⚠️Risks

untrading DAO, together with our subsidiary entities (collectively, “untrading” or “we”, “us” or “our”), was established to build and steward the untrading protocol, a combination of software applications, hardware devices, blockchain-network based “smart contracts”, digital assets, and various rules and procedures (together, the “Protocol”). Our objective is to use the Protocol to revolutionize crypto trading by implementing a Participatory Value Amplification (PVA) framework, fostering shared wealth creation and empowering users to benefit from future price increases, creating a community-driven platform for equitable and transparent trading. (the “Project”). The Protocol has been designed primarily as an open-source public utility, open to any and all who choose to use it. The Protocol is centered around a unique extension to the Ethereum network, known as ERC-5173: NFT Future Rewards (“nFR”), and a new crypto asset, known as the untrading token (“UN”). Owners of UN tokens will be able to participate in guiding the governance of the Protocol and will contribute to the Project alongside a global community of developers, economists, technologists, and other interested individuals. The UN token may also function as a means of making payments.

The Protocol and its component elements, including the UN token, are experimental technologies. The objective of the Project is to become “decentralized” as quickly as practicable, meaning that all important governance decisions about the Project will be made by the community of UN owners. As a result, there are significant uncertainties as to how these technologies function at scale and the extent to which users around the world will find the project and the UN token useful.

Although untrading hopes many people around the world will want to become involved with the Project, before engaging with the Project, including through accepting grants of UN from untrading or through acquiring UN in secondary transactions from third parties, you should read the information below and ensure that you understand both the objectives of the Project and the various risks that may arise from engaging with it. The Project and the UN token are intended only for informed users above the age of majority or legal age in any jurisdiction applicable to them who can understand and accept both the anticipated benefits and related risks of engaging with the Protocol. The Project is being made available to you by us without charge on an “as is” basis and neither untrading nor any other entity makes any warranties to users about the Project or its components. More information about the Project and your use of the Protocol, including important disclaimers of legal liability can be found in our Terms of Service.

The Protocol is experimental and is under continuous development. The Protocol may never achieve significant user interest or the scale or usability necessary to attract the participation of third-party developers and users. Current features of the Protocol may not function as anticipated or may temporarily or permanently cease functionality.

The Protocol and many of its components are under continuous development and thus are subject to change. We cannot assure you that the Protocol will function as intended at any given time or that it will be able to sustain long-term operation. Some of the technological solutions that comprise the Protocol are new and/or relatively untested. As a result, some or all of these technologies may not operate as intended. In addition, if functional at any time, this functionality may be impaired by subsequent changes made through the Project’s governance process.

Individuals may be hesitant to provide their social or personal data to a new and unknown project or may not trust or understand the potential value of UN tokens and the Protocol. Additionally, acceptance of the UN tokens distributed by us requires that there be outlets to transfer UN tokens to others or to spend tokens as a currency, which may not develop or grow with sufficient scale to support successful growth and adoption of the Protocol.

If over time the number of individuals and businesses that chose to utilize the UN is limited, we may be forced to cease operations that support the Project. Should this occur, those UN that have already been distributed will continue to exist on the relevant blockchain network and it will be up to the community of users to continue the Project. In this case, it is possible that owners of UN may no longer be able to utilize their tokens or realize any value from UN they purchased or hold.

UN tokens are technological tools that allow you to interact with the Protocol and may in the future be usable to make payments. UN tokens do not convey any ownership rights to you, whether in untrading or any other legal entity.

The UN tokens are expected to be used as a global internet currency and, as the decentralization process occurs, as a means of providing direction in Protocol governance. UN tokens are not investment products. There should be no expectation of future profit or gain from the purchase or sale of the UN tokens. The UN tokens do not represent any equity or other ownership interest in untrading or any other entity, or any right to dividends or other distribution rights from untrading or any other entity.

When initially distributed to users, UN tokens will have no immediate monetary value. Although trading markets for UN tokens may develop, any monetary value of UN tokens may be highly changeable based on factors relating to the Project, the overall market for cryptocurrencies such as bitcoin and ether, or geopolitical or macroeconomic events. Users should only hold as much value in UN tokens as they are prepared to lose.

