Newton Protocol MiCAR White Paper
IN ACCORDANCE WITH
TITLE II OF REGULATION (EU) 2023/1114
IN ACCORDANCE WITH
TITLE II OF REGULATION (EU) 2023/1114
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The only purpose is to issue and make the Token available for exchange.
Holding company
N/A, as entity has not been established for three years.
As the Issuer was established only recently, there is no three-year track record of historical financial data. However, since the date of its registration, the Issuer’s financial standing has been solid and forecasted to be sustainable into the future based on (i) generation of steady revenues, (ii) sufficient cash flow to support ongoing development with no material debt obligations, and (iii) demand for Protocol offerings which drive growth and support continuous Protocol enhancements.
The Newton Protocol is a decentralized policy engine for programmable, verifiable compliance and authorization across agents, applications, and financial systems. The Protocol aims to serve as a foundational policy layer that governs what on-chain or off-chain actions may occur, under what conditions, and with what attestations.
Through its Actively Validated Service (AVS) network, Newton Protocol evaluates proposed actions against reusable policy modules defined by applications or users. These policies can encode business logic, compliance controls, or user-defined safety rules, and may be enforced cryptographically through zero-knowledge proofs or validated by decentralized operator quorums that co-sign verifiable authorization receipts.
The Protocol’s architecture combines on-chain determinism with off-chain cryptographic validation. Before any transaction executes, its governing policy must be provably satisfied, ensuring that every authorized action is transparent, auditable, and compliant by design.
By extending the guarantees of blockchain consensus into policy consensus, Newton Protocol aims to enable:
Programmable Compliance and Risk Management: encoding KYC/AML, jurisdictional, or asset-specific rules directly in smart-contract logic.
Agent Safety & Alignment: constraining AI or autonomous agents to operate only within authorized boundaries.
Composability & Interoperability: portable policies across chains, contracts, and agent frameworks.
Auditability & Transparency: each authorization produces an immutable, verifiable receipt of compliant behavior.
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V1 Staking Infrastructure: The initial version of the NEWT staking contract is live. This deployment serves
as the foundational architecture required to support the upcoming Operator staking mechanisms.
Beta Mainnet Operations: The Beta mainnet is operational. Access is currently granted to a whitelisted group
of developers who are actively building and testing applications on the Protocol that operates with NEWT.
Oracle Integrations: A diverse array of data oracles has been successfully integrated to the Protocol to
ensure robust data reliability. Notable integrations include: Magic Labs Risk Scoring Data Oracle;
Vaults.fyi Data Oracle; Etherscan Data Oracle, among others.
The future milestones may be the following, subject to governance approval and Protocol development:
V2 Staking Infrastructure: As the Protocol transitions toward decentralization, the staking function will
secure the Actively Validated Service (AVS) network that underpins Newton Protocol’s policy evaluation
layer. Participants may stake NEWT to register and maintain active status as Operators within the AVS,
responsible for verifying whether proposed actions comply with defined policies. Over time, Token holders
who do not operate infrastructure directly may delegate their stake to trusted Operators or to restaking
frameworks (such as EigenLayer integrations), thereby contributing to network security and participating in
rewards distribution without running validation nodes themselves.
Not applicable
Not applicable
The Issuer seeks admission of the Token to trading on multiple Exchanges in order to encourage users to exert efforts towards contribution and participation in the Ecosystem, thereby creating a mutually beneficial system where every participant is fairly compensated for their efforts. Additionally, by seeking admission to trading, they aim to increase the liquidity of the Token, facilitating its exchangeability.
The Exchanges may impose restrictions on holders of Tokens on their respective Exchanges, in accordance with applicable laws and internal policies.
Trading platforms are accessible via their respective websites
The use of services offered by Exchanges may involve costs, including transaction fees, withdrawal fees, and other charges. These costs are determined and set by the respective Exchanges and are not controlled, influenced, or governed by the Issuer. Consequently, any changes to fee structures or the introduction of new costs are solely at the discretion of these platforms.
The Issuer is not aware of any potential conflict of interest among its management body members or any other persons within the Issuer with respect to the admission of the Token to trading.
Subject to mandatory applicable law, any dispute arising out of or in connection with this white paper and all claims in connection with the Token shall be exclusively, including the validity, invalidity, breach or termination thereof, shall be governed by and construed and enforced in accordance with the laws of the British Virgin Islands.
