Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with ZRX.
No securities regulatory authority has expressed an opinion about ZRX, including an opinion that ZRX itself is not a security and/or derivative.
Token Description & Project Background
The 0x protocol (0x) represents a decentralized exchange (DEX) that facilitates the trading of tokenized assets, including stocks, gold, real estate, and other financial services. Its vision revolves around tokenizing all forms of value on public blockchains, ensuring accessibility for every individual. What sets 0x apart from other DEXs is its hybrid off-chain relay and on-chain settlement structure. Unlike most DEXs that operate solely on-chain, 0x allows orders to be stored off-chain while being settled on-chain, resulting in a more developer-friendly and gas-efficient network.
The governance and staking token of the 0x protocol is known as ZRX. Token holders have the ability to vote on protocol parameters and express their opinions on the future direction of the protocol. Additionally, they can stake their tokens to earn ETH liquidity rewards.
ZRX was launched through an Initial Coin Offering (ICO) in 2017, raising approximately US$24 million. Prominent investment firms such as Polychain Capital, Pantera Capital, and FBG Capital led the funding round.
0x Labs, the organization behind 0x, was founded in 2016 by Will Warren and Amir Bandeali. Prior to creating 0x, Warren worked in various research roles and briefly served as a technical advisor to Basic Attention Token (BAT). On the other hand, Badeali graduated from the University of Illinois with a BSc in Finance and held several trading positions.
Risks of ZRX
Like an investment in other crypto assets, there are some general risks to investing in ZRX. 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 ZRX is subject to the following specific risks:
- ZRX 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 ZRX token holders.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with ZRX. 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 ZRX community and 0x Labs are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of ZRX have no recourse to ZRX, 0x Labs, or Uphold if ZRX 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 ZRX on the Uphold Platform, Uphold performed due diligence on ZRX and determined that ZRX 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 ZRX, 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 ZRX.
- Any marketing materials put forward by the ZRX social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with ZRX, including any code defects, security breaches and other threats concerning ZRX 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 ZRX, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of ZRX.
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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