Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with BADGER.
No securities regulatory authority has expressed an opinion about BADGER, including an opinion that BADGER itself is not a security and/or derivative.
Token Description & Project Background
BADGER is a decentralized autonomous organization (DAO) focused on increasing the utilization of bitcoin as collateral across different blockchains. The inception of Badger DAO came from the recognition that BTC was primarily held in centralized custodians. It initially launched on Ethereum but expanded to other major Ethereum Virtual MAchine (EVM) chains. The ecosystem relies on two key components: SETTS and DIGG.
SETTS are pools of tokens where users can lock up tokenized bitcoin into smart contract managed liquidity pools and earn rewards on their deposits. If a user deposits bitcoin or BADGER tokens, they receive tokenized receipts known as ‘bTokens’.
DIGG is a cryptocurrency designed to maintain a peg to the price of bitcoin. It can be used in the decentralized finance (DeFi) ecosystem or to earn rewards by depsoting into SETTS.
BADGER serves as the native governance token of the DAO and allows holders to stake their tokens and provide liquidity within the ecosystem. BADGER holders have the ability to vote on protocol parameters and express their opinions on the future direction and development of the protocol.
In December 2021, the DAO experienced a significant hack, resulting in a loss of approximately US$130 million after one of their DeFi yield vaults was exploited.
BADGER tokens were distrbuted through a fair launch, with no direct sale of tokens to investors. The project was founded by Chris Spadafora, Ameer Rosic and Albert Castellana. Spadafora previously initiated the Crypto COVID19 Charity Poker Tournament; Rosic was a co-founder of Blockgeeks.com and Casellana co-founded Stakehound.
Risks of BADGER
Like an investment in other crypto assets, there are some general risks to investing in BADGER. 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 thestatement.
In addition to these general risks, an investment in BADGER is subject to the following specific risks:
- BADGER 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 BADGER token holders.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with BADGER. 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 BADGER community and BadgerDAO are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of BADGER have no recourse to BADGER community, BadgerDAO or Uphold if BADGER 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 BADGER on the Uphold Platform, Uphold performed due diligence on BADGER and determined that BADGER 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 BADGER, 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 BADGER.
- Any marketing materials put forward by the BADGER social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with BADGER, including any code defects, security breaches and other threats concerning BADGER 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 BADGER, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of BADGER.
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 thestatement 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. Please also review the 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 statement.
Last updated on June 21, 2023.
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