Hyperliquid (HYPE) - Crypto Asset Statement

PLEASE READ THIS CAREFULLY. BY PROCEEDING TO TRANSACT IN HYPE, YOU ACKNOWLEDGE AND ACCEPT THE STATEMENTS SET OUT BELOW.

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

Description of HYPE

History of HYPE

HYPE is the native token of Hyperliquid, a purpose-built layer-one blockchain designed to support fully on-chain spot and perpetual futures order books through “HyperCore” and a general-purpose smart contract execution environment through “HyperEVM.” Hyperliquid publicly introduced HYPE through a late-2024 genesis event that emphasized community distribution, and public reporting described the launch as having no allocations for private investors, centralized exchanges, or market makers. Public materials and third-party reporting have described HYPE as having a maximum supply of 1,000,000,000 tokens, with allocations including a genesis distribution, future emissions and community rewards, and allocations for core contributors and a foundation budget.

What is HYPE used for

HYPE is used as the native staking token on HyperCore and as the native gas token on HyperEVM. Holders may delegate HYPE to validators in Hyperliquid’s delegated proof-of-stake system in order to support network security and earn staking rewards sourced from the protocol’s future emissions reserve. HYPE is also used operationally within HyperEVM to pay transaction fees for smart contract activity. More broadly, HYPE is tied to the network’s economic design because Hyperliquid’s documentation describes fee flows that direct value to the community through mechanisms such as protocol vaults and an assistance fund that converts certain trading fees into HYPE and burns those tokens.

How HYPE works

Hyperliquid operates as a custom layer-one blockchain using a consensus mechanism called HyperBFT, with execution split between HyperCore and HyperEVM. HyperCore handles the on-chain spot and perpetual order books, where every order, cancel, trade, and liquidation is intended to happen transparently on-chain with one-block finality. HyperEVM is secured by the same consensus and uses HYPE as its native gas token. HYPE can be transferred between HyperCore and HyperEVM through protocol defined mechanics, and on the EVM side it is received as the native gas asset rather than as an ERC-20 token. Within staking, HYPE may be delegated to validators, who become active once they meet the protocol’s self-delegation requirement; delegators are subject to a one-day lockup and a seven-day unstaking queue back to spot balance. Staking rewards accrue frequently and are automatically redelegated. Hyperliquid’s documentation also states that certain trading fees are converted into HYPE through the assistance fund and that the HYPE held there is burned, reducing circulating and total supply.

Certain Staking Services Terms

You can cancel your 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: 

“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 HYPE. Each of these risks are 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 HYPE below.

Specific risks associated with HYPE may include smart contract risk, layer-one risk, market liquidity risk, and oracle manipulation risk, all of which are expressly identified in Hyperliquid’s own documentation. Hyperliquid also relies on bridge infrastructure and associated smart contracts for certain asset movements, which means a bridge exploit or other failure could affect user funds or overall system integrity. In addition, Hyperliquid’s architecture is specialized for on-chain financial markets, and liquidation mechanics may behave differently during periods of high volatility or on highly leveraged positions. From a governance and staking perspective, HYPE holders rely on a delegated proof-of-stake validator set, and although validators may be jailed for non-performance or poor responsiveness, Hyperliquid’s staking documentation states that there is currently no automatic slashing implemented generally at the protocol level. HYPE is also exposed to ecosystem and market-structure risk because its value is tied not only to general crypto market conditions but also to the adoption and stability of the Hyperliquid exchange and developer ecosystem. Finally, while Hyperliquid has disclosed a bug bounty program and has published bridge contract audit materials, the publicly available audit coverage described by the project is limited in scope and should not be interpreted as a comprehensive review of the entire ecosystem.

While we have tried to describe the key risks associated with HYPE 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 HYPE. You should also do your own research on HYPE to make sure you are comfortable investing in such a crypto asset.

Risks specific to staking HYPE

Prior to staking your crypto assets, you acknowledge that:

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

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

Last Updated: August 19, 2026