NO SECURITIES REGULATORY AUTHORITY IN CANADA OR ANY OTHER JURISDICTION HAS EXPRESSED AN OPINION ABOUT CRYPTO CONTRACTS OR ANY OF THE CRYPTO ASSETS MADE AVAILABLE THROUGH THE PLATFORM (as hereinafter defined), INCLUDING AN OPINION THAT THE CRYPTO ASSETS ARE NOT THEMSELVES SECURITIES AND/OR DERIVATIVES.
Coinberry is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Coinberry Limited dated August 19th 2021 [link]. The statutory rights of action for damages and the right of rescission in section 130.1 of the Securities Act (Ontario) and similar legislation in the other provinces and territories of Canada would not apply in respect of a misrepresentation in this Crypto Asset Statement or the Statement of Crypto Asset and Crypto Contract Risks.
Together with the Statement of Crypto Asset and Crypto Contract Risks, the provisions of which are incorporated herein, this Crypto Asset Statement, lists certain specified risks associated with Ethereum. The risks identified in this Crypto Asset Statement and in the Statement of Crypto Asset and Crypto Contract Risks may not be all of the risks related to the Crypto Assets and Crypto Contracts and there may be other additional unknown risks, that may exist.
About this Statement
Coinberry (“Coinberry” or “we”) believes that our users should understand the crypto assets that they are able to trade using our crypto trading platform (the “Platform”). One of the crypto assets we offer through the Platform is Algo (“ALGO”). We created this summary to help you understand the basics of ALGO as well as some of the risks involved in acquiring it. While we tried to describe the key features of ALGO here, this summary isn’t meant to tell you everything you’d want to know before acquiring it. You should also do your own research on ALGO to make sure you are comfortable acquiring it.
Description of ALGO
ALGO is the native token of the Algorand network. The Algorand network is based on a whitepaper authored by Silvio Micali, a computer scientist and M.I.T. professor, in 2017. The development of the Algorand network, which is intended to be a secure, scalable and decentralized blockchain that provides a common platform for building products and services for a borderless economy, is overseen by the Algorand Foundation, a Singaporean corporation.
As a blockchain solution which allows for the creation of products and services, the Algorand network competes directly with Ethereum and other similar projects for market share. The primary feature of the Algorand network which distinguishes it from competing projects is its use of a novel mechanism known as a pure proof-of-stake (“PPoS”) consensus protocol, which the Algorand Foundation suggests makes for a more secure and scalable blockchain.
Algorand’s PPoS consensus protocol relies on a two-stage process for creating blocks. The first stage is the proposal stage, where the Algorand network deploys a mechanism that selects nodes randomly based on the amount of ALGO staked by the node. The node that is selected is the block leader that will propose the next block. By using a random mechanism, the Algorand network attempts to make it more difficult for bad actors to target and compromise the node proposing a new block. Once the block leader has proposed the block, more nodes are randomly selected to ensure the integrity of the block (i.e., to ensure that there has been no double-spend, overspend, etc.).
Like Ether, the native token of the Ethereum network, ALGO can function as a means of exchange and/or a store of value, with its value also being influenced by the additional use cases associated with its network. ALGO is also valuable because of its ability to be staked in exchange for rewards.
Like other crypto assets, there are some general risks associated with acquiring ALGO. We describe many of these general risks in the risk statement we publish on our website, including risks relating to: (i) volatility; (ii) access, loss or theft, (iii) control of processing power; (iv) settlement of transactions on crypto asset networks; (v) momentum pricing; (vi) private keys; (vii) internet disruptions; (viii) faulty code; (ix) network development and support; (x) regulatory risk; (xi) network forks; (xii) air drops; (xiii) voting rights; (xiv) cybersecurity incidents and other systems and technology problems; and (xv) unforeseeable risks. We also point out some risks that are specific to ALGO below. While we tried to describe the key risks associated with ALGO here and in our risk statement, these aren’t all of the risks associated with trading in ALGO. You should also do your own research on ALGO to make sure you are comfortable acquiring it.
Dependence on Developers
While many contributors to the Algorand network are employed by companies in the industry, most of them are not directly compensated for helping to maintain the platform. As a result, there are no guarantees that they will continue to contribute to Algorand.
The success of the Algorand network is predicated on developers choosing to build and use Algorand-native applications. There is significant competition between crypto asset networks seeking to offer open, programmable smart contracts platform for decentralized applications. The price of ALGO is likely to decline in the long run if constructive and meaningful applications are not created, supported and used on the Algorand network.
How Coinberry Decides to List Crypto Assets
Coinberry reviews crypto assets before making them available for trading on the Platform. In making our decision to list a new crypto asset, we consider publicly available information about the crypto asset, including (among other things) its creation, design, governance, usage, supply, demand, maturity, utility, liquidity, material technical risks and legal and regulatory risks.
To date, we have only made crypto assets available for trading on the Platform which have significant supply, demand and liquidity. In our experience, crypto assets with these qualities tend to also satisfy the other criteria we evaluate as part of our review. That being said, our review process is fulsome and flexible, and we don’t prioritize any one factor over another. You should review the risk statement published on our website for more information about our procedures for determining whether to make a crypto asset available for trading on the Platform.
Please make sure to review the Statement of Crypto Asset and Crypto Contract Risks for additional discussion of general risks associated with the Crypto Contracts and Crypto Assets made available on Coinberry.