Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with SRM.
No securities regulatory authority has expressed an opinion about SRM, including an opinion that SRM itself is not a security and/or derivative.
Token Description & Project Background
Serum is a decentralized exchange software built on the Solana blockchain. Utilizing smart contracts, it operates a decentralized order book that aims to replicate the functionality of traditional exchanges by facilitating the matching of buyers and sellers. While aiming to compete with other DEX’s such as Uniswap and Sushiswap, Serum benefits from the low transaction fees offered by the Solana blockchain. Additionally, it provides cross-chain support allowing users to easily engage with the Ethereum and Polkadot ecosystems.
The utility token of the platform, SRM, offers users a potential discount of up to 50% on trading fees. Furthermore, SRM holders have the opportunity to participate in governance processes, enabling them to vote on protocol parameters and shape the future development of the project.
SRM was launched through public token sales in August 2020, raising over US$1 million. The development of Serum was carried out by the Serum Foundation, which is a consortium composed of partners such as FTX, Alameda Research, and the Solana Foundation. Unfortunately, the Serum protocol experienced a security breach following the collapse of FTX and Alameda. As a result, plans are underway to fork the platform and implement necessary improvements.
Risks of SRM
Like an investment in other crypto assets, there are some general risks to investing in SRM. 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 SRM is subject to the following specific risks:
- SRM 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 SRM token holders.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with SRM. 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 SRM community and Serum Foundation are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of SRM have no recourse to SRM, Serum Foundation, or Uphold if SRM 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 SRM on the Uphold Platform, Uphold performed due diligence on SRM and determined that SRM 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 SRM, 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 SRM.
- Any marketing materials put forward by the SRM social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with SRM, including any code defects, security breaches and other threats concerning SRM 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 SRM, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of SRM.
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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