About this Statement
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 through the Platform is YFI. We created this summary to help you understand the basics of YFI as well as some of the risks involved in acquiring it. While we tried to describe the key features of YFI here, this summary isn’t meant to tell you everything you’d want to know before acquiring it. You should also do your own research on YFI to make sure you are comfortable acquiring it.
Description of YFI
YFI is a governance token for Yearn Finance, a suite of products that provides lending aggregation and yield generation on the Ethereum network. Yearn Finance was launched by a developer named Andre Cronje in 2020. Yearn Finance is now overseen by the holders of YFI, who vote on various matters relating to Yearn Finance’s development.
Yearn Finance consists of several products such as Vaults, Earn, Zap and APY, which enable users to lend or trade their crypto assets. Each product has its own particular functionality. Vaults are pools of crypto assets. Vaults are intended to benefit users by spreading transaction fees among participants in the pools and automating the allocation of crypto assets based on changing market conditions. Earn algorithmically locates lending protocols, such as Aave or Compound, with the best interest rates on lending, ensuring that users earn the best return on the crypto assets they lend. Zap allows users to complete several investments in one action via the Curve decentralized exchange protocol. APY, also known as annual percentage yield, searches across lending protocols that Earn uses and provides users with an estimate on how much interest they can expect to earn.
As noted above, YFI is a governance token. YFI holders submit and vote on off-chain proposals that govern the Yearn Finance ecosystem. Proposals that generate a majority support are implemented by a 9-member multi-signature wallet appointed by YFI holders. YFI holders are also eligible to receive a portion of profits generated by the protocol.
Yearn Finance’s products rely on multiple decentralized finance protocols to generate the best returns for their users. Many decentralized finance applications have been subject to bugs and hack, resulting in millions of dollars being lost by investors. Because Yearn Finance interacts with multiple decentralized finance applications, the likelihood of its products being exposed to a bug or hack may be higher than a product which only relies on a single protocol. Should users of Yearn Finance lose a significant amount of crypto assets as a result of a bug or hack, the price of YFI may decline significantly.
Like other crypto assets, there are also some general risks associated with acquiring YFI. We describe many of these general risks in the risk statement we publish on our website, including risks relating to: (i) volatility; (ii) access, loss or theft, (iii) control of processing power; (iv) settlement of transactions on crypto asset networks; (v) momentum pricing; (vi) private keys; (vii) internet disruptions; (viii) faulty code; (ix) network development and support; (x) regulatory risk; (xi) network forks; (xii) air drops; (xiii) voting rights; (xiv) cybersecurity incidents and other systems and technology problems; and (xv) unforeseeable risks. While we tried to describe the key risks associated with YFI here and in our risk statement, these aren’t all of the risks associated with trading in YFI. You should also do your own research on YFI to make sure you are comfortable acquiring it.
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 YFI 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 YFI, including an opinion that YFI is not itself a security and/or derivative.