White paper drafted under the European Markets in Crypto-Assets Regulation (EU) 2023/1114 for FFG 4HDN9HKCJ

The crypto-asset Cygnus (CGN) referred to in this white paper is a crypto-asset other than EMTs and ARTs and is deployed on the Base network, according to the DTI FFG shown in section F.14, as of 2026-03-16. The maximum supply of the crypto-asset is 10,000,000,000 tokens. The first activity on Base can be viewed on 2025-05-21 (transaction hash: 0x1292b7436011e7052a6f7493b62669f151983311d40d34c12c7d8bb67df1a239, source: https://basescan.org/tx/0x1292b7436011e7052a6f7493b62669f151983311d40d34c12c7d8bb67df1a239, accessed 2026-06-02).

Cygnus is a blockchain project that combines a modular yield infrastructure with an application layer designed to support participation in decentralised applications and creator-focused ecosystems. The project includes the Cygnus Omnichain Liquidity Validation System (LVS), which provides validation and liquidity infrastructure across EVM and non-EVM blockchain environments. Cygnus Network is being developed as an Optimistic Rollup-based network that separates execution, settlement and data availability functions through a modular architecture. Transactions are processed through rollup infrastructure and settled on Ethereum, while interoperability with different blockchain ecosystems is supported through the project’s cross-chain design.

The CGN crypto-asset is used within the Cygnus ecosystem for protocol-level functions. CGN is used for transaction fees on the Cygnus Network, staking within the Liquidity Validation System, and participation in governance processes relating to protocol operation and development. The crypto-asset may also be used for incentives and rewards within applications associated with the Cygnus ecosystem, including the Instagram application layer. As of the date of this white paper, CGN is issued on the Base network, while the Cygnus Chain mainnet remains under development.

The crypto-asset does not grant any legally enforceable or contractual rights or obligations to its holders or purchasers. Any functionalities accessible through the underlying technology are purely technical or operational in nature and do not confer rights comparable to ownership, profit participation, governance, or similar entitlements known from traditional financial instruments.

As defined in Article 3(9) of Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on Markets in Crypto-Assets – amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 – a utility token is “a type of crypto-asset that is only intended to provide access to a good or a service supplied by its issuer”. This crypto-asset does not qualify as a utility token for the purposes of Article 3(9) of Regulation (EU) 2023/1114, as its intended use goes beyond providing access to a good or a service supplied solely by the issuer.

Cygnus Information Limited is seeking admission to trading on the Payward Global Solutions LTD (“Kraken”) platform in the European Union in accordance with Article 5 of Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on Markets in Crypto-Assets, amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937. The admission to trading is not accompanied by a public offer of the crypto-asset.

The company is a specialised software development firm focused on building a decentralised app layer, merging on-chain and off-chain assets to power the creator economy.

At the time of drafting, audited or unaudited financial statements of Cygnus Information Limited are not publicly available in connection with Cygnus. As such, this white paper cannot provide quantitative financial information (revenue, profit/loss, equity) for the last three financial years.

Prospective holders should assume that Cygnus Information Limited is a private, early-stage company, with financial performance primarily dependent on the adoption of the Cygnus and related services, and should treat the absence of published financial statements as a material issuer-related risk.

The CGN crypto-asset forms part of the Cygnus ecosystem, a blockchain-based project focused on combining decentralised infrastructure, liquidity validation services, and consumer-facing applications intended to support broader Web3 adoption. At the time of writing, the CGN crypto-asset is issued on the Base blockchain. The project is also developing the Cygnus Network, an Optimistic Rollup-based Layer 2 infrastructure intended to provide scalable execution, modular data availability, and interoperability across EVM and non-EVM ecosystems. The broader objective of the project is to support decentralised applications, creator-economy use cases, staking and restaking activities, and the integration of Web2 users into blockchain-based services.

The Cygnus ecosystem consists of several interconnected components. These include the Cygnus Omnichain Liquidity Validation System (LVS), a decentralised coordination framework designed to support staking and restaking activities across multiple blockchain networks, as well as the Cygnus Instagram App Layer, which is intended to facilitate user onboarding and engagement through applications integrated with the Instagram ecosystem. The project further incorporates validator and operator infrastructure, collateral vaults, dispute-resolution mechanisms referred to as resolvers, and modular network services that allow participating protocols to customise security, delegation, and operator-management processes. In addition, the planned Cygnus Network includes modular data-availability infrastructure, Optimistic Rollup technology, oracle integrations, and developer tooling intended to support the deployment of decentralised applications.

The CGN crypto-asset does not confer ownership rights, profit-participation rights, redemption rights, or legal claims against the issuer or other contributors to the project. Instead, the crypto-asset is intended to support certain functional and governance-related activities within the Cygnus ecosystem. The long-term evolution of the Cygnus ecosystem, including the development and launch of the Cygnus Network, the implementation of liquidity validation services, governance arrangements, validator participation, and the scope of available applications and infrastructure, may vary based on technical, economic, and regulatory considerations. All future developments remain subject to change.

