Crypto Asset Statement - The Graph (GRT)

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 GRT. We created this summary to help you understand the basics of GRT as well as some of the risks involved in acquiring it. While we tried to describe the key features of GRT 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 GRT to make sure you are comfortable acquiring it. 

Description of GRT

The Graph is a protocol for indexing and querying data from blockchains, starting with Ethereum. Developers build applications with open APIs called subgraphs to easily access on-chain data that is indexed by a network of node operators. Subgraphs are open source so anyone can use the APIs to build decentralized applications. Many Ethereum applications have already built subgraphs and use them including Audius, Uniswap, Opyn, ENS, DAOstack, Synthetix, Moloch and more. Over 20,000 developers have contributed to developing subgraphs across more than 20 chains.

Risks

Like other crypto assets, there are some general risks associated with acquiring GRT. 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 GRT below. While we tried to describe the key risks associated with GRT here and in our risk statement, these aren’t all of the risks associated with trading in GRT. You should also do your own research on GRT to make sure you are comfortable acquiring it.

Dependence on The Graph Developers

While many contributors to The Graph’s software are employed by companies in the industry, most of them are not directly compensated for helping to maintain the protocol. As a result, there are no contracts or guarantees that they will continue to contribute to The Graph’s software.

Disputes on the Development of The Graph Network may lead to Delays in the Development of the Network

There can be disputes between contributors on the best paths forward in building and maintaining The Graph’s software. Furthermore, the miners supporting the network and companies using it can disagree with the contributors as well, creating greater debate. Therefore, The Graph community often iterates slowly upon contentious protocol issues, which many perceive as prudently conservative, while others worry that it inhibits innovation.

Significant Increase in The Graph Interest Could Affect the Ability of The Graph Network to Accommodate Demand

One of the most contentious issues within The Graph community has been around how to scale the network as user demand continues to rise. The debate goes back to the earliest days of The Graph. There are many possible solutions, and most of them boil down to different ideologies on how The Graph should be used. However, it will be important for the community to continue to develop at a pace that meets the demand for transacting in The Graph, otherwise, users may become frustrated and lose faith in the network.

Attacks on The Graph Network

The Graph Network is periodically subject to distributed denial of service attacks to clog the list of transactions being tabulated by miners, which can slow the confirmation of authentic transactions. Another avenue of attack would be if many miners were taken offline then it could take some time before the difficulty of the mining process algorithmically adjusts, which would stall block creation time and therefore transaction confirmation time. Thus far these scenarios have not plagued the network for long or in a systemic manner.

Competitors to The Graph

To the extent a competitor to The Graph gains popularity and greater market share, the use and price of The Graph could be negatively impacted, which may adversely affect its price.  

Significant Energy Consumption to run The Graph Network

Because of the significant computing power required to mine The Graph, the network’s energy consumption may ultimately be deemed to be or indeed become unsustainable (barring improvements in efficiency which could be designed for the protocol). This could pose a risk to broader and sustained acceptance of the network as a peer-to-peer transactional platform.

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. 

Risk Statement 

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.