What is Gala Games?

Gala Games is the company behind a rich ecosystem of blockchain-based games, also called Gala Games. Gala Games’ mission emphasizes the goal of building player-owned, community-governed games. Using the Ethereum blockchain, each in-game item is a non-fungible token, or NFT, that can be fully owned, controlled, and traded by users, rather than only by the game developers. Players can operate nodes from their home computers to support the Gala Games ecosystem and earn rewards while doing so. 

Founded by Eric Schiermeyer, co-founder of Zynga Games, the studio behind games like Mafia Wars and Farmville, Gala Games launched in 2019. Since then, it boasts 1.3 million active users, 26,000 NFTs sold, and up to $3 million spent on a single in-game NFT. So far, only two games, Townstar and Spider Tanks, are available to play, but twelve additional games are in active development. The Gala Games team has grown to over 400 employees and continues to partner with game studios, like Ion Games and Certain Affinity, to pursue new game development.

What is GALA?

The Gala Games ecosystem of games is powered by its utility token, GALA. The GALA token runs on, and is secured by, both the Ethereum and Binance Smart Chain blockchains. However, Wealthsimple only supports the ERC-20 token that runs on the Ethereum blockchain. GALA can primarily be used to purchase and sell in-game items. However, it’s also sold on public exchanges independent of the game. Games may also come with their own individual tokens, which should not be confused with GALA, such as the TOWN token used in the Town Star ecosystem.

GALA can also be used to purchase Founder Nodes. Once purchased, users can run the Founder node to earn additional GALA as rewards and participate in distributed voting mechanisms to, for example, help determine what games should be developed and receive funding. Gala Games will only sell 50,000 Founder Nodes, of which 23,000 have been purchased so far.

Gala Games completed a scheduled v2 upgrade of their GALA token on May 15th, 2023 via a 1:1 airdrop to existing GALA holders. Per Gala Games, the v1 GALA token has been deprecated from their ecosystem. The upgrade intends to expand the utility of the GALA token to the Gala Games ecosystem. No action was required by Wealthsimple GALA holders to participate in the upgrade, and all trading and transfers of the GALA token will reflect the v2 GALA asset from May 15, 2023. 

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 GALA can be supported by Wealthsimple’s platform, including whether GALA is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.

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

• The creation, governance, usage and design of GALA, 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 Gala Games;
• The supply, demand, maturity, utility and liquidity of GALA;
• Material technical risks associated with GALA, including any code defects, security breaches and other threats concerning GALA 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 GALA, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of GALA; and
• Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether GALA, 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 GALA may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support GALA.

Like all other crypto assets, there are some general risks to investing in GALA. 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.

Additional Risks / Information

As the founding team continues to play an important role in ongoing development of Gala Games, fixes to any issues or bugs with the blockchain’s operations may be dependent on the core team. Gala Games also presents higher short history risk and its value is tied, in part, to the popularity of the games within the Gala Games ecosystem. While the GALA ERC-20 smart contract is open-source, Gala Games has not open-sourced the Gala Node software nor have they provided comprehensive documentation explaining its technical characteristics. As such, if Gala Games stops operating, developing, or updating Gala Node software, the Gala Games ecosystem may cease to function, leaving GALA token holders without recourse.

We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading GALA. 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: May 23, 2024