Crypto Asset Statement: ANT (Aragon)
Last updated: May 24, 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 ANT (Aragon). This summary sets out certain key information about ANT as well as some of the risks involved in trading it. While we tried to describe the key features of ANT here, this summary doesn’t provide all relevant information on ANT. 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 Aragon
The Aragon project was founded by Luis Ivan Cuende and Jorge Izquierdo as an open-source software built on the Ethereum blockchain and is used for creating and maintaining decentralized autonomous organizations (DAOs). A DAO is a type of bottom-up entity structure with no central authority that makes decisions through consensus according to a pre-existing set of programmable rules. Through its suite of tools and software, Aragon empowers developers to create their own DAOs on the Ethereum network. Aragon offers developers the flexibility to design and launch various types of applications that can be utilized by other network participants.
The Aragon Association, Aragon client, and Aragon Network DAO (Aragon DAO) are the three key components of the Aragon project. The Aragon Association operates as a nonprofit entity responsible for managing and distributing funds obtained from the original ANT token sale, Aragon client provides a set of tools for developers who are engaged in building DAOs, and the Aragon DAO enables and facilitates communication between users and services operating within the blockchain-powered ecosystem that Aragon embodies.
What is ANT?
ANT is a governance token that allows holders to submit and vote on proposals for the governance of the Aragon DAO. Since the launch of the Aragon DAO, the token has been used on Aragon Voice to vote on proposals for the project. Each token holder can vote on proposals and participate in the community's decisions.
This overview provides a summary of certain risks associated with ANT. We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading ANT, 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.
Recent Events. In May, 2023 certain ANT tokenholders representing traditional investment funds have been advocating for distributions from the Aragon Association’s treasury to ANT holders to address inequalities between the size of the treasury and the market cap of ANT tokens. These actions have led to some conflict between the Aragon Association and these tokenholders. At the time of publication of this document the Aragon Association has resisted efforts to allow distribution of assets to ANT tokenholders, however, in the past efforts like these have led to the liquidation and winding up of the DAO projects.
Additionally, if these parties are successful in generating such distributions this could lead to the conclusion that ANT is a security under Canadian laws and result in the delisting of the token from the Catalyx platform.
Dependence on Aragon Association. The future success of the Aragon DAO is likely dependent on the actions of the Aragon Association over the next several months and years. If this entity ceases their support for the Aragon project such actions may be detrimental to the project going forward.
Regulatory Risks. There is some uncertainty how regulators will ultimately view governance tokens for decentralized autonomous organizations like the Aragon DAO. While Catalyx has reviewed ANT and Aragon carefully and has determined that based on the facts publicly available ANT is likely not currently a security under Canadian laws, regulators may not agree with this conclusion. In addition, future events as discussed above may also affect the conclusions we have reached.
Please note that these risks and the associated summaries or overviews provided for each in 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 ANT. We encourage all Catalyx users to perform their own due diligence to assess the risks associated with ANT 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 ANT or any of the other crypto contracts or crypto assets made available through the Platform, including an opinion that ANT 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.