TABLE OF CONTENTS. 1 I Executive summary 3

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2 TABLE OF CONTENTS 1 I Executive summary 3 2 I Market, Industry, and Opportunity Market potential Cryptocurrency market Robo-advisory Competitive analysis 7 3 I Automata s solution Clients first Our key features Solutions to the common problems in the market Target group Client s journey 14 4 I Investment Strategies 15 5 I Platform structure 25 6 I Economics Business model Token design and value 31 7 I How we use Blockchain 35 8 I Team 37 9 I Roadmap I Legal 43

3 2 MARKET, INDUSTRY, AND OPPORTUNITY Cryptocurrencies have experienced enormous growth in volume and popularity over the last several years. However, with this explosive expansion, market volatility and investing securely have risen to become two major concerns for investors. Best market practices continue to lack behind those implemented in traditional markets, resulting in an immediate need for technologies that efficiently grow investor capital while effectively managing risk. Additionally, the opportunities for safe and stable investments in cryptocurrencies are rare and for retail investors, often non-existent. Enter Automata. Automata s vision is to become the leading robo-advisory platform in the cryptocurrency space. Through the use of proven, extensively tested investment strategies, Automata is addressing the problems listed above by coupling cutting-edge algorithmic trading models with a user-friendly interface exuding in elegance. As a result of this marriage, the standard investor no longer needs the patchwork of cryptocurrency exchanges, trading bots and signal providers that they may have previously relied upon. Instead, they will have access to their very own bespoke investment manager capable of adapting to client needs and implementing a personalised cryptocurrency strategy, all at the touch of a button. The growth of robo-advisors is widely recognised in traditional markets, currently accounting for a significant percentage of the global wealth management market. Automata s core goal is to bring these highly advanced platforms to the cryptocurrency market allowing for investments, whether large or small, to grow without constant human supervision. Furthermore, this results in investors being able to lead their everyday lives and observe their capital growth without the wide-ranging risks and time constraints that come with active investment in a highly liquid market such as cryptocurrency. At Automata, our priority is protecting our client s interests by focussing on effective risk management and capital protection. We are able to consistently develop high risk-adjusted returns consistently and therefore heavily minimise the chances of significant loss. With our automated investment strategies, we can achieve sustained profit from the high volatility in the market while protecting customer s funds using optimised portfolio insurance strategies. Based on your individual risk profile, you will get a bespoke cryptocurrency investment portfolio that can easily adapt to both market volatility and changes in your financial situation, allowing you to relax as your investment is cultivated and protected with a program developed by some of the global financial sector s brightest minds. Whether looking to invest 1 or 10,000, Automata can offer you entry into the surging cryptocurrency market without having to navigate the rampant risks that come with investing in the market in its current state. WHITEPAPER - Page 3 of 44

4 2 MARKET, INDUSTRY, AND OPPORTUNITY Over the last years, both the cryptocurrency market and the use of robo-advisors in traditional markets have experienced exponential rates of growth. As blockchain technology has been revolutionalised in its underpinning of cryptocurrencies and establishing an immutable ledger, so have robo-advisor platforms with the impact it has on traditional markets. In the next few paragraphs, we will explain this in detail, show the correlation between the growth of these individual technologies as well as highlight the unique market position Automata finds itself in MARKET POTENTIAL As seen in many areas of society, the wealth management market is transitioning to a greater level of automation. Robo-advisory services have cemented themselves as leaders in the financial management sector and the exponential growth in cryptocurrencies has become widely noted. Combining these two ground-breaking, high-growth technologies represents a huge market opportunity as well as, understandably an impressive challenge. The high-risk, highly iliquid cryptocurrency market needs to be met with a platform capable of maintaining low-risk and a stable source of income. Robo-advisory platforms, renowned for their ability to manage risk and stabilise investments would be a natural fit for this role. At the current stage, the high-risk in the cryptocurrency market can only be handled by experienced cryptocurrency traders and is not suitable for retail investors who do not have the time or extensive trading skills needed to build a highly optimised cryptocurrency portfolio. Prospect theory developed by Kahneman & Tversky in 1979 tells us that individuals make decisions based on their expectations of loss or gain and individuals are more inclined to protect their initial investment rather than chance that investment in the hope of capital growth. Simply put, this means that a gain contributes less to individual happiness than a loss takes from that same happiness (when the investment sizes are the same). Additionally, people would rather accept a small but certain reward over gambling that same investment for a larger gain. This proven, preeminent theory clearly states that participating in the current cryptocurrency market is therefore not suitable for retail investors given the high-risk level of the market. WHITEPAPER - Page 4 of 44

5 2 MARKET, INDUSTRY, AND OPPORTUNITY CRYPTOCURRENCY MARKET Predictions of the future market capitalisation can be difficult as they depend on too many unknown variables that the cryptocurrency market does not provide in its current legislative state. However, given the past growth rates of Bitcoin users (measured by the number of Bitcoin wallets), it is possible to predict the adoption rate of cryptocurrencies in the future. It is important to note that it is possible for an individual to have more than one Bitcoin wallet, as well as multiple wallets for the thousands of alternate cryptocurrencies that are not Bitcoin. However, since the leading cryptocurrency platform Coinbase alone had 13 million users by the end of 2017, it can be assumed that the total number of Bitcoin users was somewhere between 13 million and 21.5 million, the total number of Bitcoin wallets registered by the end of The fact that Coinbase was not offered in the major cryptocurrency markets of China, South Korea, and Japan indicates that the number is probably closer to 21.5 million and could, in fact, be a great deal higher. Using the growth rate of Bitcoin wallets from 2014 to 2017 and extrapolating it a further three years to 2020, it would be reasonable to suggest that the total number of Bitcoin wallets is likely to exceed the 100 million mark. WHITEPAPER - Page 5 of 44

