ALPHA STRATEGIES Leveraging industry expert knowledge to create a balanced crypto portfolio - Dragon Dynamic Funds Platform Ltd.
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ALPHA
STRATEGIES
Leveraging industry expert knowledge to
create a balanced crypto portfolio
For Qualified Investors Only
3rd quarter, 2021
WELCOME
DISCLAIMER
SWITZERLAND
The domicile of the Fund is Bermuda. The Representative of the Fund in Switzerland is OpenFunds Investment
Services AG, with its registered office at Seefeldstrasse 35, CH-8008 Zurich, Tel +41 44 500 31 08, www.open- Dragon Dynamic Advisors S. A. is the
funds.ch. The Paying Agent in Switzerland is Società Bancaria Ticinese SA, Piazza Collegiata 3, 6501 Bellinzona,
Tel. +41 91 821 51 21, Fax. + 41 91 825 66 18, www.bancaria.ch. The distribution of Shares of the Fund in
investment manager led by Mr. J.A. Michie,
Switzerland must be made exclusively to Qualified Investors. The place of performance and jurisdiction for the a Canadian businessman based in Panamá,
Shares of the Fund distributed in Switzerland is at the registered office of the Representative. Publications to Swiss with extensive experience in private equity,
investors in respect of the Shares of the Fund are effected from the Representative.
mergers and acquisitions, and considerable
UK experience in asset management
This presentation is being made only to and is directed only at: Persons who have professional experience in
matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Top-tier service providers such as
Promotion) Order 2005 (the "Order"); or high net worth entities, and other persons to whom it may otherwise
lawfully be communicated, falling within Article 49(1) of the Order (all such persons together being referred to as Silvergate (Banker), Copper (Custodians),
"relevant persons"). and Trident Fund Services (Administrators).
RESEARCH TEAM
EVOLVENT RESEARCH CORP
Consistent management of portfolios with
provable track record of consistent market-
beating strategies.
Members in crypto industry since 2013
Technical background in Blockchain research,
creation/implementation of strategies,
and auditing.
01 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 02
O P P O R T U N I T Y: EXTRACTING YIELD AND
ALPHA FROM HIGH QUALITY
CRYPTO PROJECTS
In today’s fast moving low- However, blockchain
yield environment, there has unleashed a new
are very few superior risk- Decentralized Finance (DeFi)
adjusted yield opportunities in marketplace that is growing
traditional financial markets. exponentially.
Traditional capital is not The “rails” bridging
moving fast enough to satisfy institutional capital to DeFi
DeFi demand for liquidity. have not been around long
enough for investors to
understand DeFi or its risk/
reward.
WHO IS THIS STRATEGY FOR?
For people or insititutions that wish to allocate part of their
portfolios to purchasing crypto assets 3-15%+
YIELD ON REGULAR
CRYPTO ASSETS
For people or institutions who believe crypto will be a part
of the future, but wish to leverage specialist research to
create a balanced portfolio 15-30%+
YIELD ON STABLECOINS
For people or institutions that wish to not only take a
position in crypto, but derive yield from their positions.
03 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 04
STRATEGY OBJECTIVE STRATEGY OVERVIEW
THE STRATEGY WILL TAKE ADVANTAGE OF UNPRECEDENTED
ALPHA OPPORTUNITIES THAT ARE AVAILABLE BECAUSE OF
THE LIMITED NUMBER OF EXPERTS IN THE CRYPTO SPACE.
This Strategy focuses on a multifaceted
strategy: to deploy and manage a portfolio
of volatile crypto assets, use them to
The Strategy provides investors exposure provide liquidity to Automatic Market Maker
to superior risk-adjusted returns by Platforms, and purchasing platform tokens
purchasing high quality crypto assets, all that allow our fund to participate in crypto-
while providing liquidity within the DeFi dividend payouts.
marketplace to generate yield.
Should the prices of crypto rise too quickly
The Strategy seeks high volatility, but also for the comfort of our managers, we will
high-yield opportunities take a “risk-off” approach and sell part
or all of the volatile crypto portfolio and
invest in Stablecoin DeFi plaforms that have
The purpose of this Strategy is to speculate
historically yielded 20-30%.
on the prices of various cryptocurrencies.
It’s returns will not only be in the alpha from
the rise of price in different crypto assets, The Strategy focuses all its investment
but in the yield that our team can extract efforts on protocols with the most robust,
from providing liquidity in these assets. liquid and secure platforms.