This section provides an overview of the historical developments related to the CGN crypto-asset and a description of planned or anticipated project milestones as publicly communicated. All forward-looking elements are subject to significant uncertainty. They do not constitute commitments, assurances, or guarantees, and may be modified, delayed, or discontinued at any time. The implementation of past milestones cannot be assumed to continue in the future, and future changes may have adverse effects for token holders.

Past Milestones

1. Pre-Seed Funding Round Closed — February 2025: Closed pre-seed funding round with participation from Manifold Trading, OKX Ventures, Mirana Ventures, Optimism Foundation, UpHonest Capital, and G-20 Group, providing the capital base for protocol development and ecosystem expansion.

2. Cygnus InstaPlay Hub Launch — February 2025: Deployment of the Cygnus InstaPlay Hub, utilizing account abstraction (AA) technology to automatically generate Web3 wallets linked to Instagram accounts, enabling seamless Web3 content interaction and lowering the entry barrier for mainstream users.

3. Token Generation Event (TGE) — 23 October 2025: Deployment of the CYGNUS (CGN) token as an ERC-20 token on the Base network (contract address: 0x2e6c4bd1c947e195645d2b920b827498cfaa6766), establishing the initial token supply and enabling on-chain ecosystem participation.

Future Milestones:

(a) Ongoing and short-term development

- Cygnus Chain testnet and validator network preparation. Development of the Cygnus Chain testnet, consensus implementation, and validator network onboarding is ongoing, in preparation for the planned mainnet upgrade described in the roadmap below.

- Strategic ecosystem integrations. Integration work is ongoing across DEX aggregator services, oracle infrastructure, and proof-of-reserves providers, intended to expand the protocol's interoperability and institutional credibility within the broader Web3 ecosystem.

- InstaPlay Hub growth and creator-economy feature expansion. Growth of the InstaPlay Hub user and creator base is continuing, alongside a planned rollout of expanded creator monetisation features, revenue-sharing mechanisms, and on-chain content interaction tools.

(b) Long-term roadmap

- Q3–Q4 2026, Cygnus Chain mainnet upgrade: the project intends to deploy major mainnet protocol upgrades designed to support increased throughput and ecosystem expansion.

- Q1 2027, user adoption target: the project is targeting a cumulative user base exceeding 10 million users.

- Q2 2027, ecosystem expansion: the project intends to onboard more than 200 ecosystem projects, including dApps, infrastructure integrations, and creator-economy applications.

- Q3 2027, network performance target: the project is targeting on-chain throughput exceeding 100,000 transactions per second (TPS).

- Q4 2027, cost efficiency target: the project is aiming to reduce average transaction fees to below USD 0.0004 per transaction.

Note: All future milestones are subject to significant uncertainty, including but not limited to technical feasibility, regulatory developments, market adoption, and community governance decisions. The project may modify, delay, or discontinue any of these initiatives at any time. Past implementation or performance outcomes do not constitute an indication of future results, and any such changes may materially affect the characteristics, availability, or perceived value of the CGN crypto-asset for its holders.

Cygnus Information Limited completed a private pre-seed financing round in February 2025, raising aggregate proceeds of USD 20,000,000. Participants in the financing round included Manifold Trading, OKX Ventures, Mirana Ventures, Optimism Foundation, UpHonest Capital, and G-20 Group.

No initial coin offering (ICO), initial decentralised exchange offering (IDO), or other public token sale has been conducted in relation to the CGN token. No funds have been raised through any public offering of CGN tokens. All capital allocated to the Cygnus project has been obtained through the private pre-seed financing round described above.

The financial resources raised through this financing round have been allocated to the continued development of the Cygnus protocol, the operation and expansion of the Cygnus InstaPlay Hub, ecosystem growth initiatives, and the planned Cygnus Chain mainnet upgrade.

The project does not intend to raise new funds.

The purpose of seeking admission to trading is to enable the crypto-asset to be listed on a regulated platform in accordance with the applicable provisions of Regulation (EU) 2023/1114 and Commission Implementing Regulation (EU) 2024/2984. The white paper has been drawn up to comply with the transparency requirements applicable to trading venues.

Holder restrictions are subject to the rules applicable to the crypto-asset service provider, as well as any additional restrictions that provider may impose.

The token is intended to be listed on the trading platform operated by Payward Global Solutions LTD ("Kraken"). Access to this platform depends on regional availability and user eligibility under Kraken’s terms and conditions. Investors should consult Kraken’s official documentation to determine whether they meet the requirements for account creation and token trading.

The costs involved in accessing the trading platform depend on the specific fee structure and terms of the respective crypto-asset service provider. These may include trading fees, deposit or withdrawal charges, and network-related gas fees. Investors are advised to consult the applicable fee schedule of the chosen platform before engaging in trading activities.

Not applicable, as this white paper is written to seek admission to trading, not for the initial offer to the public.

