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Plasma (XPL) Crypto Asset Statement

Plasma (XPL) Crypto Asset Statement

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

Description of XPL

History of XPL

Plasma is a recently launched Layer-1 blockchain designed around high-throughput, low-latency settlement for stablecoin and payments use cases. Its native token, XPL, was introduced alongside the network to secure consensus, pay protocol-level fees, and support validator economics. The project markets itself as an EVM-compatible chain with a streamlined design for exchange and payment integrations, accompanied by an official block explorer (“PlasmaScan”) and listings on major centralized exchanges. Since launch, the team has emphasized validator onboarding, staking, and ecosystem integrations focused primarily on stablecoin transfer and settlement.

What is XPL used for

XPL is the native asset of the Plasma network. It is used to: (i) secure the network via validator and delegator staking; (ii) pay network fees/gas for transactions and on-chain operations; and (iii) align incentives for validators and ecosystem participants through protocol rewards. Depending on venue support, exchanges and custodians may also use XPL for operational fees (deposits/withdrawals) and governance-related signalling where applicable.

How XPL works

Plasma runs an EVM-compatible execution environment, allowing standard Ethereum-style accounts and smart contracts. XPL underpins consensus by being staked to validators, who produce and attest to blocks; in return, validators (and their delegators) receive protocol rewards denominated in XPL subject to slashing/penalties for misbehavior. Users pay network fees in XPL to execute transactions and interact with smart contracts. The token’s economic role is therefore threefold: fee medium, security collateral, and an incentive asset. Supply, emissions and reward rates are set by protocol parameters that may be adjusted by the project over time, and circulating supply may expand via validator/delegator rewards depending on the chain’s monetary policy.

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 XPL. 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 XPL below.

  • Early-stage network risk. Plasma/XPL is a relatively new Layer-1 with limited operating history. Consensus, client software, and tooling may still be maturing, increasing the risk of bugs, outages, or unanticipated forks.

  • Validator and staking centralization. If a small set of validators controls a large portion of stake, the network could be vulnerable to censorship or governance capture.

  • Ecosystem concentration. Plasma’s stated focus is stablecoin and exchange/payment flows. If adoption by those partners lags or reverses, on-chain activity and fee demand for XPL could be materially lower than expected.

  • Token economics uncertainty. Emissions/reward schedules, fee policies, or incentive programs can change via governance or core-team decisions, which may affect inflation, staking yields, and the market value of XPL.

  • Bridge and interoperability exposure.  As an EVM-compatible chain that relies on external bridges and custodial listings, XPL holders are indirectly exposed to bridge/custody incidents (e.g., exploits, freezes, or listing changes).

  • Regulatory uncertainty. Legal treatment of native tokens used for staking and network fees continues to evolve across jurisdictions; changes could impact access, liquidity, or exchange support for XPL.

  • Liquidity and volatility. Market depth for XPL may be concentrated on a handful of venues. Rapid price moves, widening spreads, and temporary illiquidity are possible, especially during market stress or network incidents.

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

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

Last Updated: 10/7/2025