About this Summary

Ndax Canada Inc. (“Ndax”, “we” and “our”) 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 MANA. We created this summary to help you understand the basics of MANA as well as some of the risks involved in trading in MANA. While we tried to describe the key features of MANA, this summary isn’t meant to tell you everything you’d want to know before investing in MANA. You should also do your own research on MANA to make sure you are comfortable investing in it.

Description of MANA

History of MANA

Decentraland began as a proof of concept in 2015 for allocating ownership of digital real estate to users on a blockchain through pixels on an infinite 2D grid. In late 2016, the team started developing a 3D virtual world divided into land parcels.

Following a US$24 million initial coin offering (ICO), Decentraland officially launched in 2017 before opening to public users in 2020.  

Decentraland’s future is focused on creating a social experience with an economy where developers will be able to create applications on top of Decentraland, distribute them to other users, and monetize them.

What is MANA used for

MANA is an Ethereum-based token that is burned to acquire NFTs in the platform’s metaverse, including the purchase of land, goods, and services around the world.

MANA tokens are also used to incentivize content creation and user adoption.

MANA also functions as the platform’s governance token and can be bought on exchanges or acquired through selling collectibles and NFTs on the Decentraland marketplace. There is a MANA treasury in place for the DAO (Decentralized Autonomous Organization) where users who want to participate in the decision-making process of the platform lock their MANA tokens.

How MANA works

Decentraland creates a dynamic fast-paced environment where users can develop their LAND parcels bought with MANA through the marketplace, while operating the system and using its functions without a central authority.

Users can also buy wearables for their avatar, including clothing, shoes, and accessories. Each transaction is recorded on the Ethereum blockchain, effectively making it a registry for all of the digital property acquired in Decentraland.

The characteristics of MANA, LAND, and Estate are defined by three smart contracts: the MANAtoken contract, the LANDregistry contract, and the EstateRegistry contract.

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 MANA. Each of these risks is described in more detail in the Risk Statement provided to you at the time that you open your account with us and is also available online on the Ndax website and app. You should review the Risk Statement.

In addition to the general risks set out in the Risk Statement, we also point out other specific risks to MANA below.  

MANA’s Dependence on the Ethereum Blockchain

As an ERC-20 token, the strength of MANA is dependent on the strength of the Ethereum network. If the Ethereum network were to experience a serious issue, MANA’s price could decline significantly.

MANA’s Dependence on Decentraland

The price of MANA is likely to decline in connection with negative public sentiment concerning the future success of Decentraland. Such negative public sentiment could arise in connection with poor user experience. For example, users have previously complained of slow loading times resulting from the use of a peer-to-peer network to enable content distribution. Additionally, users could be affected by the difficulty of filtering content for mature audiences (like pornography, violence, or gambling) within a decentralized network. If Decentraland cannot properly moderate inappropriate or adult content, users may not interact with Decentraland.

While we have tried to describe the key risks associated with MANA here and in our Risk Statement, we emphasize that this Crypto Asset Statement is not exhaustive of all of the risks associated with trading in MANA. You should also do your own research on MANA to make sure you are comfortable investing in such a crypto asset.

Regulatory Information  

Ndax is offering Crypto Contracts in accordance with the terms of a pre-registration undertaking dated March 23, 2023, that we entered into with the Canadian securities regulators, while our application for registration in certain Canadian jurisdictions is reviewed. Please note that Ndax is not currently registered under securities or derivatives legislation of Canada and there is no guarantee that registration will be granted.  

The statutory rights of action for damages and the right of rescission in securities legislation of each province and territory of Canada would not apply in respect of a misrepresentation in this Crypto Asset Statement.

Prior to offering a Crypto Contract on MANA, Ndax assesses whether MANA 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 the MANA (such as how it was created and its governance structure), its characteristics, its market capitalization, and any regulatory concerns regarding MANA. Based on its assessment, Ndax concluded that MANA 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 MANA from trading on the Platform and stop any future trading of Crypto Contracts based on MANA, and users holding MANA may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in MANA 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 MANA.

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