05 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 06
B A C KG R O U N D - WHAT IS DEFI B A C KG R O U N D - IS DeFi GROWING?
Decentralized Finance (DeFi) is a form of peer-to-peer
finance that does not rely on centralized financial
intermediaries such as brokerages, exchanges, or TOTAL VALUE LOCKED (USD) IN DeFi
banks to offer traditional financial instruments, and
instead utilizes smart contracts on blockchains.
Ethereum is the blockchain network most utilized by
DeFi platforms, but Binance Smart Chain and others
are gaining traction as Ethereum “gas” fees are
becoming an obstacle to smaller traders.
OVER $60B
OF TOTAL VALUE IS LOCKED ON
DEFI PLATFORMS.
07 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 08
B A C KG R O U N D - WHAT IS A LIQUIDITY B A C KG R O U N D - HOW DO WE PLAN TO
PROVIDER? PROVIDE LIQUIDITY?
A Liquidity
Provider is the This is done to increase the liquidity of the decentralized exchange
term used to for users, as they will be able to transaction quicker and in larger
describe someone quantities.
who deposits
cryptocurrency Liquidity Providers earn production based rewards. These rewards
into a DeFi normally come from a cut of any fees charged by the protocol, and
protocol, usually from being awarded protocol tokens.
a decentralized
exchange.
Automated Market Making with our Strategy’s only occurs on
decentralized exchanges designed for efficient Stablecoin and
Crypto-Asset trading.
Because our protocols focus mostly USD stablecoins, they have the
most robust and liquid markets in this market segment. As a result,
transaction fees are lower than its competitors and the platform can
accommodate much larger transaction sizes and volume.
The transaction fees charged on the protocols are paid to us, the
Liquidity Providers, based on their respective ownership of the
liquidity pool.
09 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 10
B A C KG R O U N D - WHAT’S A STABLECOIN? B A C KG R O U N D - REDUCING FRICTIONS
Prior to DeFi, there was no easy, cost By using the knowledge we have
effective, and decentralized way to trade accumulated during the past 18 months
between cryptocurrencies. In 2020, DeFi in DeFi, not only will we have the ability
allowed normal market participants to to benefit from the upside of crypto but
provide liquidity to order books, and earn generate yield from the assets we are
yield, effectively cutting out the traditional holding.
“Centralized Exchanges”.
A stablecoin is a There are different types Although all USD
cryptocurrency that is of stablecoins: stablecoins are intended
fixed to the price of the to have the same
US dollar or other major Fiat-backed underlying value, due to
fiat currency. Collateral-backed the nature of the market,
certain investors require
certain stablecoins.
11 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 12
S T R AT E G Y STRATEGY - OPTIMIZATION S T R AT E G Y STRATEGY - INCOME
OF THE LIQUIDITY PROVIDER
DEPLOY AND MANAGE A VARIETY OF STABLECOINS AND
VOLATILE CRYPTO ASSETS TO DEFI-AMM LIQUIDITY POOLS ASA
LIQUIDITY PROVIDER. THE STRATEGY WILL GENERATE FOUR
SOURCES OF INCOME:
PROTOCOL
REWARD STAKING
PROTOCOL
TRANSACTION
REWARDS
FEES
PROOF-OF-STAKE
STAKING REWARDS
PURCHASE AND MANAGE STAKING REWARDS PURCHASING AND
A VARIETY OF CRYPTO FROM VALIDATING STAKING PLATFORM
ASSETS (VOLATILE TRANSACTIONS ON TOKENS TO EARN
AND NON-VOLATILE) TO PROOF-OF-STAKE ADDITIONAL YIELD.
LIQUIDITY POOLS AS A BLOCKCHAINS
LIQUIDITY PROVIDER. (4-14% APY)
13 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 14
S T R AT E G Y STRATEGY - 1 S T R AT E G Y STRATEGY - 2
PURCHASING CRYPTO LP TRANSACTION FEE
ASSETS INCOME
NOT ALL PROJECTS ARE CREATED EQUAL TRANSACTION FEES
Since 2018, our Industry Expert Partner The Strategy receives its proportional
has shown significant and consistent share of the transaction fees generated
market-beating strategies. from the respective liquidity pool. Fees
paid to Liquidity Providers total 50% of
Research team specialized in Blockchain the fees earned by the pool (~5% APY)
Economics, Finance, Risk Management,
and Auditing. Transaction and corresponding fee
growth at a rate of about 10-15% per
Principles at Evolvent have been involved month.
in crypto since 2013.
