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

Description of OP

History of OP

Optimism is a Layer 2 scaling solution for Ethereum that aims to enhance the scalability and efficiency of the Ethereum network. It was developed to address the limitations of Ethereum’s scalability by enabling faster and cheaper transactions. The Optimism network has been gaining attention for its role in improving the performance of Ethereum-based applications.

What is OP used for

OP is the native utility token of the Optimism network. It is used for governance, paying transaction fees, and participating in the network’s consensus mechanism. The Optimism network focuses on improving the scalability of Ethereum-based applications, making it an essential tool for developers and users within the Ethereum ecosystem.

How OP works

Optimism operates as a Layer 2 scaling solution, using a technology called Optimistic Rollups. This approach allows the network to process transactions more quickly and at a lower cost than the Ethereum mainnet, while still maintaining a high degree of security and decentralization. Optimistic Rollups essentially bundle a large number of off-chain transactions into a single data point on the Ethereum blockchain, significantly reducing congestion and fees.

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 OP. 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.

While we have tried to describe the key risks associated with OP 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 OP. You should also do your own research on OP 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 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 OP, Ndax assesses whether OP 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 OP (such as how it was created and its governance structure), its characteristics, its market capitalization, and any regulatory concerns regarding OP. Based on its assessment, Ndax concluded that OP 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 OP from trading on the Platform and stop any future trading of Crypto Contracts based on OP, and users holding OP may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in OP 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 OP.

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