Token Description & Project Background

Cryptex is a DAO specializing in bringing traditional assets to the decentralized world. It aims to provide an innovative opportunity for investors to gain exposure to the entire cryptocurrency in a decentralized and trust minimized protocol through a synthetic asset called TCAP. 

At any given time, TCAP’s price represents the total market capitalization of all crypto assets – divided by 10 billion. In other words, if the current market capitalization of all digital assets is $500 billion, TCAP will be valued at $50. According to the project’s whitepaper, Cryptex leverages a suite of Chainlink-powered oracles that actively scour leading data providers like CoinGeckoin order to update TCAP’s price on-chain in a fast and efficient manner.

TCAP is backed by two, ERC-20 assets, ETH and DAI which are deposited into a series of Ethereum-based smart contracts referred to as Vaults. As TCAP is overcollateralized, these deposits must be at least 200% of the token’s current value. Should the value of this collateral drop below a sufficient level, the vault can be subject to liquidation. Per documentation, TCAP tokens can be redeemed for the underlying collateral at any time. Those who choose to discard of their tokens are charged a burn fee by the protocol for doing so.

Once in circulation, TCAP tokens can be stored, traded or used to fund a range of Uniswap based liquidity pools. Those who deposit TCAP into a protocol-supported pool earn TCAP LP tokens which can be staked on Cryptex for CTX-based rewards.

Cyrptex is currently managed as a decentralized autonomous organization (DAO) governed by CTX holders. Within this framework, CTX holders can vote directly on proposed changes to the protocol of delegate their stake to a representative who casts votes on their behalf.

CTX is the network’s governance token that powers and secures the protocol. Holders can vote on protocol upgrades. CTX is also provided as a reward to users who mint new TCAP tokens. 

The CTX token launched in April 2021.

CTX was founded by Joe Sticco (CEO), Preston Van Loon (Blockchain Lead) and Thomas Matzner (Brand Lead). 

Risks of CTX

Like an investment in other crypto assets, there are some general risks to investing in CTX. 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 CTX is subject to the following specific risks:

• The protocol space faces intense competition - any potential success associated with CTX depends on Cryptex Finance’s rate of adoption.

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with CTX. 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 CTX community and Cryptex DAO are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of CTX have no recourse to the CTX community, Cryptex DAO, or Uphold if CTX 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 CTX on the Uphold Platform, Uphold performed due diligence on CTX and determined that CTX  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 CTX, 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 CTX.
• Any marketing materials put forward by the CTX social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
• Material technical risks associated with CTX, including any code defects, security breaches and other threats concerning CTX 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 CTX, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of CTX. 

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.