Sei (SEI) - Crypto Asset Statement

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

Description of SEI

History of SEI

SEI is a Layer-1 blockchain built on the Cosmos SDK, designed to be the fastest blockchain for trading and decentralized finance (DeFi). It was co-founded by Dan Edlebeck, Jayendra Jog, and Jeff Feng in 2022 and launched its mainnet in August 2023.

What is SEI used for

SEI, the native token of the SEI blockchain, serves several important functions within the network. Primarily, SEI is used to pay transaction fees for processing and storing transactions on the blockchain, ensuring the smooth operation of decentralized finance (DeFi) applications built on the platform. Additionally, SEI plays a critical role in securing the network through its Delegated Proof-of Stake (DPoS) mechanism. Users can stake SEI tokens to participate in network validation or delegate their tokens to validators in exchange for rewards. Furthermore, SEI holders are also given governance rights, allowing them to vote on key decisions and protocol upgrades that shape the future of the SEI ecosystem.

How SEI works

SEI operates using a Twin-Turbo Consensus mechanism, designed for high performance and scalability in trading applications. This combines optimistic parallel execution and a Central Limit Order Book (CLOB), which serves as a native order-matching engine for decentralized exchanges. The CLOB ensures that transactions are executed in the correct sequence, preventing frontrunning and optimizing order processing. This makes SEI particularly well-suited for decentralized finance (DeFi) and high-frequency trading applications. Built on the Cosmos SDK, SEI also leverages the Inter-Blockchain Communication (IBC) protocol, allowing seamless interoperability with other blockchains in the Cosmos ecosystem.

In addition to its innovative consensus mechanism, SEI uses a Delegated Proof-of-Stake (DPoS) system. Validators secure the network by validating transactions, and users can delegate their SEI tokens to these validators in return for staking rewards. This structure supports both network security and efficiency. The combination of DPoS with SEI’s Twin-Turbo Consensus allows the platform to achieve low-latency, high-throughput transaction processing, making it ideal for DeFi applications and other high-demand use cases.

Certain Staking Services Terms Applicable to SEI

You can cancel your opt-in to the staking services for any crypto-asset within the first four hours of your initial opt-in.

In addition to the other staking terms that you agree to when you opt-in to our staking services, please consult the table below for additional terms that currently apply to the staking service for particular crypto assets at this time. Note that the annual percentage yield (“APY”) is an estimate, and terms are subject to change. All terms in effect are maintained on our website.

Example: If you have 100 coins staked at 3% APY, 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. 21 days 

“Bonding Period” refers to the amount of time it takes before you begin to generate staking rewards for that crypto 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 SEI. 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 SEI below:

• Validator and Infrastructure Performance: SEI relies heavily on validators to secure the network and process transactions. However, the performance of these validators, particularly in high-demand scenarios, could be a risk. For example, SEI’s innovative Twin-Turbo Consensus system, designed for high-frequency trading, requires fast and reliable validators. If validators experience outages or performance degradation, it could disrupt transaction finality and the overall performance of the blockchain 
• Market Volatility and Liquidity Risk: SEI is still relatively new, and while it has made strides in building a trading-focused blockchain, it is subject to the same market volatility as other cryptocurrencies. Additionally, its liquidity hubs and decentralized exchanges built on SEI must maintain sufficient liquidity. If liquidity falls, it could lead to greater price fluctuations and slippage for users 
• Operational Risks: SEI aims to optimize trading efficiency with features like a central limit order book (CLOB) and Twin-Turbo Consensus, but high-frequency trading introduces additional risks of market manipulation, such as frontrunning. While SEI has designed mechanisms to minimize these risks, vulnerabilities could still be exploited, especially by sophisticated traders or bots. 
• Regulatory Risks: As with all blockchain-based projects, regulatory changes can impact the operation and value of the SEI Network and its token.

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

Risks specific to Staking SEI

Prior to staking your crypto assets, you acknowledge that:

• given the volatility of crypto assets, the value of your staked SEI 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 SEI; 
• 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 SEI if the validator does not perform as require 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 SEI 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 SEI. 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 SEI, Ndax assesses whether SEI 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 SEI (such as how it was created and its governance structure), its characteristics, its market capitalization and any regulatory concern regarding SEI. Based on its assessment, Ndax concluded that SEI 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 SEI from trading on the Platform and stop any future trading of Crypto Contracts based on SEI, and users holding SEI may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in SEI 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 SEI.

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

Last Updated: August 17, 2026