Crypto Asset Statement: GLM (Golem Network Token)
Last updated: May 23, 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 Golem Network Token (GLM). This summary sets out certain key information about GLM as well as some of the risks involved in trading it. While we tried to describe the key features of GLM here, this summary doesn’t provide all relevant information on GLM. We encourage users to perform their own research in order to understand any crypto asset that they intend to trade on the Platform.
About Golem Network
The Golem Network was launched by the Golem Factory in 2018. The Golem Factory was co-founded in 2016 by Aleksandra Skrzypczak, Andrzej Regulski, Julian Zawistowski and Piotr Janiuk.
The Golem Network is a layer-2 blockchain platform built on Ethereum. It allows network users to connect and rent out their unused computer resources.. Users called “Providers” offer up their digital resources, including idle computer power, on the decentralized Golem Network market for rent by other users called “Requestors”. Providers and Requestors each outline their offerings and needs and issue the related Offer or Demand into the Golem Network. Offers and Demands with similar characteristics are matched up and the Provider’s resources are acquired by the Requestor. Requestors pay Providers in GLM tokens in exchange for using their computer resources. Payments are made through the Ethereum mainnet directly or through one of the Golem Network’s Layer 2 Solutions, like Polygon. The Network uses a reputation system to manage security of transactions. Once a task is completed by a Provider, both Providers and Requestors are reviewed and graded on things like timeliness and computing ability.
In addition to Requestors and Providers, software developers are another key participant in the Golem Network. The Golem Network permits software developers to develop Golem-based products on the network and publish them on the network’s Application Registry, where they can be accessed and run by Providers. Validators on the network review and mark applications as safe or malicious and Providers can use that information to determine which applications they wish to run.
What is GLM?
GLM is the native utility token of the Golem network and is used as a currency to facilitate peer-to-peer transactions on the network. It is an ERC-20 token and has a maximum supply capped at 1,000,000,000 tokens, all of which have been issued.
Initially, the Golem Network was launched with the native token GNT, but the Golem Network has been subject to an ongoing migration of GNT tokens to GLM tokens since the end of 2020, following the decision to launch a new version of the Golem Network platform and adopt an ERC-20 token on the network. Users can migrate their GNT to GLM at a 1:1 ratio.
This overview provides a summary of certain risks associated with GLM. We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading GLM, 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 Statementfor additional discussion of general risks associated with crypto assets made available through the Catalyx platform.
Adoption. The Golem Network was built for the purpose of facilitating use of IT resources between users. The future value of the GLM token will be based on some degree on the adoption of its technology by individuals and entities looking to use the Golem Network model of computer resource sharing, since GLM is required on the network to engage in transactions. Failure of the Golem Network protocol to obtain satisfactory levels of adoption could be detrimental the value of the GLM token.
Dependence on Developers/Founders. The future success of the Golem Network is likely somewhat dependent on the ongoing participation in network development by the founders and the Golem Factory and the network’s core developers. If these entities cease their support for the network such actions may be detrimental to the project going forward.
Concentration Risk. As of the date of publication, a large percentage of the total supply of GLM appears to be held by a relatively small number of holders. In particular, as of May 2023, the top five GLM holders hold approximately 48% of the total supply of GLM. With this level of concentration of ownership, the actions of a very small number of holders can significantly and quickly affect the price of GLM.
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 GLM. We encourage all Catalyx users to perform their own due diligence to assess the risks associated with GLM 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 GLM or any of the other crypto contracts or crypto assets made available through the Platform, including an opinion that GLM 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.