Drawing Capital – Bitcoin and Blockchain Technology

Sagar Joshi, Managing Partner; Jugal Lodaya, Managing Partner, Drawing Capital April 12, 2021

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Blockchain and Cryptocurrencies

Presented by: Sagar Joshi and Jugal Lodaya

1 Disclosures

This presentation may not be reproduced in whole or in part without the express consent of Drawing Capital Group, LLC (“Drawing Capital”). This presentation is not an offer to sell securities of any investment fund nor a solicitation of offers to buy, sell, or hold any securities or cryptocurrencies. Past performance of these strategies is not necessarily indicative of future results. There is the possibility of loss and all investment involves risk including the loss of principal. Drawing Capital may own securities discussed in this presentation.

The information in this presentation was prepared by Drawing Capital and is believed by Drawing Capital to be reliable and has been obtained from sources believed to be reliable. Drawing Capital makes no representation as to the accuracy or completeness of such information. Opinions, estimates and projections in this presentation constitute the current judgment of Drawing Capital and are subject to change without notice.

Any projections, forecasts and estimates contained in this document are necessarily speculative in nature and are based upon certain assumptions. In addition, matters they describe are subject to known (and unknown) risks, uncertainties and other unpredictable factors, many of which are beyond Drawing Capital’s control. Cryptocurrencies and blockchain can be speculative and experimental in nature and carry additional risks. No representations or warranties are made as to the accuracy of such forward-looking statements. It can be expected that some or all of such forward-looking assumptions will not materialize or will vary signiﬁcantly from actual results. Drawing Capital has no obligation to update, modify or amend this presentation or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Due to various factors, investments that seek to track indices may lead to different performance compared to the performance of the underlying benchmark index.

Drawing Capital is not afﬁliated with Interactive Brokers LLC. Drawing Capital receives trade execution, custody, clearing, and other services from Interactive Brokers LLC Disclosure of risks of trading Bitcoin products from Interactive Brokers can be found here: https://gdcdyn.interactivebrokers.com/Universal/servlet/Registration_v2.formSampleView?formdb=4098..

2 ABOUT

At Drawing Capital, our mission is to help investors capture the expansion of a technology-forward world while maintaining total alignment of goals and incentives. In doing so, we believe we can broaden the economic foundation of our Limited Partners and empower them to further support the causes and relationships that are most important to them.

We leverage our expertise in ﬁnance, technology, and data science to create a robust framework for decision-making, and introduce opportunities in public markets not captured by passive investing.

3 Topics Covered

1 History 4 Valuation

2 Blockchain 5 Opportunities

3 Varieties 6 Adoption

4 SECTION I

History

5 Money & Finance

● Role of Money ● Role of Finance ○ Store of value ○ Connecting lenders to borrowers ○ Medium of exchange ○ Transfer of value and risk between parties ○ Unit of account ○ Community empowerment for improved standard of living

● A social consensus mechanism bound by 4 traits ○ Code / Architecture ○ Market and Economic Forces ○ Explicit Laws and Mandates by the Government ○ Social Conventions and Norms

Data Source: MIT Lecture and Larry Lessig’s 4 Forces Book 6 Digital Currency Failures

DigiCash by David CyberCash by Lynch, Hashcash by Adam Back Chaum Melton, Crocker & Wilson

1989 1994 1997

1993 1996 1998

Mondex by National E-gold by Gold and Silver Bit Gold by Nick Szabo Westminster Bank Reserve

7 Why Digital Currencies Failed

1 Low merchant adoption 3 Consensus of a common ledger

2 Use of centralization 4 Double spending problem

8 Timeline of Digital / Mobile Payments

PayPal

Ericsson Telenor Partnership MPesa Safaricom WeChat Pay 2003 2011 2014

1998 2007 2013 AliPay Google Wallet Apple Pay

Starbucks Mobile App

9 SECTION II

Blockchain

10 Idea

System of records (blocks) chained together to form an eventually stable decentralized system.

A Block Data

B Chain

11 Hash A

Hash Function b31d032cfdcf47 a399990a71e43 c5d2a A function that maps arbitrary inputs to ﬁxed Hash B sized outputs. d63d0e21fdc05f 618d55ef306c54 af82 “hello” zfd280436

Hash C

fc741db0a2968c 39d9c2a5cc75b 05370 “Hello” bac3b0051

12 Mining

Solving a complex math problem to add a block onto the chain.