Subject to mandatory applicable law, any dispute arising out of or in connection with this white paper and all claims in connection with the Token shall be exclusively, including the validity, invalidity, breach or termination thereof, subject to the jurisdiction of the courts in British Virgin Islands.
NEWT tokens are considered as crypto-assets other than EMTs and ARTs under Regulation (EU) 2023/1114. NEWT tokens are fungible tokens.
According to Article 3(1)(5) of MiCA, a crypto-asset is a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology. As reminded by the European Banking Authority (“EBA”), the term ‘right’ should be interpreted broadly in accordance with recital (2) of MiCA.
The Token qualifies as a crypto-asset within the meaning of MiCA, as it is a digital representation of the right to access the Ecosystem and participate in the Ecosystem’s governance. The Token can be transferred and stored using distributed ledger technology (“DLT”).
The Token facilitates Token holders’ interaction with the Ecosystem. The Token displays the following functionalities:
Governance Rights: Token holders who stake their Tokens can take part in important decisions regarding the Ecosystem, including voting on Protocol modifications and upgrades.
Staking Capabilities: Token holders can deposit the Token into the Staking Contract and be rewarded. Once the Protocol evolves to its decentralised stage and implements a dPoS consensus mechanism, Token holders may delegate their stake to trusted Operators or to restaking frameworks (such as EigenLayer integrations), thereby contributing to network security and participating in rewards distribution without running validation nodes themselves.
Rewards: The Token will be used to reward Token holders for staking and governance participation.
Fees: The Token will be used to pay for Protocol usage fees.
The future functions or utilities of the Token may include the following, subject to governance approval and Protocol development:
Staking: With the evolution of the Protocol into a decentralised phase and implementation of a dPoS consensus mechanism, Token holders may delegate their stake to trusted Operators or to restaking frameworks (such as EigenLayer integrations), thereby contributing to network security and participating in rewards distribution without running validation nodes themselves.
The Token will be launched as an ERC-20 token on the Ethereum blockchain. The Token will provide its holders with a set of rights within the Ecosystem. Token holders will be able to stake the Token to participate in the Protocol’s governance by voting on proposals to modify and update the Protocol.
Additionally, those who stake the Token will be rewarded with the Token. Once the Protocol reaches the appropriate stage of maturity, the Token will also be used to pay the Protocol’s fees.
Any changes based on proposals can only occur through a governance vote by the Protocol governance, meaning that any modifications require the approval of those who have staked the Token.
The Issuer does not provide any other services not covered by Regulation (EU) 2023/1114.
The Token aims to enable their holders to interact with the Ecosystem that operates autonomously and without the Issuer having an operative role. As a result, the Issuer, to the fullest extent permitted by applicable laws, disclaims all warranties, whether express or implied. This includes, but is not limited to, implied warranties of merchantability and fitness for a particular purpose. Moreover, to the fullest extent permissible by applicable laws, the Issuer is not liable for any damages arising from the holding, use, transfer, or interactions involving Tokens and the Ecosystem. This limitation applies to all forms of damages, including direct, indirect, incidental, punitive, and consequential damages.
Token holders have the following rights:
Governance Rights: To exercise their governance rights, consisting of voting on Protocol modifications and upgrades, Token holders must stake (deposit) their Tokens in the designated governance smart contract.
Staking Capabilities: Token holders can deposit the Token into the Staking Contract, and be rewarded with the Token. Once the Protocol evolves to its decentralised stage and implements a delegated res-staking mechanism, Token holders will be able to stake their Tokens in order to help secure the Protocol and participate in the Protocol’s governance while being rewarded with the Token.
Rewards: The Token will be used as a reward, to encourage Token holders to stake the Token and participate in the Protocol’s governance.
Fees: The Token will be used to pay fees for using the Protocol.
The Issuer does not intend to offer the Token to the public in the future.
The Exchanges may impose restrictions on holders of Tokens on their respective Exchanges, in accordance with applicable laws and internal policies. Token holders who acquire the Token through ‘private sales’ are subject to restrictions as per the terms of sale.
Subject to mandatory applicable law, any dispute arising out of or in connection with this white paper and all claims in connection with the Token shall be exclusively, including the validity, invalidity, breach or termination thereof, shall be governed by and construed and enforced in accordance with the laws of the British Virgin Islands.
Subject to mandatory applicable law, any dispute arising out of or in connection with this white paper and all claims in connection with the Token shall be exclusively, including the validity, invalidity, breach or termination thereof, subject to the jurisdiction of the courts in British Virgin Islands.