When initially distributed to users, UN tokens will simply be numerical ledger entries and will have no inherent monetary value whatsoever. Any subsequent monetary value UN tokens have will likely be based primarily on the current, or anticipated future, demand for UN tokens as a means of payment or for use of other functionalities of the Protocol. The prices of cryptocurrencies have historically been subject to dramatic fluctuations and are highly volatile, which has deterred widespread adoption of cryptocurrency networks for day-to-day transactions or reliable means of exchange. To the extent that trading markets for UN tokens develop, any market price for UN tokens may be highly volatile based on factors relating to the Project, the overall market for cryptocurrencies such as bitcoin and ether, and/or geopolitical or macroeconomic events.

In addition, “market” prices for UN tokens published on the Internet may not be available from a marketplace available in your jurisdiction. Purported market prices may also be subject to distortion based on the manipulative activities of others, including self-deal or wash-trading transactions, making it difficult to accurately assess the value of UN for use in commercial transactions at any given time. Also, as discussed above, regulatory issues applicable to digital asset marketplaces may impact the venues on which you may be able to dispose of UN tokens you or other users have received.

Further, digital assets have only recently become accepted as a means of payment for goods and services by certain major retail and commercial outlets, and use of digital assets by consumers to pay such retail and commercial outlets remains limited, particularly in the countries where UN has gained relatively higher levels of adoption. Conversely, to date a significant portion of digital asset demand has been generated by speculators and investors seeking to profit from the short- or long-term holding of digital assets. For the Project to be successful, users across many jurisdictions would need to engage with the Protocol and adopt UN as a means of payment. If this does not occur, it is possible that your UN tokens may have little or no monetary value.

UN tokens are ledger entries at a particular “public address” on a blockchain network, such as the Ethereum or Polygon network, and ownership of UN tokens refers to the ability to control transfers of the UN tokens through knowledge of a “private key” associated with that public address. If you have not properly secured the relevant private key for your UN tokens in a software or hardware wallet to which you have access, you may permanently lose access to your UN tokens.

At this time, all UN tokens distributed by us will be made to Web3-compatible Ethereum wallet addresses such as MetaMask. The Web3 wallets are what are known as “self-hosted” wallets, meaning that none of us, MetaMask, or any other party will have access to your private key for any UN tokens you own. Accordingly, the loss of the private key(s) associated with UN Tokens, whether such key(s) are stored in MetaMask, in another digital wallet you control, at a crypto asset marketplace, or by another means you have adopted for storing your private key(s), will result in the permanent and irretrievable loss of your UN tokens. In addition, if a third party gains access to your private key(s), including by gaining unauthorized access to your self-hosted wallet or to the login credentials of a hosted wallet or vault service you use, that third party may be able to irretrievably misappropriate your UN tokens. Neither we nor any other party will be able to recover your UN tokens for you.

In addition, any errors or malfunctions caused by, or otherwise related, to the digital wallet or vault at which you choose to receive and store tokens, including your own failure to properly maintain or use such digital wallet or vault, may also result in the loss of your UN tokens. Additionally, your failure to follow precisely the procedures set forth for buying and receiving tokens may also result in the loss of your UN tokens.

The tax characterization and treatment of the UN tokens and their use is uncertain in many jurisdictions and may adversely affect the value of UN tokens to you.

The tax characterization of the UN tokens is uncertain, and you should seek your own tax advice in all jurisdictions relevant to you in connection with your ownership and use of the UN tokens. A purchase of UN tokens from a third-party marketplace or a disposal by you of UN tokens you received from us may result in adverse tax consequences to you in your jurisdiction, including withholding taxes, income taxes and tax reporting requirements. Further, the use of the UN tokens as a form of currency may or may not be subject to income taxes, capital gains taxes, value added, sales or use taxes or other forms of taxes. The uncertainty in the tax treatment of the UN tokens and transactions in the UN tokens may discourage others from seeking to accept UN tokens from you in commercial transactions or purchase UN tokens from you in a digital asset marketplace or other setting, potentially decreasing or eliminating any monetary value the UN tokens may have.

The regulatory framework applicable to the Protocol and the UN token is highly uncertain in many jurisdictions.

The regulatory status of blockchain networks, cryptographic tokens such as UN, digital assets, biometric verification and identification devices and processes, and blockchain technology is unclear or unsettled in many jurisdictions. It is difficult to predict how or whether governmental authorities will ultimately regulate such technologies. It is likewise difficult to predict how or whether any governmental authority may make changes to existing laws, regulations and/or rules that will affect cryptographic tokens, digital assets, biometric verification and identification devices and processes, blockchain technology and its applications or how they may choose to enforce compliance with regulatory regimes that may be applicable to the Protocol or the UN token.