6 2 MARKET, INDUSTRY, AND OPPORTUNITY ROBO-ADVISORY The field of robo-advisory has also seen strong growth rates over past years as well, coinciding with the near-parabolic rise of cryptocurrency s market capitalisation. Only invented 10 years ago, the market is expected to hit a staggering $8 trillion in 2020 according to forecasts from renowned bodies such as The Journal of Alternative Investments. Furthermore, it is estimated that 10% of all assets worldwide will be managed by robo-advisors in CRYPTOCURRENCY ADOPTION AND ROBO-ADVISORY GROWTH RATE BTC wallets in million ,700 Robo-advisory AUM in USD billion ,000 5, , ,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 The graph confirms multiple market realities, the obvious being the similarity between the exponential rise of the two technologies in their respective markets. It also validates the notion that robo-advisor platforms are unquestionably trusted to manage immense sums of capital in the financial sector. In the wider context, the pairing of robo-advisor technology and the highly liquid cryptocurrency market presents a unique, currently untapped opportunity. In combining these two emerging technologies, investors are taking advantage of the high volatility of the cryptocurrency market while the robo-advisor works to dramatically limit the downside risk. Needless to say, the emphasis when investing in cryptocurrencies is risk management and capital protection, traits that roboadvisor platforms are renowned in traditional markets. Through the use of this platform, the cryptocurrency market becomes accessible and increasingly attractive to retail investors, a key challenge if the cryptocurrency market is to reach a position of widespread adoption. Automata will be the first platform to combine cryptocurrencies and robo-advisory by bringing an already well-known concept in the form of automated investment solutions into the world of cryptocurrencies. This unlocks huge potential and offers high, risk-adjusted returns for millions of potential users. WHITEPAPER - Page 6 of 44

7 2 MARKET, INDUSTRY, AND OPPORTUNITY COMPETITIVE ANALYSIS Currently, there is no cryptocurrency-specific robo-advisor in the market. Investors are constrained to choosing between roboadvisors in traditional markets, cryptocurrency buy-side institutions and cryptocurrency trade execution platforms. Automata will unify these three options and simplify investing in cryptocurrencies by providing tailor-made, adaptable cryptocurrency portfolios. Traditional robo-advisors Trade execution plateforms Buy-side institutions (HF, VC, AM) WHITEPAPER - Page 7 of 44

8 2 MARKET, INDUSTRY, AND OPPORTUNITY Characteristics of each group and why they are not suitable for retail investors Traditional robo-advisors As highlighted previously, traditional robo-advisors have been highly successful recently, resulting in a considerable boost to their popularity. They are uniquely capable of providing high risk-adjusted returns dealing with traditional assets like bonds and equities. However, they do not provide access to the surging cryptocurrency market, additionally lacking the market expertise and infrastructure needed to enter this market sustainably. Trade execution platforms There are now more than 500 cryptocurrency exchanges to choose from. They all offer very similar services and lack key features necessary for retail investors like portfolio optimisation, risk management tools, and smart diversification. Alternatively, many have been subject to security breaches resulting in major capital losses for users that held their funds on affected exchanges. Cryptocurrency funds Like cryptocurrency exchanges, cryptocurrency funds are abundant in quantity but contain fundamental issues restricting their overall quality as an investment option for retail investors. Within these funds, with numbers close to 300, little to no distinguishing features separates them from one another. Additionally, they tend to lack the high level of transparency required by retail investors while maintaining high fees, initial investment requirements, and restrictive lock-in periods. Features Cryptoasset investing Screening & vetting / scam risk mitigation Risk appetite profiling Investment allocation and diversification Automated portfolio rebalancing Capital protection controls Cold storage / custodian security measures Cash liquidity / no investment lock-in Constant portfolio monitoring Fiat-cryptoasset compatibility No minimum investment threshold Intuitive online UX/UI and tracking tools Big data supported investment approach Crypto Hedge/VC Funds Trading Bots / Investment Strategy tools Trade Execution Platforms Traditional Robo- Advisory Automata By combining all the features indicated above, Automata is advantageously placed to disrupt the cryptocurrency investment industry significantly. A comprehensive and detailed strategy on how Automata will achieve this is listed below. WHITEPAPER - Page 8 of 44

9 3 AUTOMATA S SOLUTION The following sections describe the key values of Automata, our core priorities, and the numerous solutions we can implement to address the systemic problems in the current market environment. We will highlight our targeted user group and the advantages of using Automata as well as giving an insight into what their investment experience will be like while using our platform C LIE NT F IRST At Automata, the client will always come first. In order to find the most suitable portfolio for each of our customers, we need to start by understanding our client s individual needs. This is accomplished via a short questionnaire to assess their risk profile upon entering our platform. This crucial starting point aligns the client s expectations and risk tolerance with the portfolio design and expected investment performance. With the information provided, the highly advanced Automata algorithm then determines the ideal portfolio for each individual investor and proposes an investment solution. The user will have the opportunity to override the suggestion manually and change the risk parameters or accept Automata s suggestion. After the user s risk preferences are calibrated correctly, the investment solution will be implemented. In real-time, we will monitor all the results and also give you the opportunity to change the investment strategy if you wish to do so. Undersand client s needs Propose solutions Implement solutions W H ITE PAPE R - Pa ge 9 of 4 4 Monitor results & adjust strategy