Specialists in not only buy and hold
strategies, but getting assets to yield in a OF THE FEES
liquid manner . EARNED BY
50% THE POOL
(~5% APY)
TRANSACTION AND
10-15% CORRESPONDING
FEE GROWTH
15 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 16
S T R AT E G Y STRATEGY - 3
DEFI AMM
PROTOCOLS REWARDS
PROTOCOL TOKENS REWARDS
To incentivize Liquidity Providers to
deposit assets, Protocol Tokens are paid
as a reward. Greater rewards are given
to Liquidity Providers who stake Protocol
Tokens .
Expected returns are about 25-35%. This
incentive is heavily linked to the price of
Protocol Tokens, but the strategy is to
liquidate Protocol Tokens rewards and
reinvest them frequently.
25-35%+
EXPECTED RETURNS, WITH
TARGET MULTIPLIERS
17 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 18S T R AT E G Y STRATEGY - 4
PROOF OF
STAKE REWARDS
VALIDATING TRANSACTIONS ON PROOF OF
STAKE BLOCKCHAINS
By validating transactions in Proof-of-
Stake Networks, we will have the ability
to earn income. Depending on each
blockchain, we’ll be able to earn between
4-14% APY by actively participating in
the validation process and keeping the
network running.
4-14%
APY
19 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 20PROTOCOL TOKENS REWARD- STRATEGY FEES
HISTORICAL PERFORMANCE
MANAGEMENT FEE:
2% of AUM
ANNUALIZED APY PER MONTH
60%
50%
40%
30%
20%
10%
PERFORMANCE
0%
FEE:
1-Sep 1-Oct 1-Nov 1-Dec 1-Jan 1-Feb 1-Mar
20%
PERFORMANCE
Performance fee FEE
*April 2021 yielded 52% APY
amounts to 20% of
profits.
RISKS* Stablecoins pegged / linked / fixed to USD could be broken by
regulatory action, extreme market conditions or fraud.
DeFi AMM Protocols could be subject to a hack or software bug.
Institutional custodian could be subject to a hack
*Additional
EXIT FEE 30 DAY
risk factors ~25% of DeFi AMM Protocol pools lend stablecoins to other DeFi
can be
seen on the
platforms which could be subject to a hack, software bug or fraud.
0.5% LIQUIDATION
NOTICE 30 day
Prospectus There is no regulatory regime governing DeFi.
21 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 22INSTITUTIONAL INSTITUTIONAL
FUND ADMINISTRATOR-
CUSTODIAN - COPPER TRIDENT TRUST
Since 1978, Trident’s experienced, independent and professional
team has forged a hard-earned reputation for providing a highly
responsive personal service, backed by uncompromising attention
to detail. That’s why over 500 funds worldwide, with AUM exceeding
$35B, have selected Trident Trust to support them.
500
AUM EXCEEDING
OVER
FUNDS WORLDWIDE $35B
ALL ASSETS WILL BE HELD BY COPPER, AN INDUSTRY
LEADING INSTITUTIONAL CUSTODIAN.
Over $15B in monthly flow through their custodial
infrastructure
Insured by Lloyd's of London
Pending the second phase of licensing by the UK’s
Financial Conduct Authority
23 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 24FUND SERVICE PROVIDERS
Fund Administrator
Trident Fund Services (Malta) Limited
www.tridenttrust.com
Custodian and Prime Broker
Copper Technologies UK Limited
www.copper.co
Swiss Legal Representative
OpenFunds Investment Services AG
www.open-funds.ch
Legal Counsel Company Secretary Auditors Banker
Conyers Dill & Pearman. Conyers Corporate Services Richey May & Co. LLP Silvergate Bank
www.conyers.com www.conyers.com www.richeymay.com www.silvergate.com
25 A L P H A S T R AT E G I E S 3 r d q u a r t e r, 2 0 21 26CONTACT Dragon Dynamic Decentralized Finance Fund CONTACT: J. A.Michie TELEPHONE: +1-617-922-1117 EMAIL: jam@dragondynamicfp.com www.dragondynamicfp.com
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