Vehicle Blockchain Cycle Technology Overview!

PROBLEMS: FROM CAR OWNER TO CAR MANUFACTURERPROBLEMS FOR BLOCKCHAIN PARTICIPANTS

The automotive industry is one of the most sophisticated and technologically advanced industries in the world with innovation ranging from electric motors to self-driving cars to IoT integration.At the same time, the industry players that form the Vehicle Lifecycle Industry are faced with operational and customer service inefficiencies that lead to unnecessary costs and inflated prices for goods and services. Such costs are passed on to individual and corporate car owners, car ridesharing service users, logistic businesses' clients, etc.According to reports from LMC Automotive and Technavio, the global new and used car markets are almost equal in terms of number of units sold. Total sales of used cars were estimated at 90 million units per annum in 2016. Lack of trust on the secondary car market is another issue: buyers of used cars feel uncertainty when they buy a used car and spend hundreds of dollars for vehicle inspections even though they do not provide 100% certainty in regard to the car’s history. Car Manufacturer― Huge warranty claims costs― Enforcement of recommended maintenance and repair prices on the dealers― Customer attrition due to car dealers’ violation of recommended maintenance prices set by car manufacturers Insurer― Arcane and costly claim management methods― Inaccurate customer policy pricing― Lack of oversight over the quality of collision repairIndependent Repair Shop― Underutilized capacity― Customer retentionSpare Parts Producer― Existence of a large market for counterfeit spare parts― Lack of transparency in warranty monitoring and enforcementCar Owner / Fleet Owner / Car Lender / Ridesharing Service Provider― Lack of transparency regarding the car's history for the would-be purchaser of a used car ―inflated prices, plus unpredictable car maintenance and repair costs― Lack of trust in the outcome of maintenance and repair jobs― High costs in ridesharing economy.

KEY POTENTIAL USERS OF VLB ECOSYSTEM

VLB TOKENS ESTIMATION OF LOSSES FOR KEY INDUSTRY PLAYERS

Car Manufacturer According to the analysis from Warrantyweek.com* 2016, global car warranty costs amounted to $56 billion annually in 2016 and were more than $61 billion the year before. 30% of the total warranty cost (almost $17 billion in 2016) derives from poor practices and processes on the part of dealers.The highest warranty costs are in Europe and North America; the lowest are in Asia.VALUE CHAIN ELEMENTS AVERAGE OPERATING COST BREAKDOWN: P&CMarketing and sales support― Product development― Marketing― Sales supportOperations― Policy issuance― Policy servicing― Claims’ management IT― ITSupport functions― Logistics, HR, Finance, Other support functionsTOTAL COST IN SCOPE100%2.7%19.2%5.3%4.8%9.8%24.2%39%22.2%11.5%Source: McKinsey&Company Johannes-Tobias Lorenz, Björn Münstermann, Matt Higginson et. al, “Blockchain in insurance – opportunity or threat?”. July 2016, McKinsey.comSource: www.fbi.gov/stats-services/publications/insurance-fraud20122013201420152016Source: www.warrantyweek.com, Worldwide Automotive Warranty repairs, July 2017100203040506070$BN Reported Accruals MadeInsurerAccording to McKinsey & Company, 5-10% of all claims worldwide are fraudulent. Dishonest insurance customers cause fraudulent damage incidents and conspire with equally dishonest repair shops to get compensation. According to the FBI*, this costs US non-health insurers more than $40 billion per year.Policy issuance and servicing and claim management account for 39% of total insurance costs. Most insurance companies use arcane methods for policy issuance and claim management which results in operational cost inefficiencies. Operations and IT account for around 60% of a typical insurer’s cost baseSpare parts producerThe Federal Trade Commission of the United States estimates the market for fake car parts at approximately $12 billion a year.In addition to warranty claims from cars manufacturers, which are the largest in developed countries, counterfeit spare parts dominate in developing countries.More than $100 billion of losses are due to warranty costs, fraudulent insurance claims, and counterfeit spare partsPOOR PRACTICES AND PROCESSES BREAKDOWNSource: MSXI WARRANTY SOLUTIONSGoodwill/Policy/Ext. Warranty CostsWrong or inadequatefailure dataExcessive labor Fraud Unnecessary repairsDuplicated claimsOver repairsRepeat repairsExtended RepairsRepairs without OEM liability Wrong or ineffective repairs.

