates digital transfer of value
● Trustless / disintermediation: distributed control eliminates
need for trust in a central authority
● Transparency: all transactions are visible to anyone with access
to the system
● Immutability & security: secure encryption and tamper-proof
data storage; no central point of failure
● Privacy: user data remains pseudonymous
● Market access: real-time global access to shared data
● Computational logic: users can set up rules that automatically
trigger transactions between nodes
● Immature scalability: low transaction throughput (vs. traditional
networks e.g. Visa / Paypal), though solutions are emerging
● Speed: transactions take time for miners to validate transactions
● Interoperability: lack of ledger interoperability
● Technology maturity: Lack of standards, difficulty in wallet / key
management, limitations of smart contract code
● Complex/UX/URI: Hard to understand for newcomers - need good
education to made mass adoption possible, skills scarcity / cost,
poor user/developer experience & tooling
● Stalled adoption: enterprise / government willingness to adopt is
low as integration with legacy systems remains challenging
● Regulatory: Potentially in conflict with existing approaches to
regulatory compliance
● New wave of innovation: cryptonetworks create new
businesses models, enabling new applications, creating new
jobs, facilitating business process acceleration & optimization
across industries
● Inclusion of unbanked population: democratization of
financial services
● Risk reduction: decreases fraud and systemic risks
● Cost savings: opportunity to reduce transaction costs, IT,
processing costs
● Regulatory & Compliance: Increased regulatory scrutiny of ICOs and
crypto price manipulation
● Unwanted centralization: mining pools and large mining farms
● Future tech: quantum computers may decrypt data
● Hype: fast changing environment, overvaluations, inefficient price
discovery
● Exploitation by criminals: cyber hacks, scams
● Poor governance: lack of basic investor protections, misaligned
company incentives
30

Features Network with Differentiated
Feature
Bock time High variation, average 10 mins High variation, average 15 sec.
Consensus PoW, energy waste for security PoW for distribution, shift to PoS
Governance slow decisions, conservative actively developed, leadership
Privacy pseudonymous pseudonymous
Extensibility hard, simple scripting language medium, smart contract + EVM
Fees Varies based on load Varies based on load
Current
Scalability
Planned
3 transactions / sec
Payment channels
Sidechains
15 transactions / sec
Payment channels
Sharding / Plasma / Raiden
Interoperability TBC Polkadot
Cosmos
Interledger
Bitcoin & Ethereum laid down infrastructure and will evolve to
become more scalable, less resource intensive, and more
interoperable, or will be replaced by new tech with these features
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
31

User experience remains challenging beyond buying and
selling a few tokens - focus on design and usability are key
to mass adoption
Users
Developers
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
32

Thefts from centralized exchanges highlight counterparty
risks - controlling someone's key to access a digital asset is
different from keeping books and records of stock ownership
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: https://www.valuewalk.com/2018/05/btc-biggest-hacks-coincheck/ 33

No KYC / AML, Fraud, ICO Scams, money laundering, drug
trafficking, unregistered security offerings, lack of investor
protections = increasing regulatory scrutiny
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Unregistered Securities Offerings
Fraud / ICO Scams
Fake Ads / Undisclosed Kickbacks
No KYC or AML / Money
Laundering / Drug Trafficking
Pump & Dump /
Pricing Manipulation
34

High hype and divide between the promise of the
technology and the use cases currently supported show a
public misunderstanding of the technology
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
35

There are 6 distinct categories of blockchain use cases
addressing 2 majors needs: record keeping $& transactions
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/blockchain-beyond-the-hype-what-is-the-strategic-business-value 36

