Scenario 21

---
name: draft-lpa-scenario-21
task_id: funds-asset-management/draft-lpa/scenario-21
description: Draft a successor fund LPA for a digital asset fund by adapting a prior-fund precedent to address updated valuation conventions for illiquid tokens, a discount for lack of marketability schedule, staking income treatment, and closing mechanics including a first-close minimum and a final-close deadline.
activates_for: [planner, solver, checker]
---

# Skill: Draft Digital Asset Fund LPA — Valuation, Staking, and Closing Mechanics

## 1. Subject-matter triage (only if applicable)

- Treat the prior fund LPA as the drafting base, the term sheet as the deal delta source, and all attached exhibits, schedules, and ancillary documents as operative inputs.
- Draft the successor fund agreement as a full, standalone LPA; do not produce a summary or annotated outline in place of operative language.
- If the source set contains multiple competing formulations, preserve the deal-specific business terms in the body and isolate unresolved points in the drafting notes.

## 2. Failure modes the skill is correcting

- Drafter applies a single valuation methodology to all digital assets without separating liquid tokens from illiquid tokens, pre-token instruments, or equity interests in token-issuing entities.
- Drafter omits the transition logic between any initial cost-based treatment and later fair value measurement for illiquid holdings.
- Drafter includes a marketability discount concept but leaves the duration-linked schedule vague or disconnected from the remaining restriction period.
- Drafter fails to address staking income timing, valuation on receipt, subsequent appreciation, and slashing risk allocation.
- Drafter does not separately address airdrops and hard forks, creating ambiguity in tax and accounting treatment.
- Drafter leaves governance voting policy open-ended or fails to tie policy adoption to the required timing in the source materials.
- Drafter reuses old closing mechanics without adding a first-close minimum, a final-close deadline, or any extension mechanic if contemplated.
- Drafter omits custody controls appropriate for digital assets, including multi-signature transaction approval and qualified custodian framing.
- Drafting notes do not surface unresolved business points, leaving the client without a decision list.
- The drafting package is incomplete if the operative LPA file is not drafted first and confirmed non-empty before any secondary note file is finalized.

## 3. Legal frameworks / domain conventions that apply

- Use conventional fund LPA architecture: defined terms, management and investment authority, capital commitments and closings, investment limitations, valuation, allocations and distributions, fees and expenses, transfer restrictions, liquidity, custody, conflicts, tax, reporting, and miscellaneous provisions.
- For digital assets, distinguish liquid tokens priced by observable market quotations from illiquid tokens and pre-token instruments valued by GP determination under a fair value standard.
- If the source materials specify an initial cost period for illiquid instruments, preserve it and state the trigger for the transition to fair value; if not, leave the transition point as an open drafting issue.
- For a discount for lack of marketability, the schedule should connect discount levels to the remaining lock-up or transfer restriction period and should decrease as liquidity approaches.
- For staking, state the receipt date for income recognition, the fair value measurement method at receipt, the treatment of subsequent changes in value, and who bears slashing losses.
- For airdrops and hard forks, define each separately and state the income recognition and fair value treatment for each.
- For governance rights, state how token voting decisions are made and how conflicts are handled, with any required policy-adoption deadline carried through from the source materials.
- For closings, state the minimum first-close condition, the consequence if unmet, the final close cut-off, and any permitted extension or waiver mechanics if the source set supports them.
- For custody, align the provisions with a qualified custodian concept and multi-signature approval requirements for transfers and other dispositions.
- Cite controlling authority where a legal proposition is stated, including the source documents’ cited authorities or generally recognized fund and digital-asset practice authorities where no source citation is supplied.

## 4. Analytical scaffolds

- Start from the precedent and replace only the deal-delta terms first; then normalize definitions, cross-references, and exhibit references across the draft.
- Draft valuation provisions by asset category:
  - liquid tokens;
  - illiquid tokens;
  - pre-token instruments;
  - equity interests in token-issuing entities.
- For each category, state:
  - valuation standard;
  - pricing source or decision-maker;
  - timing of measurement;
  - any initial cost treatment;
  - any transition to fair value;
  - any special adjustment or restriction-based discount.
- If the source set does not supply a DLOM schedule, leave bracketed or NTD placeholders for each unresolved discount tier and tie each one to a remaining restriction interval.
- Draft staking provisions in four parts:
  - when staking income is recognized;
  - how receipt is valued;
  - how later fluctuations are treated;
  - how slashing losses affect the fund and capital accounts.
- Draft separate definitions and operative treatment for:
  - airdrop;
  - hard fork;
  - staking reward;
  - slashing event;
  - lock-up or transfer restriction, if needed for the valuation mechanics.
- Draft governance language so that voting authority, consultation rights, and conflict management are internally consistent with the adviser and GP governance framework elsewhere in the LPA.
- Draft closing mechanics so the first-close minimum is stated as a condition to commence investment activity if that is the intended business deal, and the final-close deadline is stated as a hard stop unless extension language is expressly included.
- Draft custody language so it works with transfer mechanics, wallet control, recordkeeping, and any approval threshold needed for digital asset transfers.
- Prepare drafting notes that identify each unresolved point, explain why it remains open, and distinguish true open issues from ministerial clean-up items.

## 5. Vertical / structural / temporal relationships (only if applicable)

- Use vertical consistency between the definitions article, investment restrictions, valuation article, and transfer/custody provisions so that one section does not undercut another.
- Ensure temporal sequencing is explicit where it matters:
  - first-close before investment period commencement, if required;
  - valuation at each measurement date;
  - staking reward recognition upon receipt;
  - later fair value changes after receipt;
  - final close by the stated deadline.
- Where the valuation logic depends on a temporal state, such as remaining lock-up duration or post-token-launch status, make that dependency explicit in the operative text.
- If the source materials provide a deadline, condition, or threshold, carry it through all affected provisions and cross-references rather than leaving it only in one section.
- Keep the drafting notes temporally aligned with the draft so each open item maps to the provision it affects.

## 6. Output structure conventions

- Produce the operative LPA draft as the primary deliverable and complete it before finalizing the drafting notes.
- The LPA should read as a complete fund agreement, not as a patch set of isolated clause inserts.
- Use industry-conventional fund-agreement headings and subheadings rather than a rubric-shaped checklist.
- Use bracketed placeholders, NTD markers, or equivalent drafting signals only for true open points that require business or counsel input.
- In the companion drafting notes, organize open issues by affected provision and state the decision needed, the reason it is open, and the downstream drafting impact.
- Keep the notes concise but complete enough for the GP or counsel to resolve each point without rereading the whole draft.
- Before ending, ensure the file names requested by the task are satisfied: the fund II LPA draft must exist and be non-empty, and the drafting notes must also exist and be non-empty.