What is Eigenlayer?
EigenLayer is a decentralized protocol built on Ethereum that allows users to "re-stake" their ETH or other staking assets to secure additional services beyond Ethereum's core consensus. It aims to expand Ethereum's security model by enabling innovative projects to leverage its economic security, fostering a decentralized marketplace for validating services such as data availability, decentralized storage, oracles, and more. EigenLayer is designed to increase the flexibility of staking capital and drive the growth of decentralized infrastructure.
What is EIGEN?
EIGEN is an ERC-20 token on the Ethereum network that serves as the native utility and governance token for the EigenLayer protocol. It incentivizes validators, facilitates staking, and governs the platform's decision-making processes. Token holders can propose and vote on upgrades, fee structures, and other protocol parameters. The total supply of EIGEN tokens is capped at 1 billion, with allocations distributed for community incentives, development, and ecosystem growth.
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 EIGEN can be supported by Wealthsimple's platform, including whether EIGEN is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated EIGEN based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of EIGEN, 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 EIGEN;
- The supply, demand, maturity, utility and liquidity of EIGEN;
- Material technical risks associated with EIGEN, including any code defects, security breaches and other threats concerning EIGEN 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 EIGEN, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of EIGEN; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdiction regarding whether EIGEN, 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 EIGEN may result in changes to this Crypto Asset Statement and/or Wealthsimple's ability to support EIGEN.
Like all other crypto assets, there are some general risks to investing in EIGEN. 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 EIGEN. 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: January 22, 2025
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