Token Description & Project Background

Abracadabra Money is a decentralized lending platform that enables users to deposit interest-bearing tokens from other protocols, like Yearn Finance and Sushiswap as collateral to acquire the platform’s own native stablecoin called Magic Internet Money (MIM). The protocol primarily operates primarily through two tokens: MIM, which is an algorithmic stablecoin and SPELL, the native governance token.

To engage in governance and voting on protocol parameters, holders of SPELL tokens are required to stake their tokens. While Abracadabra was initiated by the pseudonymous figure “Squirrel,” it is currently led by Daniel Sesta, a prominent and active member in the DeFi space. 

Risks of SPELL

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

• Abracadabra Money’s operations are based on smart contracts, which, like any other smart contract, can be susceptible to bugs and hacks. Additionally, it operates within the decentralized finance ecosystem, where competition is continuously growing. The value of SPELL is reliant on the level of demand it garners and the extent of adoption it achieves within the ecosystem. 

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

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.