Many famous technologists & world leaders are bullish on the
tech, yet there is no dearth of intelligent people claiming that
cryptoassets are overvalued or scams
"I'm just approaching with the principle that the Internet deserves a
native currency. It will have a native currency. I don't know if it will be
bitcoin. I hope it will be bitcoin. I'm a huge fan.“
-Jack Dorsey, Co-Founder & CEO of Twitter, Square
"There are several factors at play in this boom of computing… the second
factor is greater demand, stemming from advanced graphics in gaming
and, surprisingly, from the GPU-friendly proof-of-work algorithms found
in some of today’s leading cryptocurrencies, such as Ethereum.“
-Sergey Brin, Co-Founder & President of Alphabet
“If the second half of 2016 and all of 2017 was about raising capital to
fund development efforts (and speculating on all of that), then it sure
feels like 2018 is the year we get decentralized applications we can use.”
-Fred Wilson, Co-Founder & Investor at Union Square Ventures
Bitcoin & Blockchain will be bigger than the Iron Age, the Renaissance,
the Industrial Age, and the Internet Age combined. It will change
everything from how we deal with each other (Commerce, Banking) to
how we take care of ourselves (HealthCare) to how we govern ourselves
(Virtual Competitive Governance).
-Tim Draper, Founding Partner of Draper Associates & DFJ
10% of global gross domestic product (GDP) will be stored on blockchain
technology by 2027
-Global Agenda Council on the Future of Software & Society
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
“When you’re buying non-productive assets, all you’re counting on
is the next person is going to pay you more because they’re even
more excited about another next person coming along. Bitcoin is
probably rat poison squared.”
– Warren E. Buffett, Chairman & CEO of Berkshire Hathaway
“I would short Bitcoin if I could.”
– Bill Gates, Co-Founder of Microsoft
"The blockchain is real. You can have cryptodollars in yen and stuff
like that. ICOs ... you got to look at every one individually. The
bitcoin was always to me what the governments are going to feel
about bitcoin when it gets really big. And I just have a different
opinion than other people… If you're stupid enough to buy it, you'll
pay the price for it one day."
-Jamie Dimon, Chairman & CEO of JP Morgan
“Bitcoin is a scam. In my opinion, it’s a colossal pump-and-dump
scheme, the likes of which the world has never seen ...
Cryptocurrency is best-suited for one use: Criminal activity. Because
transactions can be anonymous — law enforcement cannot easily
trace who buys and sells — its use is dominated by illegal
endeavors.”
-Bill Harris, Founding PayPal CEO, former Intuit CEO
37

The market is not priced efficiently - while activity to date
has been mostly speculative, multiple valuation approaches
have emerged to value the new asset class
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
● General hype
● Exchange listings & partnerships
● Whales
● Sentiment analysis
● Regulatory updates
● Code base updates
● Business adoption
● Broader access for retail and
institutional investors
Short-term Price Drivers Long Term Value Drivers
Source: https://blockchainatberkeley.blog/todays-cryptoasset-valuation-frameworks-573a38eda27e 38

39

1. The strong are getting stronger: early winners are turning into investors
& acquirers
2. The race for institutional capital: new products are focused on attracting
institutional capital, expanding adoption beyond retail investors
3. Ecosystem development: smart contract platforms are investing to
attract applications developers and building out their ecosystem
4. Enterprise blockchain continues to grow: established tech & financial
services companies are making bets on disruptive trends
5. Increasing regulatory scrutiny & clarity: regulatory guidance is emerging
while self-regulation is needed
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Cryptoassets Market Trends Overview
40

1. The strong are getting stronger: digital assets exchanges
play a major role in the ecosystem, processing billions in
trading volume; the market is currently fragmented
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: https://howmuch.net/articles/crypto-exchanges-revenue
41

1. The strong are getting stronger: amidst a correction in
2018, early winners are making strategic investments to
enhance product offerings and acquire talent
DateAmount $M Strategic RationaleTarget
• Airdrops tying "free" tokens to bounty tasks, EARN
CEO Balaji Srinivasan joins Coinbase as CTO
• Relay platform enabling users to trade tokens
directly from their wallets
• Acquire license to become a fully SEC-regulated
broker dealer - operate as a RIA and offer ATS
• spot and derivative crypto trading (cash and
physical settlement) targeting institutional investors
• Ethereum wallet / browser, Pete Kim becomes head
of engineering of Toshi
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Investor
• Online platform for alternative investing letting issuers
market private securities to institutional investors
• Fee-only financial planning and investing
management firm
• Open global token marketplace allowing for crypto-
to-crypto exchange
2/18
12/17NA
$400
6/18NA
• Advance Circle’s product roadmap including the
launch of a stablecoin
2/18$110
Stake %
6/18NA
6/18NA 100%
100%
100%
100%
100%
100%
Source: www.crunchbase.com
100%
$120 4/18
4/18
5/18NA
NA
controlling
stake
Lead strategic
investment
• 170M+ user base, P2P architecture6/18$140 100%
• Ledger-as-a-service to securely track & transfer
balances in a token format / further payments network
rumored~$400 100%
42

1. The strong are getting stronger: companies use their
wealth to grow their ecosystems through seed
investments, grants, direct funds, and fund of funds
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Fund Size Overview
• Token/wallet designed to integrate with mobile
messaging apps (e.g., WhatsApp, Facebook, Signal)
Investor
$1B
NA
$25M
Portfolio
• Platform based on 0x protocol allowing users to
borrow and lend cryptocurrency
• Platform for users to research & validate online claims
• P2P marketplace for crypto collectibles
• Crypto / blockchain VC, established in 2013
• Storage & rental startup, with rumored plans to
use XRP within its service
Denominated in
Binance’s BNB coin
• Blockchain-based ride-hailing service in ChinaDache Chain
We’ll be providing financing to promising early
stage companies that have the teams and
ideas that can move the space forward in a
positive, meaningful way.
Denominated in XRP
$25M
From Ripple exec. team
$50M
• Research grants to 17 universities across the
globe focused on crypto / blockchain
• Next-generation blockchain platform for scalable,
privacy preserving smart contracts
• Verification platform for smart contracts & blockchains
Ripple announced a new initiative called
Xpring which is aimed at bringing
entrepreneurs and their businesses over to
XRP, both the cryptocurrency and the smart
ledger, to build an ecosystem
• Crowdfunding platform
Binance Labs will focus on startups working
with public blockchains, decentralized
exchanges, custody/payments/wallet, stable
digital currency, and compliant alternative
trading systems or security token platforms.
• Reserved-back stablecoin
43