10 3 AUTOMATA S SOLUTION OUR KEY FEATURES Ease of use Investment strategies Security and reliability Automata provides solutions for current cryptocurrency investment problems all in one place. We are developing a mobile app which is simple to use but offers all advantages of a secure trading platform. An exceptional user-friendly experience will be provided from the moment you log on. Automated investment strategies developed by an award-winning proprietary trader will ensure everyone reaches their goals. The focus of each strategy is on risk management and capital protection. Every user will get a bespoke cryptocurrency portfolio which will be rebalanced automatically to ensure optimised individual returns. Automata adopt institutional-grade security measures to keep client s funds safe and secure. The vast majority of funds will be placed in cold storage to ensure the protection of these assets. Security and reliability are at the heart of our investment approach. WHITEPAPER - Page 10 of 44

11 3 AUTOMATA S SOLUTION SOLUTIONS TO THE COMMON PROBLEMS IN THE MARKET Weak trading strategies: Many investment strategies and trading bots are built upon nothing more than simple technical analysis, leaving out any expertise in risk or wealth management. They often choose the simplest approach to get the system up and running and on the market. And while this may work well in the beginning, their inability to handle risk management parameters or capital protection mechanisms leads to the eventual loss of your investment. It has become imperative that strategies need to be engineered from a global portfolio perspective, ultimately taking into account underlying diversification, the correlation between assets, volatility in the market and transaction costs. Such strategies cannot be built quickly; they require an empirical approach that can be developed only by experts and extensive backtesting, both critical for long-term success. Our team has decades of combined experience building and elaborating on automated trading strategies. This way customers can grow their wealth effortlessly. No risk management Cryptocurrencies can provide high returns, however, significant risk factors also remain abundant. You will see many providers underlying their AI skills with the goal of providing superior returns, however, in reality, this asset class has only been introduced recently and is still underdeveloped. Current AI platforms contain few historical data samples, resulting in understandably poor data quality. This, in turn, makes it nearly impossible to develop reliable trading strategies using either AI or statistical quantitative systems that take market dynamics into account. In this new environment, the only option is an empirical approach. The rules must be derived from traditional markets so as to achieve superior risk-adjusted returns. We have obtained our strategies from a portfolio allocation methodology using an insurance capital protection mechanism combined with strict risk management rules adaptable to different types of market conditions. Every investor has different risk/return expectations - so we have built these different risk-adjusted return portfolios to allow us to be adaptable to their specific individual needs. WHITEPAPER - Page 11 of 44

12 3 AUTOMATA S SOLUTION Difficulty of access There are many providers that allow you to invest in cryptocurrencies. However, most require a complex set-up process and lack intuitive, user-friendly aspects. Many of these platforms act as signal providers only and are therefore not suitable for the retail market. There are also a high number of cryptocurrency funds without track records or proven investment strategies. They usually require high minimum investments and don t allow retail investors to participate in the market. We aim to democratise crypto investments. We propose a simple and reliable way to invest in proven automated trading strategies by offering multi-support (desktop/mobile version), multi-account (new clients or already registered clients with our exchange partners) and multi-currency solutions (FIAT or crypto investment) from just 1. Unsecured platform Another common problem with crypto investment platforms lies in inefficient security measures. There are hundreds of exchanges and crypto wallets that have been compromised due to hacking or other targeted attacks. This has lead to a loss of trust from investors who now wish to invest in a more secure, user-friendly interface like Automata. Automata is built to the highest standards, with constant auditing and testing security is assured. Gaining the trust of our clients is imperative to our investment approach. Funds are locked in cold storage, and we follow all the best practices currently available in the market (multi-signature wallets, 2-factor-authentication, internal controls). Poor customer service & language support Most trading bots only focus on one language or country. Our international, multi-lingual team has extensive working experience in North America, Europe, and Asia, and we are able to smoothly support the global market by offering different languages (Chinese, Korean, Japanese, and Russian). We recognised the importance of being a global company which acts locally to be as close to their customers as possible in order to provide the standard of service we strive to provide. WHITEPAPER - Page 12 of 44

13 3 AUTOMATA S SOLUTION TARGET GROUP Identifying our target group is the key to personalising our marketing activities. We need to look at robo-advisory and cryptocurrencies in conjunction with one another to find the most likely users. For robo-advisory services, millennials are the group most likely to use it. According to a survey, 25% of millennials who have heard about robo-advisors have already used one in the past or are likely to use one in the future. Millennials currently represent around 20% of the world s population which gives a total number of about 2 billion people. This presents an enormous potential market for Automata moving forward. For the use of cryptocurrencies, the target group is very similar. More than 50% of millennials feel optimistic about the future of cryptocurrencies, and they are twice as likely to invest as any other age group. People who have already heard about cryptocurrencies will be more likely to use our services as well. A survey conducted in 2017 revealed that 78.5% of Americans had heard about Bitcoin. In the United States alone, that gives a potential target group of around 255 million people. Besides the United States, East Asian countries tend to show a higher adoption rate for cryptocurrencies compared to other regions globally. Judging by the Bitcoin trading volume, by currency, we can see that Asian countries make up for 4 of the top 5 currencies (USDT is a cryptocurrency pegged to USD) with Japanese Yen leading by more than 50% of the total Bitcoin trading volume by currency. We expect Asia to be the biggest and the most important market for Automata as we continue to grow and expand. The following graph highlights this current market reality. BITCOIN TRADING VOLUME BY CURRENCY 52% 2% 3% 3% 10% 17% 15% JPY USD USDT RUB KRW EUR Other WHITEPAPER - Page 13 of 44

14 3 AUTOMATA S SOLUTION CLIENT S JOURNEY Below is a sample of the user journey: New client Withdraw Funds Download app & Register an account Consult the live performance of your portfolio at anytime Increase/ decrease balance Fill in questionnaire to determine your risk profile Deposit an investment amount one-off or recurring payment Change investment strategy if necessary System automatically finds bespoke portfolio, Ability to overwrite manually WHITEPAPER - Page 14 of 44

