RCIF II - Five bullet Friday - Issue # 42

Dear Partners,

     All of you should have received your October statements after the audit review. Our RCIF 2 was up by 67.76% (net of fees) in October 2021. We had a YTD growth of 729.96% so far for 2021. November is a positive month as well.

1. There is not much to add on the recent pull back of bitcoin. It is always mysterious to me why the rest of the market goes down along with bitcoin. Most market participants react negatively when the SEC disapproves of the bitcoin ETF. There are almost 40 applications pending for review and the SEC seemed to routinely disapprove these filings. Grayscale and many other firms are suing the SEC and 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 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 the 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 jump 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 the KLIMA price dropped precipitously, it liquidated a lot of people. That liquidation process accelerated the price drop, because it caused 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 156744 tokens of OHM in our portfolio. These are generating 613.18 tokens per rebase or 1839.54 OHM tokens per day. At the current price of $617, we are earning $1,134,996 per day. We have been staking since March and have not sold any OHM tokens since then.

Have a wonderful weekend!

Sam Ikkurty