2. The rise of institutional capital: trading is dominated by retail;
new tools offered to attract $10+B in institutional capital
Derivatives
Institutional investors are in the early adoption phase of investing in the asset class and require more sophisticated tools
Need
Hedge risk or add
leverage
Startups
Leverage position
either long or
short
Dark pools allow
traders to put in trades
without signalling to
the market
Required for short
selling, margin
trading, derivatives,
risk management
● Uncertainty about regulations
● Lack of risk management infrastructure
● Lack of institutional-grade sources of market information
● Security – funds lost or stolen have little or no possibility of recovery
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Margin Trading &
Short selling
Lending OTC Markets
Custodian
Solutions
Barriers to
Entry
Incumbents
Hold digital assets in a
secure and legally-
compliant way
44

2. The rise of institutional capital: the launch of Bitcoin futures
was a watershed event, indicating institutional demand for
exposure to the asset class on regulated exchanges
Factor CBOE’s XBT CME’s BTC
Calculation Gemini 4 bitcoin exchanges
Size 1 BTC ($1 per contract) 5 BTC ($5 per contract)
Limitations Investors may not own or control more than a net 5,000
contracts, long or short combined
Limit the amount of contracts investors can hold to 1,000 (equivalent
to CBOE because 1 contract = 5 bitcoins).
Margin
Reqs
Initial: 66%
Maintenance: 60%
Initial: 60%
Maintenance: 64%
Final
Settlement
Procedure
Cash settlement on business day immediately following final
settlement date. The cash settlement amount on the final
settlement date shall be the final mark to market amount
against the final settlement value of the XBT futures contract.
Delivery is by cash settlement by reference to the Final Settlement
Price, equal to the CME CF Bitcoin Reference Rate (BRR) on the Last
Day of Trading.
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Daily CME Exchange Futures Volume
45

2. The rise of institutional capital: the migration to futures
exchange trading could help drive institutional adoption
and ETF fund approval but development is still early
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
● SPDR Gold Shares ETF provided investors with easy access to spot gold in equity form at low costs
● Enhanced access to the physical market coincided with a meaningful increase in the price of Gold
● SPDR Gold Shares ETF Is now one of the biggest funds in the market with >$30B AUM
GOLD ETF helped gradually
transform the gold market
● CBOE & CME received CFTC approval, began listing and trading Bitcoin Futures on Dec. 10th and 18th
● Contracts are cleared through commission-regulated clearing houses and trading activities are closely
monitored by CFTC
Futures exchanges launch
bitcoin futures trading –
adding security &
legitimacy
● Bitcoin Futures volumes are low but increasing
● Higher volume for new contracts that started trading in December, but does not compare with
activity on more established venues
Bitcoin futures beginning
to get traction, though
activity levels still early
● Many funds have based investments off of futures for decades, as derivatives readily track
underlying assets pretty well
● Futures exchanges are highly regulated, highly transparent, and are another source of liquidity
and access for mutual funds and ETFs
Bitcoin futures add more
credibility and legitimacy
for funds to build products
● SEC still sees questions in: 1) the legal questions raised by untested products traded on largely
unregulated markets 2) the security and surveillance of the spot market 3) whether frequently
traded ETFs can be accurately valued when cryptocurrencies are highly illiquid
Shifting to futures-based
trading Is still under
regulatory scrutiny
Source: JP Morgan Research 46

