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

Description of PYTH

History of PYTH                             

Pyth Network was created to bring high-fidelity, real-time financial market data to the blockchain ecosystem. The network was launched in 2021, to address the challenges of delivering high-quality financial market data, often referred to as "price feeds", to decentralized applications (dApps) in a secure and efficient manner.

What is PYTH used for

PYTH is the native token of the Pyth Network. It is used primarily to incentivize data providers and validators within the network. The Pyth Network provides a decentralized infrastructure for sourcing, aggregating, and distributing financial market data to various blockchain networks. This data is crucial for DeFi applications, which require accurate and timely price feeds to operate effectively.

How PYTH works

The Pyth Network operates by aggregating price data from a variety of financial institutions and trading firms. This data is then transmitted to the blockchain where it is aggregated and made available to dApps. The network relies on a decentralized network of validators who ensure the accuracy and reliability of the data. The Pyth token (PYTH) is used to reward these validators and data providers for their contributions to the network.

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 PYTH. 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 PYTH below:

• Market Dependency: The Pyth Network’s value is heavily dependent on the demand for accurate financial data in the DeFi space. Any decrease in this demand can adversely affect the value of PYTH.

• Data Accuracy: While the Pyth Network aims to provide high-fidelity data, any inaccuracies in the provided data can have significant consequences for users and applications relying on this data.

• Regulatory Risks: As with all blockchain-based projects, regulatory changes can impact the operation and value of the Pyth Network and its token.

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

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

Last Updated: May 22, 2024