What is SKL?
The SKALE Network is a expandable multichain blockchain network with the stated goal of serving as a secure Ethereum scalability solution. SKALE architecture is built to support an expanding set of dApp-specific chains. It uses the Ethereum mainnet to manage and orchestrate network operations in an effort to enhance overall network security and transparency.
SKL tokens can be utilized to access and leverage the SKALE Network. Developers can rent SKALE chains that each act as a private Ethereum-compatible smart contract platform with faster block times and the ability to process more transactions per second than the native Ethereum network. According to core developer SKALE Labs, SKALE chains can run full-state smart contracts, support decentralized storage, execute rollup contracts (a layer-2 scaling solution), and run machine learning algorithms using the Ethereum Virtual Machine. SKALE Network aims to allow Web3 apps to compete with traditional apps on a cost and performance basis.
SKL tokens were designed on the ERC-777 token standard, which supports delegation on the token level. With ERC-777, a delegator no longer needs to send the token to a delegation smart contract, but instead shares the secure delegation key with the staking provider while storing the tokens. This allows token transfers to occur in one transaction, rather than two on the ERC-20 standard. The token is backwards compatible with ERC-20, which means it may be broadly supported by the Ethereum ecosystem.
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 SKL can be supported by Wealthsimple’s platform, including whether SKL is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated SKL based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of SKL, 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 SKL;
- The supply, demand, maturity, utility and liquidity of SKL;
- Material technical risks associated with SKL, including any code defects, security breaches and other threats concerning SKL 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 SKL, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of SKL; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether SKL, 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 SKL may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support SKL.
Like all other crypto assets, there are some general risks to investing in SKL. 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 SKL. 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