Developments or changes in regulatory treatment or unanticipated enforcement activity could negatively affect the UN tokens in various ways, including, for example, through a determination that the verification mechanism is unlawful under data protection regulations, that the UN tokens are regulated financial instruments that require registration or licensing of those instruments or some or all of the parties involved in the sale, purchase and delivery thereof, or that owners of tokens who are involved in the governance of a protocol may have responsibility for losses to third parties interacting with that Protocol. Any such determination may result in a termination of UN distribution or of the Project itself.

Public policy towards token distributions and cryptocurrency is evolving, and it is conceivable that regulators may in the future seek to broaden the scope of regulation of token distributions or cryptocurrency or interpret existing regulations in a way that adversely impacts the Project. If the offer, distribution and/or sale of the tokens becomes subject to registration, prospectus, or licensing requirements in a particular jurisdiction, the utility of the UN tokens in that jurisdiction may be adversely affected. Developments such as these may also impact the practicability of our continuing to support the Project.

Certain jurisdictions, including the European Union, China, Russia, and Turkey have already adopted laws, regulations or directives that may affect the Ethereum and Polygon blockchain networks, in general, and the Project, in particular. For instance, the European Union has ratified the Markets in Crypto-Assets (MiCA) framework governing the licensing of crypto businesses. China has adopted certain regulations prohibiting certain distributions of certain digital assets as well as their ownership, while other countries, like India, are reportedly seriously considering such bans. Legislation impacting the distribution, trading and use of crypto assets has also been proposed in both houses of the U.S. Congress. These laws, regulations or directives may directly and negatively impact the functionalities of the Protocol or the utility of any UN tokens you may own.

The technology underlying the Protocol may have flaws or errors or may otherwise fail to function as intended, which could negatively impact the Protocol’s usefulness to you or the willingness of new users to engage with the Protocol.

The Protocol may have coding errors or otherwise not function as intended, which may negatively affect your use of the Protocol and/or the functionality of the UN tokens. Changes to the Protocol may have unintended adverse effects on the UN tokens. It will be up to Project governance as to whether any coding errors or unintended functionalities in the Protocol that may be discovered remain unresolved or are addressed in some manner.

The Protocol may be the target of malicious cyberattacks or may contain exploitable flaws in its underlying code, or may be the target of other attacks to its integrity, any of which may result in security breaches. This may result in the security of the Protocol being compromised or the Protocol being subjected to attacks that frustrate or thwart its use.

The Protocol’s open-source structural untrading and the various software applications and other interfaces built on the Protocol are still in an early development stage and are unproven. We are not able to provide you with assurances that the Protocol and the means of creating, transferring, or storing UN tokens will be uninterrupted or fully secure. This may reduce the interest in, or use of, the Protocol and the UN tokens. The Protocol or the UN tokens could be subject to security attacks, including but not limited to double-spend attacks, 51% attacks, or other malicious attacks, which could materially and adversely affect any UN tokens you own or the Protocol itself.

The Protocol may also be the target of malicious social or presentation attacks, or the hardware associated with user adoption may possess vulnerabilities, which may result in unauthorized access to the Protocol or applications built on the Protocol or other security breaches. If the Protocol’s integrity is perceived to be in question or compromised, the reputation of the Project may suffer and users may decline to adopt, cut back on, or stop using the Protocol.

We rely on third-party service providers for certain aspects of our operations, including identifying and vetting operators of Orbs, and any interruptions in services provided by these third parties may impair our ability to support our network.

In addition to the untrading.org website, we currently or may in the future rely on third parties, including Cloudflare, Amazon Web Services, Google Cloud, in connection with other aspects of the Project.

If security or data privacy breaches occur or if there are incidents of other unauthorized or improper access to, use of, or destruction of user data, the ability of the Project to continue functioning could be disrupted or terminated.

As part of the Project, we may collect certain categories of personal data, including sensitive personal data, for permissible purposes such as to comply with any applicable legal KYC/AML requirements. Any failure to prevent or mitigate security breaches or improper access to, use of, or disclosure of any such data could adversely affect the Project, including through a diminished ability to retain or attract new users, and disruption to our operations. We rely on third-party service providers to host or otherwise process some of the data we collect and any failure by such third parties to prevent or mitigate security breaches or improper access to, or disclosure of, such information could have similar adverse consequences on the Project. This risk is enhanced in certain jurisdictions with stringent data privacy laws.