KARMA

KARMA

P2P lending platform

Investor presentation
 PREMISES
Investment Imbalance
• There are more than 1 billion potential investors all
over the world and dozens of millions potential
entrepreneurs-borrowers.
• There are trillions of USD at the investors' disposal
being idle, due to the lack of investment
opportunities.
• At the same time, entrepreneurs experience
difficulties attracting loans to business development.
Geographical Imbalance
• In developed countries: loan interest rates are very
low, deposit rates are even negative.
• In developing countries: loan interest rates are very
high, but entrepreneurs cannot get loans even if
they accept the conditions.
• According to the World Bank, there is 2.1-2.6 trillion
USD lack of credits in growing markets
 KARMA
The 1st cross-border p2p (peer-to-peer) platform using blockchain technology in the world, where investors can
directly provide loans to SMEs (small and medium enterpreneurs)

VIDEO
PRESENTATION

HIGH-TECH. Deals registration, asset accounting and reputation storage in the blockchain. Smart scoring to reduce
default risk. Document e-management using digital signature

PROFITABLE. No intermediaries: it means the higher income for an investor and lower interest rates for a borrower.
Both parties gain the benefit from the cross-border capital flows: investors from countries with low interest rates
provide loans to borrowers from countries with high interest rates

SAFE. All transactions are 100% valid for both parties, even if they are from different countries

CONVENIENT. Simple interfaces, personal account, mobile application and e-document management simplifies
communication between an investor and a borrower
 BANKS VS P2P PLATFORMS
Banks need a few months to approve an SME It takes a few days to make a decision on p2p-
loan platforms

Best case scenario is that investors' income from p2p services help investors and borrowers to
deposits covers inflation contract in mutually beneficial terms

Banks prefer providing secured credits, p2p services work with both secured and
according to the regulator requirements unsecured loans

It is very risky for SMEs to receive funds from Crowdlending (funding from a few private
a single bank or investor investors) is often used on p2p-platforms

Tight standards and numbed requirements for Investors are more flexible selecting the borrowers
borrowers lead to a great number of lending allowing more entrepreneurs to raise funds on p2p-
rejections platforms
 PROSPECTS OF P2P LENDING IN THE WORLD

• Over the past four years, the p2p-lending market

has grown by more than 1000% achieving
$119 billion (2018)

• According to Morgan Stanley estimates, this

market will reach almost $ 300 billion by 2020
and to $ 1 trillion by 2025.

• The loan portfolio of the American p2p-service

Lending Club is already $ 35.9 billion, Prosper
Funding - $ 8 billion of issued loans. Only in May
2018, the British service Zopa demonstrated an
increase of loans volume by €99.2 million.
We set up a brand new credit
business model
 Costs for banks and insurers (30% of GDP)

Economy of
18-20th Investor’s income Cash flow
centuries
Investors Bank — center of expertise Borrowers
The investor brings money to the bank, because he is not competent and sufficiently informed for self-lending.

The revenue of centralized p2p platform

p2p platform — center of expertise

Economy of
21st century
Investor’s income
Investors Borrowers
Investor credits entrepreneur directly, independent peer-to-peer platform provides him expertise

The revenue is distributed among the

decentralized community
Marketing Specialist Lower Analist Realtor

Guarantor Insurant Collector Appraiser

Participants — center of expertise

Economy of
the future
Investor’s income
Investors Borrowers
Lending becomes transboundary. Expertises pass to independent participants, their efficiency is determined by the rating.
 COMPETITOR ANALYSIS
Karma is the 1st p2p platform for cross-border lending in fiat. It is cross-border lending that provides access to cheap money
to entrepreneurs from countries with high interest rates.

Why none of competitors still didn't manage to solve the transborder problem?

INTERBANK MONEY TRANSFERS. Bank control becomes harder from year to year. Banks request significant packages of documents
for cross-border transfers often declining the transaction. Moreover, settlements under loan agreements are banned in many countries.
Our solution. We will effect the cross-border money transfer, due to the blockchain technology. Karma will conduct all operational issues
with banks.

EXCHANGE RATE RISK. There is no convenient mechanism for insurance exchange rate risk for small amounts of investments
Our solution. We will create our own fund for currency risk insurance, which will further reinsure risk in international banks.

PAYBACK IN CASE OF DEFAULT IN ANOTHER COUNTRY. It is quite evident that it is extremely difficult for investor to defend his
interests abroad in case of default. It won't be profitable at all if investor operates small sums.
Our solution. At the time of loan issue, investors will be able to buy an insurance option to sell the loan to the guarantor in case of
default for the borrower. The price will be determined beforehand. The discount depends on the borrower's guarantee and
reliability.
 DIFFERENCE FROM COMPETITORS

CROSS-BORDER LENDING. 98% of the p2p lending platforms operate locally within one or several regions. Karma Model
supposes attracting investors the cheapest way possible and borrowers from countries with high capital requirements and high
business profitability.