VLB TOKENSBLOCKCHAIN AS A SOLUTION FOR AUTOMOTIVE INDUSTRY PROBLEMS

Why Use Blockchain in the Vehicle Lifecycle Industry?Integrity and up-to-date records are the main aspects when dealing with interactions between the participants of the Vehicle Lifecycle Industry. Accuracy and immutability of records is essential for enforcing real-life contractual relations, maximizing the resale value of vehicles, ascertaining the authenticity of spare parts, achieving more accurate and cost-effective insurance claim management, monitoring the adherence to various recommendations of business partners, and optimizing insurance. Furthermore, recency of records and the ability to access them in real time opens up optimization opportunities for operations such as more robust inventory management for spare parts’ distributors and better capacity utilization forecasting for repair shops. Poor practices, which amount for 30% of the total warranty costs, could be eliminated by implementing a blockchain for warranty management where all claims, stock keeping units (SKU) for spare parts, and labor hours are recorded. For example, auto manufacturer warranties are contingent on vehicle owners maintaining their cars at certified repair shops that use original spare parts from trusted suppliers. This means that the car owner has an indisputable service record for their vehicle from certified repair shops and is able to demonstrate the origin and the SKU numbers of replacement parts installed. This is critical to being covered by the warranty. Blockchain technology also offers potential use cases for insurers that include innovating insurance products and services for growth, increasing effectiveness in fraud detection and pricing, all while reducing administrative costs. A distributed ledger can enable the insurer and various third parties to easily and instantly access and update relevant information (e.g. claim forms, evidence, police reports, and third-party review reports). According to McKinsey & Company,* by putting its insurance processes on a blockchain, an insurance company can reduce claims regulation costs by 20-30%.All of this leads to significant cost and inefficiency reduction for both the consumers and businesses not only in the auto industry, but in any individual human activity or business dependent on auto transportation. VLB will save billions of dollars a year globally and, more importantly, hundreds of thousands of jobs in the auto industry, all while making cars safer and more reliable without the long-term anticipation of automation, electrification, and mobility platform development. *Source: McKinsey&Company Johannes-Tobias Lorenz, Björn Münstermann, Matt Higginson et. al, “Blockchain in insurance – opportunity or threat?”. July 2016, McKinsey.com

VLB TOKENS PARTICIPANTS BENEFITS RECEIVED BENEFITS ESTIMATION Auto Manufacturer

Essential decrease of warranty claims costs and car recalls costs― Increase of customers loyalty and brand confidence― Verification of maintenance records in the event of warranty claims and identification of counterfeit spare parts― Control and instant pricing for car maintenance performed by authorized dealers $17 bnInsurer― Optimization of vehicle insurance policy pricing― Decrease and optimization of claim management costs― Decrease of clients attrition$12 bnSpare Parts Producer― Decrease of warranty claims against faulty non-original spareparts ― Stock management optimization$6 bnIndependent repair shop― Secure repair and maintenance records― New client flown/aCar Owner / Fleet Owner/ Car Lender/ Ridesharing Service Provider ― Trust and confidence in the used car market― Maximization of the vehicle's resale value― Creation of transparent car history― Decrease in costs for individuals and businesses in the ridesharingn/aThe Vehicle Lifecycle Blockchain will create a seamless decentralized platform of all records related to the Vehicle Lifecycle from the production door to the junk yard and will encompass the following benefits for industry participants:Minimum $35 billion of potential benefits for key market participants from the use of VLB Tokens BLOCKCHAIN AS A SOLUTION FOR AUTOMOTIVE INDUSTRY PROBLEMS

