What is The Graph?
Likened to the “Google of Blockchain,” The Graph is a decentralized, open-source indexing protocol used to query data from blockchains such as Ethereum and IPFS. Blockchain data is processed by core network participants called indexers and delegators and is aggregated and stored on open application programming interfaces (APIs), or subgraphs. Indexing blockchain data allows The Graph to offer efficiencies to developers of decentralized applications (dApps) who query the subgraphs and retrieve information which can then be leveraged in dApp project development.
Created by Yaniv Tal, Brandon Ramierz and Jannis Pohlmann, The Graph was founded in 2018. Following a successful launch of The Graph mainnet in 2020, Tal became the CEO of Edge & Node, a software development company led by the initial project team which has committed its continued support to the evolution of The Graph protocol into 2023. The Graph governance responsibilities now rest primarily with The Graph Foundation, The Graph Council and the broader ecosystem of community participants.
What is GRT?
The Graph economy is powered by its native utility token, GRT. GRT is an ERC-20 token which means that it is compatible with and secured by the Ethereum network. The public sale of GRT launched in 2020 with an initial maximum supply of 10 billion tokens. New tokens are issued as indexing rewards at a rate of 3% annually. The value of GRT is closely tied to the utility of The Graph and its development, but GRT can also be traded on public exchanges independently.
GRT has multiple uses in The Graph ecosystem: it is the medium of exchange used by developers and other end-users to pay for subgraph queries and it is earned by network participants including indexers, curators and delegators who stake GRT to perform their roles. GRT holders also participate in protocol governance. While the token’s governance function is currently limited, a DAO (Decentralized Autonomous Organization) is expected to launch in the future. As part of its mandate, The Graph Foundation supports the development of The Graph ecosystem and allocates grants to projects building on The Graph. These funding activities are supported by a small fee which is re-allocated from fees collected on the network.
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 GRT can be supported by Wealthsimple’s platform, including whether GRT is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated GRT based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of GRT, 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 The Graph;
- The supply, demand, maturity, utility and liquidity of GRT;
- Material technical risks associated with GRT, including any code defects, security breaches and other threats concerning GRT 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 GRT, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of GRT; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether GRT, 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 GRT may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support GRT.
Like all other crypto assets, there are some general risks to investing in GRT. 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 GRT. 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