USING BLOCKCHAIN. In recent years, the world’s trust in p2p credit platforms has dramatically droped, largely due to a lack of
transparency and data manipulation as a result. Today, Karma is the only solution among Fiat-based p2p platforms that use
blockchain, which provides full transparency and security of transactions for the participants.

DECENTRALIZING ROLES. Deep analysis of borrowers’ requests directly affects the performance of the entire platform. 98% of
credit p2p platforms use the in-house model analysis. This model, in our opinion, is not perfect. There are independent experts on
Karma who make a review to the requests and give them ratings. The rating of the request is a sum of various experts’, increasing
reliability. According to investors, the most notable reviews will be financially rewarded by the platform.
 USING BLOCKCHAIN
Karma is the world's first platform to develop its own blockchain for p2p lending.

TRANSPARENCY AND INFINITY. Fixing all transactions in the blockchain. Using a token as a virtual asset in the blockchain
network to fully display and account for transactions between borrowers, investors and the platform. The user will encounter a fiat
only when raising and withdrawing funds on the platform.

UNIQUE TECHNICAL CHARACTERISTICS:


- The platform uses the sdBFT consensus algorithm - an improved version of the dBFT algorithm
- Blockchain KARMA can process up to 10 thousand transactions per second

- The ability to allocate wallets within the blockchain with special rights - for example, for a KYC provider.

USING SMART CONTRACTS.

Smart contracts built into the platform determine a lifetime of a deal and perform the following functions:
- synchronization with the schedule of payments in order to obtain information about the upcoming payments of the borrower
- conducting of the asset transactions from a borrower’s crypto-wallet towards the investors' crypto-wallets in accordance with
the loan conditions – debt principal and interest repayment
- notification from external systems in case if next transaction of a virtual asset is impossible, accrual
penalties to the borrower with further repayment control

FULLY OPEN CODE. 


The blockchain source code is public, anyone is able to see and check out all the conditions / logic of smart contracts.
 ORDER RATING SYSTEM
REPUTATION (KARMA)
• Charged for useful activities
towards the community
• Good Karma of each
member increases the
demand for his services or
improves his loan conditions
SMART SCORING
• Financial condition
assessment
• Work experience and
education
• Project Estimation
• More than 100 parameters of
estimation
• Re-estimation in real-time
mode on a daily basis
COLLATERAL
• Real-estate, vehicles and
equipment
• Different characteristics for
collateral estimation: liquidity,
cover ratio and so on.
• Option for collateral selling in
case of default
 BUSINESS PLAN

Breakeven point

LAUNCHING THE PROJECT CREATION OF THE PRODUCT EARLY DEVELOPMENT INTERNATIONAL EXPANSION

2015 2018 2019 2020 2021

• Idea creation • Establishing the MVP Platform
• Testing the market • Initial product exploitation
• Fund-raising for the project • Operational breakeven
launch • Fund-raising for business
development in 2019
• Implementing the cross-border
functions
• Implementing the currency
hedging
• Launching the project at least in
3 regions besides Russia
• Fund-raising for business
development in 2020
• The platform presence
regions is increasing to 20
• Platform development due to
the sale of franchises and the
purchase of local p2p
companies
 TECHNOLOGICAL PLAN

Breakeven point

LAUNCHING THE PROJECT CREATION OF THE PRODUCT EARLY DEVELOPMENT INTERNATIONAL EXPANSION

2015 2018 2019 2020 2021

• Token emission based on the • Launching MVP Karma 2.0 (fiat loans • Implementation of the cross-border • Improvement and
Grаphene blockchain option): functions modification of functionality
• Launching the crypto a. Market of orders • Implementation of the currency
pawnshop b. E-document flow hedging
c. Routing of payments through • Decentralization of scoring and
nominal bank account analysis
• Launching own blockchain • Online monitoring of borrower’s
• Launching mobile application for financial status
investors • Expanding the acting parts in the
• KRM implementation for service fee ecosystem
 FINANCIAL PLAN
Operational break-even in Q4 2019
Increase the volume of loans issued by 33% quarterly (conservative forecast)
Organize the loans issuance for $ 1 billion in 2021

2018 2019 2020 2021

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Operational performance
Volume of transactions, million
USD 0 0,5 3 12 16 21 28 38 50 66 88 117 156 208 276 368