MiCA-compliant crypto-asset service providers shall have strong measures in place to manage conflicts of interest. Due to the broad audience that this white paper addresses, potential investors should always check the conflicts of Interest policy of their respective counterparty.

Not applicable, as this white paper is written to seek admission to trading, not for the initial offer to the public.

Not applicable, as this white paper is written to seek admission to trading, not for the initial offer to the public.

The CGN crypto-asset is the native crypto-asset of the Cygnus ecosystem and functions as the principal functional asset within the Cygnus protocol environment. CGN is currently issued as an ERC-20 token on the Base blockchain and is intended to support a range of technical functions across the Cygnus ecosystem. These functions include participation in staking and liquidity validation activities through the Cygnus Liquidity Validation System (LVS), payment of transaction-related fees within the planned Cygnus Network, distribution of ecosystem incentives and rewards, and participation in governance processes relating to protocol development and ecosystem management.

CGN is further integrated into the operation of the Cygnus ecosystem through its use in staking, validation, and incentive mechanisms. Participants may use CGN in connection with the provision of economic security for supported networks through the LVS framework and may receive rewards derived from validation activities, network fees, and other protocol-related incentive mechanisms. CGN is also intended to be used within the Cygnus application ecosystem, including creator-economy and community-engagement applications, where it may be distributed as rewards to users, creators, developers, and other ecosystem participants. In addition, CGN is intended to function as the native gas asset of the planned Cygnus Network and may be used in connection with governance proposals, protocol upgrades, ecosystem grants, and other governance-related activities.

The CGN crypto-asset does not confer ownership, profit participation, governance rights over the issuer or any related entity, or any form of economic entitlement. All functionalities are technical in nature and relate exclusively to interactions within the Cygnus protocol environment. The usability of CGN depends on factors such as the continued operation of the relevant protocol infrastructure, the performance and security of the underlying blockchain networks and planned Cygnus Network infrastructure, the correct functioning of staking, validation, governance and smart-contract related systems, and future development decisions associated with the Cygnus project.

Future Milestones:

(a) Ongoing and short-term development

- Cygnus Chain testnet and validator network preparation. Development of the Cygnus Chain testnet, consensus implementation, and validator network onboarding is ongoing, in preparation for the planned mainnet upgrade described in the roadmap below.

- Strategic ecosystem integrations. Integration work is ongoing across DEX aggregator services, oracle infrastructure, and proof-of-reserves providers, intended to expand the protocol's interoperability and institutional credibility within the broader Web3 ecosystem.

- InstaPlay Hub growth and creator-economy feature expansion. Growth of the InstaPlay Hub user and creator base is continuing, alongside a planned rollout of expanded creator monetisation features, revenue-sharing mechanisms, and on-chain content interaction tools.

(b) Long-term roadmap

- Q3–Q4 2026, Cygnus Chain mainnet upgrade: the project intends to deploy major mainnet protocol upgrades designed to support increased throughput and ecosystem expansion.

- Q1 2027, user adoption target: the project is targeting a cumulative user base exceeding 10 million users.

- Q2 2027, ecosystem expansion: the project intends to onboard more than 200 ecosystem projects, including dApps, infrastructure integrations, and creator-economy applications.

- Q3 2027, network performance target: the project is targeting on-chain throughput exceeding 100,000 transactions per second (TPS).

- Q4 2027, cost efficiency target: the project is aiming to reduce average transaction fees to below USD 0.0004 per transaction.

Note: All future milestones are subject to significant uncertainty, including but not limited to technical feasibility, regulatory developments, market adoption, and community governance decisions. The project may modify, delay, or discontinue any of these initiatives at any time. Past implementation or performance outcomes do not constitute an indication of future results, and any such changes may materially affect the characteristics, availability, or perceived value of the CGN crypto-asset for its holders.

The crypto-asset referred to herein is a crypto-asset other than EMTs and ARTs and is available the Base network. The crypto-asset is fungible up to 18 digits after the decimal point. The crypto-asset constitutes a digital representation recorded on distributed-ledger technology and does not confer ownership, governance, profit participation, or any other legally enforceable rights. Any functionalities associated with the token are limited to potential technical features within the relevant platform environment. These functionalities do not represent contractual entitlements and may depend on future development decisions, technical design choices, and operational conditions. The crypto-asset does not embody intrinsic economic value; instead, its value, if any, is determined exclusively by market dynamics such as supply, demand, and liquidity in secondary markets.

No such services are currently provided by the issuer.

The crypto-asset does not grant any legally enforceable or contractual rights or obligations to its holders or purchasers. Any functionalities accessible through the underlying technology are of a purely technical or operational nature and do not constitute rights comparable to ownership, profit participation, governance, or similar entitlements known from traditional financial instruments. Accordingly, holders do not acquire any legally enforceable claim against the issuer of the crypto-asset or any third party.