15 4 INVESTMENT STRATEGIES Investment methodology: The term robo-advisory is an umbrella term used for a broad range of services and applications. Traditional robo-advisors using solely automated systems were first introduced into traditional markets in 2008 and have since then developed into many differing forms. Currently, the most popular of these systems is called hybrid robo-advisory. This form of automated investment solution adds human interaction to the client advisory process, improving results significantly. It achieves this by adding a control layer to the investment process that a machine cannot currently handle. A prime example of this occurring would be when market conditions are hectic, immature, and primarily driven by news flows. As a result, market volatility increases and triggers their system, but often in the wrong way. To avoid this issue, most traditional automated roboadvisors have tried to add an AI layer to their respective platforms, but this technology is still in its infancy and lacks the significant amount of data required to operate a reliable system that is effectively capable of replacing the human decision-making process. The hybrid solution that Automata provide remains the most secure and efficient way to manage funds. As Nobel laureate Robert Merton said, pure robo-advisory services lack the ability to create trust because the technology is not capable of creating trust on its own. Automata provides human interaction into key aspects of the traditional robo-advisory investment approach, resulting in an optimised outcome for consumers. When significant news is expected to reach the market, it is often difficult for automated services to filter the overwhelming magnitude of information. This may lead to incorrect investment decisions and could easily be avoided by involving human decision making. WHITEPAPER - Page 15 of 44

16 4 INVESTMENT STRATEGIES Conventional Human only Machine only or Hybrid In order to efficiently manage client s funds, it is important to understand client s knowledge in the cryptocurrency asset class, their risk appetite and return expectations. As a part of this, several key areas must be analysed: Client Typology and Experience Some clients are more familiar with this emerging asset class and have already invested in it. In the same way as traditional assets, our robo-advisor will simply comply with client classification typology, according to their knowledge in the space and amount deposited. They are then classified either as retail or a professional client. Retail clients will only have funds invested in more secure strategies. Risk tolerance This is the most important parameter in selecting the appropriate investment strategy for individual clients. The higher a client s risk tolerance is, the more he can expect to have significant returns. As a mutually exclusive flip side to this, it additionally implies an increased risk of capital fluctuations, due to volatility and a real potential for the chance of capital loss. Time horizon The expected length of investment of each client will modify their assigned asset allocation mix. Generally, clients with longer investment horizons are able to absorb higher risk in their portfolios as the focus will be on long-term growth rather than short-term returns and Automata s platform will reflect this. Funds under management We are able to create an individualised, bespoke portfolio from 1, but to optimise portfolio diversification, it is naturally better to have more money invested. As a result, Automata s platform has created payment facilities, such as the option of scheduling a recurring payment, so that clients can grow their deposit over several months and are not required to commit to a large initial investment. In this way, they can effectively build their wealth over time. WHITEPAPER - Page 16 of 44

17 4 INVESTMENT STRATEGIES Investment approach: We use strategic and tactical asset allocation models that are based on modern portfolio theory to achieve diversification targets and enable high, risk-adjusted returns. In each of these areas we have developed different models to build the most efficient portfolio: Strategic Asset Allocation: Quantitative Strategies Models CPPI (Constant Proportion Portfolio Insurance) Rebalancing The optimised CPPI approach splits the amount invested into risky assets (cryptocurrencies) and a risk-free asset (fiat currency). This intelligent rebalancing model is capable of increasing the allocation to cryptocurrencies exponentially in a bull market and decreases it faster than a classic buy-and-hold strategy in an established market downturn. Therefore, this model will outperform a static model with a periodic rebalancing period and those without any rebalancing whatsoever. Volatility autocorrelation Predicting the market trend over time is difficult. However, some patterns in the behaviour of market volatilities can be found over time. A prominent pattern Automata can observe is called volatility clustering. It simply means that a large move in the market tends to be most likely followed by another large move in either direction. In other words, if the volatility is at an elevated level today, it is more likely that it will also be high tomorrow. This behaviour helps us in the implementation of a volatility-based model, as well as allowing us to leverage recognised triggers more efficiently. Trend analysis Trend analysis techniques can improve portfolio returns significantly, as they help to determine the established trend. More importantly, it can give warning signs as to when the market is about to experience a reversal. Diversification The benefits of diversification are well established and beyond controversy. Cryptocurrencies seem to be strongly correlated to one another, and especially to Bitcoin. However, tokens and coins from different sectors and applications have lower correlations and combining them enhances risk-adjusted returns and decreases risk. To emphasise the effect, we will compare a diversified cryptocurrency portfolio with the returns of Bitcoin alone. WHITEPAPER - Page 17 of 44

18 4 INVESTMENT STRATEGIES ANALYSIS OF THE RESULTS: Comparison of annualized performance and maximum loss according to each assest 200% Annual return Max drawdown We isolated each of our investment models and compared it to a Bitcoin buy-and-hold investment strategy. This graph compares the four models above to a static portfolio which lacks the advantages of each specific model. Volatility & trend analysis are combined in the graph as the 2 models work complementary. 150% 100% 50% 0% -50% -100% BTC Dynamic allocation Volatility & trend analysis Diversification (TOP 4) We back-tested our strategies from 20 June 2017 to 20 June Bitcoin s performance during this time was about 150%. However, volatility and risk in Bitcoin was much higher than it was in each of our investment strategies (here indicated as the Maximum Drawdown). More important than the absolute performance of a portfolio is the return per unit of risk taken. In the next few paragraphs, we will explain the best ways to measure a portfolio s risk and compare it to the return the portfolio achieved. An important indicator to capture the risk of a portfolio is the maximum drawdown. A maximum drawdown (MDD) is the maximum loss from a peak to a trough of a portfolio, before a new peak is attained. Maximum Drawdown (MDD) is an indicator of downside risk over a specified period. Simply put, it is how much would investors lose if they had invested at the top and sold at the bottom. WHITEPAPER - Page 18 of 44

