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Risks

A token involves many risks, some of which are mentioned below, although there may be others. These risks may result in the partial or total loss of the tokens, or their value.the holder of the token fully assumes and understands all the risks involved in a token and, in no event, if the token loses value or any other adverse event occurs, will the issuer of such token compensate the holder in any way whatsoever.

 

Risks associated with bidding and negotiation

Illiquidity Risk

It is possible that the token in question may not be listed on any secondary market or that there may be a lack of liquidity in OTC (over the counter) markets, and the Company is not responsible for any fluctuations that the token in question may undergo in any type of market or that such types of markets may allow the token to be listed, which may entail illiquidity risks. Even if the token were to be listed on a third party platform, such platforms may not have sufficient liquidity or even face risks of regulatory or compliance changes, and are therefore susceptible to failure, crash or manipulation.In addition, to the extent that a third party platform lists the token in question, giving an exchange value to the token (whether in cryptocurrencies or fiat money), such value may suffer volatilities. As a buyer of this type of asset, you assume all the risks associated with the aforementioned speculation and risks.

 

  1. Risks associated with the execution of the project and/or the Issuer

Future information risk

‍Certain information contained in this document is forward-looking in nature, including projections of business growth. Such forward-looking information is based on what the Company’s management believes to be reasonable assumptions, and there can be no assurance that results will be actual. Future events could differ materially from those anticipated.

 

Unanticipated Risks

Cryptographic tokens are a newly developed technology that is in the testing phase. In addition to the risks discussed above, there are other risks associated with their acquisition, storage, transmission and use, including some that are difficult to anticipate. Such risks may further materialize with unforeseen variations or arising from combinations of the above risks.

 

Regulatory risk

Blockchain technology enables new forms of interaction and it is possible that certain jurisdictions will enforce existing regulations or introduce new regulations addressing blockchain technology-based applications, which may be contrary to the current configuration of smart contracts and may, among other things, result in substantial modifications to smart contracts, including their termination and the loss of tokens for the purchaser. Risk of failure or abandonment of the project

 

The development of the project raised by the Issuer herein may be prevented and ceased for various reasons, including lack of interest from the market, lack of financing, lack of commercial success or prospects (e.g. caused by competing projects). This token issuance does not guarantee that the milestones set forth herein will be fully or partially achieved or that it will provide benefits to the holder of tokens offered by the Issuer.

 

Risk of competing companies

It is possible that other companies could provide services similar to that of the company. The company could compete with such other companies, which could have a negative impact on the services provided by the company.

 

  1. Risks associated with tokens and the technology usedv

High risk product

This type of product has a high implicit risk. The value of the tokens may go up and down and a buyer may not get back the capital initially used. There may also be changes in taxation and/or possible tax credits. The aforementioned taxes and tax allowances always refer to those in force and their value will depend on the circumstances of each buyer. Participation in this type of project must always be made taking into account all the information provided by the issuer.

 

Software risk

Distributed registry technologies are still at an early stage of maturity, with many of these networks having been created recently, so they may not be sufficiently tested and there may be significant flaws in their operation and security.

 

The computer code (smart contract) by which these tokens are marketed is based on the Polygon protocol. Any malfunction, failure or abandonment of the Polygon project may cause adverse effects on the operation of the tokens in question. On the other hand, technological advances in general and in cryptography in particular, such as the development of quantum computing, may bring with them risks resulting in the malfunctioning of these tokens.

 

Smart Contracts and the software on which they are based are at an early stage of development. There is no guarantee or way to ensure that the issuance of tokens and their subsequent trading may be interrupted or otherwise suffer from errors, so there is an inherent risk of defects, flaws and vulnerabilities that may result in the loss of funds contributed or tokens obtained.There is a risk of hacker or hacker attacks on the technology infrastructure used by the Issuer and on critical networks and technologies.

 

As a result, the Issuer may be partially, temporarily or even permanently prevented from carrying out its business activities. The registration of transactions in networks based on distributed registry technologies works through consensus protocols that may be susceptible to attacks that attempt to modify such registry and, in case these attacks are successful, there would be no alternative registry to support such transactions and therefore the balances corresponding to the public keys, and the totality of the cryptoassets could be lost.

 

In the case of proof-of-work consensus mechanisms in Polygon, it could be the case that someone could control more than 50% of the computational power of the blockchain miners in a so-called 51% attack and thus take control of the network (the blockchain).

 

By using more than 50% of the mining power (hash power), the attacker will always represent the majority, which means that he can impose his version of the blockchain. In principle, this is also possible with less than 51% of the mining power. Once the attacker has gained control of the network, he could reverse or redirect the transactions he initiated, so it would be possible to “double spend” (i.e. perform multiple transactions of the same token).

 

The attacker could also block the transactions of others by refusing confirmation.There could, in addition, be other computer attacks on the Polygon blockchain, software and/or hardware used by the Issuer. In addition to attacks by computer hackers, there is a risk that the Issuer’s employees or third parties could sabotage the technological systems, which could lead to the failure of the Issuer’s hardware and/or software systems. This could also entail a negative impact on the Issuer’s business activities.

 

Custody risk / loss of private keys

 

Only tokens issued by the Issuer can be acquired using a Polygon digital wallet of which the token acquirer has its respective private key and password. The private key, as a general rule, is usually encrypted by a password.

 

The Issuer’s token acquirer acknowledges, understands and agrees that, if its private key or password for tokens obtained and associated with its Polygon digital wallet is lost or stolen, it could permanently lose access to its tokens. In addition, any third party who has access to such private key may misappropriate the tokens contained in the digital wallet in question. Any error or malfunction caused by or related in any way to the digital wallet or token storage system in which the acquirer wishes to receive his tokens could also result in a loss of tokens.

 

Risk of theft

The anonymity facilities that cryptoassets can provide make them a target for cybercriminals, since in the case of stealing credentials or private keys they can transfer the cryptoassets to addresses that make their recovery difficult or impossible. The Smart Contracts concept, and the software platform on which they run (i.e. Polygon) may be exposed to cyber attacks or hacks by third parties, either through malware attacks, denial of service attacks, consensus attacks, Sybil attacks, smurfing and spoofing. Any of these attacks could result in the theft or loss of invested capital or acquired tokens and, in turn, could lead to the failure to obtain the tokens.

 

  1. High-risk investment product

– The value of the investments and the return obtained from them may experience significant upward and downward variations, and the entire amount invested may be lost

– Investments in early stage projects involve a high level of risk, so it is necessary to properly understand their business model

– Cryptoassets within the scope of this Circular are not covered by customer protection mechanisms such as the Deposit Guarantee Fund or the Investors’ Guarantee Fund

– Cryptoassets are not covered by customer protection mechanisms such as the Deposit Guarantee Fund or the Investors’ Guarantee Fund. Crypto-asset prices are formed in the absence of mechanisms that ensure their correct formation, such as those present in regulated securities markets.

– Many crypto-assets may lack the necessary liquidity to be able to unwind an investment without suffering significant losses, given that their circulation among investors, both retail and professional, may be very limited.