Karma Presentation

Monday, June 18, 2018
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Karma Economy of Trust

What is Karma? A platform for creating social and economic interaction between people all over the world: from pawnshop to charity, from loans to direct exchange of goods and services. Mission: — Give people from countries with inefficient financial systems access to resources. — Create possibility for investors from countries with low interest rates to invest into emerging markets. — Create a powerful impulse to the development of entrepreneurship all over the world. — Create a society of mutual trust and aid. — Lower down the interest rates to 0% (net of inflation).

Expenditures on banks and insurers (30% GDP) 18th - 20th Centuries Investor’s profit Repayments Economy Investors The bank is the center of competences Borrowers The investor brings money to the bank, because he does not have competences and information for independent crediting. The profit of the centralized p2p-platform p2p-platforms are the center of competences 21st Century Economy Investor’s profit Investors Borrowers The investor gives a loan to the entrepreneur directly, an independent peer-to-peer platform provides the investor with the competences. The profit is divided between the members of the decentralized community Marketing Lawye Analyst Realtor expert r Guarantor Insurer Debt Appraiser collector Future The participants are the center of competences Economy Investor’s profit Investors Borrowers Loan becomes a cross-border activity. Competences are passed to independent participants, the efficiency is defined by their rating.

Market Volume We create new relations worth trillions of dollars Lack of loans in emerging markets: 2.1—2.6 trillion USD 50% The percentage of GDP in bank deposits worldwide (World Bank) 38 trillion USD Approximate value of bank deposits in the world Source: worldbank.org/en/topic/financialsector/brief/smes-finance, datamarket.com/data/set/28m2/bank-deposits-to-gdp

The background of p2p development Old banking formats Time Collateral It takes a bank from 1 to 6 Banks act like pawnshops months to process with SMEs. The value of the a business loan application collateral exceeds the loan a few times. Strictness Inaccessibility Strict loan requirements More than 2 billions of people and rigorous procedures of are unbanked in the world. checks limit financing (World Bank). options Images by freepic

The speed of p2p credits market growth Morgan Stanley, Disruptive Innovation in Financials 2020 286.3 2019 273.2 2018 220.3 2017 182.8 2016 119.1 2015 61.2 The largest markets: 2014 23.7 USA, UK, 2013 9.3 China, Australia 2012 2.4 Markets with high potential: 2011 1.4 Russia, Latin America, Asia, Africa 2010 1

Competitors and partners The main Karma’s difference: it’s an open platform for economic relations with unlimited options for people around the globe. Karma BitBond Everex WeTrust Dharma SALT Suretly Kiva LendingClub Cross-border international deals Members can play any role in the process Different types of credit assets (crypto, fiat, other) Different types of collateral assets Members can create new types of loan conditions Interest rates are determined on the open market Different types of scoring parameters Mutual responsibility, reputation accumulation Loans for the future delivery (forward contracts) Legal in fiat world Karma has no competition policy: we are ready to become partners with any financial service or asset tokenization platform.

10 key features Decentralized roles Unlimited relations parameters Decentralized geography 1 Community members can perform 2 Participants can choose loan 3 An efficient entrepreneur from Asia any role: scoring, investment, conditions: credit terms, interest can get a loan from an investor in borrowing, insurance. The efficiency and collateral rate from zero Switzerland. Currency risks are will affect the members’ karma (rating). to infinite. insured by other participants. Decentralized IT Any assets to borrow or lend Maximal automation 4 Thanks to the blockchain 5 Crypto assets, fiat currencies, 6 Electronic loan agreements and surety technology, the data is securely mortgage through API, loan against bonds, transfer of rights, class actions, stored in a worldwide delegates housing, goods in transit, gold, and deposit or collateral registration and network. other assets. liberation. Smart scoring Mutual responsibility Marketing 7 Programmed scoring: big data, 8 Every deal participant puts their 9 The producers of goods and services machine learning. External scoring reputation and money at stake. We will be able to tell about their products services. Online scoring of create a close community based on to the world. Buyers can become borrowers’ performance. mutual responsibility. investors. Loans for the future delivery 10 Selling goods or services to be delivered in future. For example, selling under-construction real estate.