19 4 INVESTMENT STRATEGIES MDD = (Trough Value Peak Value) Peak Value Maximum Drawdown 350 Peak Peak Bitcoin s MDD over the analysed period is -67%. It can be seen that each of our models above add value as their MDD is lower than BTC s MDD. The best comparison however can be found in looking at different ratios. The Sharpe ratio is among the most commonly used performance measurements in traditional markets and the advantage of the Sharpe ratio is that it analyses the average return per unit of risk taken % -53% Valley Valley Maximum drawdown = Max percentage drop from Peak to Valler RP = average return of the portfolio RF = risk-free rate σp = standard deviation of portfolio returns For simplicity, we assumed a risk-free rate of 0%. 6 5 Comparison of the Sharpe ratio and Calmar ratio according to each assest Sharpe ratio= (RP- RF) σp, where 4 3 The Calmar ratio compares the annualized return to the maximum drawdown and is calculated the following way: 2 1 Calmar ratio= Annualized return Maximum drawdown 0 BTC Dynamic allocation Volatility & trend analysis Diversification (TOP 4) Sharpe ratio Return/Max drawdown (Calmar ratio) WHITEPAPER - Page 19 of 44

20 4 INVESTMENT STRATEGIES 1 2 Here are two things you need to know when it comes to understanding the Sharpe ratio: The higher a Sharpe ratio of a trading strategy, the better the return an investor can expect to realise in direct relation to the possible risk. When comparing two trading strategies with the same return, the one with the higher Sharpe ratio has experienced less volatility in the past. Sharpe ratio and Return/MDD is higher for each of our models compared to Bitcoin. At this point it is important to understand that the isolation of the different models was used to analyse the strengths and weaknesses of each model. This does not mean individuals can choose between the different models on our platform. Eventually, every user will get a combination of each of the models based on their personal preferences. We will show the results for a specific risk profile at a later stage in this paper. Tactical asset allocation: Market Timing Strategies Tactical asset allocation is an active management portfolio strategy that shifts the percentage of assets held in various underlying to take advantage of market pricing anomalies or strong market views. This strategy allows portfolio managers to create extra value by taking advantage of certain situations in the marketplace. It can be a highly effective strategy since the portfolio goes back to the original strategic asset mix when the desired short-term profits are achieved. WHITEPAPER - Page 20 of 44

21 4 INVESTMENT STRATEGIES MODELS: Systematic Technical analysis Technical Indicators Moving Averages, Relative Strength Index or Stochastic Oscillators are only a few technical indicators which help to understand the market and, in turn, profit from market anomalies Patterns Recognition Patterns recognition largely builds on the fact that history repeats itself. Similar chart patterns can be found in various markets repeatedly. Discretionary Market Analysis Elliot waves analysis This is a form of technical analysis which determines market cycles and forecasts market trends. Fundamental analysis: news trading, events trading In terms of extraordinary news or expected news with an uncertain outcome, we add human interaction to manage our client s funds, providing optimised outcomes. WHITEPAPER - Page 21 of 44

22 4 INVESTMENT STRATEGIES RESULTS Below is a graph which shows the overall performance of our investment strategies having deducted all trading fees. We combined all of the models to get the results for an investor with the following risk profile: Risk-averse Risk-taking Short-term Long-term investor Holding Frequently trading WHITEPAPER - Page 22 of 44

23 4 INVESTMENT STRATEGIES The records start on 1 January 2016 and end on 20 June The total return over the period was 399%. 600 Investment strategy / 01 / / 06 / / 12 / / 05 / / 11 / / 06 / 2018 Our investment strategies show extraordinary results in both of these indicators, as listed below. In the worst case scenario expressed by the maximum drawdown, investors would have still kept 90% of their portfolio value, while investing in Bitcoin would have seen their portfolio decline to 34% of the original number. Investment Strategies Performance 399 % Annualized volatility % Sharpe ratio 4.56 Max drawdown % WHITEPAPER - Page 23 of 44

24 4 INVESTMENT STRATEGIES Bitcoin and Investment Strategies The real strength of our investment strategies lie in the strong risk management and capital protection mechanisms we have set in place. This becomes even more evident when we look at our results, operating in the difficult market environment of 2018 is thus far. Below is a table and a graph which compares our results to a traditional buy and hold strategy in Bitcoin starting from 1 January 2018 : 130,00 100,00 65,00 32,50 0,00 01 / 01 / / 02 / / 03 / / 04 / / 05 / / 06 / 2018 Bitcoin Investment strategy Bitcoin Investment Strategies Year-to-date performance % 8.4 % Annualized volatility 98.1 % 13.5 % Sharpe ratio Max drawdown % -6.1 % WHITEPAPER - Page 24 of 44

25 4 INVESTMENT STRATEGIES RESULTS FOR DIFFERENT RISK PROFILES 3,000 2,500 2,000 1,500 1, Extreme Aggressive Balanced Moderate Conservative 0 1/1/16 19/3/16 5/6/16 22/8/16 8/11/16 25/1/17 13/4/17 30/6/17 16/9/17 3/12/17 19/2/18 8/5/18 Performance (since 2016) Annual return Max drawdown Sharpe ratio Return/max drawdown Conservative 135 % 41 % -5.3 % Moderate 258 % 67 % -7.9 % Balanced 441 % 98 % % Agressive 1,112 % 174 % % Extreme 2,210 % 256 % % WHITEPAPER - Page 25 of 44

