What is Brave?
The digital advertising space is fraught with challenges. The advent of corporations like Google and Facebook, and the proliferation of bots, malware, and online fraud, has turned the digital advertising industry into an opaque and unsustainable marketplace where consumers, publishers, and advertisers all suffer. Consumers can’t opt-out of seeing ads they don’t want, auto-loading video ads drains device batteries and uses data, popular websites have as many as several dozen trackers slowing down page-loading times, and data costs are increasing.
To counteract the introduction of ad blockers, advertisers found loopholes that compromise online privacy. Users’ online activities are tracked by technology companies that analyze their behaviours and sell the data on to advertisers for a profit.
The Basic Attention Token (BAT) is a currency exclusive to the Brave ecosystem as its native utility token. Its value is derived from, and therefore commodifies, user attention. If a user opts-in, the BAT extension starts to track their time spent viewing and engaging with ads. Users are rewarded for their time in BAT which they can use to ‘tip’ content producers, hold onto in their browser wallet, or exchange.
What is BAT?
The Basic Attention Token is an ERC-20 token which means that it’s built on the Ethereum blockchain using a standardised smart contract template (smart contracts are bits of code that execute once a certain condition is satisfied). BAT launched on May 31, 2017 and is a unit of currency within Brave’s ecosystem. Its utility outside of the Brave browser is limited, but it shares certain features with other ERC-20 assets and can be speculated upon just like any other cryptocurrency.
The total supply of BAT is capped to 1.5 billion tokens, which were pre-mined prior to its token sale in 2017. One billion tokens were sold during the Initial Coin Offering (ICO), with a further 500 million kept in reserve while the platform grew and developed. BAT does not represent or convey any ownership, however, it only serves to fuel the rewards cycle between consumers, advertisers, and publishers in the Brave ecosystem. Brave as a browser has done well recently: its daily active user count rose from 3.8 million to 8.6 million in 2020. In addition, the number of verified content creators using the Brave platform has risen to well over a million.
BAT is also receiving institutional support. On March 17, 2021, Grayscale announced on Twitter that BAT was one of five tokens added to Grayscale’s inventory of digital asset trusts.
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 BAT can be supported by Wealthsimple’s platform, including whether BAT is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated BAT based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of BAT, 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 BAT and Brave;
- The supply, demand, maturity, utility and liquidity of BAT;
- Material technical risks associated with BAT, including any code defects, security breaches and other threats concerning BAT 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 BAT, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of BAT; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether BAT, 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 BAT may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support BAT.
Like all other crypto assets, there are some general risks to investing in BAT. 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 BAT. 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 1, 2024