EcoChain ONE (bitcoin bond) (Asset-backed) Crypto Analytics & User Data

Participation in the Programme carries certain third-party risks clearly outlined in the prospectus. To mitigate those risks, we are: I. fully hedged; ii. we fund projects backed by assets to protect against BTC counter-party risk—additionally, iii. By providing liquidity, we limit risk in case BTC does not appreciate; iv. We provide liquidity while BTC hits the target price.

The Bond will pay Interest in BTC every quarter from the Commencement Date.

The Investment Strategy which the Trading Subsidiary shall implement on behalf of the Company is summarized as follows: (1) Dealings with BTC miners The Programme Manager has identified BTC miners with whom the Trading Subsidiary will deal in the following manner: (a) Leasing of servers/GPUs to support enhanced BTC mining operations; or (b) Lending of BTC, for miners to use to finance or support their businesses. These activities will typically occur because the given miner will charge or pledge assets to the Trading Subsidiary as security for the lease or loan. Concerning BTC loans, the miner must deposit Initial Margin and mark this daily to market to reflect changes in the exchange rate between BTC and the US Dollar. This and other provisions are regulated under a Margin Deed that the miner enters into with the Trading Subsidiary upon entering into the loan arrangements. (2) Dealings with BTC miners in default The Company and the Programme Manager anticipate that trading conditions for BTC miners, in general, will be far more difficult than has previously been the case, given the rising expense of mining operations (e.g. on account of an increase in global energy prices, the possibility of global war etc.) and the potential for further fall in the value of BTC in fiat currency terms. Miners who cannot remain in business may prove to be attractive distressed purchases for the Trading Subsidiary. The logic behind this is that they will be being disposed of as business entities at distressed prices and that because of the deployment of the capital it has raised through the Programme, the Trading Subsidiary will be in a position to oversee the BTC mining functions at more competitive prices. The Trading Subsidiary will look at such opportunities. It is stressed that these need not refer to the BTC miners with whom the Trading Subsidiary has dealings under the first limb of the Investment Strategy. (3) Secondary Debt Instruments The Programme Manager’s concern is that if BTC should continue to fall in value (or remain low-value) relative to the US Dollar (or other relevant currencies), the value from BTC mining (whether from miners or distressed entities under the control of the Company) may be insufficient to provide the Company with the means of servicing the interest on the Bonds at the rates stated in the relevant Pricing Supplement. The Trading Subsidiary will, in such cases, have the power to invest proceeds of subscription to the Bond into Secondary Debt Instruments. Investment into Secondary Debt Instruments may be as a subscriber during their initial offer or by transfer. The Trading Subsidiary will also have the power and right to resell Secondary Debt Instruments. Any Secondary Debt Instrument must in the Trading Subsidiary’s opinion, have evidence that at some point in their period of issue, they will be backed by assets (not including real estate) supporting at least 70% of their nominal value.

The advantage of the Programme is that it targets the generation of an income return per annum gross of tax, derived from the successful exploitation of the Investment Strategy, limiting the risk by backing the bond with assets. It's a way out for those who have bought bitcoin at higher than the current rates and would like to hold on to their investment until their level is reached. Interest comes as a bonus, as it keeps their holding liquid. For first-time bitcoin buyers, interest payments keep their investment liquid and reduce the risk of price decreases.