26 5 PLATFORM STRUCTURE Sign-up Signing up to the Automata app will make entry in the cryptocurrency market simple. After registration, you will be asked different questions to assess your risk profile. The system will suggest the best cryptocurrency portfolio for you by analysing your answers. You will always have the ability to override the suggestion of the system and choose a different investment strategy if you feel it is more suitable to your individual financial needs. Start to invest from only 1. Decide to invest a one-off amount or choose a recurring payment. WHITEPAPER - Page 26 of 44

27 5 PLATFORM STRUCTURE Portfolio View your portfolio holdings to understand your current allocation better. In this example, the portfolio consists of 3 different cryptocurrencies (BTC, ETH, and XRP) which represent 80% of the total holdings. 20% of the money invested is currently staying in cash to ensure risk minimisation. Depending on the market environment and your risk profile, your cash position will change over time. WHITEPAPER - Page 27 of 44

28 5 PLATFORM STRUCTURE Balance Your balance is displayed and updated in realtime. A graph indicates how your portfolio s performance has developed over a specific period of time. WHITEPAPER - Page 28 of 44

29 5 PLATFORM STRUCTURE Transactions A list of all your deposits and withdrawals is available to ensure that you can efficiently track your capital in and outflows. Money can be withdrawn (as well as deposited) at any point in time. The focus of our mobile app lies on simplicity and reliability. All the screens are designed in a way that makes them easy to use and understandable at a glance. We want to provide the best user experience possible and offer a clean user interface for our customers. WHITEPAPER - Page 29 of 44

30 6 ECONOMICS The following paragraphs will outline Automata s business model, token design and financial projections. This gives detailed insight into how the platform over time will generate revenues BUSINESS MODEL Automata s clients will be split into 2 different groups based on their Assets under Management (AUM) classing. Clients with an initial investment of higher or equal to 1,000 will be treated as premium clients and get access to special services as detailed below: Customers Premium Customers Yearly fees % based on AUM Minimum investment 1 1,000 Service Access to investment strategies Access to investment strategies 24/7 priority support Monthly reporting Access to future premium services WHITEPAPER - Page 30 of 44

31 6 ECONOMICS Revenue from fees Monthly fees The use of the Automata platform will be subject to a monthly fee of 2 for accounts up to a 1,000 initial investment. Clients investing more than this amount will be treated as premium clients. They will receive special treatment (i.e. 24/7 priority support, reporting, access to premium services) and will pay fees based on their assets under management (AUM). In both cases, fees will be taken directly from the amount invested. Revenue from deal flow By forming partnerships with cryptocurrency exchanges, we will be able to get fees back on the deal depending on the revenue flow we provide. Since our approach will require a daily rebalancing of all of our client s position, trades will be generated at least on a daily basis. A certain percentage of these transaction fees will flow back to Automata through our partnerships. W H ITE PAPE R - Pa ge 3 1 of 4 4

32 6 ECONOMICS TOKEN DESIGN AND VALUE Automata will create its own native token which will entitle token holders to the following: Revenue sharing 5% of all the revenues we make from management fees is distributed to all token holders. Profit sharing 20% of the performance fees we collect from our users is distributed to all token holders. Token distribution 600M ATO token. Price 0.01 USD Hard cap 6M USD Tokens available in token sale 500M (80%), the rest will go to the bounty program, advisors and early investors WHITEPAPER - Page 32 of 44

33 7 HOW WE USE BLOCKCHAIN The revolutionary blockchain technology that underpins all cryptocurrencies also has viable use cases for the operation of Automata. Simply put, a blockchain is a decentralised public ledger that is shared across a distributed network. This ledger is fully transparent as it can keep track of every asset you own and transaction you make on the network. The real-world value of this immutable ledger lies in its ability to enable trustless transactions between two parties without the need of an intermediary third party. The record of these transactions is stored on the blockchain and open for all to access. This information is locked once inputted into the ledger, disabling the ability for any party to tamper with the record after a transaction has been completed. Individual miners secure the blockchain network by validating transactions using consensus mechanisms like proof of work or proof of stake. Earning cryptocurrencies to accurately validate transactions incentivises miners to continue to do this. Digital currencies like Bitcoin act as a store of value, in which the Bitcoin public ledger tracks and validates the exact amount of money that is sent between separate parties. Another major digital currency is Ethereum, an open-source, blockchain-based distributed computing platform that provides an infrastructure for companies to launch their own tokens and build decentralised applications. It achieves this through the development of Smart contracts, which are essentially a contractual agreement that self-executes using computer code. This means that funds can be transferred from one party to the next based on a set of pre-defined rules that have been coded into the Blockchain, and are therefore transparent and immutable. WHITEPAPER - Page 33 of 44

34 7 HOW WE USE BLOCKCHAIN Automata has identified several use cases for Blockchain technology and smart contracts on our platform. They are listed as follows: To create and distribute ERC20 Tokens (ATO) based on the Ethereum Blockchain which will be used by investors on the network to receive a discount on monthly service fees and exit fee. To secure vital information such as user and portfolio data by hosting it on a decentralised network as opposed to one that is centralised and has a single point of failure. To power our upcoming Copy Portfolio feature by enabling Automata to establish a decentralised peer to peer marketplace for executing group orders on individual portfolio strategies and collecting performance fees based on the success of those portfolio strategies. This feature will utilise Ethereum smart contracts and will operate as follows: Automata will record all trades made by individual portfolio managers on an open and immutable ledger. Buy or sell orders are simultaneously executed for all users who follow a particular portfolio manager. Performance fees are transferred from followers to portfolio managers in form of the ATO token based on present conditions that are coded into a smart contract. These conditions specify the performance targets a portfolio managers sets for themselves and the fees that will be rewarded to them based on achieving those performance targets. These conditions also specify that followers will pay portfolio managers a predetermined fee if their copied portfolios are successful in producing a certain positive return. If a copied portfolio achieves a certain agreed-upon return, the fees will be deducted from the followers account in the form of ATO token and transferred to the managers. If not, then the fees will remain in the followers account. Smart contracts will enable funds held by hundreds of followers to be instantly deployed to cryptocurrency investments based on the strategy of a copied portfolio. Smart contracts also enable funds held by hundreds of followers to be instantly distributed to portfolio managers once the predefined metrics of a successful portfolio are achieved. With the help of the Ethereum blockchain, Copy Portfolio provides an open and trusted marketplace for followers to crowdsource a variety of portfolio strategies from experienced managers. WHITEPAPER - Page 34 of 44