The NEWT Token will be launched on the Ethereum blockchain. The Ethereum network serves as the foundational distributed ledger for the Token, acting as the core infrastructure for settlement and finality. The Newton Protocol is deeply integrated with this DLT, designed to leverage Ethereum's security model, specifically through restaking, to secure its own decentralized network of operators.
The Token will adhere to the ERC-20 standard on the Ethereum blockchain to ensure broad, industry-standard compatibility.
Beyond the token standard, the Newton Protocol itself employs several other technical standards to function. Policies within the protocol are expressed in high-level, human-readable languages such as Rego or WASM. For privacy-preserving verification, these policies can be executed as SP1 zkVM (zero-knowledge Virtual Machine) programs. Furthermore, the protocol's operator network uses BLS quorum signatures to validate and attest to policy evaluations.
As an ERC-20 token, the Token is deployed as a smart contract on the Ethereum blockchain. Users can manage their Tokens using standard third-party non-custodial wallets or by interacting directly with the Token's smart contract via a third-party API.
The broader Newton Protocol, which the Token is used to secure and govern, is a decentralized policy engine. This engine is designed to codify and enforce compliance, risk, and business logic as machine-executable policies.
The protocol's architecture is layered and utilizes several key technologies:
Operator Network (AVS): The protocol functions as an Actively Validated Service (AVS). A
decentralized network of operators evaluates proposed transactions (or "intents") against the relevant
policies in real-time.
Restaked Security: This entire network of operators is
secured by Ethereum's restaking model.
Modular Oracle Layer: To make informed decisions, policies are powered by oracles and data providers that supply facts required for enforcement. This can include sanctions lists, fraud detection signals, or proof-of-reserve attestations.
Privacy-Preserving Technologies: To validate compliance checks without revealing sensitive underlying data, the protocol employs both Trusted Execution Environments (TEEs) and Zero-Knowledge Proofs (ZKPs).
The NEWT Token itself does not have an independent consensus mechanism. It relies on the consensus mechanism of the blockchain it is launched on: Ethereum Proof of Stake (PoS). In Ethereum's PoS system, validators are randomly selected to propose and attest to blocks. To become an Ethereum validator, a participant must stake at least 32 ETH and run the required validator software.
In addition to Ethereum's consensus, the Newton Protocol's Operator Network (AVS) has its own consensus process. These operators, who are economically bonded, evaluate policies and "conduct consensus" to validate transaction intents. This consensus is secured by a BLS quorum threshold and a slashing mechanism to penalize dishonest behavior.
As the protocol matures, it is intended to implement a delegated Proof of Stake (dPoS) consensus mechanism, where NEWT holders can delegate their stake to trusted operators.
The ecosystem's incentives and fees exist on two distinct levels: the underlying Ethereum blockchain and the Newton Protocol itself.
1. Ethereum Blockchain (ETH)
Incentives: Ethereum validators are compensated in ETH for proposing and attesting to blocks. This compensation is sourced from both transaction fees and a block reward. Validators who misbehave are penalized through "slashing," which involves losing a portion of their staked ETH.
Fees: All transactions on the Ethereum network require the payment of gas fees in ETH. Following the EIP-1559 standard, this fee is split into two parts:
Base fee: Automatically calculated based on network demand and subsequently burned (removed from circulation).
Priority fee (tip): An optional fee paid directly to the validator to incentivize them to include the transaction in a block.
2. Newton Protocol (NEWT)
Incentives: The NEWT Token is the primary incentive mechanism for the Newton Protocol.
Staking Rewards: Token holders are encouraged to stake their NEWT to help secure the protocol and participate in governance. In return for staking, participants are rewarded with more NEWT Tokens.
Operator Security: The protocol's operators are economically bonded and subject to slashing for dishonest behavior, aligning their incentives with the health of the network.
Fees: Once the protocol reaches the appropriate stage of maturity, the NEWT Token will be used to pay fees for using the protocol's services.
The Issuer neither operates, controls, oversees, nor manages the functioning of the Exchanges where the Token will be admitted. Additionally, the Token’s underlying protocol and governance structure may evolve due to ongoing technical, regulatory, and industry developments. Unforeseen risks may arise, and new challenges or opportunities may necessitate changes in the Protocol’s strategies, goals, and structure. The risks outlined below highlight regulatory uncertainty, liquidity limitations, governance risks, network centralization concerns, security vulnerabilities, and potential adjustments to fees or token supply that could impact the offer and trading of the Token.
