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IO.net (IO) Crypto Asset Statement

IO.net (IO) Crypto Asset Statement

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

Description of IO

History of IO

IO.net began in 2023 as a “Decentralised Cloud for GPUs” project spearheaded by founder Ahmad Shadid, initially incubated within the Solana ecosystem. The team raised a $30 million seed round co-led by Multicoin Capital and Hack VC in Q1 2024 to scale a global marketplace that aggregates idle GPU capacity from data-centres and crypto-mining farms. A public incentivised test-net (“Ignition”) launched in November 2023, onboarding more than 15,000 GPU providers within six weeks. The IO token (“IO”) and its tokenomics were detailed in March 2024 when the project open-sourced its ReadMe documentation; the genesis (maximum) supply is capped at 800 million IO, with community mining rewards beginning at main-net launch in 2025 and halving every four years.

What is IO used for

IO is the native utility token that underpins the IO.net GPU marketplace. Holders can:

  • Pay for compute – Developers and AI researchers spend IO (or bridged USDC with an IO-backed credit system) to rent on-demand or spot GPU resources via IO’s scheduler.
  • Earn rewards – Suppliers of GPUs stake a security deposit denominated in IO and are paid proportional IO emissions plus task fees when their hardware completes jobs. 
  • Govern the protocol – IO token-holders vote on gauge weights that direct weekly emission toward different GPU “clusters” (e.g., NVIDIA A100 vs. RTX 3090) and can propose/approve changes to fees or emission schedule.

 

How IO works

IO.net matches buyers and sellers of GPU compute through a three-layer architecture: (1) the On-chain Scheduler posts job requests and escrows user funds; (2) an off-chain Proof-of-Workload (PoWL) oracle verifies that a provider actually served the job output; and (3) Settlements are finalized on Solana, releasing payment and minting IO block rewards to cooperating hosts. Each epoch (≈ one week) emits a fixed IO amount that is split 60 % to active GPU suppliers, 20 % to delegated “verifier” nodes who validate PoWL attestations, and 20 % to the IO Foundation treasury for future R&D. To align long-term capacity, suppliers must bond IO as collateral; malicious or offline behaviour triggers slashing, redistributing the stake to honest participants. The supply curve targets inflation of 8 % in year 1, falling below 2 % after the third halving event in 2033, after which no new IO will be minted beyond the 800 million cap.

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 IO. 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.

Specific risks associated with IO make include:

  • Early-stage DePIN model – IO.net’s “Internet of GPUs” is a novel decentralised-physical-infrastructure concept. Network usage and revenue are still experimental; if enterprise demand for decentralised GPUs fails to materialise, IO’s value and reward structure could diminish sharply.
  • Central-operator dependency – Until DAO governance reaches sufficient distribution, the IO Foundation retains upgrade keys for the scheduler and PoWL contracts, meaning protocol continuity currently depends on a small core team. 
  • Hardware availability and quality – The network’s service promise hinges on third-party data-centre or miner-owned GPUs. Hardware failures, regional electricity shortages or sudden repricing of electricity could disrupt supply and dilute user confidence in IO compute credits. 
  • Regulatory exposure to AI export rules – Because IO aggregates high-end GPUs, jurisdictions may seek to restrict export-controlled chips or impose KYC on compute buyers/sellers, potentially constraining network growth and token utility. 
  • Emission-driven sell pressure – Block rewards start high relative to circulating supply; suppliers may immediately market-sell tokens to cover electricity costs, creating downward price pressure until organic demand (compute buyers) scales.

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

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 accordance with the terms of the Decision Document dated December 19, 2024 that we entered into with the Canadian securities regulators.  Any fiat currency held in user's accounts are protected by the CIPF's Investment Dealer Fund in accordance with its Coverage Policy. However, CIPF coverage does not extend to any virtual assets held in user's accounts. These assets are not eligible for deposit insurance or any protection from the Canada Deposit Insurance Corporation (CDIC) or CIPF.

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

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

Last Updated: 05/30/2025