Token Description & Project Background

Stacks is a Layer-1 blockchain, built to bring smart contract functionality to Bitcoin.

The Stacks network allows users to directly own digital assets, such as domain names and programs; computing is handled on the periphery (on user devices); data is stored discreetly, on behalf of individual users, via applications on the platform.

The project was originally named ‘Blockstack’, but rebranded to ‘Stacks’ in 2020. It was co-founded by Princeton University alumni, Muneeb Ali and Ryan Shea, in 2013.

STX is the network’s native token, which fuels the execution of smart contracts, the processing of transactions, and the registration of new digital assets.

Risks of STX

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

• The Layer-1 blockchain space faces significant competition. Any potential success will depend on the extent of Stack’s adoption.
• Miners can commit BTC to generate Stacks (STX) tokens, and  STX coin holders can stack their tokens to earn Bitcoin as a reward. The profitability of this mining system, and its impact on the number of STX tokens in open circulation, and therefore price, will depend partly on the relative price of STX vs BTC.

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

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 2, 2023.