2. The rise of institutional capital: Crypto Trusts & Index funds
targeting accredited investors have emerged; regulated
investment vehicles for retail investors remain elusive
Source: company websites
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Fund Overview
Grayscale
Investment
Trusts
Offers single-asset
trusts (BTC / BCH / ETH
/ ETC / LTC / XRP /
Zcash) and diversified
index targeting
institutional investors
BTC trust has $1.4B in
AUM, 2% annual fees,
trades at ~>30%
premium against
underlying spot market
Fund Status
Winklevoss Bitcoin
Trust ETF
Denied but
Appealing
Bitcoin Investment
Trust ETF
Withdrawn
VanEck Bitcoin ETF Withdrawn in early
2018, resubmitted
proposalSolidX Bitcoin ETF
Existing products lack scale and
liquidity, charging high fees for
purchasing, storing, and
transferring crypto assets
Asset managers have sought to
launch Bitcoin ETFs, but have had
no success with SEC thus far;
recent proposals focus on
institutional investors only
Asset managers have recently
launched cryptocurrency index
funds but these are limited to
accredited investors only
Fund Limitation
Limited exposure to 4
assets on GDAX
weighted by market cap,
2% management fee,
$250k minimum
investment
Bitwise HOLD 10 Private
Index Fund holds top 10
cryptocurrencies
weighted by 5-year
diluted market cap and
rebalanced monthly,
2.5% management fee,
$25k minimum
47

Launch Date 2015 2017 NA 2018 Late 2018
dApp Listings 1639 29 598 150 NA
Key Features Searchable
directory tagged
by sector
Browser for the
Ethereum network
providing global
payments, secure
messaging, and an
app ecosystem
Searchable
directory tagged by
category, smart
contract balances,
DAUs, tx volumes
Aggregator of
usable dapps for
gaming, social
networking,
productivity, and
financial services
Provide new layer
of enterprise
driven services
between
blockchains and
user-facing
applications
Platform Web Mobile Web Web Web
Dapp Directories & Discovery Comparison
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
3. Ecosystem development: Ethereum dApp development is
exploding but user adoption has been limited; dGames
appear to be the gateway dApp
Source: https://www.stateofthedapps.com/, https://blog.e11.io/dgames-are-the-gateway-dapp-8a15c9de94f9 48

3. Ecosystem development: Ethereum is in the clear lead but
other smart contract platforms are competing to attract
decentralized applications (dApps) and developers
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: www.smithandcrown.com, Token Report
While the vast majority of ICOs have taken place on
the Ethereum network suggesting a winner-take-all
market, the race is not yet fully won
49

3. Ecosystem development: dApps are new types of
applications with unique properties built on top of smart
contract platforms
● Dependence on a decentralized network infrastructure (P2P network)
● Underlying decentralized protocol (technical or operational)
● Decentralized operations (for decision-making)
● Blockchain-based transactions (for immutability, self-ownership, P2P value transfers)
● Distributed content storage (including identity)
● End-user empowerment over content ownership
● Some level of decentralized autonomy that is free from central authority
● Equitable distribution of rewards/benefits/stakes to end-users
Source: modified from https://medium.com/@wmougayar/where-are-all-the-decentralized-applications-2d05d5dec0aa
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
50

4. Enterprise blockchain continues to grow: US Banks are making
strategic bets to build, buy, and partner
Equity
Investments
Consortia
Internal
Projects
Partnerships
Source: CB Insights
left R3
consortium
Setting up a
cryto trading
desk
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
51

Build Partner Buy / Invest
Patent application for use of blockchain in system
for creating & verifying timestamps
X X
Blockchain-as-a-Service offered via Google Cloud
(rumored)
X
Blockchain-as-a-Service on Azure
Coco Framework, Blockchain-based identities
Blockchain-as-a-Service on AWS
AWS Blockchain Templates
X
Launched new team dedicated to the blockchain
led by David Marcus (Coinbase Board Director)
X X
Blockchain-as-a-Service
Private + Public networks
X
Blockchain-as-a-Service X
Blockchain-as-a-Service, software (image rights
management system / gaming / finance)
Alibaba Software (asset/supply chain provenance/finance)
40+ patents via Ant Financial
X
Software (gaming / medical prescription tracking)
Patent filings
FBSC X
4. Enterprise blockchain continues to grow: Tech Giants are
forging ahead to build internal capabilities & form partnerships
to enhance cloud offerings
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
52

Members ● Large open-source alliance
connecting corporates with
blockchain SMEs
● 200+ members, but has seen
member attrition / churn
● Early setbacks but now has
200+ banks / DFIs
Use Cases ● Generic platforms allows
for cross-vertical
cooperation
● Hybrid blockchains (public-
private)
● Supply chain / logistics
● Supply chain (Walmart, Kroger,
Nestle)
● Ethereum smart contracts (via
Monax integration with
Sawtooth, and Burrow)
● Potential for tokens/ ICOs on
top of Hyperledger platform
● Commercial bond trading (with
Russia’s NSD)
● Among other use cases,
Corda is being used to
create a new syndicated
loan marketplace
● Expanding vision beyond
financial services, to supply
chain, insurance, and
healthcare
Road Ahead ● Structuring alliance
governance
● Standards setting
● Indy is built around
decentralized identity, with an
expected launch this year
● Iroha is a mobile-first
blockchain, with an expected
launch in May
● Projects are going live at a fast
clip = Hyperledger continues to
focus on interoperability
● R3 plans to launch and
distribute Enterprise Corda
in Q2’18, which will be
available to businesses
beyond its consortium
4. Enterprise blockchain continues to grow: Blockchain Consortia
are working with enterprise to drive use case trials
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
53