Regulatory Compliance Risks: Although the Token is designed to comply with existing regulations (such as MiCA), evolving regulatory landscapes could impact its classification, trading status, or community acceptance. Changes in regulatory requirements may necessitate modifications to the Protocol’s operation, structure, or governance. Token holders must ensure compliance with local laws, as regulatory treatment of crypto-assets varies across jurisdictions.
Volatility: The Token is subject to extreme price fluctuations, influenced by speculation, sentiment, and broader industry trends. External factors, such as regulatory announcements or technological developments, may further contribute to volatility, potentially leading to financial losses for holders.
Liquidity Risks: The ability to transact Tokens depends on activity on decentralized exchanges (“DEXs”) and, if applicable, centralized exchanges (“CEXs”). Limited liquidity may result in difficulties executing large trades without significant price impact, increasing the risk of loss.
Risk of Trading Platforms: When Token holders trade on Exchanges, the Issuer does not act as a contractual party to these transactions. All legal relationships regarding these trading platforms are subject to their respective terms and conditions, with no responsibility assumed by the Issuer for their operations, services, or outcomes.
Risk of Delisting: There is no guarantee that the Token will remain listed on any exchange. Delisting could significantly hinder the ability to trade Tokens, reducing liquidity and market value.
Risk of Bankruptcy: The Exchanges or trading platforms where the Token is listed may become insolvent or cease operations, potentially resulting in a loss of access to funds or Tokens.
Blockchain and Smart Contract Dependency: The Token relies entirely on its blockchain infrastructure. Any network downtime, congestion, security vulnerabilities, or smart contract failures could negatively impact its functionality, accessibility, or security. Additionally, the Protocol may initially operate under a centralized or permissioned model, where specific providers or node operators manage the network. This structure presents centralization risks, including the potential for censorship or data monetization.
Custodial and Reimbursement Risks: Contributions during the public offer are safeguarded by a supervised financial institution. However, delays or unforeseen circumstances may affect the speed of reimbursements in the event of a failed or cancelled offer. Refunds may also be subject to specific timing constraints.
Governance and Economic Model Risks: The current model relies on existing token allocations and does not incorporate inflation. However, governance decisions or operational needs may necessitate future adjustments, potentially introducing inflationary mechanisms or modifications to the fee structure.
Operational Risks: Risks associated with the Issuer’s internal processes, personnel, and technologies may impact the ability to manage the Token’s operations effectively. Failures in operational integrity could lead to disruptions, financial losses, or reputational damage.
Financial Risks: The Issuer may face financial risks, including liquidity shortages, credit risks, or market fluctuations, which could affect its ability to continue operations, meet obligations, or sustain the stability and value of the Token.
Legal Risks: Uncertainties in legal frameworks, regulatory changes, potential lawsuits, or adverse legal rulings could pose significant risks, affecting the legality, usability, or value of the Token.
Fraud and Mismanagement Risks: The risk of fraudulent activity or mismanagement within the Issuer’s operations may impact the credibility of the project and the usability or value of the Token.
Reputational Risks: Negative publicity—whether due to operational failures, security breaches, or associations with illicit activities—could damage the Issuer’s reputation and, by extension, impact the value and acceptance of the Token.
Technology Management Risks: Inadequate management of technological updates or failure to keep pace with advancements may result in security vulnerabilities, inefficiencies, or obsolescence of the Token and its supporting infrastructure.
Dependency on Key Individuals: The success of the Token and its ecosystem may be highly dependent on key individuals. Loss or changes in project leadership could lead to operational disruptions, a loss of trust, or potential project failure.
Conflicts of Interest: Misalignment of interests between the Issuer and Token holders may lead to governance decisions that are not in the best interests of the community, potentially affecting the value of the Token or damaging the credibility of the project.
Counterparty Risks: The Issuer’s reliance on external partners, service providers, and collaborators introduces risks related to non-fulfilment of obligations, which may affect the Token’s operations, liquidity, or overall ecosystem stability.
Industry Competition Risks: The Issuer faces competition from other projects, including larger and well-funded ventures that may attract more users and liquidity, potentially diminishing the viability of the Token.
Investor Vesting Risks: While investors and Issuer’s Tokens are subject to a 36-month vesting schedule (beginning on the date of the first Token listing) to prevent ‘rug pulls’ and conflicts of interest, the unlocking of Tokens over time could affect supply and demand trends and liquidity.
