What is STORJ?
Storj Decentralized Cloud Storage (Storj DCS) is advertised as an encrypted, secure, object storage service that enables the storage, back up, and archiving of large amounts of data to a decentralized cloud. Storj Labs operates Tardigrade, a enterprise level decentralized object storage service for storing data in the cloud between Storj DCS network participants. Any open source applications that enable users to store data (storage and network bandwidth) on Tardigrade via connectors will receive a percentage of the revenue produced by those users through the Tardigrade Open Source Partner Program. Tardigrade users are incentivized to pay using the STORJ token, instead of a credit card, by receiving a bonus on any STORJ token deposit they make. Any third party operating a Satellite (a type of node) must also accept STORJ as a means of payment for storage and bandwidth.
STORJ is an Ethereum ERC-20 token that serves as a unit of account for Storj DCS, and it has a total supply of 425,000,000 units. After a customer uploads a file to Storj DCS, pieces of each file are distributed to a global network of independent nodes. When someone requests the file, it is then recompiled securely and made available for download. This is supposed to allow anyone to store files on Storj DCS without having to trust a centralized data centre. Developers can purchase cloud storage services with STORJ. Network participants earn STORJ in return for providing unused hard drive space and bandwidth to the network.
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 STORJ can be supported by Wealthsimple’s platform, including whether STORJ is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated STORJ based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of STORJ, 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 STORJ;
- The supply, demand, maturity, utility and liquidity of STORJ;
- Material technical risks associated with STORJ, including any code defects, security breaches and other threats concerning STORJ 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 STORJ, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of STORJ; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether STORJ, 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 STORJ may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support STORJ.
Like all other crypto assets, there are some general risks to investing in STORJ. 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
STORJ is used as a means of payment within the Storj DCS. The Storj DCS appears to be dependent on Storj Labs and its affiliated entities, which created the network. The risks associated with this token are centred on the notion that if Storj Labs were to cease operations, it is unclear whether Storj DCS would continue to operate and whether STORJ would continue to have utility and value.
We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading STORJ. 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
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