4. Enterprise blockchain continues to grow: a variety of use cases
are being explored on a global scale
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: https://medium.com/@matteozago/50-examples-of-how-blockchains-are-taking-over-the-world-4276bf488a4b
54

5. Increasing regulatory scrutiny & clarity: while the cryptoasset
revolution is global, the degree of regulation varies significantly,
with the US seeing moderate levels
55
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Bitcoin is unrestricted in 107
of 251 countries/regions
Source: https://coin.dance/poli

“This (cryptocurrency) is a global phenomenon and it’s
important there is an international follow-up at the
global level. We do not exclude the possibility to move
ahead (by regulating cryptocurrencies) at the EU level if
we see, for example, risks emerging but no clear
international response emerging.”
-- Valdis Dombrovskis, the EU’s Financial Chief.
Cryptocurrencies do not threaten “financial stability” at
the moment, but they could after more consumers get
involved. It is time to incorporate the cryptocurrency
ecosystem into the rest of the financial system, applying
to it the same regulatory approach and the same
“rigorous standards”
-- Mike Carney, Bank of England Governor
It could be more efficient to prohibit banks and other
financial institutions from holding and selling
cryptocurrencies, than to directly regulate crypto.
-- Andrea Enria, Chairperson, European Banking Authority
“(I am) very optimistic that developments in financial
technology will help facilitate capital formation,” but
“promoters of ICOs and cryptocurrencies” are creating
“significant risks” by failing to comply with securities laws”.
SEC staff have been instructed “to be on high alert for
approaches to ICOs that may be contrary to the spirit of our
securities laws.”
-- Jay Clayton, SEC Chairman
“I have yet to see an ICO that doesn’t have a sufficient
number of hallmarks of a security”
-- Jay Clayton SEC Chairman
The CFTC has issued new guidance to exchanges and other
trading platforms that are interested in listing bitcoin futures
and other cryptocurrency derivatives products. “CFTC staff is
providing this information, in part, to aid market participants
in their efforts to design risk management programs that
address the new risks imposed by virtual currency
products.”
-- Brian Bussey, Director of CFTC’s Clearing and Risk division
“They (cryptocurrencies) are speculative markets. They are
not a currency. If you have money you really need, do not put
it in these markets.”
-- Raphael Bostic, President, Federal Reserve Bank of Atlanta
5. Increasing regulatory scrutiny & clarity: regulators are
watching closely and starting to provide guidance as policy
makers become more educated about the tech
Source: CB Insights
USA Europe Asia
“Some complainants claimed that cryptocurrency exchanges
had misappropriated their assets or manipulated the
market, or that technical breakdowns of the exchanges’
platforms had caused them significant losses. Several
complaints against ICO issuers alleged unlicensed or
fraudulent activities. We will continue to police the market
and enforce when necessary.”
-- Ashley Alder, Chief Executive, Securities and Futures
Commission, Hong Kong
“When it comes to money laundering or terrorism financing,
Singapore’s laws do not make any distinction between
transactions effected using fiat currency, virtual currency or
other novel ways of transmitting value. ” MAS will seek to
impose anti-money laundering and anti-terrorist financing
requirements on intermediaries that exchange fiat for
virtual currencies – such as exchanges and brokers.
-- Tharman Shanmugaratnam, Deputy Prime Minister and
Chairman of the Monetary Authority of Singapore
“Virtual Currencies raise concerns of consumer protection,
market integrity and money laundering, among others.
Reserve Bank has repeatedly cautioned users, holders and
traders of virtual currencies, including Bitcoins, regarding
various risks associated in dealing with such virtual
currencies.” Entities regulated by RBI shall not deal with or
provide services to any individual or business entities
dealing with or settling VCs. Regulated entities which
already provide such services shall exit the relationship
within a specified time.
-- Jose J. Kattoor, RBI Chief General Manager
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
56

5. Increasing regulatory scrutiny & clarity: Vitalik’s Test sets a new standard
for securities laws exemption, but how do you measure decentralization?
“Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the
Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions...and, as with
Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.”
-William Hinman, head of the SEC division of corporation finance
Name Consensus Miners/voter
incentivized
# of entities in
control of >50% of
voting / mining
power
% of supply held
by top 100
accounts
# of client codebases
that account for >90%
of nodes
# of public
nodes
PoW Y 3 19% 1 9933
PoW Y 3 35% 2 18266
RPCA N 1 81% 1 596
Pow Y 3 25% 2 1887
PoW Y 3 45% 3 261
FBA N 1 95% NA 111
PoS N 1 33% NA NA
Tangle (DAG) Y 1 62% 1 23
DBFT N 1 70% NA NA
Source: www.arewedecentralizedyet.com, as of June 16, 2018
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
57

