Five bullet Friday - issue #119

Dear Partners,

     All of you should have received your October statements after the audit review. Our RCIF 1 was up by 89.45% (net of fees) in October 2021. We had a YTD growth of 436.85% so far for 2021.

1. There is not much to add on the recent pull back of bitcoin. It is always mysterious to me why the rest of market goes down along with bitcoin. Most market participants react negatively when SEC disapproves bitcoin ETF. There are almost 40 applications pending for review and SEC seemed to routinely disapprove these filings. Grayscale and many other firms are suing SEC are challenging them in courts.

2. Many partners are rightfully concerned over the steep drop in the price of KLIMA. This was caused due to a many factors. The first of them came from Verra, which said they are not directly associated with Klima. Here is the link: https://verra.org/statement-on-crypto/. This statement looks like it is written by lawyers to cover themselves. In my view, this is neutral to Klima and KLIMA does not directly deal with Verra, who maintains this registry.

3. The second reason why KLIMA is dropping is due to the reduction of the APY. This apy is going to be brought down from current rate of 57,000% to 20,000% .There are currently 350 odd forks of OHM protocol, each competing with minor improvements. There are a number of speculators who are jumping from project to project in search of yield. This caused many early investors to take their profits and jumped into newer ones. In my view, this is a negative in the short-term but hugely positive in the long-term. This gives protocol longevity and sustainable growth in carbon offsets.

4. The third reason why KLIMA is dropping is due to leverage brought on from borrowing. A huge number of investors used their existing KLIMA as collateral and borrowed more money. They used the borrowed money to buy KLIMA. When KLIMA price dropped precipitously, it liquidated lot of people. That liquidation process accelerated the price drop, because it causes even more liquidations and so on. We don't borrow against KLIMA. For us, this is a buying opportunity. I am attaching the article that shows the commodities market as reported by Macquarie. It shows the huge spike caused by KLIMA.

5. We plan to add to our OHM position if it falls from here. OHM launching version 2 is a big positive for us. We currently hold 49588 tokens of OHM in our portfolio. These are generating 193.98 tokens per rebase or 581.94 OHM tokens per day. At the current price of $617, we are earning $359,056 per day.

Have a wonderful weekend!

Sam Ikkurty