What is Hedera?
Hedera Hashgraph is a crypto project launched in 2018. It aims not only to offer a cryptocurrency in the traditional sense, but also an infrastructure for the decentralization of the Internet. It positions itself as a 3rd generation blockchain after Bitcoin and Ethereum. Like most cryptocurrencies, its technology is based on the Distributed Ledger Protocol.
This technology aspires to compete with Bitcoin by guaranteeing security and high performance, without giving up on decentralization. It is designed to execute multiple tasks with time variations between requests and responses within the system to improve performance. The HBAR is the native utility token of the system. It acts as a cryptocurrency, but also as a currency used to pay application transaction fees on the platform and protect the network from attack through proof-of-stake. Hedera’s governance council is made up of a diverse number of well-known global enterprises including Google, IBM, Standard Bank, Nomura, Boeing, and many others.
What is HBAR token?
HBAR is Hedera’s native token serving two primary functions within the network: the token is used to pay for transaction fees and to execute smart contracts. Users can also stake HBAR as part of the proof-of-stake consensus mechanism, however rewards are not currently accrued to the public. By design, there is a maximum supply of 50,000,000,000 HBAR units.
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 HBAR can be supported by Wealthsimple’s platform, including whether HBAR is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated HBAR based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of HBAR, 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 HBAR;
- The supply, demand, maturity, utility and liquidity of HBAR;
- Material technical risks associated with HBAR, including any code defects, security breaches and other threats concerning HBAR 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 HBAR, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of HBAR; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether HBAR, 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 HBAR may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support HBAR.
Like all other crypto assets, there are some general risks to investing in HBAR. 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 HBAR. 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