Cardano (ADA) - Crypto Asset Statement

PLEASE READ THIS CAREFUL. BY PROCEEDING TO TRANSACT ADA, YOU ACKNOWLEDGE AND ACCEPT THE STATEMENTS SET
OUT BELOW.

About this Summary

Ndax believes that our users should understand the crypto assets that they are able to trade and stake using our crypto trading platform (the “Platform”). One of the crypto assets we offer on the Platform is ADA. We created this summary to help you understand the basics of ADA as well as some of the risks involved in trading it. While we tried to describe the key features of ADA here, this summary isn’t meant to tell you everything you’d want to know before investing in ADA. You should also do your own research on ADA to make sure you are comfortable investing in it.

Description of ADA

History of ADA

Cardano is widely termed as a third generation blockchain because it was built to address the scalability problems of Bitcoin (first-generation blockchain) and Ethereum (second-generation blockchain).

In 2015, Charles Hoskinson, an early Ethereum and BitShares co-founder, started developing the Cardano platform. The project was officially launched in 2017 under the ‘Byron’ bootstrap phase and raised more than $60 million in an ICO. Currently, Cardano is being developed by three different organizations:

• Cardano Foundation oversees the development of the Cardano community.
• Input Output Hong Kong (IOHK) is responsible for developing Cardano blockchain and its application tools.
• EMURGO promotes the commercial applications of Cardano.

What Cardano is used for

The Cardano blockchain is still in its early stages of development, and as such, it has not been used yet. In the future, Cardano can be used for the execution of smart contracts that are not only secure but immutable too. Cardano also has ambitious goals in terms of scalability and intends to process millions of transactions per second.

Cardano is expanding its efforts by partnering with IBM to work on a software distribution project and PwC to generate a commercial strategy. Cardano has also signed a memorandum of understanding with the US government to use the platform in the Agri-tech sector sometime in the future.

How Cardano works

Cardano, the blockchain network, consists of two layers. The Cardano Settlement Layer settles all the transactions using ADA, and the other one, the Control Layer, hosts the smart contracts. At the heart of Cardano is Ouroboros, a consensus protocol developed in-house by the IOHK team.

The platform will roll out in five different stages: Byron, Shelley, Goguen, Basho, and Voltaire. The Byron phase arrived in 2017 with the Cardano blockchain’s mainnet launch that only supported ADA transactions. Shelley was launched in August 2020 and brought proof-of-staking to life. The other three stages will be launched in the near future.

ADA is the native cryptocurrency of the Cardano network. It has a total supply of ADA of 45 billion coins. With Shelley’s launch, validators on the network can stake ADA to help mint new blocks on the Cardano network.
 

Certain Staking Services Terms Applicable to ADA

You can cancel you opt-in to the staking services for any crypto-asset within the first four hours of your initial opt-in.

Please consult the table below for additional terms that currently apply to the staking service for particular crypto assets at this time. Note that APY percentages are estimates, and terms are subject to change. All terms in effect are maintained on our website.

Example: if you have 100 coins staked at 3% annual APY equal to the gross reward will be 3 coins for the year. Ndax will earn a fee of 20%, in this case 0.6 coins, and 2.4 coins will be credited to your account based on the payout frequency.

For purposes of the above table:

“Instant Redemption” may be available for flexible plans on a first come, first serve basis, subject to availability. If elected, your opt-out is effective immediately, and you are not entitled to any rewards generated within the reward period. This is subject to Ndax liquidity management provisions to fulfill client instructions to sell or transfer Crypto Assets prior to the unbonding period.
“Standard Redemption” means that your opt-out is delayed for the period of time indicated in the above table, but you collect any rewards generated up to and including generated within the reward period.”
“ Ndax Admin Fees” refers to the percentage fee on the total amount of the reward generated through staking.
“Bonding Period” refers to the amount of time it takes before you begin to generate staking rewards for that asset from the time you have started staking.

Risks

Before entering into an agreement (a “Crypto Contract”) with Ndax to buy or sell any crypto assets through the Platform, it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.

