Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with DOT.
No securities regulatory authority has expressed an opinion about DOT, including an opinion that DOT itself is not a security and/or derivative.
Token Description & Project Background
Launched in 2017, Polkadot (DOT) is a blockchain protocol created by Ethereum co-founder Gavin Wood.
Polkadot is designed to provide foundational infrastructure to connect and secure various blockchains; in essence, creating the “internet of blockchains” that can seamlessly interact and communicate.
Core to the network is “Relay Chain” the base security settlement layer that connects user-built parallel blockchains “Parachains”. Parachains offer a simple solution for developers and entrepreneurs looking to launch their own blockchains; by providing the fundamental architecture blockchains require.
Using Polkadot, developers are able to create decentralized applications, or "dapps," on private parachains but able to connect with large public blockchains i.e. Ethereum.
The protocol was developed by a consortium of three organizations -- Parity Technologies, Chainsafe Systems, and Soramitsu.
DOT is used to distribute protocol governance among holders, and secure the network through staking. Users who stake DOT play a fundamental role in securing and validating network operations.
Risks of DOT
Like an investment in other crypto assets, there are some general risks to investing in DOT. 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 DOT is subject to the following specific risks:
- There are a growing number of competing interoperability solutions. Any potential success will be partially dependent on the extent of the Polkadot network’s adoption by developers and projects.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with DOT . 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 DOT community and Gavin Wood, Parity Technologies, Chainsafe Systems, and Soramitsu are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of DOT have no recourse to Gavin Wood, Parity Technologies, Chainsafe Systems, Soramitsu, or Uphold if DOT 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 DOT on the Uphold Platform, Uphold performed due diligence on DOT and determined that DOT 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 DOT, including ensuring the source code being open-source, audited and peer reviewed, security, and roadmap for growth in the developer community.
- The supply, demand, maturity, utility, and liquidity of DOT.
- Marketing materials put forward by the DOT social team including, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with DOT, including any code defects, security breaches and other threats concerning DOT 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 DOT, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of DOT.
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 2, 2023.
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