Speculative Nature of the Token: Other than as stated herein with respect to governance, staking, and fee-payment, or other utility as may be introduced by governance votes, the Token has no inherent utility beyond community-driven interest. Its value is highly speculative and subject to fluctuations based on external perceptions.
Unanticipated Risks: There may be additional risks that cannot be foreseen. Some risks may materialize as unexpected variations or combinations of the factors discussed in this section.
Not applicable, as the Issuer is the same as the person seeking the admission of the Token to trading.
Volatility Risks: The Token’s value is highly volatile and may fluctuate due to speculation, sentiment, regulatory developments, and technological advancements. External factors, such as shifting trends in the crypto industry, changing demand for blockchain services, or macroeconomic conditions, could contribute to extreme price fluctuations, potentially leading to total depreciation.
Speculative Nature: No assurances of future value, performance, or rewards are made regarding the Token. Other than as stated herein with respect to governance, staking, and fee-payment, or other utility as may be introduced by governance votes, the Token has no inherent or guaranteed utility beyond its role in the Ecosystem, and its valuation depends entirely on user adoption, demand, and community engagement. If adoption of the Protocol fails to grow as expected, the Token’s value may be significantly impacted.
Liquidity Risks: The ability to trade the Token depends on the level of activity on decentralized exchanges (“DEXs”) and, where applicable, centralized exchanges (“CEXs”). Low trading volume may result in difficulties executing large transactions without significant price impact. Limited demand for the Token or the underlying protocol may further reduce liquidity, making it difficult to transact with the Token.
Adoption and Network Demand Risks: The long-term success of the Token is dependent on widespread adoption of the Protocol. Adoption is influenced by various external factors, including user demand, competitive economic conditions, and organic community-driven expansion. The Issuer has no control over the pace of adoption, and there is no guarantee that the Protocol will gain sufficient traction to sustain its economic model. If demand is too low, obtaining services through the Protocol may be difficult, while an inadequate supply may lead to delays in accessing services.
Blockchain Dependency Risks: The Token operates exclusively on its underlying blockchain network. Any disruptions, such as network congestion, downtime, or security vulnerabilities, could impact the ability to transfer, store, or trade the Token. Changes to blockchain infrastructure, governance, or transaction fees may also influence the Token’s usability and cost-effectiveness.
Transaction Costs: While blockchain fees are generally low, network congestion, high demand, or changes in blockchain fee structures may increase transaction costs, potentially reducing the economic viability of using the Token within the Ecosystem.
Security Risks:
Smart Contract Vulnerabilities: Despite security audits and best practices, unforeseen vulnerabilities in smart contracts could lead to security breaches, impacting Token security or functionality.
Private Key Management: Token holders are solely responsible for safeguarding their private keys and recovery phrases. Loss of wallet credentials will result in the permanent loss of Tokens, as blockchain transactions are irreversible.
Scam and Fraud Risks: Token holders are exposed to risks associated with scams, phishing attacks, fake giveaways, impersonation of the Issuer or its team, counterfeit Tokens, and fraudulent airdrops. Engaging with unverified third-party platforms or unofficial communications increases the risk of fraud.
Community and Narrative Risks: The Token’s success is closely tied to community interest and the broader crypto narrative. Macroeconomic trends, emerging competitors, or declining community engagement may negatively impact the Token’s perceived value and adoption.
Regulatory and Compliance Risks:
Evolving Legal Frameworks: Regulations governing crypto-assets differ across jurisdictions and are subject to change. New legal requirements may impact the Token’s classification, availability, or functionality.
Jurisdictional Restrictions: Some jurisdictions may impose restrictions or prohibitions on the trading or use of the Token, limiting its accessibility for certain users.
Regulatory Harmonization Risks: A lack of global regulatory alignment may create uncertainty, with some authorities potentially classifying the Token as a security or financial instrument, leading to increased compliance costs and legal obligations.
Regulatory Enforcement Risks: Government agencies may take enforcement actions against the Issuer if the Token is deemed an unregistered security or if other financial laws are found to have been violated. Such actions could negatively impact the Token’s availability, appeal, and value.
Anti-Money Laundering (“AML”) & Counter-Terrorism Financing (“CTF”) Risks: Crypto transactions may be scrutinized for potential links to illicit activities. Authorities may take action against wallets or platforms suspected of facilitating money laundering or terrorist financing, affecting the ability of Token holders to use or trade their assets.
