8 Decimal Capital, a leading fund in the blockchain venture capital space, has begun focusing on security tokens (STs) and security token offerings (STOs). We believe this new technology will revolutionize the financial industry and how assets are managed and traded.

1. Disclaimer: The information contained in this document and its included confidential information should not be disclosed. In addition
to the fund investors, no person shall distribute, copy, print or use any part of this document set out for any content thereof
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Kadeem Clarke, Investment Manager

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I. 8 Decimal Capital
II. Blockchain Overview
III. Token Overview
IV. Introduction
V. Market Opportunity
VI. Industry Outlook
VII. Regulatory Overview
VIII. Current Solutions
Overview: Explore the investment
opportunity in the newest wave of
blockchain and cryptocurrencies,
security tokens

3. 3

4. 8 DECIMAL CAPITAL is a multi-strategy investment firm focusing on the blockchain industry with an
AUM of $60M. It thematically invests in core projects that addressees Public Chains, Cross-Chains,
Exchanges, Decentralized Exchanges, Privacy, Storage, Telecom, Stable Coins, Security Tokens and
also invest in projects in the blockchain ecosystem layer.
8 Decimal has obtained great performance since established in 2017. Based on the professional
fund index ranking agency Token Metrics, 8 Decimal was ranked second out of the 51 active crypto
funds. 8 Decimal is also well-received in China, named one of the top 10 funds in the blockchain
industry by both 36Kr, Chainbs, and Odaily, as well as named one of the top 20 funds by Tsinghua
X-Lab and Youth Education Chain League.
4
Introduction
4

5. 5
Fund Strategy
Crypto
Funds
VC Funds Quant Fund
Hybrid

6. Smart
Contract
Storage Oracle
Payment
Channel
Decentralized
exchange
Decentralized
exchange
Investment Portfolio

7. 8D Investment Scope - The Building Blocks 7

8. 8

9. Blockchain Came in Two Phases
Blockchain 1.0:
Blockchain was first introduced in
2009 with its first application, Bitcoin.
In its simplest form, Blockchain is a
decentralized digital database, in
which untrusted parties can share
digital history and reach consensus
without a middleman.
Benefits
decentralization, security
transparency, immutability
programmability, self-execution
audibility, efficiency
Blockchain 2.0:
Introduced by Ethereum with smart
contracts, the utilization of blockchain has
grown beyond cryptocurrencies, enabling
interorganizational use cases. This enables
for exchange of value in a truly
peer-to-peer fashion, without the
involvement of middlemen, and the
potential for a programmable economy.
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Benefits

10. Blockchain Will Save Money and Time
10
The core strengths of blockchain...
...bring the promise of reduced transaction costs and streamlined processes to the industry
Shared ledger Immutability Security
10

11. Blockchain Can Streamline Many Processes
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Top cases for blockchain commercial adoption:
Digital identity
management
Cross-border
payments
Clearing and
settlement
Letter of credit
process
Syndication
of loans

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13. Not Every Token is Created Equally
1313
to some extent similar to
securities
gives its holders access to services
often considered as a mean of payment

14. Tokens Combine Liquidity with Lower Costs
14
Public securitiesTokens
Private securities
Liquidity
Cost effectiveness
Low High
High
Low
More liquidity

15. STOs Bring Cost Effectiveness to Fundraising
15
Cost saving analysis:
Traditional private
placement
VS
Digital securities
OfferingOngoing

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17. Any Asset with Ownership Can Be Tokenized
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A security token represents traditional, private
security interest...Essentially, you’re taking
something that today you have on paper and
you’re putting an electronic wrapper around it.
—— Josh Stein, CEO of Harbor

18. STs Incorporate the Benefits of ICOs and IPOs
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ICO STO IPO
Regulatory oversight None Comprehensive Comprehensive
Track record & Credibility Weak None Strong
Utility Adoption Dividends Dividends
Duration of offerings Short Moderate Lengthy
Access to Trading Open to all Open to all Geographic
Limitation
Preparation Cost Low Moderate High
VS VS

19. STs Intersect Blockchain Tech and Regulation
19
Blockchain Technology
Security Tokens improve
traditional financial products
by making ownership
programmable to streamline
global private investment
Security Tokens
Security Tokens are
considered the intersection of
digital assets and traditional
financial products with
government regulation
Government Regulation
Security Tokens are subject to
federal securities regulations,
including the Securities Act of
1933 (most importantly Reg D,
Reg A+, Reg S)
+ =

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21. Multiple Asset Classes Can Be Tokenized
2121
Real Estate
Startups and
Small Businesses
Mature BusinessesFine Art Venture Fund
Private Equity

22. Security Tokens Come in Four Structures
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Tokenized VC Funds
provides token holders with a claim to a share of a fund
Benefits:
- Profits can be shared through token buyback
- Liquidity opportunities sooner (12 months vs 7 years)
- Capital allocation flexibility, smaller capital commitments
1
Asset-Backed Tokens
an economic right to a real-world asset, e.g commodities
Benefits:
- Can be used for fungible or non-fungible assets
- Ability to subdivide larger assets into smaller units and to
create unique and diversified products
2
Share-Like Tokens
ownership stake, LP shares, voting rights, or profit shares
Benefits:
- Fractionalization of ownership and increased liquidity
- Automated compliance
- After-hours operations
3
Crypto-Bonds
constitutes a fixed claim on future streams of income
Benefits:
- Elimination of middlemen and registries
- Reduction in settlement time and decrease in
operational risks
4