As the crypto-asset does not confer any legally enforceable rights or obligations, there are no applicable procedures or conditions for their exercise. Any interaction or functionality that may be available within the project’s technical infrastructure – such as participation mechanisms or protocol-level features – serves operational purposes only and does not create, evidence, or constitute any contractual or statutory entitlement.

As the crypto-asset does not confer any legally enforceable rights or obligations, there are no conditions or mechanisms for modifying such rights or obligations. Adjustments to the technical protocol, smart contract logic, or related systems may occur in the ordinary course of development or maintenance. Such changes do not alter the legal position of holders, as no contractual rights exist and no rights arise under applicable law or regulation. Holders should not interpret technical updates or governance-related changes as amendments to legally binding entitlements.

At the time of drafting this white paper, the issuer has not announced, planned, or approved any future offers of the crypto-asset to the public. Should any such offer be considered in the future, it would be subject to the applicable legal and regulatory requirements in force at that time.

The crypto-assets themselves are not subject to any technical or contractual transfer restrictions and are generally freely transferable. However, crypto-asset service providers may impose restrictions on buyers or sellers in accordance with applicable laws, internal policies or contractual terms agreed with their clients.

Not applicable.

Not applicable, as the crypto-asset in scope does not have any value protection scheme in place.

Not applicable, as the crypto-asset in scope does not have any compensation scheme in place.

Applicable law likely depends on the location of any particular transaction with the token.

Competent court likely depends on the location of any particular transaction with the token.

The crypto-asset in scope is implemented on the Base network following the standards described below.

The crypto-asset that is the subject of this white paper is available on the Base network.

The following applies to Base:

Base is an Ethereum Layer-2 network introduced by Coinbase. Base launched in 2023 as an optimistic rollup based on Optimism’s OP Stack. In February 2026, Base announced a phased migration towards a unified, Base-operated technology stack. Base does not operate a separate decentralised consensus mechanism or validator set comparable to a Layer-1 blockchain. Transaction ordering is currently performed by a centralised sequencer, while transaction data and state commitments are posted to Ethereum Layer-1. Ethereum provides the underlying data availability and settlement layer, and its Proof-of-Stake consensus secures the Layer-1 infrastructure on which Base relies. The integrity of Base’s Layer-2 state is supported by an optimistic fault-proof mechanism, under which proposed state transitions may be challenged during the applicable challenge period. If the sequencer becomes unavailable, users may submit transactions through Ethereum Layer-1 to force inclusion, subject to the protocol’s applicable delay mechanisms.

The crypto-asset that is the subject of this white paper is available on the Base network.

The following applies to Base:

1. Base-compatible wallets: The tokens are supported by wallets compatible with the Ethereum Virtual Machine (EVM), including MetaMask, Coinbase Wallet and Trust Wallet. These wallets interact with Base in the same manner as with other EVM-compatible networks through standard Web3 interfaces.

2. Distributed ledger: Base operates as a Layer-2 network on Ethereum and maintains its own distributed ledger for recording token transactions. Transaction batches and corresponding state commitments are periodically posted to Ethereum Layer 1, allowing the Layer-2 state to be anchored to Ethereum and verified through the network’s security mechanisms.

3. ERC-20 token standard: Base supports crypto-assets implemented using the ERC-20 token standard. As an EVM-compatible network, Base supports the same token interface standards commonly used on Ethereum.

4. Scalability and transaction efficiency: As an optimistic rollup Layer-2 network, Base executes transactions on the Layer-2 network and periodically posts transaction data and state commitments to Ethereum Layer 1. This architecture is intended to reduce the amount of data processed directly on Ethereum Layer 1 and may result in lower transaction costs compared to executing transactions directly on Ethereum Layer 1.

The crypto-asset that is the subject of this white paper is available on the Base network.

The following applies to Base:

Base does not operate its own consensus mechanism or decentralised validator set comparable to a Layer-1 blockchain. As an optimistic rollup Layer-2 network, Base relies on Ethereum’s Proof-of-Stake consensus for the finality and settlement of data and state commitments posted to Ethereum Layer 1. Transaction ordering on Base is performed by a sequencer, currently operated by Coinbase. This sequencing function provides transaction ordering and execution on the Layer-2 network but does not constitute a decentralised consensus mechanism. The validity of Layer-2 state transitions is supported by an optimistic fault-proof mechanism, under which incorrect state commitments may be challenged during the applicable dispute period. Accordingly, Base’s security model depends on Ethereum Layer 1 for settlement and finality, while Layer-2 transaction ordering remains dependent on the sequencer.

The crypto-asset that is the subject of this white paper is available on the Base network.

The following applies to Base:

Base does not have a native protocol token and does not operate a staking, validator reward or token issuance mechanism. Transaction fees on Base are paid in ETH. The economic incentives within the network are primarily related to transaction processing and network security. Transactions are executed on Base and periodically submitted to Ethereum Layer 1 in batches. As the cost of a Layer-1 submission is shared among multiple Layer-2 transactions, the average transaction cost per transaction may be lower than executing the same transactions directly on Ethereum Layer 1. The integrity of withdrawals from Base is supported by a fault-proof mechanism. Withdrawals are subject to a dispute period during which participants may challenge incorrect state commitments. The dispute process incorporates economic incentives intended to encourage honest behaviour and discourage invalid claims.