VLB TOKENS

VLB OVERVIEW With VLB

All car industry participants are data owners with respect to goods and services produced: vehicle production and ownership, warranties and recalls, repair and maintenance records, accidents and damages, insurance history, and so on. They will use the blockchain ecosystem to record and secure relevant data.Data consumers are individuals or other businesses (including fellow VLB participants) that will use VLB for the purpose of viewing all necessary information in regards to a particular car/driver/spare part/repair shop/etc. with 100% confidence that this information is and always will be accurate and complete. Data owners will pay small fractions of VLB Tokens to record and broadcast information on the blockchain (VLB “Fuel” — similar to Ethereum’s gas) and receive payments in larger amounts of VLB Tokens for access to this data from data consumers via smart contract or get compensated otherwise in case of freely broadcasted data, depending on their business rationale. Taking into account the benefit of blockchain for participants, the low cost of recording transactions will facilitate the active usage of VLB by data owners, while data consumers will be willing to pay a higher price for the accurate data. The price of the transaction will be determined by the market. Data owners will have incentive to produce complete data that can be cross-referenced by groups of data owners participating in a single transaction (for example, a car manufacturer, a spare parts producer, or a warranty repair service provider in a transaction covering repair job under warranty). The accuracy and completeness of data will be enforced by VLB protocol, not only financially rewarding the faithful actors, but punishing the inaccurate ones with the loss of their VLB Token stake as well as revocation of the actor’s VLB participant status along with legal and other corresponding “offline” consequences in the real world.The Vehicle Lifecycle Blockchain will initially be fully implemented within the VLB early auto industry participants’ ecosystem, which includes the CarFix* network of repair shops, test mode for car manufacturers, insurance companies, spare parts distributors, and fleet management companies. However, the true mass-market potential of this blockchain lies in its decentralized deployment beyond the initial ecosystem. Blockchain fueled by VLB Tokens has an innate disposition to become global through the facilitation of expansion by certain nodes. Car manufacturers and spare parts producers are global Super Nodes** and insurance companies are national Super Nodes. We expect that these participants will integrate and distribute VLB globally as soon as they get positive results during the test period. VLB founders will dedicate a sales and business development team to work with Super Nodes to promote the independent and decentralized use of the Vehicle Lifecycle Blockchain through the utilization of VLB Tokens. VLB Tokens’ turnover through the system will increase in parallel with the blockchain system development.Footnotes:* CarFix is a comprehensive online-to-offline auto repair platform, covering client experience improvement and algorithmic price setting, repair shop ca-pacity management, spare part market optimisation while also providing an end-to-end online transaction capability. CarFix was launched as a start up in April 2016 and is currently comprised of 280 fully integrated independent repair shops (with 500+ onboarded repair shops in total), all key spare parts distributors and dealers of most popular mass-market car brands in the CIS region. ** Super Node - Node on the Vehicle Lifecycle Blockchain that has an inherent ability, due to the nature of its business, to propagate the creation of VLB Token fueled ecosystem in new geographies. Car manufacturers and global spare parts producers are global Super Nodes. Insurance companies are national Super Nodes. Data ownerData consumerFreeVLB TokenVLB FuelRecordPublicSmart ContractDataData

VLB TOKENS COMPETITIVE ADVANTAGES

Elaborate validation processBefore entries become eligible for inclusion in blocks they will go through several layers of real world validation processes:— Arm’s length counterparty verification— Node identity confirmation — Cross-identity acceptability— Proof of paymentLeadership TeamVLB’s founders have a proven track record of building successful businesses and a deep understanding of automotive industry, having launched successful companies CarFix and CarPrice. VLB's core team consists of high-level professionals with technology, blockchain development, business development and general management expertise.CarFix and other Initial Industry Participants' current businesses will act as a testing groundThe existing CarFix and other Initial Industry Participants* ecosystem present a per-fect staging ground to develop and deploy the Vehicle Lifecycle Blockchain. CarFix Ecosystem Indicators10 spare parts distributors500 + Repair shops50,000 +Customers250,000 + Repair jobs doneThe Advisory Board is comprised of influential leaders in the areas of blockchain and crypto-technologies, insurance, financial technologies and business development.Nitin Gaur (Director at IBM Blockchain Labs), Roberto Medrano(CEO of Beach View Capital), Sergey Solonin (CEO and Founder of QIWI Group), Hannes Shariputra Chopra (ex-CEO of Sberbank Insurance), Alexey Arkhipov (Director for cryptotechnologies at QIWI Group), etc.AdvisorsThe VLB project is supported by strong partners from automotive, blockchain, legal and venture capital industries. Partners* The VLB team is working on forming new partnerships with auto industry partici-pants from various regions to ensure wider adoption of VLB

VLB TOKENS EFFECT OF COST REDUCTION

The chart below identifies and quantifies costs that can be significantly reduced by respective industry participants: COST PER CUSTOMERFootnotes:¹ McKinsey, European Insurance & Asset Management² www.cars.com, AAA (based on 15% commission paid on average repair cost in US of $500); ³ www.warrantyweek.com/archive/ww20160107.htmlVLB Token ICO PriceUSD per customerInsurer591-2105Policy issuance, administration & claim management1Customer acquisition cost2Warranty costs due to poor dealer / repair shop management & processes3Repair shopCar manufacturer02040608010012075Cost reductions due to Vehicle Lifecycle Blockchain implementation

VLB TOKENS PROJECT TIMELINE DATE MILESTONES FUNDRAISING PLAN

April 20182H 2018VLB FUNDING ROUND A (ICO)PROJECT DEVELOPMENT― Alfa and Beta versions of the Vehicle Lifecycle Blockchain$4-$12m 1H 2019VLB FUNDING ROUND B (PRIVATE, INSTITUTIONAL INVESTORS)STAGE 1: PROJECT TESTING― Achievement of a certain critical mass of data owners and data contributors and recorded transactions ― Entry into new markets $15-$30m 2H 2019VLB FUNDING ROUND C (PRIVATE, INDUSTRY PARTICIPANTS)STAGE 2: PROJECT DECENTRALIZATION AND EXPANSION― Connection of key project participants to the system:car manufacturers and insurance companies― Permissionless access to the Vehicle Lifecycle Blockchain for Industry Participants― Decentralized development of applications for a broad range of business needs$20-$40m2021