23. STs Address the Issues of Four Large Markets
2323
Asset-Backed Tokens
CRE is a popular use case for security tokens
$54 trillion
size of global commericial real estate market
(Source: Fortune)
Tokenized VC Funds
shorter holding periods will attracts more LPs
$5.2 trillion
amount invested in VC firms
(Source: McKinsey & Company)
Share-Like Tokens
Given easier exit opportunities, VCs will invest more
$1.8 trillion
cash not being used by VCs
(Source: McKinsey & Company)
Crypto-Bonds
local governments are exploring the benefits of STs
$3.8 trillion
size of municipal bond market
(Source: Bloomberg)

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25. Security Tokens Have 8 Major Benefits
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Rapid settlement Reduction in direct costs
Fractional ownership Automated compliance
24/7 markets Flexibility of smart contracts
Increased liquidity & market depth Asset interoperability

26. STs Face Common Issues of New Technology
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Regulation
Traditional asset tokenization regulations
will take years to develop.
Governance
Solutions needed to enable governance
of widely held tokenized assets.
Deal Execution
Middleman’s responsibilities shift onto
the buyer or seller in the transaction.
Thinly Traded Tokens
If a token is thinly traded it is still
relatively illiquid.

27. The ST Market Has Multiple Infastructure Layers
27
Issuance Platforms Hybrid Solutions Exchanges Liquidity Layers
Existing Tokenized
Securities

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29. U.S. Securities Regulation Guide the Market
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Regulation D
most commonly used exemption
Regulation A+
best for unaccredited investor base
Regulation S
raise money from non-US investors
Section 5 of the Securities Act of 1933
all offers and sales of securities must be registered with the SEC or qualify for some
exemption from the registration requirements.
Exemptions:
These exemptions allow issuers to avoid the costly and lengthy process of registering with the SEC
Regulation CF
allows crowdfunding of businesses

30. Regulation D
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Rule 506(b) Rule 506(c) Rule 504
Offering limit within a year None None $5 million
General solicitation No Yes Limited circumstances
Issuer requirements None
“Bad actor” disqualifications
apply
“Bad actor” disqualifications
apply
Investor requirements
Up to 35 sophsticated but
non-accredited investors
Issuer must take reasonable
steps to verify that all
purchasers are accredited
None
SEC filing requirements
Form D, additional
information for
non-accredited investors
Form D Form D
Restrictions on resale Yes, restricted securities Yes, restricted securities
Yes, restricted securities
except in limited
circumstances
Preemption of state
registration or qualification
Yes Yes No

31. Regulation A+
3131
Tier 1 Tier 2
Offering limit within a year $20 million $50 million
General solicitation
Permitted; before qualification, testing the waters permitted before and after
the offering statement
Issuer requirements US or Canadian issuers
Investor requirements None
Non-accredited investors limited to
the greater of 10% of annual income
or net worth
SEC filing requirements
Form 1-A including two years of
financial statements. Exit report.
Form 1-A, including two years of
audited financial statements. Annual,
semi-annual, current, and exit reports
Restrictions on resale No No
Preemption of state registration or
qualification
No Yes

32. Regulations S and CF
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Regulation S Regulation CF
Offering limit within a year None $1.07 million
General solicitation
Permitted; no directed sales
efforts made in the U.S.
Permitted with limits on advertising after Form C is
filed
Issuer requirements
Must offer and sell securities
outside of the U.S.
Excludes non-US, blank-check, reporting, and
investment companies. “Bad actor”
disqualifications apply
Investor requirements Non-U.S. person Limitations based on annual income and net worth
SEC filing requirements None
Form C, including two years of financial statements
that are certified, reviewed or audited, as required.
Progress and annual reports.
Restrictions on resale 12-month resale limitations 12-month resale limitations
Preemption of state registration
or qualification
No Yes
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33. Regulation of STs Varies Around the World
3333
China
Token sales are currently banned in China
European Union
Token sale will fall under the EU’s
pan-European securities laws as laid out in
the prospectus directive and regulation
Switzerland
Digital tokens that promise a claim on a
company’s assets or future cash flows will
be classified as securities under Swiss law
Singapore
Security token offerings fall under local
securities laws as set out by the Securities
and Futures Act (SFA)

34. Malta Is Now a Haven for Blockchain Companies
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VFAA
Virtual Financial Assets Act
● Purpose: Established with
the sole aim of regulating
Initial Coin Offerings
● Scope: Governs ICOs,
cryptocurrency exchanges,
wallet providers, and all
platforms relating to
cryptos
MDIA
Malta Digital Innovation
Authority Act
● Purpose: Established to
ensure credibility and
provide legal certainty to
consumers of DLT
platforms
● Scope: Certifies
Distributed Ledger
Technology platforms
ITASA
Innovative Technology
Arrangements and Services Act
● Purpose: Established with
the purpose of certifying
DLT platforms
● Scope: Deals with
exchanges and other
companies operating in the
cryptocurrency market

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36. First US-based Regulated ST Trading Platform
3636
Open-source platform
specializing in secondary markets for alternative
assets, built to innovate the securities transaction
lifecycle
Partnerships and Clients
Republic, Harbor, Polymath, KoreConX, Securitize,
Blockchain Capital, SPiCE VC, Science Blockchain
Team refocused attention on blockchain
OFN team has been working together since 2014,
offering trading, clearing and settlement services

37. First Major Asset in NYC to be Tokenized on ETH
3737
Tokenized $30 million building
with 12 units locoated on 436 & 442 E 13th Street
in the East Village
Benefits
“We can remove the unruly pressure of traditional
bank financing, which is much healthier for the
project and all of the stakeholders.”
- Ryan Serhant, Listing Agent
Security tokens comply with Regulation D rule
506(c)
through issuance completed by the joint
partnership of Propellr and Fluidity

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