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

Description of DOGE

History of DOGE

In 2013, an Australian marketer and software developer, Jackson Palmer, had the funny idea of combining two tabs open side-by-side on his computer screen. One was CoinMarketCap, a crypto stats website, and the other was an article on a popular meme about the Japanese Shiba Inu dog. He put together both the elements and sent out a tweet about a new cryptocurrency called Dogecoin.

Shortly afterward, an IBM developer, Billy Markus, approached Jackson on Twitter, asking if he would like to create an actual cryptocurrency named Dogecoin. Palmer agreed, and Dogecoin was officially launched on 6th December 2013. Later, both the founders stepped away from Dogecoin, leaving it entirely in community members’ hands.

What is DOGE used for

On its website, Dogecoin (DOGE) is described as ‘the internet currency’ that enables you to send money online. In the real world, the coin is majorly used for tipping and donation. Occasionally, DOGE has been used by its community to raise funds. Some notable events are:

• Raising $50,000 to fund the Jamaican Bobsled Team's journey to the Winter Olympics in 2014.
• Raising $30,000 in 2014 to build wells of clean water in Kenya.
• Raising $55,000 to sponsor Josh Wise, a NASCAR driver.

Additionally, DOGE has a floating exchange rate with other cryptocurrencies and can be traded and bought for fiat currencies.

How DOGE works

Dogecoin uses a proof-of-work consensus mechanism to append blocks and approve transactions. While Bitcoin uses the SHA-256 hash function for mining, Dogecoin relies on Litecoin’s Scrypt, an ASIC-resistant algorithm.

DOGE is a fork of LuckyCoin, which itself was a fork of Litecoin. However, Dogecoin developers switched to a merged mining model to avoid risk and competition from the Litecoin community. This meant Litecoin miners could also mine Dogecoin without any additional effort.

Unlike Litecoin, Dogecoin does not have a limited supply of DOGE tokens. The inflation-based approach was designed to ensure miners would always be rewarded with new Dogecoin.

Initially, the total supply of DOGE was capped at 100 billion coins, with an additional 5.256 billion coins to be released every year after that. Dogecoin mining targets a one-minute block time, and 10,000 coins are rewarded per block.

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 DOGE. 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 DOGE below.  

Concentration of DOGE Holdings

The largest DOGE addresses hold a very large portion of the DOGE currently outstanding. Market volatility may result when large holders of DOGE decide to sell significant amounts of their DOGE positions.  

Relative Lack of Synced Nodes

When compared to the Bitcoin network, the Dogecoin Network has significantly fewer nodes (i.e., computers) synced within five blocks of the chain’s tip. Less nodes being synced to the blockchain’s tip makes it in more difficult for new nodes to connect to the network, which results in less decentralization and has the potential to undermine the permissionless nature of the Dogecoin Network.  

Volatility Based on Public Sentiment

DOGE has seen extreme fluctuations in value related to public statements from celebrities and other public individuals. Most notably, statements from Tesla founder Elon Musk have caused the price of DOGE to rise and fall in a manner largely unrelated to its functionality. DOGE is likely at a greater risk of volatility than other crypto assets due to this history.  

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

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