Understanding Crypto

Crypto offers the ability to own and move money globally without relying on banks.
Before using Krak or participating in Ezra Trusts, it’s important to understand the basics and the risks.

This guide explains:

• What cryptocurrency is
• Why Ezra Trusts use USD-backed stablecoins
• What “gas fees” are and why they exist
• The risks involved with crypto assets
• What Krak may ask during setup (FCA-style questions)

What Is Cryptocurrency?

Cryptocurrency is digital money secured by cryptography.
It exists on blockchains — shared global networks that record every transaction publicly.

There are different types of crypto:

Ezra Trusts primarily use USDC, a regulated stablecoin backed by US Treasury assets and audited reserves.

What Are Gas Fees?

Whenever you interact with a blockchain — transferring funds, updating balances, claiming rewards —
you pay a tiny gas fee to:

• Reward network validators
• Prevent spam transactions
• Guarantee fair order processing

On Base Network (operated by Coinbase) gas is normally:

Less than 1 US cent per transaction.

For most users, Ezra Trusts covers gas automatically.
You may only need gas when modifying wallet permissions.

Crypto Risks You Should Know

Crypto assets can be complex and carry risks. You must understand:

• Value risk — asset prices may go down
• Regulatory risk — rules can change in your country
• Technology risk — private keys must be protected
• Smart contract risk — code could contain bugs
• Counterparty risk — custodial platforms could fail
• Tax risk — gains may be taxable where you live

Only invest money you can afford to lose.

Why Ezra Trusts Use Stablecoins

Ezra Trusts aim to reduce volatility by holding stablecoin assets and allocating them into diversified yield vaults.

How it works:

1. Profits from trading are deposited into trusts
2. The trust allocates into ERC-4626 yield vaults (like savings accounts on-chain)
3. Yield accumulates over time
4. A portion is reinvested to protect against inflation
5. The remainder becomes claimable income for you

Each shareholder holds shares representing their percentage of the trust’s assets.

Your returns are proportional to your shareholding.

Example

If you hold 3% of shares in a trust with:

• $100M principal
• 5.8% annual yield
• 2.7% inflation rate

Your estimated annual return would be:

≈ $85,000 USD per year, before tax.

Your income grows over time because reinvestment targets 10% above inflation —
helping maintain buying power even when prices rise.

FCA-Style Suitability Assessment (What Krak May Ask)

To protect users, Krak may ask questions such as:

✔ Knowledge & Understanding

• Have you purchased or used crypto before?
• Do you understand that crypto assets carry risk?
• Do you understand private keys must be kept secure?

✔ Financial Wellbeing

• Are you investing with discretionary funds?
• Would losing this money impact your essential living costs?

✔ Risk Awareness

• Do you understand cryptocurrency values may go to zero?
• Do you understand returns are not guaranteed?

These questions help ensure crypto is suitable for your circumstances.

Tax Disclaimer

Returns may be taxed depending on your country.
You are responsible for your own tax reporting.

Summary

Crypto provides global, secure digital finance — but with real risks.
Ezra Trusts help reduce volatility and protect long-term returns through:

• Stablecoin-only allocations
• Automated inflation-aware reinvestment
• Fully transparent on-chain architecture

If you’re unsure at any point, consider seeking independent financial advice.

Need help setting up your Krak wallet or with your first deposit?
Explore the Help Center or reach out to the Ezra Trust team — we’re here to support you.