5. Increasing regulatory scrutiny & clarity: a research group linked to
China’s Ministry of Industry & IT has started releasing evaluations of
blockchain networks
By the end of March 2018, there were 456 blockchain
technology companies in China.
China is likely to support homegrown tech
companies: every Western company has a Chinese
equivalent (Amazon / Alibaba, Google / Baidu, Uber /
Didi)
Through NEO’s partnerships with various Chinese
corporation and state entities,the network has the
ability to carve out a niche as the smart contract
platform for China or Chinese Ethereum.
58
Overview Landscape
Tech Overview /
Why Now
Cryptoassets
Market Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Soruce: http://www.miit.gov.cn/n1146290/n1146402/n1146445/c6180238/part/6180297.pdf

1. New financing model: Initial Coin Offerings (ICOs) are displacing public
markets and private investments for fundraising, the lines between
equity financing and ICOs are blurring
2. ICO fundraising is evolving: companies that once might have held public
token sales are moving to private and pre-sale rounds
3. ICO hubs are emerging: While USA, Switzerland, and Singapore have
been clearly the main ICO hubs in 2017, countries like UK and HK are
gaining ground in 2018
ICO Trends Overview
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
59

1. New financing model: with ~$21 billion in token sales to date, ICOs are
displacing public markets and private investments for fundraising
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Average Duration
/ ICO (Days)
Average Funding
/ ICO (US$ M)
41 68 32 39 29 48
$0.4 $3.8 $1.0 $5.1 $12.8 $25.5
Source: Strategy&, PwC, https://cryptovalley.swiss/wp-content/uploads/20180628_PwC-S-CVA-ICO-Report_EN.pdf 60
Total # of ICOs and Total Volume US$ M
Within the first 5 months of 2018, more money has been raised with ICOs than in all years prior

1. New financing model: Anticipating a world of decentralized apps,
investors have poured money into infrastructure projects
61
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: www.coinsechedule.com, 2018 infrastructure data includes $4.2 billion ICO for EOS, as of June 19th 2018.
ICO investments by category, US$ M
The majority of ICO investments have focused on protocols & foundational infrastructrure

1. New financing model: the 15 biggest ICOs since 2016 have raised
more than $8 billion in capital but it remains to be seen which
ones will lead to greater adoption
62
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: Strategy&, PwC, https://cryptovalley.swiss/wp-content/uploads/20180628_PwC-S-CVA-ICO-Report_EN.pdf

2. ICO fundraising is evolving: pure-play ICOs are losing funding
momentum as companies that once might have held public token
sales are moving to private and pre-sale rounds
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
ICO Financing
Completed ICOs
Equity Financing
(excluding ICOs)

2. ICO fundraising is evolving: companies are increasingly
structuring exclusive private rounds and opting for airdrops, and
looking for investor experienced in tech / community-building
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Q1
2017
Q3 2017
Project
Announcement
Public SalePresaleSeed Private Sale
Project
Announcement
Public SalePresaleSeed
Project
Announcement
Public SalePresale
Project
Announcement
Public Sale
Project
Announcement
AirdropsSeed Private Sale
Q2
2017
Q3
2017
Q4
2017
Status
Quo
For Issuers
• Bootstrap community with enthusiasts
• Reach and connect with millions
• Distribute tokens compliantly using infrastructure
• Target specific groups and avoid getting spammed
For Users
• Collect tokens from top blockchain companies
• Learn about tokens before they launch
• Amass tokens for helping projects
• Get notified when issuers begin airdrops
Airdrops
64

Overview:
● Encrypted messaging app with 200M+ users,
communication platform of choice for crypto
● Based in UK, founded by Russian Pavel Durov
Plan:
● Build TON (Telegram Open Network), a blockchain
based platform extending its messaging app into a
range of services including payments, file storage,
censorship-proof browsing and decentralized apps
ICO Process:
● According to the original whitepaper, the plan was to
raise $1.2 billion using both invite-only private
investors and an open sale to the public
What actually happened:
● Telegram raised $1.7 billion by selling newly created
cryptocurrency to fewer than 200 private investors (via
SEC Form D) and cancelled its public sale
● Approach minimizes regulatory risk since sale was only
offered to accredited investors and the company
already had an existing product
Overview:
● Block.one is a Cayman-based organization with offices in
Hong Kong, California, and Virginia
● No product pre-ICO
● Led by Americans Brendan Blumer & Daniel Larimer
Plan:
● Build EOS, a blockchain-based decentralized operating
system, designed to support commercial-scale
decentralized apps with core functionality, faster
processing speed and greater flexibility while eliminating
the need for user fees
ICO Process:
● ICO process lasted 340 days and open to all participants
globally, no hard cap, pricing tiered based on stages
● EOS tokens on Ethereum blockchain are redeemable for
tokens on the EOS blockchain once the EOS mainnet
launches in June 2018
What actually happened:
● EOS completed the largest initial coin offering (ICO) in
history raising $4.2 billion
2. ICO fundraising is evolving: Telegram & EOS broke new
grounds raising $1+ billion in funding becoming ICO Unicorns
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
highlights trend of VC money moving into the
crypto economy to buy tokens
Year-long uncapped sale
65