Block

0000...???? A B ? ???????

Nonce

Bitcoin’s Protocol Finding a suitable hash (starts with 0’s) for a block of data + a nonce.

13 SECTION III

Varieties

14 Bitcoin

Digital Decentralized Store of Value

15 Trait Gold Bitcoin

Trusted for thousands of years Yes No

Low volatility among commodities & currencies Yes No

Traded on a regulated exchange Yes Yes

Limited amount in existence Yes Yes

Markets determine the value Yes Yes

Strive to be used globally Yes Yes

Is mined over time Yes Yes

Uncorrelated to other assets Yes Yes Bitcoin vs Gold Easy to store No Yes Easily divisible into small units No Yes

Quickly moved across the world No Yes

Cheaply moved across the world No Yes

Easily secured No (safe/vault) Yes (2 factor auth)

Users control the financial system No (monarch/banks) Yes (protocols/forks)

Requires computer skills No Yes

Able to evolve over time No Yes

● Discussion of differences in investment objectives, costs, liquidity, ﬂuctuations, and tax considerations 16 Bitcoin Forks

Bitcoin Bitcoin Bitcoin Dark

Bitcoin ABC

Bitcoin Gold Bitcoin Diamond Bitcoin Cash Bitcoin SV Ethereum

Digital Decentralized Smart Contracts

18 1 Decentralized Finance (DeFi) and Apps (Dapps)

2 Payments Ethereum Use Cases 3 Non Fungible Tokens (NFT)

4 Stable Coins

19 Altcoins

Chainlink Aave Binance

Enables data integration for smart Pays interest on deposited assets Acts as shares of Binance, a popular contracts without a custodian crypto exchange

20 Number of Projects Growing

Data Source: Statista and Coin Market Cap Past performance is not indicative of future results. Any investments or products displayed are for illustrative purposes only and are not intended to portray recommendations. SECTION IV

Valuation

22 Valuing Bitcoin

Past performance is not indicative of future results. Any investments or products displayed are for illustrative purposes only and are not intended to portray recommendations.

23 Ideas to Value Ethereum

Disinﬂationary; 18M Ether 1 created annually

2 Value of 884+ ERC20 tokens

3 Transaction Volume

Demand for Ethereum for 4 DeFi/Dapps

Past performance is not indicative of future results. Any investments or products displayed are for illustrative purposes only and are not intended to portray recommendations.

24 Ideas to Value ChainLink

This data is shown for explaining that Chainlink simply generates revenue. This data should not be used to project past or future performance of Chainlink. Data Source: Chainlink Market 25 SECTION V

Adoption

26 1 Software is more honest than humans

2 Hyperinﬂation and debasement in US, VE, ZI

Why Now? 3 Decentralization is power to the people

4 Physical assets hinder an increasingly digital world

5 Opportunity for higher returns in crypto’s disruption

27 Companies Buying Bitcoin e.g. 1 MicroStrategy, Square, etc

2 New Financial Products e.g. Crypto IRAs & Funds Investment Exposure 3 Crypto Derivatives and Lending Growth

4 More Apps Offering Crypto e.g. SoFi, CashApp, etc

28 1 Double Spending Attacks

2 Hacks and Breaches vs Cold Storage Risks

3 Personal Responsibility vs Insured Custodian

4 Scandals on Social Media

29 Altcoin Dominance Grows

Past performance is not indicative of future results. Any investments or products displayed are for illustrative purposes only and are not intended to portray recommendations. Data Source: Coin Market Cap Crypto Market Cap

Opportunities

32 Popular Crypto Vehicles

GBTC BITW ETHE

Grayscale Bitcoin Bitwise Grayscale Ethereum Trust Trust

33 Crypto Platforms

Coinbase Binance Kucoin BlockFi

Most commonly Largest crypto Shares almost Offers high used U.S. crypto exchange in the half of proﬁts interest crypto exchange. world by volume. with investors. lending.

140+ coins 1000+ coins Up to 25% 8.6% on USD 1.5% fee 0.1% fee dividend yield 5.5% on BTC

1 Tokenizing Stocks 4 Non Custodial Finance

2 NFT for Digital Assets 5 Frictionless Global Transfers

3 Store of Value 6 Crypto-democracy

35 Thank You

Email: [email protected]

Website: www.drawingcapital.com

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