Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with BAL.
No securities regulatory authority has expressed an opinion about BAL, including an opinion that BAL itself is not a security and/or derivative.
Token Description & Project Background
Balancer is a decentralized finance (DeFi) protocol that operates on the Ethereum blockchain, functioning in a similar manner to other decentralized exchanges (DEXs) like Uniswap and Curve. However, Balancer distinguishes itself by offering additional features, including the ability to create pools composed of up to eight different tokens. This pool bundling functionality is akin to index funds, where a curated selection of various cryptocurrencies can be combined. Also, Balancer also operates as an automated market maker, which enables it to route trades through whichever liquidity pools necessary to secure the best rate for the user.
The governance and rewards token of the Balancer protocol is known as BAL. Token holders have the opportunity to vote on proposed changes to protocol parameters and actively contribute to the future development and direction of the platform. Additionally, BAL rewards users who provide liquidity to the protocol.
Balancer originated as a research project at BlockScience, a software consulting firm, and was founded by Fernando MArtinelli and Mike McDonald in 2019. In 2020, the project received approximately US$3 million in funding under the name of Balancer Labs.
Risks of BAL
Like an investment in other crypto assets, there are some general risks to investing in BAL. 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 BAL is subject to the following specific risks:
- BAL 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 BAL token holders.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with BAL. 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 BAL community and Balancer Labs are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of BAL have no recourse to BAL community, Balancer Labs, or Uphold if BAL 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 BAL on the Uphold Platform, Uphold performed due diligence on BAL and determined that BAL 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 BAL, 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 BAL.
- Any marketing materials put forward by the BAL social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with BAL, including any code defects, security breaches and other threats concerning BAL 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 BAL, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of BAL.
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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