3. ICO Hubs are emerging: while the USA, Switzerland, and
Singapore have been clearly the main ICO hubs in 2017,
countries like UK and HK are gaining ground in 2018
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: Strategy&, PwC, https://cryptovalley.swiss/wp-content/uploads/20180628_PwC-S-CVA-ICO-Report_EN.pdf 66

Investment Thesis: Security Tokens = programmable digital
securitization of ownership in real-world assets, subject to
securities regulations, will disrupt Wall Street
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Wall Street 1.0: Status Quo Wall Street 2.0: Security Tokens
Market Hours Varies based on market 24/7 - accelerates integration of global markets
Fractional
Ownership
Some assets have high single unit cost
Diversified index (e.g., REITs) exist but investors forego
exposure to single high value assets
Fractional ownership of single high value assets
More optimal asset allocation at the retail level to market portfolio
Enhanced price discovery / market efficiency
Settlement T+2 for securities, longer for other assets Instant settlement
Costs Securities issuance advisory costs are elevated, high
admin cost for ownership reconciliation/post-issuance
Automated cap tables
Lower costs passed on to investors and / or assets
Liquidity /
Market Depth
Private assets are relatively illiquid / costly to trade
~20-30% illiquidity discount
Invest in illiquid assets, access liquidity in secondary markets
Decrease in order book depth
Compliance Regulations vary across jurisdiction & asset types: manual
compliance adds latency and cost to trade
Automated compliance integrating requirements (e.g, KYC/AML, tax rules,
reporting information, and accreditation status) into each token
Interoperability Limited interoperability Global pooled liquidity for all asset classes through a single interface
Contract Design Standardized ownership rights Programmable contracts with rights (eg., voting, buybacks, profit shares)
Source: https://hackernoon.com/the-security-token-thesis-4c5904761063,
Real Estate
Property
Art Private Equity /
LP Interests
Derivatives Equity / Debt
67

Investment Thesis: Security Tokens landscape is still nascent
and will evolve as regulatory guidance emerges
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Issuance Platforms Exchanges /
Secondary Trading
Hybrids
Liquidity Providers
Existing Tokenized Securities Planned Tokenized Securities
68

Investment Thesis: Custodian Solutions = banks like JPMorgan, Citigroup, &
BNY Mellon act as qualified custodians for billions of dollars worth of
securities; the current state of crypto self-custody remains challenging
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
69
Insurance

Fiat Collaterized
Investment Thesis: stablecoins attempt to address the problem of
price stability and high volatility, a major barrier of entry for
adoption; the race is on for the best business model
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Crypto Collaterized
Algorithmic supply
stablecoins (Non-
collaterized)
Metal Collaterized Hybrids
70Source: https://stablecoinindex.com/projects/

Crypto Collectibles: the early success of CryptoKitties displayed
the potential for users to interact with scarce digital assets in new
and unique ways
Publishers Marketplaces Infrastructure Resources
Emerging Ecosystem
71
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities

While the sources of capital are increasingly diversified, liquidity
remains fragmented
Sources of Capital
Generalist VCs
investing in
equity/pre-IC via
cryptoassets
Traditional
FIs
Quant
Funds
VCs
investing via
equity
Mining
Pools
Asset
Managers
Exchanges
Crypto
Whales
Crypto Funds
& Fund of
Funds
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
VCs creating
crypto-focused
funds
72

Traditional VCs are taking different approaches to increase
exposure to the space
Set up Separate
Crypto Fund
Invest in Token &
Equity as part of
Generalist Fund
Invest in Crypto
Fund
Equity Investments
Pros Cons Examples
● Ring-fenced exposure
● Opportunity to build a
platform
● Potentially high return
● Requires strong dealflow
● Often one man show, lack
of support team
● Require specialised crypto
team / lead
● Proprietary learning
● Potential high returns
● Flexibility to invest in equity
and tokens
● Requires strong dealflow
● Require specialised crypto
team / lead
● Learning from dedicated
team
● Good heading
● High fees
● No direct investment exposure
● Top funds are oversubscribed
● Governance
● Easier to assess companies
(valuation, business model)
● LPs more comfortable
● No token economy
● Smaller universe of companies
● Lack of learning
Source: https://medium.com/@etiennebr/most-vcs-missed-exposure-to-Cryptoassets-how-can-vcs-adapt-to-crypto-57b12a83d279 73
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities

Top VCs are investing in both equity securities & cryptoassets
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities

The number of specialized funds investing in crypto exploded
in 2017 but growth has slowed amidst a market correction
YoY
Growth %
33% 125% 33% 53% 355% 16%
Source: Autonomous NEXT 75
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities

Asia-focused investors are actively investing in building out a
regional crypto ecosystem
Global crypto/blockchain investor and
accelerator with large asia network
Asia-focused digital asset management firm
PortfolioOverview
• Nebulas, DeepBrain, IoT Chain, Aelf, Eximchain, Zeepin, WePower, Libra,
Taxa
Investors
Shanghai-based crypto VC, with Vitalik
Buterin formerly a GP
• TenX, Factom, SiaCoin, and ZCash
• TenX, Quoine, Raiden Network, IoT Chain, Fantom, Ankr
• ADEX, Zilliqa, IoT Chain, Aelf, LoopRing, Nebulas, Republic, Libra, Origin
One of China’s largest mining consortiums • Elastos
Advises dApps being developed on NEO
Singapore-based crypto VC
Singapore-based crypto VC • Ankr Network, Bluezelle, Open Platform, Moonlight
• Qlink, Deepbrain, Zeepin, NEX, TheKey
76
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities

Investing in a new asset class carries many risks
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Highly
speculative /
Overvaluations
Value accruing
towards tokens
instead of
equity
“It is an established fact that 90% of startups
fail. And it should also be an established fact
that 90% of these ERC20s on CoinMarketCap
are going to go to zero.”
-Vitalik Buterin
77Source: The Information

78
Investing in ICOs is risky: ~20% of ICOs are dead, raising $3.7
billion for defunct coins in the process
Source: stats.digrate.com
Total Raised
Total Raised by
Dead ICOs %
# of ICOs
$27M
74%
$26M $291M $9.6B $14.2B
65% 13% 16% 15%
Top 10 Dead
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities

While the type of risk in ICOs is similar to other early stage
projects, judging quality is different from traditional
venture capital
Factors Crowdfunding Early stage VC ICO
Team • Most important element of
project; proven capacity to
deliver on similar projects
• Mix of tech and business leaders • Track record in crypto
community
• Highly technical
Market • Predetermined product
problem, no pivots
• Large $1B+ addressable market,
potential pivots
• Predefined large technical
problem
• Proximity to infrastructure
Traction • Team assures customers on
ability to deliver
• MVP or initial committed
customers
• Prior technical projects publicly
shared on Github
Competition • Not relevant as demand is
defined by raise
• Structure of industry meaningful
for ability to monopolize
position
• Many blue-ocean opportunities,
need only vague market
strategy
Economics &
Distribution
• Not relevant as demand is
defined by raise
• Business model exists and works
on margin
• Vague indications tends to be
sufficient
Legal Status • Well defined contracts that are
automatically papered and
actioned
• C-Corp or SAFE investment • Wide range of legality, from
CoinList to frauds / scams
Presentation • Video, written narrative
• Highly social media
• Powerpoint, Demo
• Relationship driven
• Tech whitepaper, video
• Highly social media
79
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities
Source: Autonomous NEXT

Top 20 pure equity VC investments
Source: Crunchbase
80
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities

Big shares of blockchain funding moves to “other” rounds - the token model is
emerging as a de facto fundraising mechanism for blockchain teams
Source: CB Insights
Equity Fundraising by Stage
81
Overview Landscape
Tech Overview /
Why Now
Cryptoassets Market
Trends
ICO Trends
Investment Thesis:
Security Tokens
Investment Thesis:
Custodian Solutions
Investment Thesis:
Stablecoins
Investment Thesis:
Crypto Collectibles
Historical VC
Investment
Investment By Stage
Successful
Companies
Selected Investment
Opportunities

Macro Review of Cryptoassets Landscape - July 2018 by David Gogel

Macro Review of Cryptoassets Landscape - July 2018 by David Gogel

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Macro Review of Cryptoassets Landscape - July 2018 by David Gogel

Similar to Macro Review of Cryptoassets Landscape - July 2018 by David Gogel (20)

Recently uploaded

Recently uploaded (20)

Macro Review of Cryptoassets Landscape - July 2018 by David Gogel