UBX - Architecture

The benefits are simple and many: convenience, no broker fees, no exit fees, full transparency, full control and a lower price bound. There is no need to keep your UBX tokens on a centralized platform and you are free to sell or exchange your tokens without restriction. Automation allows UBX to operate with fees of only 0.5% p/a as opposed to the market average of 3% p/a.

No trust is required in the ability of human fund administrators/traders - an index fund strategy does not require any discretion or judgment, just adherence to a method determined via data science. The number of tokens, rebalancing frequency and asset weightings were carefully determined and our approach is detailed in this white paper.

The ICO funds will be used to buy the underlying assets. Tokens can be liquidated through the UBX smart contract for their share of the portfolio's net asset value (NAV). This is key: it protects the token price as it would not be rational to sell at a lower value on exchange when tokens can be directly liquidated for a higher value.

Funds with stellar performance attract substantial amounts of new money. A manager will most likely have to use that new money to "chase" a relatively small group of coins. This buying pressure can drive up coin prices. forcing the fund manager to pay higher prices than would otherwise be the case - affecting all token holders by reducing the fund's future gains. This is the motivation for issuing no further tokens post-ICO.

The total market cap of the S&P 500 (June 30th, 2017) was 21.83 trillion USD while the entire combined cryptocurrency market cap is only a fraction (approximately 0.7%) of this. The S&P 500 is only a small part of the global investment market. There is thus still significant potential to introduce retail investors into the crypto market.

Exposure to crypto returns with a broad, limited risk profile offers a compelling case to both crypto and fiat investors. UBX's value proposition (diversification by holding a single token) will be heavily promoted via marketing and investor outreach. The only opportunity to purchase these tokens post-ICO will be on exchange from ICO participants - highlighting whilst simultaneously creating value for participants.

UBX will be of benefit to the community as a whole market transparency and liquidity will increase as a result of our trading activity. We will bring fresh support, funding, and understanding to the community. Conventional Investors who were uncertain about investing in a single technology or system will now have an option to support the emerging cryptocurrency market through UBX.

2. TYPICAL PORTFOLIO & FUND STRUCTURES

Definitions:

Open-end mutual fund:

An open-end fund is a mutual fund issuing unlimited shares of investments in stocks and/or bonds. Investing creates more shares, whereas selling shares takes them out of circulation. Shares are bought and sold on demand at their net asset value, which is based on the value of the fund's underlying securities and is calculated at the end of the trading day. When a large number of shares are redeemed, the fund may sell some of its investments to pay the investor. Shares are bought directly from the fund administrators.

Exchange-traded fund (ETF) :

An exchange-traded fund is like an open-end mutual fund but instead trades as a common stock on a stock exchange. it is not purchased directly from fund administrators. An ETF may trade at a premium or discount to the NAV but this is often very short-lived due to arbitrage by institutional investors.

Closed-end fund (CEF) :

A closed-end fund is seeded once-off via an IPO and then traded on exchange thereafter

No further shares are issued and CEFs may trade above net asset value as buying and selling the shares on exchange has no effect on the underlying assets. The structure of UBX is analogous to a new hybrid type a closed-hybrid fund (CHF): A CHF is a closed-end fund that trades with an index strategy whereas traditionally all closed-end funds have been actively managed.

Post-ICO, investors will only be able to purchase the UBX tokens on exchange. No further tokens will be sold directly. Buying and selling tokens on an exchange does

not affect the underlying NAV and CHFs are able to trade at a premium depending on market forces.

A price floor is created via the liquidation option in the smart contract, effectively ensuring that the token is not able to trade at a discount.

3. RATIONALE BEHIND A CRYPTO INDEX STRATEGY

Index investing has seen exponential growth among investors since the first index mutual fund was launched in 1976. This has proven to be a successful form of investment as the low-cost involved has allowed index funds to outperform the majority of active managers across market and asset styles.

Over a 10-year investment horizon more than 80% of large-cap fund managers failed to outperform their benchmark index. The odds of picking a winning fund manager are also low: studies show that regardless of past performance, future performance is virtually random.

Simply, an index fund allows investors to track the index the underlying trend behind the selection of assets without being reliant on a particular one. There is no active trading apart from the rebalancing of assets at fixed time intervals. This allows the fund to consistently track the mean market performance even if some of the original assets fall out of favor.