Not applicable, as the DLT is not operated by the issuer, the offeror, the person seeking admission to trading, or any third-party acting on their behalf.

The Cygnus protocol underwent an external smart contract security audit (source: https://github.com/peckshield/publications/blob/master/audit_reports/PeckShield-Audit-Report-Cygnus-v1.0.pdf, accessed 2026-06-02) conducted by PeckShield, with the final audit report published on 11 December 2023. The audit identified a number of findings and recommendations relating to the audited smart contracts. According to the audit report, the identified findings were subsequently addressed or mitigated by the project team and corresponding fixes were incorporated into the audited codebase.

No unresolved critical or high-severity issues were identified in the final audit report. However, users should note that security audits provide only a limited assessment of specific components at a particular point in time and do not eliminate the risk of future vulnerabilities, exploits, implementation errors, or changes to the protocol.

1. Regulatory and Compliance

Regulatory frameworks applicable to crypto-asset services in the European Union and in third countries are evolving. Supervisory authorities may introduce, interpret, or enforce rules that affect (i) the eligibility of this crypto-asset for admission to trading, (ii) the conditions under which a crypto-asset service provider may offer trading, custody, or transfer services for it, or (iii) the persons or jurisdictions to which such services may be provided. As a result, the crypto-asset service provider admitting this crypto-asset to trading may be required to suspend, restrict, or terminate trading or withdrawals for regulatory reasons, even if the crypto-asset itself continues to function on its underlying network.

2. Trading venue and connection risk

Trading in the crypto-asset depends on the uninterrupted operation of the trading venues on which it is listed and, where applicable, on its technical connections to external liquidity sources or venues. Interruptions such as system downtime, maintenance, faulty integrations, API changes, or failures at an external venue can temporarily prevent order placement, execution, deposits, or withdrawals, even when the underlying blockchain is functioning. In addition, trading platforms in emerging markets may operate under differing governance, compliance, and oversight standards, which can increase the risk of operational failures or disorderly market conditions.

3. Market formation and liquidity conditions

The price and tradability of the crypto-asset depend on actual trading activity on the venues to which the service provider is connected, whether centralised exchanges (CEXs) or decentralised exchanges (DEXs). Trading volumes may at times be low, order books thin, or liquidity concentrated on a single venue. In such conditions, buy or sell orders may not be executed in full or may be executed only at a less favourable price, resulting in slippage.

Volatility: The market price of the crypto-asset may fluctuate significantly over short periods, including for reasons that are not linked to changes in the underlying project or protocol. Periods of limited liquidity, shifts in overall market sentiment, or trading on only a small number of CEXs or DEXs can amplify these movements and lead to higher slippage when orders are executed. As a result, investors may be unable to sell the crypto-asset at or close to a previously observed price, even where no negative project-specific event has occurred.

4. Counterparty and service provider dependence

The admission of the crypto-asset to trading may rely on several external parties, such as connected centralised or decentralised trading venues, liquidity providers, brokers, custodians, or technical integrators. If any of these counterparties fail to perform, suspend their services, or apply internal restrictions, the trading, deposit, or withdrawal of the crypto-asset on the listing crypto-asset service provider can be interrupted or halted.

Quality of counterparties: Trading venues and service providers in certain jurisdictions may operate under regulatory or supervisory standards that are lower or differently enforced than those applicable in the European Union. In such environments, deficiencies in governance, risk management, or compliance may remain undetected, which increases the probability of abrupt service interruptions, investigations, or forced wind-downs.

Delisting and service suspension: The crypto-asset’s availability may depend on the internal listing decisions of these counterparties. A delisting or suspension on a key connected venue can materially reduce liquidity or make trading temporarily impossible on the admitting service provider, even if the underlying crypto-asset continues to function.

Insolvency of counterparties: If a counterparty involved in holding, routing, or settling the crypto-asset becomes insolvent, enters restructuring, or is otherwise subject to resolution measures, assets held or processed by that counterparty may be frozen, become temporarily unavailable, or be recoverable only in part or not at all, which can result in losses for clients whose positions were maintained through that counterparty. This risk applies in particular where client assets are held on an omnibus basis or where segregation is not fully recognised in the counterparty’s jurisdiction.

5. Operational and information risks

Due to the irrevocability of blockchain transactions, incorrect transaction approvals or the use of wrong networks or addresses will typically make the transferred funds irrecoverable. Because trading may also rely on technical connections to other venues or service providers, downtime or faulty code in these connections can temporarily block trading, deposits, or withdrawals even when the underlying blockchain is functioning. In addition, different groups of market participants may have unequal access to technical, governance, or project-related information, which can lead to information asymmetry and place less informed investors at a disadvantage when making trading decisions.