Taxation Risks: The tax treatment of the Token varies by jurisdiction, and Token holders are solely responsible for understanding and complying with applicable tax laws. Any appreciation, conversion, or sale of the Token may trigger tax obligations that differ depending on the regulatory environment.
Team Vesting and Token Release Risks: Tokens allocated to the team and other stakeholders are subject to a vesting and unlock schedule. When these Tokens are vested, unlocked, and released into circulation, they may affect demand trends and liquidity.
Technological Obsolescence Risks: The blockchain and crypto industries evolve rapidly. The emergence of new technologies, changes in user demand, or advancements in competing protocols could render the Token or its underlying blockchain infrastructure less competitive, reducing adoption and utility.
Software Weakness Risks: The Token’s infrastructure relies on relatively new blockchain technologies, which may contain undiscovered bugs, vulnerabilities, or inefficiencies. There is no guarantee that the process of transacting, storing, or interacting with the Token will be uninterrupted or error-free.
Unanticipated Risks: Beyond the risks outlined above, additional unforeseen risks may emerge due to changes in regulatory, technological, or macroeconomic conditions, potentially affecting the Token’s security, functionality, or value.
The Issuer neither operates, controls, oversees, nor manages the technology underlying the Ecosystem. While efforts are made to ensure security and stability, blockchain-based technologies are still evolving, and various risks exist. Additionally, the success and sustainability of the project rely on various external factors, including macroeconomic conditions, regulatory developments, and technological advancements.
Technical Development Risks
Smart Contract Issues: Despite robust security measures, unforeseen vulnerabilities or bugs in the smart contracts could disrupt Token distribution, refunds, or vesting mechanisms.
Blockchain Dependency: The Token operates exclusively on its underlying blockchain. Any network congestion, downtime, or security breaches could impact the project’s implementation and functionality.
Risk of Security Weaknesses in Core Infrastructure: The project relies on open-source software, which may be modified by third parties not directly affiliated with the Issuer. Weaknesses or bugs introduced into the core infrastructure could compromise security and lead to the loss of digital assets. Furthermore, malfunctions or inadequate maintenance of the Protocol may negatively impact the Token’s usability.
Bugs in Core Blockchain Code: Even with rigorous testing, unknown bugs may exist in the blockchain protocol, potentially leading to disruptions, incorrect transaction processing, or security vulnerabilities.
Regulatory and Compliance Risks
Regulatory Actions in One or More Jurisdictions: The Token and the underlying Protocol could be impacted by regulatory inquiries or actions, which may restrict further development, implementation, or usage.
Evolving Laws and Regulations: New and changing laws related to financial securities, consumer protection, data privacy, cybersecurity, and intellectual property could impact the project. Compliance with these laws may require significant resources and could impose additional operational constraints.
Governance Risk: Decision-making mechanisms in blockchain governance may be inefficient, slow, or disproportionately influenced by specific stakeholders, leading to potential centralization or unfavourable network changes.
Operational Risks
Resource Allocation: The project’s success depends on the Issuer and team allocating sufficient resources (both financial and non-financial) to ensure timely development and deployment. Poor resource management could lead to delays or failure to achieve key milestones.
Team Vesting Risks: While the team’s Tokens are subject to a vesting and unlock schedule to align interests with the community, the eventual vesting and unlocking of these Tokens may impact market stability or long-term commitment from team members.
Adoption Risks
Competitive Environment: The crypto industry is highly competitive and trend-driven. There is a risk that the Token may fail to capture sufficient interest, limiting its adoption.
Community Engagement Risks: The success of the Token depends heavily on community-driven sentiment and engagement. Failure to build or sustain an active community could hinder growth and long-term tradability.
Timeline and Milestone Risks
Delayed Milestones: Key deliverables such as Token distribution and liquidity access may face delays due to technical, operational, or funding challenges.
CEX Listing Risks: Listings on centralized exchanges depend on securing the necessary funding for listing fees and meeting platform-specific requirements. Delays or insufficient resources could postpone broader community access.
Ecosystem Risks
Dependence on External Partners: The project relies on partnerships with infrastructure providers, liquidity providers, exchanges, and other third-party service providers. Any failure or delay from these partners could disrupt implementation plans.
Risk of Withdrawing Partners: The Token holder understands that the feasibility of the project depends strongly on the collaboration of service providers and other key stakeholders. A loss of critical partnerships could impact project sustainability.