35 8 TEAM Our team combines extensive experience in the financial industry, wealth management and robo-advisory, cryptocurrency market and digital marketing. We were able to form a team of entrepreneurs who will build the best possible product and help Automata s brand to worldwide success. Hi, I m Matthias Kurz, CEO Co-Founder Matthias spent more than 7 years working for different investment banks in Vienna and London, managing teams in the areas of Valuations and Risk Management. With the experience he gained he understands the key aspects of protecting client s funds and has invaluable knowledge of automated investment strategies. In 2013, he started to invest in cryptocurrencies as a proprietary trader and studied various implementation techniques for systematic trading strategies. As a CFA charterholder he knows the ins and outs of portfolio management and the Certificate in Quantitative Finance (CQF) gives him the mathematical backing to understand the global markets and the behaviour of financial products. Hi, I m Gael Itier, CTO - Co-Founder Gael is one of the most talented proprietary traders you will find in the market. He brings a decade of implementing systematic trading strategies in traditional markets and in the cryptocurrency space. In 2014 he won the trading competition Les Talents du trading in France against 3,500 other competitors, broadcasted live on TV by BFM Business. Gael is the former Head of Quantitative Strategies & Prop. Trading of JFD Wealth where he was responsible of leading a team of traders and developers in the modelling and implementation of automated trading strategies. Hi, I m Diego Mascio, COO Co-Founder With over a decade s worth of experience working as a trader and portfolio manager, Diego has become an expert in asset allocation and portfolio management. Upon discovering a passion for crypto, he started merging the two concepts, soon developing an automated asset allocation model geared towards crypto. Diego was the Head of Structured Investment Solutions for JFD Brokers and brings extensive experience in the creation of innovative investment solutions. WHITEPAPER - Page 35 of 44

36 8 TEAM Hi, I m Sandra Nahon, CMO As Chief Marketing Officer, Sandra brings with her a wealth of knowledge on successfully growing companies from inception to a stage of global branding. Her broad experience base is centred upon strategic performance, communications planning and product development, skills in which she naturally excels. Sandra s rich experience profile stems from her time as Founder and CEO of highly successfully cosmetic start-up Biutag, as well as with Paris-based add agency DDB and heavyweight cosmetics firm L Occitane. Furthermore, she aptly fits Automata s policy of attaining premier talent from all over the globe to enrich our collective skill set. We look forward to witnessing Sandra utilise her aforementioned skills to assist Automata in becoming a globally recognised brand. Hi, I m Jean-Yves Guillou, Head of Research With over 10 years market experience as senior strategist (Technical Analysis & Strategy), Jean-Yves has provided research for the world s most reputable hedge funds, asset managers and traders. He is an expert in technical analysis, fractal / chaos theory and Elliot wave theory. His recent work in crypto research models is an invaluable asset to our team as Jean-Yves is able to bridge the gap between traditional assets and cryptocurrencies. Hi, I m Alicia Lui, CRO Alicia is a highly experienced CSM and CRM expert, having worked directly for leading global research technology firm GFK, as well as several successful startups. She has in-depth project management and technical knowledge. With over 10 years of professional experience in account and client relationship management, customer success and consulting, she continues to ensure implementation processes run smoothly. Additionally, she has 6 years experience on Salesforce CRM as well as 2 years of automation marketing at Salesforce. WHITEPAPER - Page 36 of 44

37 8 TEAM Hi, I m Thibaut Gruner, Junior Portfolio Manager Thibaut is a passionate trader of traditional markets and cryptoassets. Over the last years he developed different systematic and automated trading strategies. With the vast experience he brings from traditional markets he is able to implement algorithmic investment strategies efficiently and effectively in the cryptocurrency world. Thibaut has 4 years of experience in trading managed accounts and has developed a thorough understanding of the different types of markets to apply the relevant trading strategies. Hi, I m Vishal Sahu, Blockchain expert With 11 years of experience in the fintech space as software engineer, head developer and IT Manager, Vishal is excellent at arranging technical development teams, both at the startup and mature level. Having studied machine learning and becoming a smart contract expert, Vishal has implemented more than 50 fintech projects in various fields. He is the co-founder of multiple successful startups, including NexThoughts and Investly, a robo-advisor for traditional assets. Hi, I m Akash Katiyar, Lead Software Engineer Akash is an experienced software engineer with a demonstrated history of working in the computer software industry, he is a veteran developer. Skilled in Java, Groovy, SQL, Hibernate, and Spring Framework, his diverse understanding of software development will allow for the sidestepping of future problems. With over five years experience as full stack developer, Akash has been exposed to end-to-end software development for prolonged periods of time. In such time, he has delivered projects in fintech, e-commerce as well as the blockchain space. WHITEPAPER - Page 37 of 44