6. Market access and liquidity concentration risk

If the crypto-asset is only available on a limited number of trading platforms or through a single market-making entity, this may result in reduced liquidity, greater price volatility, or periods of inaccessibility for retail holders.

1. Insolvency of the issuer

As with any commercial entity, the issuer may face insolvency risks. These may result from insufficient funding, low market interest, mismanagement, or external shocks (e.g. pandemics, armed conflicts). In such a case, ongoing development, support, and governance of the project may cease, potentially affecting the viability and tradability of the crypto-asset.

2. Legal and regulatory risks

The issuer operates in a dynamic and evolving regulatory environment. Failure to comply with applicable laws or regulations in relevant jurisdictions may result in enforcement actions, penalties, or restrictions on the project’s operations. These may negatively impact the crypto-asset’s availability, market acceptance, or legal status.

3. Operational risks

The issuer may fail to implement adequate internal controls, risk management, or governance processes. This can result in operational disruptions, financial losses, delays in updating the white paper, or reputational damage.

4. Governance and decision-making

The issuer’s management body is responsible for key strategic, operational, and disclosure decisions. Ineffective governance, delays in decision-making, or lack of resources may compromise the stability of the project and its compliance with MiCA requirements. High concentration of decision-making authority or changes in ownership/control can amplify these risks.

5. Reputational risks

The issuer’s reputation may be harmed by internal failures, external accusations, or association with illicit activity. Negative publicity can reduce trust in the issuer and impact the perceived legitimacy or value of the crypto-asset.

6. Counterparty dependence

The issuer may depend on third-party providers for certain core functions, such as technology development, marketing, legal advice, or infrastructure. If these partners discontinue their services, change ownership, or underperform, the issuer’s ability to operate the project or maintain investor communication may be impaired. This could disrupt project continuity or undermine market confidence, ultimately affecting the crypto-asset’s value.

1. Valuation risk

The crypto-asset does not represent a claim, nor is it backed by physical assets or legal entitlements. Its market value is driven solely by supply and demand dynamics and may fluctuate significantly. In the absence of fundamental value anchors, such assets can lose their entire market value within a very short time. Historical market behaviour has shown that some types of crypto-assets have become worthless. Investors should be aware that this crypto-asset may lose all of its value.

2. Market volatility risk

Crypto-asset prices can fluctuate sharply due to changes in market sentiment, macroeconomic conditions, regulatory developments, or technology trends. Such volatility may result in rapid and significant losses. Holders should be prepared for the possibility of losing the full amount invested.

3. Liquidity and price-determination risk

Low trading volumes, fragmented trading across venues, or the absence of active market makers can restrict the ability to buy or sell the crypto-asset. In such situations, it is not guaranteed that an observable market price will exist at all times. Spreads may widen materially, and orders may only be executable under unfavourable conditions, which can make liquidation costly or temporarily impossible.

4. Crypto-asset security risk

Loss or theft of private keys, unauthorised access to wallets, or failures of custodial or exchange service providers can result in the irreversible loss of assets. Because blockchain transactions are final, recovery of funds after a compromise is generally impossible.

5. Fraud and scam risk

The pseudonymous and irreversible nature of blockchain transactions can attract fraudulent schemes. Typical forms include fake or unauthorised crypto-assets imitating established ones, phishing attempts, deceptive airdrops, or social-engineering attacks. Investors should exercise caution and verify the authenticity of counterparties and information sources.

6. Legal and regulatory reclassification risk

Legislative or regulatory changes in the European Union or in the Member State where the crypto-asset is admitted to trading may alter its legal classification, permitted uses, or tradability. In third countries, the crypto-asset may be treated as a financial instrument or security, which can restrict its offering, trading, or custody.

7. Absence of investor protection

The crypto-asset is not covered by investor-compensation or deposit-guarantee schemes. In the event of loss, fraud, or insolvency of a service provider, holders may have no access to recourse mechanisms typically available in regulated financial markets.

8. Counterparty risk

Reliance on third-party exchanges, custodians, or intermediaries exposes holders to operational failures, insolvency, or fraud of these parties. Investors should conduct due diligence on service providers, as their failure may lead to the partial or total loss of held assets.

9. Reputational risk

Negative publicity related to security incidents, misuse of blockchain technology, or associations with illicit activity can damage public confidence and reduce the crypto-asset’s market value.

10. Community and sentiment risk

Because the crypto-asset’s perceived relevance and expected future use depend largely on community engagement and the prevailing sentiment, a loss of public interest, negative coverage or reduced activity of key contributors can materially reduce market demand.

11. Macroeconomic and interest-rate risk

Fluctuations in interest rates, exchange rates, general market conditions, or overall market volatility can influence investor sentiment towards digital assets and affect the crypto-asset’s market value.

12. Taxation risk

Tax treatment varies across jurisdictions. Holders are individually responsible for complying with all applicable tax laws, including the reporting and payment of taxes arising from the acquisition, holding, or disposal of the crypto-asset.