Like other crypto assets, there are some general risks associated with investing in ADA. We describe many of these general risks in the risk statement we publish on our website that you have already acknowledged, including risks relating to: (i) short history; (ii) volatility in the price of crypto assets and loss of liquidity; (iii) potential decrease in global demand for crypto assets; (iv) The blockchains on which crypto assets operate may temporarily or permanently fork or halt; airdrops; (v) issues with the cryptography underlying the Crypto networks; (vi) custodial wallet systems; (vii) uncertainty in regulation and future financial institution support; (viii) currency risks; (ix) concentration risks; (x) electronic trading and dependence on the internet; (xi) cyber security risks; (xii) inadequate due diligence; (xiii) Ndax’s reliance on vendors and third-party service providers; (xiv) liquidity constraints; (xv) no voting rights; (xvi) lack of investor protection insurance; (xvii) commissions and other charges for trading; (xviii) no advise; (xix) transfers; (xx) beta features; (xxi) unforeseeable risks; and (xxii) conflicts of interest. We also point out a risk that is specific to ADA below. While we tried to describe the key risks associated with ADA here and in our risk statement, these aren’t all of the risks associated with trading in ADA. You should also do your own research on ADA to make sure you are comfortable investing in it.

Concentration of ADA Holdings

Approximately 20% of the ADA ownership is held by the Cardano Foundation, IOHK and EMURGO. As a result, these entities control a significant vote related to planning and decision making of the foundation. A high level of ownership by these entities may adversely affect the price of ADA itself.

Risks Specific to Staking ADA  

Prior to staking your crypto assets, you acknowledge that:

• given the volatility of crypto assets, the value of your staked ADA when you sell or withdraw it, and the value of any rewards you earn through staking, may be significantly less than their current value;
• there is no guarantee that you will receive any rewards on staked ADA;
• past rewards are not indicative of expected future rewards;
• the rewards you are entitled to may be changed at the discretion of Ndax;
• you may lose all or a portion of your staked ADA if the validator does not perform as required by the network; and
• additional risks can be found in the Risk Statement.

Conflict of Interest Disclosure

Ndax has assessed potential conflicts of interest associated with the offering, and ongoing availability of ADA through the Platform. As of the date of this statement, Ndax has not identified any actual, material, or reasonably foreseeable conflict of interest that would be expected to impair our ability to act in the best interests of clients or to make fair, objective, and independent decisions regarding ADA. Ndax maintains policies and procedures designed to identify, manage, and address conflicts of interest on an ongoing basis and will update our disclosures if any material conflict is identified in the future. For additional information about the material conflicts of interest identified by us, please refer to our Conflicts of Interest Statement, the latest version of which can be found on our Website.

Regulatory Information  

Ndax is a registered investment dealer under securities legislation in all provinces and territories of Canada, and is a member of the Canadian Investment Regulatory Organization (CIRO) and of the Canadian Investor Protection Fund (CIPF). Ndax is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re NDAX Canada Inc. dated December 19, 2024 (found here) and under the terms and conditions imposed by CIRO on Ndax’s membership with CIRO (found here). Any fiat currency held in users’ accounts is protected by CIPF’s Investment Dealer Fund in accordance with its Coverage Policy. However, CIPF coverage does not extend to any virtual assets held in users accounts. These assets are not eligible for deposit insurance or any protection from the Canada Deposit Insurance Corporation (CDIC) or CIPF.

Please be aware that the statutory rights of action for damages and the right of rescission in the securities legislation of each province and territory of Canada do not apply in respect of a misrepresentation in this Crypto Asset Statement.

Prior to offering a Crypto Contract on ADA, Ndax assesses whether ADA is a security and/or a derivative under the securities and derivatives laws of Canada. Ndax’s assessment includes a review of the history of ADA (such as how it was created and its governance structure), its characteristics, its market capitalization and any regulatory concern regarding ADA. Based on its assessment, Ndax concluded that ADA is not a security or a derivative. However, there is a risk that this conclusion could change in the future. In that case, Ndax may be required to halt or withdraw ADA from trading on the Platform and stop any future trading of Crypto Contracts based on ADA, and users holding ADA may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in ADA will be notified via the Platform or other electronic means and advised of the options available to them and any applicable period to sell or withdraw their positions in ADA.

No Canadian securities regulatory authority has expressed an opinion about ADA, including an opinion that ADA is not itself a security and/or derivative.

Last Updated: 8/10/2026