What is Immutable X?

Immutable X is a layer-two scaling solution designed to improve the trading and management of non-fungible tokens (NFTs) on the Ethereum blockchain. Launched in 2021 by the Sydney-based company Immutable, the platform addresses issues like high network costs and slow transaction times in Ethereum-based transactions. Utilizing StarkWare’s zero-knowledge rollup technology, Immutable X allows for gas-free and instant transactions, enhancing scalability while maintaining the security of the Ethereum network. The platform aims to increase accessibility to digital asset markets and support the growing ecosystem of NFT creators, gamers, and developers, contributing to the broader adoption of blockchain technology.

What is IMX?

IMX is the native utility token of the Immutable X protocol, strategically embedded within its ecosystem to drive and optimize its operations. As an ERC-20 token on the Ethereum network, IMX serves multiple functions, including the payment of transaction fees, participation in the governance of the protocol, and the distribution of rewards to users who contribute positively to the network. There is a fixed supply of 2 billion IMX tokens.

Risk Statement

Before trading any crypto assets 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.

No securities regulatory authority or regulator in Canada has evaluated or endorsed the Crypto Contracts or any of the crypto assets made available through the platform.

Wealthsimple has performed an assessment of whether IMX can be supported by Wealthsimple’s platform, including whether IMX is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.

We evaluated IMX based on publicly available information, including (but not limited to):

• The creation, governance, usage and design of IMX, including the source code, security and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that first created IMX;
• The supply, demand, maturity, utility and liquidity of IMX;
• Material technical risks associated with IMX, including any code defects, security breaches and other threats concerning IMX and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them;
• Legal and regulatory risks associated with IMX, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of IMX; and
• Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether IMX, or generally about whether the type of crypto asset, is a security and/or a derivative.

Wealthsimple monitors ongoing developments related to crypto assets available on its platform for significant changes that may affect Wealthsimple’s original assessment of those assets, including Wealthsimple’s assessment of the application of securities and derivatives laws. Any significant changes relating to IMX may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support IMX.

Like all other crypto assets, there are some general risks to investing in IMX. These include short history risk, volatility risk, liquidity risk, demand risk, forking risk, cryptography risk, regulatory risk, concentration risk, electronic trading risk and cyber security risk. Please review the Wealthsimple Crypto Product Risk Disclosure for additional discussion of general risks associated with the crypto assets made available through the platform.

We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading IMX. Investors should perform their own assessment to determine the appropriate level of risk for their personal circumstances.

Wealthsimple is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Wealthsimple Investments Inc. dated December 18, 2023 (the Decision).

The statutory rights of action for damages and rescission in section 130.1 of the Securities Act (Ontario), and, if applicable, similar statutory rights under securities legislation of other jurisdictions of Canada, do not apply in respect of this Crypto Asset Statement to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.

Last updated: September 4, 2024