Sam Ikkurty - Constitutional Rights & Legal Advocacy

Dear Partners,

This week Crypto markets moved up a lot due the major upcoming changes on Ethereum. Ethereum went through a transformational journey in the last 2 years. Starting with the implementation of EIP-1559, it burns ethereum tokens with ethereum miner's income.

1. I need to alert the existing partners that we have added an additional $4 million dollars and 23 new partners are added in the month of April. This means that there is a lot of dilution of equity to the existing partners. Dilution effect of adding new partners is bad news in the short term for existing partners. Those partners who joined in January, February and March will feel the negative impact of this new money coming into the fund. But if we invest this capital wisely and grow the pie, all of us collectively will benefit from this $4 million in the long run.

2. Many partners were unhappy with the drop in the fund value in March. It overlooks the fact that we had a growth of 89.55% (net of fees) in Q1 of 2021.

In the long run, Funds that invest in equities have always outperformed other asset classes like bonds, commodities. I have come across an article that showed that the best performing hedge fund is Senvest Partners, which produced 66.91% growth in 2021 Q1. RCIF II has outperformed the best equity fund by 22.64% in 2021 Q1. In comparison, S&P 500 was up by 5.77% as reported by Morningstar.

3. I have added a number of positions this week. These are LINK, SUSHI, RGT, LDO and RUNE. In our Fund 1, I was acquiring a Chainlink at $0.4 to $0.50 in 2019. $LINK does not generate any income currently but it is central to the entire DeFi ecosystem. Nothing in Decentralized Finance would function without price oracles of Chainlink. It is almost like the heart of the whole DeFI market itself.

4. KLONX has dropped a lot in the past month. But it is still generating greater than 100% APY in income. I am confident that it will perform well and will cross $1000 in a year or two. I remember buying many tokens and seeing them drop by 90% and still produce 20X gains later. Synthetix dropped from $8 to $2, even though it was generating good income all along. I position our fund for the long-term and use the short-term price swings to dollar-cost average into the positions.

5. Our current largest position is $OHM token at 5368 tokens in the fund. I consider OHM as a low risk bet on the growth of the DeFi markets. Based on my calculations, OHM token price could drop 90% from now and we could still make money. It would be a mistake to judge the performance based on its price. It should be based on the market cap of OHM protocol. Just in one month we recovered our cost-basis of our investment and rest is all gravy from now on.

I am planning to send April distributions next week to all the partners.

Have a wonderful weekend!

warm regards,

Sam Ikkurty

RCIF II - Five bullet Friday - Issue # 14