BITTENSOR (TAO) - Crypto Asset Statement

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

Description of TAO

History of TAO

TAO is the native token of Bittensor, a decentralized blockchain network designed as a “peer-to-peer intelligence market” for AI models. Launched by the Opentensor Foundation in 2021, Bittensor enables AI models to collaborate and evaluate each other’s outputs using a novel consensus mechanism known as Proof-of-Intelligence (or the Yuma Consensus).

What is TAO used for

TAO serves multiple functions within the Bittensor ecosystem. It is used to pay transaction fees on the network and for staking by validators, which secures block production. Additionally, TAO incentivizes network participants—rewarding miners for contributing valuable AI outputs—and supports the overall economic model of the decentralized AI marketplace.

How TAO works

Bittensor operates on a standalone blockchain built with Substrate. Its unique ProofofIntelligence consensus selects miners based on the quality of their AI outputs. TAO is distributed as mining rewards under a fair-launch model with a fixed supply cap of 21 million tokens and a halving schedule to reduce inflation over time. The network’s design leverages gametheoretic mechanisms (such as Shapley value calculations) to ensure fair reward distribution and collusion resistance.

Certain Staking Services Terms

TAO is distributed as mining rewards under a fair-launch model with a fixed supply cap of 21 million tokens and a halving schedule to reduce inflation over time. The network’s design leverages game-theoretic mechanisms (such as Shapley value calculations) to ensure fair reward distribution and collusion resistance. 

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. “Unbounding Period” refers to the amount of time you need to hold your eligible staked crypto assets after opting-in to the staking service before you are able to opt-out.

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 TAO. 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 TAO may include significant market volatility driven by speculative trading and early adoption dynamics; technical vulnerabilities arising from the network’s innovative Proof-of-Intelligence mechanism and complex integration of AI models, which—despite rigorous audits (e.g., the Gov-Spearbit audit available at https://github.com/RaoFoundation/subtensor)—may harbor undiscovered issues; operational risks highlighted by the July 2024 supply-chain attack via a malicious Python package that resulted in significant token losses and underscored weaknesses in software verification practices; governance and centralization risks, as early network control remains concentrated in the hands of the Opentensor Foundation and a limited group of early miners, raising concerns about potential conflicts of interest and manipulation. Investors should be aware that these factors, combined with the experimental nature of the technology and ongoing development of the decentralized AI marketplace, render TAO a high-risk, speculative asset.

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

Risks specific to staking TAO

Prior to staking your crypto assets, you acknowledge that:

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

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

Last Updated: August 17, 2026