The algorithm of a deal — Users register and browse lists of supply and demand — The borrower performs monthly repayments through the escrow for resources. account, the system marks the number of the electronic agreement — To conclude deals, it is necessary to go through KYC (Know Your in all the payments. Client) procedure: provide their mobile phone number and — The smart contract sends the payment from the escrow account passport or identity card. to the creditor. — The deal participants sign an electronic agreement — Karma registers the repayment in the blockchain. that has legal force. — When the repayments are finished, Karma registers the loan closing — Karma provides an independent escrow account in a bank in the blockchain. for fiat currencies or crypto escrow for crypto assets. — The deal participants’ karma is recalculated (their rating is updated). — The creditor sends assets to the escrow account, the system adds a note with the number of the electronic agreement. — The smart contract analyzes the notes made to the payment orders and sends money to the borrower from the escrow account. — Karma registers the loan in the blockchain.

Plan Past, present, future The first 10 companies, over 5M USD. Complete version of the platform. business loan: 0% default rate. Transactions volume about 50M USD. 0.5M USD Demand few times Presale completed. Reaching operational self-sufficiency under 30% annual exceeds supply 500k USD raised. of the project. interest 2016 Q2.2017 11.2017 2014 2017 08.2017 Q3.2018 Portfolio Presale Alpha version presentation, of 5 companies, preparation 100% legal construction with 1.5M USD volume developed, token sale at 10M USD. Alpha version (11.2017): Second version (Q1-Q2.2018): Third version (Q3-Q4.2018): — Collateral-free loans with fiat; — Karma-token as a payment for internal commissions; — Transaction with tokenized offline assets — Loans against crypto currency. — Cross-border deals; (real estate, gold, other resources); — Currency risk hedging; — Creation of new social roles; — Increasing the number of social roles; — Financing for the future delivery — Involvement of new partners in scoring, identification, of goods and services; and liquidity. — Barter economy. — Creation of the global ambassadors network.

Presale Token Sale 17-30 August 2017 27-29 November 2017 Hard cap 500k USD successfully reached Hard cap: 10M USD — Funds distribution: — Basic token price: 0.01 USD. Token sale is held directly at the OpenLedger exchange. — Alpha-version development; After the token sale ends, new exchanges will be added to provide extra liquidity. — Project management; — Until 26 November 2017 inclusive: white listed participants KYC. — Legal construction development; — 27-28 November: exclusive token sale for whitelisted members. — Token sale Marketing and PR; 50% discount until 1M USD is collected, 30% until 3M, 15% until 8M. — Creating a foundation for investing — 29 November: open sale of remaining tokens. in the first loans inside Karma. — Task: fundraising for platform development during 1 year, until reaching self-sufficiency. — Funds distribution: — 45% product development and marketing, — 20% conservative endowment foundation, — 18% marketing and PR of token sale, — 10% mutual aid system (insurance fund), — 2% lawyers, — 5% founders, 1-year vesting, — Final distribution of tokens: — 59% presale and token sale buyers, — 17% founders, 1-year vesting, — 24% bounty reserve.

Karma token economy Utility token for paying commission to transaction participants — All of the ecosystem commissions will be paid with karma tokens: scoring, transaction processing, insurance, collection, and others. — Transaction participants will automatically buy Karma tokens on a stock exchange via API. — The bigger the transactions volume in the ecosystem, the greater the commissions volume and Karma tokens demand. — While the total tokens number remains steady and demand increases, the token’s price will grow. — The growth of the token value and the number of people who will want to keep tokens will create extra deficit in supply. — Unlike BTC or ETH, the absolute commission will not grow proportionally to the growth of token value. If Karma token’s exchange rate has doubled, one will pay 2 times fewer tokens for the same commission. — Additional options for holders of more than 100 000 tokens: — Priority access to new applications from investors and borrowers. — 50% discount on conducting transactions inside the platform. — Additional token emissions will be executed after the token price growth and only after being approved by the top-15 network delegates. Economic development forecast: 2017 2020 2025 Transaction volume, USD 5M 1bln 15 bln Commission volume (demand for tokens), USD 250k 50M 750M

Economy Karma’s operations — Karma is a non-profit project. — The aim of the project is the ecosystem development, that is why surplus revenue will be spent on: — Buying tokens from anyone wishing to sell them; — Maintaining and developing the platform; — Forming the insurance foundation; — Giving subsidiary loans to the ecosystem members; — Karma gains a commission on every deal. — In the beginning, while Karma team will be playing numerous roles, about 2-7% from every deal will go to the team. — Later, when the roles are delegated to the community members, Karma’s commission on every deal will be less than 1%, while all the other commissions will be distributed across the community. — For maintaining the project, it is necessary that operations worth 0.5M USD are conducted in the system daily. This figure is hundreds of times smaller than in a typical fiat bank.

