The information contained in this Crypto Asset Statement was last updated on August 15, 2022.
No securities regulatory authority in Canada has expressed an opinion about The Graph or any of the other Crypto Contracts or Crypto Assets made available through Newton Crypto Ltd. (Newton) on the Newton Platform, including an opinion that The Graph itself is not a security and/or derivative. Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.
Newton is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Newton Crypto Ltd. dated August 15, 2022. 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 Newton Platform Risk Statement.
This overview provides a summary of certain risks associated with The Graph and is not an exhaustive description or summary of these risks and, in addition, does not take into account an individual’s particular situation or risk tolerance. Investors are encouraged to conduct their own research prior to trading any crypto asset.
Newton users should read the Newton Platform Risk Statement for additional discussion of general risks associated with crypto assets made available through the Newton platform. A copy of the Newton Platform Risk Statement acknowledged by you is available in your account in the “Statements & Reports” section.
Token Description & Project Background
The Graph is an indexing protocol used for querying various networks such as the Ethereum network, or the Interplanetary File System (IPFS), and is an essential piece of infrastructure that aids the Web3 ecosystem as a whole. The Graph allows any developer to publish open APIs that applications can use to query blockchain data, using GraphQL. The Graph was founded by many contributors who worked in the core features of the earlier Web3 ecosystem, such as OpenZeppelin, Decentraland, and the Ethereum Foundation among others, and three of their most notable founders are Yaniv Tal, Brandon Ramirez, and Jannis Pohlman, all of whom have extensive engineering experience.
The Graph’s token, GRT, is used as a utility token to reward Indexers, Curators and Delegators according to the work they perform in managing data on the network, as well as allow for users of The Graph to pay for the queries and indexing services they use. GRT can also be staked to provide rewards for powering the protocol.
* Currently, Newton does not provide its users with the ability to participate in the staking functions of GRT to provide rewards.
Risks of The Graph
Like an investment in other crypto assets, an investment in The Graph includes the following general risks: (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk.
For additional information of general risks associated with crypto assets, you may refer to the Newton Platform Risk Statement. In terms of specific risks, as The Graph is one of the longest-standing crypto assets and its community base is widely decentralized, there is no central working group or authority to disclose material information to the public regarding The Graph.
Please note that these risks and the associated summaries or overviews provided for each herein are not intended to be an exhaustive discussion pertaining to all such risks and, in addition, there may be other risks that come with exposure to The Graph. We encourage all Newton users to perform their own due diligence to assess the risks associated with The Graph and to determine whether this level of risk is acceptable to them. Neither The Graph nor Newton guarantees the value of The Graph, and holders of The Graph will not have any recourse to The Graph or Newton if the value of The Graph declines for any reason whatsoever.
Newton’s Evaluation Process
Newton has reviewed and assessed The Graph prior to making it available on the Newton Platform and has concluded that The Graph is not a security or derivative under Canadian securities legislation; however, there is a risk that this conclusion could change in the future and that, in such event, Newton will be required to halt, suspend, and then remove The Graph from its platform as described in the Newton Platform Risk Statement.
Further, as indicated above, no Canadian securities regulatory authority has expressed an opinion about The Graph, including an opinion that The Graph is not itself a security and/or derivative.
Based on publicly available information Newton has reviewed The Graph, including, but not limited to, a review of the following:
- The creation, governance, usage, and design of The Graph, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created The Graph.
- The supply, demand, maturity, utility, and liquidity of The Graph.
- Material technical risks associated with The Graph, including any code defects, security breaches and other threats concerning The Graph and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
- Legal and regulatory risks associated with The Graph, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of The Graph, and (ii) statements made by any securities regulatory authorities in Canada, other regulators in IOSCO-member jurisdictions, or the regulator with the most significant connection to The Graph about whether The Graph, or generally about whether the type of crypto asset, is a security and/or derivative.
A link to the The Graph White Paper is available at the following link.