38 8 TEAM Hi, I m Camille Disquay, Project Manager Camille joins Automata as an expert in digital marketing after working for some of the world s leading brands, including Chanel and Peugeot. Her recent experience comes from her time at prominent swimwear label Banana Moon where she successfully created business development plans, implemented social media campaigns and effectively organised company events. Camille s extensive experience and adaptable skill set is valued greatly by Automata, as we disrupt the cryptocurrency investment sphere Hi, I m Ivan Chow, Compliance and accounting expert Ivan brings with him a long career working for the big4 firms and experience in investment management. With a total of 6 years working for EY and KPMG he is a compliance and accounting expert. He is currently enrolled in the MBA program of Warwick Business School which he will finish in He is also a CPA (Certified Public Accountant) certificate holder and a fintech advisor. Ivan managed numerous projects in the field of compliance, audit and accounting, leading a team of 20 members and advising customers like Alibaba, Cathay Capital and Aberdeen Asset Management. Hi, I m James Whiteley, Communications Manager James brings with him extensive experience in both long and short-form content creation with qualifications in social media marketing and online reputation management. His longer form work has included being published in numerous journals, including Australia s Young Diplomats Society. James exposure to all of these mediums leaves him well placed to effectively communicate Automata s vision and assist in its growth moving forward. WHITEPAPER - Page 38 of 44

39 8 TEAM Hi, I m Florent Ghigi, Graphic designer Automata welcomes Florent as our in-house graphic designer. With extensive experience on a variety of platforms, Florent s ability to create amazing, elegant visuals is virtually unmatched. Automata is exceptionally grateful to have a designer of Florent s calibre join our team moving forward. Hi, I m Zaied Al-Sultani, Lawyer Zaied comes to Automata having significant experience in international cryptocurrency law. His unique ability in the field of traditional business disruption and regulatory matters results in a natural fit with the Automata team and we are excited to utilise his incredible skill set as we launch our investment platform in the coming weeks and months. Hi, I m Andrew Palchykovsky, Web developer Di ut alit ant ut landa nos velitatiate quam faccum inturio nsequia debis rectiunt qui atium res doluptat omnim nonectur seque natur molupta sperferum quaecabora dolorem ius nonseque et essenih illenda ecaeritis es expe aut fuga. Et et, tem quibus exeriti is rent. Officae alia derrorpor se eumet eroviditas ex et alibus pro optatus del inullac ipsani sae. Sed eiciant. Officid qui corrore voloresectur moluptur. WHITEPAPER - Page 39 of 44

40 8 TEAM Hi, I m Augustas Staras, Advisor Augustas has 10 years of experience in building, growing and managing growth for online consumer businesses. As a partner in the advisory firm Fortum partners, he is an expert in digital marketing and in business development in the emerging digital finance industry. Augustas has advised different startups and led them to successful token sales in the past. With his experience in fintech, blockchain and crowdfunding he is able to share his invaluable insights into token design and business development. Hi, I m Julian Kaljuvee, Advisor Julian has started his career at McKinsey and Goldman Sachs as a Quantitative Analyst in New York after graduating from Harvard Business School. He brings 2 decades of experience in finance as well as in the fintech industry. He is the founder of several fintech startups in the areas of P2P lending, invoice financing and property financing. As a crypto enthusiast, Julian is a blockchain expert who is able to drive this business forward with his global network. WHITEPAPER - Page 40 of 44

41 9 Q to Q Adjustment of trading strategies to cryptocurrency market ROADMAP Q Kick-off marketing campaign Q Release of live version using fiat money deposits Development of copy portfolio feature 2016 Q Q Q Development of robo-advisor for traditional assets Creation of robo-advisor Automata Launch of beta product version (monitor live Release of full version including cryptocurrency deposits performance of investment strategies) Our initial roadmap emphasises the significant strides Automata has already made in product development, testing and marketing as well as our upcoming platform releases and goals for the future. From our inception and extensive testing phases in 2017 to our pending platform launch, Automata remains committed to achieving sustained success via repeated product optimisation, enhancement and analytical review. This roadmap will be updated constantly as Automata expands and sets its sights on further market opportunities. W H ITE PAPE R - Pa ge 4 1 of 4 4

42 10 LEGAL The information contained in the document may not be exhaustive and does not imply any elements of a contractual relationship. While we make every effort to ensure that any material in this white paper is accurate and up to date, such material in no way constitutes the provision of professional advice. Automata does not guarantee, and accepts no legal liability whatsoever arising from or connected to, the accuracy, reliability, currency, or completeness of any material contained in this white paper. Investors and potential ATO token holders should seek appropriate independent professional advice prior to relying on or entering into any commitment or transaction based on material published in this white paper. This material is purely published for reference purposes alone. ATO tokens will not be intended to constitute securities in any jurisdiction. This white paper does not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities or a solicitation for investment in securities in any jurisdiction. Automata does not provide any opinion on any advice to purchase, sell, or otherwise transact with ATO tokens and the fact of presentation of this white paper shall not form the basis of, or be relied upon in connection with, any contract or investment decision. No person is bound to enter into any contract or binding legal commitment in relation to the sale and purchase of ATO tokens, and no cryptocurrency or other forms of payment is to be accepted on the basis of this white paper. IMPORTANT You are not eligible and you are not to purchase any ATO tokens if you are a citizen or resident (tax or otherwise) of Singapore, if you are a citizen or resident (tax or otherwise) of the People s Republic of China («PRC») or citizens or residents (tax or otherwise) of the United States of America. WHITEPAPER - Page 42 of 44

43 REFERENCES 01. Robert A. Meyers: Complex Systems in Finance and Econometrics; 2009; p. 3 versions#v=onepage&q&f=false Publication_Dynamic_Risk_Control_ETFs.pdf WHITEPAPER - Page 43 of 45 44

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