13. Anti-money-laundering and counter-terrorist financing risk

Wallet addresses or transactions connected to the crypto-asset may be linked to sanctioned or illicit activity. Regulatory responses to such findings may include transfer restrictions, reporting obligations, or the freezing of assets on certain venues.

14. Market-abuse risk

Due to limited oversight and transparency, crypto-assets may be vulnerable to market-abuse practices such as spoofing, pump-and-dump schemes, or insider trading. Such activities can distort prices and expose holders to sudden losses.

15. Legal ownership and jurisdictional risk

Depending on the applicable law, holders of the crypto-asset may not have enforceable ownership rights or effective legal remedies in cases of disputes, fraud, or service failure. In certain jurisdictions, access to exchanges or interfaces may be restricted by regulatory measures, even if on-chain transfer remains technically possible.

16. Concentration risk

A large proportion of the total supply may be held by a small number of holders. This can enable market manipulation, governance dominance, or sudden large-scale liquidations that adversely affect market stability, price levels, and investor confidence.

As this white paper relates to admission to trading of the crypto-asset, the risk description below reflects general implementation risks typically associated with crypto-asset projects and relevant for the crypto-asset service provider.

Delays, failures, or changes in the implementation of the project as outlined in its public roadmap or technical documentation may negatively impact the perceived credibility or usability of the crypto-asset. This includes risks related to project governance, resource allocation, technical delivery, and team continuity.

Key-person risk: The project may rely on a limited number of individuals for development, maintenance, or strategic direction. The departure, incapacity, or misalignment of these individuals may delay or derail the implementation.

Timeline and milestone risk: Project milestones may not be met as announced. Delays in feature releases, protocol upgrades, or external integrations can undermine market confidence and affect the adoption, use, or value of the crypto-asset.

Delivery risk: Even if implemented on time, certain functionalities or integrations may not perform as intended or may be scaled back during execution, limiting the crypto-asset’s practical utility.

As this white paper relates to admission to trading of the crypto-asset, the following risks concern the underlying distributed ledger technology (DLT), its supporting infrastructure, and related technical dependencies. Failures or vulnerabilities in these systems may affect the availability, integrity, or transferability of the crypto-asset.

1. Blockchain dependency risk

The functionality of the crypto-asset depends on the continuous and stable operation of the blockchain(s) on which it is issued. Network congestion, outages, or protocol errors may temporarily or permanently disrupt on-chain transactions. Extended downtime or degradation in network performance can affect trading, settlement, or the usability of the crypto-asset.

2. Smart contract vulnerability risk

The smart contract that defines the crypto-asset’s parameters or governs its transfers may contain coding errors or security vulnerabilities. Exploitation of such weaknesses can result in unintended token minting, permanent loss of funds, or disruption of token functionality. Even after external audits, undetected vulnerabilities may persist due to the immutable nature of deployed code.

3. Wallet and key-management risk

The custody of crypto-assets relies on secure private key management. Loss, theft, or compromise of private keys results in irreversible loss of access. Custodians, trading venues, or wallet providers may be targeted by cyberattacks. Compatibility issues between wallet software and changes to the blockchain protocol (e.g. network upgrades) can further limit user access or the ability to transfer the crypto-asset.

Outdated or vulnerable wallet software:

Users relying on outdated, unaudited, or unsupported wallet software may face compatibility issues, security vulnerabilities, or failures when interacting with the blockchain. Failure to update wallet software in line with protocol developments can result in transaction errors, loss of access, or exposure to known exploits.

4. Network security risks

Attack risks: Blockchains may be subject to denial-of-service (DoS) attacks, 51% attacks, or other exploits targeting the consensus mechanism. These can delay transactions, compromise finality, or disrupt the accurate recording of transfers.

Centralisation concerns: Despite claims of decentralisation, a relatively small number of validators or a high concentration of stake may increase the risk of collusion, censorship, or coordinated network downtime, which can affect the resilience and operational reliability of the crypto-asset.

5. Bridge and interoperability risk

Where tokens can be bridged or wrapped across multiple blockchains, vulnerabilities in bridge protocols, validator sets, or locking mechanisms may result in loss, duplication, or misrepresentation of assets. Exploits or technical failures in these systems can instantly impact circulating supply, ownership claims, or token fungibility across chains.

6. Forking and protocol-upgrade risk

Network upgrades or disagreements among node operators or validators can result in blockchain “forks”, where the blockchain splits into two or more incompatible versions that continue separately from a shared past. This may lead to duplicate token representations or incompatibilities between exchanges and wallets. Until consensus stabilises, trading or transfers may be disrupted or misaligned. Such situations may be difficult for retail holders to navigate, particularly when trading platforms or wallets display inconsistent token information.

7. Economic-layer and abstraction risk

Mechanisms such as gas relayers, wrapped tokens, or synthetic representations may alter the transaction economics of the underlying token. Changes in transaction costs, token demand, or utility may reduce its usage and weaken both its economic function and perceived value within its ecosystem.