Technology and Software Risks
Risk of Software Weakness: The Token holder acknowledges that blockchain and smart contract technologies are still evolving. There is no guarantee that Token usage will be uninterrupted or error-free. Vulnerabilities in the underlying blockchain, smart contracts, or supporting technologies could lead to the complete loss of Tokens or their functionality.
Dependency on Underlying Technology: The Protocol relies on blockchain infrastructure, hardware, and network connectivity, all of which may be subject to failures, outages, or vulnerabilities.
Risk of Technological Disruption: The emergence of new technology, such as quantum computing, could undermine the security of blockchain encryption and compromise the integrity of digital assets.
Network Security Risks
Network Attacks and Cybersecurity Threats: Blockchain networks can be vulnerable to cyberattacks such as 51% attacks, Sybil attacks, or distributed denial-of-service (“DDoS”) attacks. These threats could disrupt network operations and compromise security.
Blockchain Network Attacks: The Protocol may be subject to validation attacks, including double-spend attacks, reorganizations, majority mining power attacks, “vampire” attacks and work race condition attacks. Successful attacks could compromise the proper execution of transactions and smart contracts.
Privacy and Anonymity Risks
Public Ledger Transparency: Blockchain transactions are recorded on a public ledger, which may expose transaction history and financial activity. Certain transactions could be linked to specific wallet addresses, making users vulnerable to fraud, phishing attacks, or targeted scams.
Economic and Governance Risks
Consensus Failures or Forks: Errors in the consensus mechanism could lead to forks, where multiple versions of the ledger coexist, or network halts, reducing trust in the network.
Economic Self-Sufficiency: The long-term sustainability of the Token ecosystem depends on sufficient transaction volume to generate fees to support rewards for validators, which in turn maintain network security. A lack of adoption could lead to governance-driven changes to monetary policy, fee structures, or consensus mechanisms.
Incentive Model Risks: Changes to block rewards, staking incentives, or governance models may be required to maintain network participation. Governance decisions could result in modifications that impact Token holders, including inflationary adjustments, transaction fees, or redistribution of rewards.
Software Weakness Risks
Unforeseen Bugs and Security Vulnerabilities: The Token and its supporting infrastructure rely on blockchain technologies that may still be evolving. There is no guarantee that Token transactions will be uninterrupted or error-free. Software vulnerabilities, weaknesses in smart contracts, or infrastructure issues may result in loss of assets, security breaches, or unexpected network failures.
Unanticipated Risks
Unforeseen Regulatory, Technological, or Economic Challenges: In addition to the risks identified, new threats may emerge due to changes in legal, technological, or economic conditions. Developments such as regulatory crackdowns, unforeseen Protocol vulnerabilities, or disruptive innovations could impact the usability, security, or value of the Token in ways not currently foreseeable.
The Issuer neither operates, controls, oversees, nor manages the technology underlying the Ecosystem. While efforts are made to ensure security and stability, blockchain-based technologies are still evolving, and various risks exist.
Blockchain Dependency Risks
Network Downtime and Congestion: The Token relies entirely on its underlying blockchain network, which may experience outages, congestion, or downtime. Such events could disrupt Token transfers, trading, or other functionalities.
Scalability Challenges: As transaction volume grows, the blockchain network may face scaling limitations. Increased congestion could lead to slower transaction processing times and higher fees, reducing efficiency and usability.
Settlement and Transaction Finality Risks: Blockchain transactions are designed to be irreversible; however, under exceptional circumstances such as network forks or consensus failures, there remains a theoretical risk that transactions could be reversed or multiple competing ledger versions could persist. Transactions sent to an incorrect address are not recoverable, leading to permanent loss of assets.
Smart Contract Risks
Vulnerabilities: While smart contracts are developed with security measures, undiscovered vulnerabilities or exploits may impact Token security, distribution, or access.
Immutability Risks: Once deployed, some smart contracts cannot be altered. Errors or security flaws in the code could result in operational failures without the possibility of corrections.
Security Exploits: Bugs or vulnerabilities in smart contracts may expose the Token ecosystem to potential hacks, allowing attackers to manipulate transactions, drain liquidity, or disrupt contract execution.
Network Security Risks
Risk of Attacks and Forks: The blockchain may be susceptible to consensus-related attacks, such as double-spend attacks, majority validation power takeovers, censorship attacks, or forks.
Cybercrime and Theft Risks: Despite security efforts, blockchain-based assets and services may be exposed to cyberattacks, including hacking, phishing, or malware threats.
