Arbitrum (ARB) - Crypto Asset Statement
PLEASE READ THIS CAREFUL. BY PROCEEDING TO TRANSACT ARB, 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 ARB. We created this summary to help you understand the basics of ARB as well as some of the risks involved in trading in ARB. While we tried to describe the key features of ARB, this summary isn’t meant to tell you everything you’d want to know before investing in ARB. You should also do your own research on ARB to make sure you are comfortable investing in it.
Description of ARB
History of ARB
The Arbitrum project was established in 2018 by a group of computer scientists and entrepreneurs, including Ed Felten, Harry Kalodner, and Steven Goldfeder. Offchain Labs, a blockchain research and development firm, initially incubated the project.
Following his tenure as Deputy CTO at the White House during the Obama administration, Felten returned to Princeton University to resume his research and be a professor. There, he collaborated with two of his Ph.D. students, Kalodner and Goldfeder, to build Offchain Labs.
In May 2021, Offchain Labs launched the mainnet beta version of Arbitrum One for developers. The "soft launch" aimed to ensure that dApp clients would have a seamless onboarding experience before public users' funds were at stake. By August 2021, over 400 dApps had been onboarded, making Arbitrum One one of the most prominent Ethereum L2 scaling solutions and the largest optimistic L2 by TVL.
What is ARB used for
The ARB token is the native token of the Arbitrum network. ARB is used for:
- Paying transaction fees on the network
- Rewarding validators for participating in network consensus
- Staking (to secure the network) and block reward remuneration
- Governance, allowing holders to vote on proposals and changes to the network
How ARB works
- Arbitrum has an ‘inbox’ which receives transaction requests from users and smart contracts; it acts as the blockchain’s ‘to-do’ list.
- Arbitrum outputs a transaction receipt once transactions are processed.
- Arbitrum utilizes an approach known as optimistic rollups to process transactions, which are denoted as their 'chain state' in Arbitrum's ecosystem. This involves aggregating Ethereum transactions into optimistic rollup packets and settling them on a sidechain. This results in a streamlined, efficient, light transaction data package reported back to Ethereum.
What’s special about an optimistic rollup?
Rollup technology compresses multiple transactions (off-chain) into one transaction (on-chain) to enhance a network’s speed, congestion, efficiency, etc.
An optimistic rollup assumes all transactions are valid before validating, ‘rolling them up’ and settling them on the Ethereum main chain. (As opposed to its better-known counterpart, the ZK–or zero knowledge–rollup)
In optimistic rollups, validators can contest transactions through a dispute resolution mechanism after the fact if they suspect fraudulent behavior. This is in contrast to zero knowledge rollups, which do not require a dispute resolution mechanism as they validate transactions before consolidating them.
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 ARB. We describe many of these general risks in the risk statement we publish on our website that you have already acknowledged, including risks relating to: (i) short history; (ii) volatility in the price of crypto assets and loss of liquidity; (iii) potential decrease in global demand for crypto assets; (iv) The blockchains on which crypto assets operate may temporarily or permanently fork or halt; airdrops; (v) issues with the cryptography underlying the Crypto networks; (vi) custodial wallet systems; (vii) uncertainty in regulation and future financial institution support; (viii) currency risks; (ix) concentration risks; (x) electronic trading and dependence on the internet; (xi) cyber security risks; (xii) inadequate due diligence; (xiii) Ndax’s reliance on vendors and third-party service providers; (xiv) liquidity constraints; (xv) no voting rights; (xvi) lack of investor protection insurance; (xvii) commissions and other charges for trading; (xviii) no advise; (xix) transfers; (xx) beta features; (xxi) unforeseeable risks; and (xxii) conflicts of interest. We also point out a risk that is specific to ARB below. While we tried to describe the key risks associated with ARB here and in our risk statement, these aren’t all of the risks associated with trading in ARB. You should also do your own research on ARB to make sure you are comfortable investing in it.
Conflict of Interest Disclosure
Ndax has assessed potential conflicts of interest associated with the offering, and ongoing availability of ARB 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 ARB. 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 ARB, Ndax assesses whether ARB 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 ARB (such as how it was created and its governance structure), its characteristics, its market capitalization and any regulatory concern regarding ARB. Based on its assessment, Ndax concluded that ARB 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 ARB from trading on the Platform and stop any future trading of Crypto Contracts based on ARB, and users holding ARB may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in ARB 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 ARB.
No Canadian securities regulatory authority has expressed an opinion about ARB, including an opinion that ARB is not itself a security and/or derivative.
Last Updated: August 17, 2026