Token Description & Project Background

Alchemix Finance is a decentralized finance (DeFi) lending platform that aims to offer users self-repaying loans. The core concept behind Alchemix is to ensure that loans taken out on the platform are automatically repaid, minimizing the occurrence of liquidations. This is achieved by requiring users to deposit stablecoins (i.e) DAI or ETH as collateral for ‘alUSD’, a synthetic token that represents the user’s future yield. The deposited collateral is then automatically placed into the Yearn.Finance Vault, generating yield that is gradually used to pay off the loan. 

The platform’s native governance token is ALCX, which is controlled by Alchemix DAO. Alchemix DAO receives 10% of the total Yearn.Finance profits generated on the platform. These profits are utilized to compensate developers, cover infrastructure expenses, provided development grants, and fund other projects as determined by ALCX token holders. 

ALCX tokens were distributed via fair launch, with no tokens ever being directly sold to investors. The project was founded by a group of pseudonmyous developers led by ‘Scoopy Trooples’, it went live in February 2021. 

Risks of ALCX

Like an investment in other crypto assets, there are some general risks to investing in ALCX. These include:  (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 these and other general risks associated with crypto assets and Uphold’s platform, please refer to the Risks Specific to Holding Digital Assets statement.

In addition to these general risks, an investment in ALCX is subject to the following specific risks:

• ALCX operates using smart contracts, which have an association with vulnerabilities and security breaches. Despite undergoing successful audits by well-regarded third-party entities, it is essential to acknowledge the existence of inherent risks. Furthermore, the project’s future trajectory hinges on the decisions made by a global community of ALCX token holders. Additionally, the development is pseudonymous making it difficult to evaluate them using traditional methods. 

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with ALCX. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.

The ALCX community and the aforementioned founders are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of ALCX have no recourse to ALCX community, or Uphold if ALCX declines in value for any reason.

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.

Uphold’s Evaluation Process

Prior to listing ALCX on the Uphold Platform, Uphold performed due diligence on ALCX and determined that ALCX is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following: 

• The creation, governance, usage, and design of ALCX, including ensuring the source code is open-source, audited and peer reviewed, security, and roadmap for growth in the developer community. 
• The supply, demand, maturity, utility, and liquidity of ALCX.
• Any marketing materials put forward by the ALCX social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
• Material technical risks associated with ALCX, including any code defects, security breaches and other threats concerning ALCX 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 ALCX, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of ALCX. 

General

Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.

Uphold users should read the Risks Specific To Holding Digital Assets statement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.  

Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following link. Please also review the Uphold Canada – Crypto Risk Statement for additional discussion of general risks associated with the crypto assets made available through Uphold Platform. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or other disclosures on the Uphold website and Risks Specific To Holding Digital Assets statement. 

Last updated on June 21, 2023.