About this Summary
Bitbuy Technologies Inc. (“Bitbuy” or “we”) believes that our users should understand the crypto assets that they are able to trade using our crypto trading platform (the “Platform”). One of the crypto assets we offer on the Platform is the LINK token (“LINK”). We created this summary to help you understand the basics of LINK as well as some of the risks involved in trading it. While we tried to describe the key features of LINK here, this summary isn’t meant to tell you everything you’d want to know before investing in it. You should also do your own research on LINK to make sure you are comfortable investing in it.
Description of LINK
LINK is the native token for the Chainlink network (the “Chainlink Network”). The Chainlink Network is a decentralized oracle network that was launched in 2017 by the for-profit company SmartContract. The Chainlink protocol assists blockchain smart contracts by incentivizing oracles (data providers) to accurately verify data inputs and outputs. Smart contracts are agreements that are programmed to execute when certain terms and conditions are met. Smart contracts rely on real-world, external data sources. Since blockchains do not allow for a sufficient connection with external data, the Chainlink Network was created to act as a decentralized bridge between smart contracts and sources of external data.
The problem the Chainlink Network tries to solve is commonly known as the oracle problem. The oracle problem stems from that fact smart contracts need real-world data to operate as intended. However, while the rest of the smart contract ecosystem uses blockchain technology which relies on consensus mechanisms for accuracy, the data providers (or oracles) may not be subject to the same constraints. Therefore, smart contracts may need to rely on a centralized source of data, which could potentially provide unreliable or untrustworthy data to the blockchain and undermine the decentralized nature of smart contracts. The Chainlink Network tries to solve this problem by creating a decentralized network of nodes in an attempt to eliminate the reliability and trust issues associated with using only a single centralized source of data. The Chainlink Network attempts to accomplish this goal by using a group of decentralized nodes, assigning those nodes reputation scores and aggregating, weighting and validating the data they provide to ensure that it is reliable and trustworthy.
LINK is a very important aspect of the Chainlink Network because the token is used to facilitate the key functions of the network. Specifically, payments in LINK are used to incentivize node operators that assist in bridging the gap between smart contracts and external data sources by retrieving data for smart contracts. Chainlink node operators are also required to stake LINK in the Chainlink Network to show their commitment to the network and incentivize good service. The Chainlink Network accounts for, among other things, the amount of LINK staked by a node operator when matching nodes with requests for data. Nodes with more LINK staked will be matched to requests more often, allowing them to earn further LINK for their services. LINK is an ERC677 token, so it is a part of the Ethereum blockchain network. LINK has similar functionality to the ERC20 token standard while also facilitating the transfer of data when a token is transferred.
Like other crypto assets, there are some general risks to investing in LINK. We identify many of these general risks in the risk statement we publish on our website. We also point out some risks that are specific to LINK below. While we tried to describe the key risks associated with LINK here and in our risk statement, these aren’t all of the risks associated with trading in LINK. You should also do your own research on LINK to make sure you are comfortable investing in it.
Concentration and Supply
The largest LINK addresses hold a very large portion of the LINK currently outstanding. The actions of these significant holders of LINK could have an impact on LINK’s valuations. It should also be noted that a large portion of LINK’s total supply of one billion tokens is not currently in circulation.
LINK’s Dependence on the Chainlink Network and Ethereum Blockchain
The strength of LINK is heavily dependent on the strength of the Chainlink Network. If Chainlink were to experience a serious issue, LINK’s price could be severely impacted in a negative way. Also, as Chainlink runs on the Ethereum blockchain, if Ethereum were to crash or experience serious issues, LINK’s price could also be negatively impacted.
How Bitbuy Decides to List Crypto Assets
Bitbuy reviews crypto assets before making them available for trading on the Platform. In making our decision to list a new crypto asset, we consider publicly-available information about the crypto asset, including (among other things) its creation, design, governance, usage, supply, demand, maturity, utility, liquidity, material technical risks and legal and regulatory risks.
To date, we have only made crypto assets available for trading on the Platform which have significant supply, demand and liquidity. In our experience, crypto assets with these qualities tend to also satisfy the other criteria we evaluate as part of our review. That being said, our review process is fulsome and flexible, and we don’t prioritize any one factor over another. You should review the risk statement published on our website for more information about our procedures for determining whether to make a crypto asset available for trading on the Platform.
Bitbuy is offering crypto contracts to purchase and sell LINK in reliance on a prospectus exemption contained in the exemptive relief decision Re Bitbuy Technologies Inc. dated November 30, 2021. The statutory rights of action for damages and the right of rescission in section 130.1 of the Securities Act (Ontario) and similar legislation in the other provinces and territories of Canada would not apply in respect of a misrepresentation in this Statement.
No Canadian securities regulatory authority has expressed an opinion about LINK, including an opinion that LINK is not itself a security and/or derivative.