Legal structure 100% legal token sale, even for the US and China residents — Token sale will be based on online offer agreement. — From the legal point of view, a token is a software license that can be sold, granted or inherited. — It is possible to legally buy a token even for USD. — Our legal structure will consist from Netherlands non-profit fund, Netherland operation company and local operational companies for legal money transfers. — Netherland companies will be registered before the token sale start. — To conform with AML and CTF, it is planned to perform KYC of token buyers. — US and China citizens will be accepted, but with some limitations. — Until the token sale, the responsibility for targeted use of the presale foundation was taken by London-based company Goodeast Consulting Ltd. (company number: 10596223). — Presale foundation is in a Multi-Sig wallet that can be opened with 3 or 4 signatures, two of them belong to EU-based lawyers. — Karma team weekly reports on spending the presale foundation.

The Team. Founders George Goognin Artem Laptev Founder, Evangelist Founder, Investment Director Ph.D in Mathematical Economy Models Since 2010 has managed private p2p investment fund for SME. IT-career since 2002, first IT-startup made in 2008. Developed own scoring strategy with stable and positive results 2009 to 2013 — Chief Operating Officer in ADV web-integrator, More than 10 years of experience in portfolio management in TOP3 in Russia. Clients: MOEX, VTB, X5 Retail. financial industry: Troika Dialog, Sberbank, Ancor Invest. 2010 to 2014 — co-founder of digital business school RIK International CFA-certified financial analyst. (more than 1000 students completed the courses). 2013 to 2016 — e-commerce automation (Apple, Samsung, LEGO, Nike)

The Team. Partners Ronny Boesing OpenLedger OpenLedger, partner in Denmark Partner in PR and ITO Marketing Founder of the World's First Decentralized Fintech Exchange Open Ledger is a decentralized conglomerate aiming to make OpenLedger, CoinsBank and OBITS. Official partner to multiple funds ICOs mainstream. The OpenLedger ecosystem includes and exchanges in China. With his partner, Dan Larimer, Ronny advertising, trading, blockchain talent, and ICO marketing is constantly developing the Graphene/BitShares ecosystem. subsidiaries dedicated to one goal: Crowdfunding the future of Open Ledger is also a significant player startup businesses. at the global ICO promotion market.

The Team. Partners Rustem Zubairov, Law partner Michael Shlemov, mentor. Deloitte hits BIG4 for a decades. Rustem is a department UBS, Executive Director of the analytics department. director, took part in project of crypto-currencies legalization More than10 years of experience in finance. At Deutsche Bank in Kazakhstan. managed the VTB IPO. In 2008 took part in the MOEX IPO. Has been recognized several times in a row as the best industry expert in Russia (Institutional Investor). Ranked among the TOP-3 analysts in financial sector by Extel Russia. Alex Chinyaev, Law partner Den Svinarchuk, fintech advisor UK Karma partner. Worked at Citi bank, RBC, PWC London. MOEX IT-infrastructure architect. Designed the core of the MOEX More than 15 years of investments and financial operations trading system, managed dev team. High-load expert: MOEX core experience. Alex have UK Investment Management IMC supports 140,000 transactions per second. certificate. Rustam Vakhitov, Law partner Dmitry Schnellereich, blockchain consultant Lives and works in Netherlands for 12 years. Expert in b2b-sales, marketing, and partnership networks. Business Expert in international law and taxes. lobbyist. Has brought more than 20 startups to the market since 2012. Ex-advisor in President Putin’s Administration. Member of the international IFA Association.

Join us Web: karma.red Telegram: t.me/karmaprojecten Facebook: facebook.com/karma.blockchain/ Whitepaper: docs.google.com/document/d/12dvzE9VoV2cjZ8C65KW2bcjQozqhNwjBRRFYy_KG0Lk/edit