Commission 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%

Revenue
Revenue million USD 0,0 0,0 0,1 0,4 0,5 0,6 0,8 1,1 1,5 2,0 2,7 3,5 4,7 6,2 8,3 11,0

Expenses
Expenses, million USD 0,49 0,51 0,55 0,49 0,60 0,74 0,91 1,12 1,38 1,70 2,09 2,57 3,16 3,88 4,78 5,88
Profit, million USD -0,49 -0,50 -0,46 -0,13 -0,12 -0,10 -0,06 0,00 0,12 0,30 0,56 0,96 1,53 2,35 3,52 5,15
 KARMA TOKEN ECONOMY

• All commissions in the ecosystem are payed on the basis of Karma-token (KRM)
• The average commission is 3% from the transaction
• The more transactions in the ecosystem, the more commission value, the higher demand for KRM
• With basic amount of tokens and growing demand the token price will raise
• Additional options for those with more than 1 000 000 KRM:
✓Priority access to new applications from investors and borrowers
✓50% discount for transactions inside the platform
• Decisions concerning new emissions and key directions for the development are taken on the open vote basis (top 15 delegates of
the network)

Forecast for economic development: Token Issue:

2018 2019 2020 2018 2019 2020

Transaction volume, USD 15 mln 100 mln 300 mln Volume, USD 7 mln 25 mln 100 mln
Commission volume, USD 450k 3 mln 9 mln Price, USD 0,01 0,025 0,1
 KARMA NOW
The international community includes 10,000+ people worldwide

2 successful rounds of crowdfunding: $ 0.5 million in August 2017 and $ 10 million in December 2017.

More than 2,000 private investors all over the world have supported Karma project

The alpha version of the online Karma platform has been launched where test transactions were made
recorded in the block and processed with a smart contract

Tokens are available on 2 exchanges from Top-10

 INVESTMENT PROPOSAL
1. Token acquisition:

• Additional emission acquisition for 1 billion tokens at a price of 0.02 USD (price ICO 0.01 USD) for 25 million USD, the project
estimation is 60 million USD
• The total number of the issued tokens issued is 3 billion
2. Participation in the equity of the holding company or one of the operating companies:

• up to 25% in the holding company based on the project estimation of 60 million USD
• up to 49% in the Russian operating company, based on a the project estimation of 15 million USD

Use plan of the raised funds:

• 100% of funds will be directed to the Karma global expansion, the implementation of cross-border functions and currency risk insurance
• According to our estimates each expansion into new market will cost about 3-5 million USD
INFORMATION DISCLOSURE

VIDEO PRESENTATION KARMA BLOG

СURRENT BALANCE +
WHITE PAPER
EXPENSES REPORT

1Q18 PROJECT 2Q18 DEVELOPMENT

DEVELOPMENT REPORT REPORT
KARMA FOUNDERS
Artem Laptev
Founder, Investment director

Since 2010 has managed private p2p-investment fund for SME.

Developed own scoring strategy with stable and positive results More than 10
years of portfolio management experience in financial industry: Troika Dialog,
Sberbank. International CFA-certified financial analyst.

George Goognin
Founder, Evangelist

Ph.D in Economy Math Models. Vice chairman of the Russian Parliament

Blockchain Experts Chamber. IT-career since 2002, first IT-startup made in
2008. Ex-Chief Operating Officer in ADV web-integrator, TOP3 in Russia.
Clients: MOEX, VTB, X5 Retail, Apple, Samsung, LEGO, Nike. Co-founder of
digital business school RIK, over 1000 students taught.

Denis Svinarchuk
CTO
Software Engineer, C/C++
developer. Architect of IT
infrastructure. Highly qualified
expert for high loads and
parallel computing. Market data
expert.
More than 15-years experience
as Head of Web Technologies
Division Trading and Clearing
Systems Center at MOEX.
KARMA TEAM
Evgeny Kovalev
Head of Front-end department
Over 20 years experience of
full-stack web-applications
development, making site
architecture particularly for
MICEX. Participated in creating
open source libraries (ruby and
nodejs).
Dmitry Bolshakov
Head of Legal Department
More than 20 years
experience in the
jurisprudence. For the last 10
years he worked as a Head of
legal departments in
systemically-important
Russian banks. The founder
of the web service that
automatize legal services.
Alexey Opanasenko
Head of Credit Analysis
Department
17-years working
experience in Moscow
commercial banks, 12 years
of them - head of credit
departments: all types of
corporate lending and
crediting VIP-persons.
 Join us! =)
Web: karma.red
Telegram: t.me/karmaproject
Facebook: facebook.com/karma.blockchain/