Crypto Asset Statement: BAT (Basic Attention Token)
Last updated: March 22, 2023
About this Statement
CatalX CTS (“Catalyx” or “we”) strives to provide our users with information to assist in understanding crypto assets that are offered for trading on the Catalyx platform (the “Platform”). One of the crypto assets we offer on the Platform is Basic Attention Token (BAT). This summary sets out certain key information about BAT as well as some of the risks involved in trading it. While we tried to describe the key features of BAT here, this summary doesn’t provide all relevant information on BAT. We encourage users to perform their own research in order to understand any crypto asset that they intend to trade on the Platform.
History & Characteristics of BAT
Launched in 2017, BAT is the native token used on the Brave browser, a browser that aims to fairly reward users for their attention while providing advertisers with a better return on their ad spend. Brave is an open-source, privacy focused web browser that blocks third party ads and trackers. Advertisers can spend BAT to invite browser users to view advertisements, Brave users than have the opportunity to agree to view advertisements and are paid in BAT for their participation. Brave features a ledger system that measures user attention to advertisements and rewards users and content creators accordingly.
A user can opt-in to Brave Rewards to reward the sites they visit most with BAT. Brave will track the amount of time and attention a user spends on different websites throughout the month, and will allocate a percentage of BAT earned by the user to each website based on this proportion. The remainder of BAT the user earned is then stored in the user’s Brave Wallet. Other ways a user can spend BAT include by tipping content creators, accessing premium content on websites, receiving content with higher-quality video or sound, gaining rights to comment on websites, or “upvoting” or “downvoting” comments on certain websites.
Brave stores users’ information in a distributed ledger on a blockchain. Each advertisement that a user views is posted and verified on the blockchain, and each member of the advertising process is paid or pays based on the verified view. For example, a company who chooses to advertise using BAT may send an advertisement and payment in BAT directly to a user in a locked state. The payment unlocks if a user chooses to view the ad, and a portion of the BAT payment will flow directly to the user’s wallet based on the attention they paid to the advertisement.
This overview provides a summary of certain risks associated with BAT. We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading BAT, and in addition, does not take into account an individual’s particular situation or risk tolerance. Purchasers are encouraged to conduct their own research prior to trading any crypto asset on the Platform. Catalyx users should read the Risk Disclosure Statement for additional discussion of general risks associated with crypto assets made available through the Catalyx platform.
Delays in Development. Issues over the BAT Protocol's development may cause delays in the protocol's development. Contributors may disagree on the best ways to proceed when developing and maintaining BAT's software. As a result, the BAT community frequently responds slowly to controversial protocol issues. While some view this as cautiously conservative, others are concerned that it prevents innovation.
Competition. Although the Brave Browser's user base is expanding, it still faces competition from other online browsers like Google Chrome and Mozilla Firefox. Currently, Google Chrome outperforms most rivals by a wide margin and continues to be the market leader in web browsers.
Dependence on Developers. The Brave browser’s promotion, development and adoption is linked to the Brave team, which is centralized. If this entity ceases its support for the Brave browser such actions may be detrimental to the project going forward.
Please note that these risks and the associated summaries or overviews provided for in this Crypto Asset Statement and the Risk Disclosure Statement are not intended to be an exhaustive discussion pertaining to all such risks and, in addition, there may be other risks that come with exposure to BAT. We encourage all Catalyx users to perform their own due diligence to assess the risks associated with BAT and to determine whether this level of risk is acceptable to them.
How Catalyx determines which Crypto Assets to List
Catalyx has established robust policies and procedures to review each crypto asset offered for trading on the Platform. Among other information, we review available public information relating to the crypto asset on the following topics prior to making a determination on whether a crypto asset will be listed:
The history and characteristics of the crypto asset including whether the crypto asset was launched by ICO;
Analysis of the founders or inventors of the crypto asset/related network and a review of their ongoing involvement with crypto asset/network;
How the crypto asset functions including a review of its utility or purpose;
The market liquidity for the crypto asset;
The current and proposed governance of the ecosystem on which crypto asset operates with a focus on the level of decentralization of such ecosystem; and
The position taken by any regulator with respect to the crypto asset including any enforcement action taken against the crypto asset, the related network, or the founders.
In addition to the above we also conduct an analysis of factors weighing in favor or against the crypto asset being deemed to be a security based on Canadian securities laws.
No securities regulatory authority in Canada has expressed an opinion about BAT or any of the other crypto contracts or crypto assets made available through the Platform, including an opinion that BAT itself is not a security and/or derivative. Changes to applicable law may adversely affect the use, transfer, exchange, or value of any crypto contracts or crypto assets you hold on the Platform.
Certain statutory rights under securities legislation in Canada do not apply in respect of this Crypto Asset Statement.