Data Corruption Risks: The reliability of blockchain data could be compromised due to software bugs, human error, or deliberate tampering.
Wallet and Storage Risks
Private Key Management: Token holders are solely responsible for securing their private keys and recovery phrases.
Compatibility Issues: The Token is supported only by blockchain-compatible wallets. Incompatibility or failures may affect access to and usability of the Token.
Ecosystem Dependency Risks
DEX and CEX Integration Issues: The Token’s availability depends on integration with exchanges. Failures or delisting could limit liquidity.
Reliance on Third-Party Services: Many blockchain services depend on third-party providers. Failures or actions against them could impact the Token.
Centralization Concerns: A small number of validators or operators may introduce risks of censorship or governance attacks.
Software and Protocol Risks
Bugs in Core Blockchain Code: Undiscovered bugs could cause failures, incorrect processing, or vulnerabilities.
Risk of Technological Disruption: Technologies like quantum computing could undermine encryption and compromise data integrity.
Dependency on Underlying Technology: The ecosystem relies on infrastructure like connectivity and cryptographic algorithms, which may face disruptions.
Privacy and Anonymity Risks
Public Ledger Transparency: Transactions are public and may expose sensitive data or link identities.
Exposure to Fraud and Targeted Attacks: Transparency may lead to phishing, fraud, or social engineering threats.
Economic and Network Viability Risks
Economic Self-Sufficiency: Long-term sustainability depends on sufficient transaction volume to support validator rewards.
Incentive Model Risks: Governance proposals may adjust inflation, fees, or reward structures to maintain security and participation.
Software Weakness Risks
Unforeseen Bugs and Security Vulnerabilities: Evolving technologies may result in undetected issues, disrupting the Token’s functionality.
Unanticipated Risks
Unforeseen Regulatory, Technological, or Economic Challenges: New threats may arise due to changing conditions that affect the Token‘s value or security.
Not applicable
See H.4
See H.5
Data provided by the MiCA Crypto Alliance as a third party, with no deviations from the calculation guidance of Commission Delegated Regulation (EU) 2025/422, Article 6(5). As the base layer is a decentralised network, estimates on individual node power draw are used. Full methodology available at: www.micacryptoalliance.com/methodologies
Data provided by the MiCA Crypto Alliance as a third party,with no deviations from the calculation guidance ofCommission Delegated Regulation (EU) 2025/422, Article 6(5). Full methodology available at :www.micacryptoalliance.com/methodologies
Data provided by the MiCA Crypto Alliance as a third party,with no deviations from the calculation guidance ofCommission Delegated Regulation (EU) 2025/422, Article 6(5). Full methodology available at: www.micacryptoalliance.com/methodologies
| Energy Source | Percentage |
|---|---|
| Bioenergy | 2,6177279659% |
| Coal | 18,1241314607% |
| Flared Methane | 0,0000000000% |
| Gas | 30,8573334461% |
| Hydro | 8,8636928320% |
| Nuclear | 14,5151276868% |
| Other Fossil | 1,3705115324% |
| Other Renewables | 0,3876992080% |
| Solar | 11,0948287657% |
| Vented Methane | 0,0000000000% |
| Wind | 12,291525% |
Land use: 17.02990 m²
Data provided by the MiCA Crypto Alliance as a third party,with no deviations from the calculation guidance of Commission Delegated Regulation (EU) 2025/422, Article 6(5). Full methodology available at: www.micacryptoalliance.com/methodologies
Data provided by the MiCA Crypto Alliance as a third party,with no deviations from the calculation guidance of Commission Delegated Regulation (EU) 2025/422, Article 6(5). Full methodology available at: www.micacryptoalliance.com/methodologies
Data provided by the MiCA Crypto Alliance as a third party, with no deviations from the calculation guidance of Commission Delegated Regulation (EU) 2025/422, Article 6(5). As the base layer is a decentralised network, estimates on individual node weight, hazardous components and deprecation rate are used. Full methodology available at: www.micacryptoalliance.com/methodologies
Data provided by the MiCA Crypto Alliance as a third party, with no deviations from the calculation guidance of Commission Delegated Regulation (EU) 2025/422, Article 6(5). Usage of natural resources is approximated through land use metrics. Land use, water use and water recycling are calculated based on energy mix-specific estimates of purchased electricity land intensity, purchased electricity water intensity, and water recycling rates. Full methodology available at: www.micacryptoalliance.com/methodologies