02. Staking - General Risks
Staking services are subject to all of the terms and conditions of the User Agreement, which terms are subject to change. You have no right to rewards associated with staking services unless and until such rewards are received by NDAX pursuant to a successful validation transaction, at which time the rewards will be transferred to your account balances. NDAX cannot guarantee that you will receive any specific staking reward. Any estimate of a rewards percentage provided by NDAX is an estimate only and may change at any time in NDAX’s sole discretion. Staking services provided by NDAX are opt-in accessible services only and NDAX bears no liability for losses incurred because of such staking services, including those resulting from on-chain contract security breaches. A determination by a crypto-asset’s network, which is outside of the control of NDAX, may resulting in staking services being operated erroneously. This may result in a “slashing penalty” and/or the non-payment of expected staking rewards. NDAX has no obligation to compensate you for any slashing penalty or any non-payment of staking rewards.
In addition to all of the risks associated with the staking services, the staking of ETH has additional risks. The Ethereum protocol is transitioning to the Ethereum 2.0 network. Until that transition is completed, staked ETH and ETH staking rewards will be locked on the Ethereum protocol. The timing of this transition is unknown; it may take years or it may never occur. NDAX has no control whatsoever over this process or when the lockup period will end. NDAX does not guarantee in any way that the upgrade to the Ethereum network will be successful and you should understand that if the network upgrade ultimately fails, you may lose all, or a portion, of the ETH staked by you. NDAX will not be responsible for any ETH lost as a result of a network upgrade failure. Unlike NDAX’s other staking services, you will not able to “opt out” of ETH staking once you have staked ETH until the transition to the Ethereum 2.0 Network is completed. As stated above, the length of this lock-up period is unknown. You will not be able to trade, transfer or otherwise access your staked ETH during the lockup period. Any rewards earned while staking ETH remain locked onchain until the Ethereum network upgrade is completed. When you stake ETH, NDAX will credit your account with staked ETH and the applicable staking rewards consistent with this Agreement and the rules of the Ethereum network. ETH staking rewards reflected in your account prior to completion of the network upgrade are an estimate based on a combination of reward rates and the period of time for which you have staked ETH (less any NDAX fees). Rewards will be reflected in your account but may not be actually credited until the end of the lockup period. Newly staked ETH is subject to a bonding period before earning rewards.
Applicable laws, rules and interpretations and judicial and similar decisions may affect NDAX’s ability to offer staking services and may adversely affect the value, use and transfer of your crypto assets and the operations of the NDAX staking service. The tax treatment of certain crypto-asset transactions is uncertain and it is your responsibility to determine what taxes, if any, arise from all transactions with your crypto-assets, including staking. You are solely responsible for reporting and paying all taxes arising from or related to your crypto-assets, including from staking. NDAX does not provide any investment, legal, tax or other advice to you in connection with staking services or otherwise. You should conduct your own due diligence and consult your own advisors before making any decision to participate in staking services. Neither your NDAX account balance, nor any of your staked crypto-assets, are eligible for deposit insurance or any protection from either the Canada Deposit Insurance Corporation or the Canadian Investor Protection Fund.
Certain Staking Services Terms
You can cancel your opt-in to the staking services for any crypto-asset within the first four hours of your initial opt-in. Please consult the table below for additional terms that apply to the staking service for particular crypto-assets:
For purposes of the above table:
- “Instant Redemption” means that your opt-out is effective immediately, but you are not entitled to any rewards generated within the reward period.
- “Standard Redemption” means that your opt-out is delayed for the period of time indicated in the above table, but you collect any rewards generated up to and including generated within the reward period.”