8. Spam and network-efficiency risk

High volumes of low-value (“dust”) or automated transactions may congest the network, slow validation times, inflate ledger size, and raise transaction costs. This can impair performance, reduce throughput, and expose address patterns to analysis, thereby reducing network efficiency and privacy.

9. Front-end and access-interface risk

If users rely on centralised web interfaces or hosted wallets to interact with the blockchain, service outages, malicious compromises, or domain expiries affecting these interfaces may block access to the crypto-asset, even while the blockchain itself remains fully functional. Dependence on single web portals introduces a critical point of failure outside the DLT layer.

10. Decentralisation claim risk

While the technical infrastructure may appear distributed, the actual governance or economic control of the project may lie with a small set of actors. This disconnect between marketing claims and structural reality can lead to regulatory scrutiny, reputational damage, or legal uncertainty – especially if the project is presented as ‘community-governed’ without substantiation.

None.

The crypto-asset that is the subject of this white paper is available on the Base network.

The following applies to Base:

Base is a Layer-2 (L2) solution on Ethereum that was introduced by Coinbase and developed using Optimism’s OP Stack. L2 transactions do not have their own consensus mechanism and are only validated by the execution clients. The so-called sequencer regularly bundles L2 transactions and publishes them on the L1 network, i.e. Ethereum. Ethereum’s consensus mechanism (Proof-of-Stake) thus indirectly secures all L2 transactions as soon as they are written to L1.

The crypto-asset that is the subject of this white paper is available on the Base network.

The following applies to Base:

Base is a Layer-2 (L2) solution on Ethereum that uses optimistic rollups provided by the OP Stack on which it was developed. Transactions on Base are bundled by a so-called sequencer, and the result is regularly submitted as Layer-1 (L1) transactions. This way, many L2 transactions are combined into a single L1 transaction. This lowers the average transaction cost per transaction, because many L2 transactions together fund the transaction cost for the single L1 transaction. This creates incentives to use Base rather than the L1, i.e. Ethereum, itself. To move crypto-assets in and out of Base, a special smart contract on Ethereum is used. Since there is no consensus mechanism on L2, an additional mechanism ensures that only existing funds can be withdrawn from L2. When a user wants to withdraw funds, the user needs to submit a withdrawal request on L1. If this request remains unchallenged for a period of time, the funds can be withdrawn. During this period, any other user can submit a fault proof, which will start a dispute resolution process. This process is designed with economic incentives for correct behaviour.

The energy consumption associated with this crypto-asset is aggregated of multiple contributing components, primarily the underlying blockchain network and the execution of token-specific operations. To determine the energy consumption of a token, the energy consumption of the underlying blockchain network Base is calculated first. A proportionate share of that energy use is then attributed to the token based on its activity level within the network (e.g. transaction volume, contract execution).

The Functionally Fungible Group Digital Token Identifier (FFG DTI) is used to determine all technically equivalent implementations of the crypto-asset in scope.

Estimates regarding hardware types, node distribution, and the number of network participants are based on informed assumptions, supported by best-effort verification against available empirical data. Unless robust evidence suggests otherwise, participants are assumed to act in an economically rational manner. In line with the precautionary principle, conservative estimates are applied where uncertainty exists – that is, estimates tend towards the higher end of potential environmental impact.

To determine the proportion of renewable energy usage, the locations of the nodes are to be determined using public information sites, open-source crawlers and crawlers developed in-house. If no information is available on the geographic distribution of the nodes, reference networks are used which are comparable in terms of their incentivisation structure and consensus mechanism. This geo-information is merged with public information from Our World in Data, see citation. The intensity is calculated as the marginal energy cost wrt. one more transaction. Ember (2025); Energy Institute - Statistical Review of World Energy (2024) - with major processing by Our World in Data. “Share of electricity generated by renewables - Ember and Energy Institute” [dataset]. Ember, “Yearly Electricity Data Europe”; Ember, “Yearly Electricity Data”; Energy Institute, “Statistical Review of World Energy” [original data]. Retrieved from https://ourworldindata.org/grapher/share-electricity-renewables.

To determine the GHG emissions, the locations of the nodes are to be determined using public information sites, open-source crawlers and crawlers developed in-house. If no information is available on the geographic distribution of the nodes, reference networks are used which are comparable in terms of their incentivisation structure and consensus mechanism. This geo-information is merged with public information from Our World in Data, see citation. The intensity is calculated as the marginal emission wrt. one more transaction.

Ember (2025); Energy Institute - Statistical Review of World Energy (2024) - with major processing by Our World in Data. “Carbon intensity of electricity generation - Ember and Energy Institute” [dataset]. Ember, “Yearly Electricity Data Europe”; Ember, “Yearly Electricity Data”; Energy Institute, “Statistical Review of World Energy” [original data]. Retrieved from https://ourworldindata.org/grapher/carbon-intensity-electricity licensed under CC BY 4.0.