What is Cartesi?
Cartesi (CTSI) was founded in 2018 and has been designed to be a Layer-2 platform that facilitates the development of smart contracts and decentralized applications (dApps) across multiple blockchains. Cartesi uses two main pieces of infrastructure to solve the problem of scalability and high transaction costs on blockchains: Descartes Rollups, which is a variant of an optimistic rollup, and Noether, a side-chain that provides data availability to applications. Notably, Cartesi is unique in that it intends to enhance programming by allowing developers to write smart contracts using coding languages with which they are already familiar, such as Python and run them on Linux OS.
The Cartesi token (CTSI) is an ERC-20 utility token that powers the Cartesi proof of stake network. It primarily allows users to pay for transactions and smart contract processing on Noether and incentivizes Cartesi node operators to engage with the system honestly. Stakers receive CTSI rewards by staking their tokens and participating in the network, node runners are selected randomly according to a proof of stake network and gain the right to create the next block, and users of the network pay CTSI fees to insert data on to the Noether side-chain.
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 CTSI can be supported by Wealthsimple’s platform, including whether CTSI is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated CTSI based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of CTSI, 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 CTSI;
- The supply, demand, maturity, utility and liquidity of CTSI;
- Material technical risks associated with CTSI, including any code defects, security breaches and other threats concerning CTSI 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 CTSI, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of CTSI; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether CTSI, 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 CTSI may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support CTSI.
Like all other crypto assets, there are some general risks to investing in CTSI. 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 CTSI. 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