HERO Risk Disclosures

This site is for informational purposes only. This communication does not constitute an offer to sell, or a solicitation to buy, any shares or securities in any jurisdiction, including, without limitation, an offer to sell or a solicitation to buy, any shares or securities in the Hero Foundation, ChainSquad GmbH or in any related or associated company.

None of the information presented in this site is intended to form the basis for any investment decision or provide any recommendations. You should not consider the contents of this site as legal, tax, or investment advice. To the extent necessary, you should consult your own legal counsel, accountant, and/or business advisor as to legal, tax and related matters concerning the BitShares Blockchain and/or the HEROs.

The HEROs are not a security or a currency. As of the date of this site, HEROs (i) cannot be exchanged for goods or services; (ii) have no known uses outside the BitShares Blockchain; and (iii) cannot be traded on any known exchanges. HEROs are not an investment and should not be held as an investment or for speculative or financial purposes. There is no guarantee that HEROs will increase in value. HEROs may be subject to volatility in terms of price and HEROs may decrease in value.

This site does not constitute or form part of, and should not be construed as any offer for sale or subscription of, or any invitation to offer to buy, or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. The HEROs do not grant its holder ownership or equity in the Hero Foundation, ChainSquad GmbH or the BitShares Blockchain or the right to participate in the control, direction or decision‐making of the Hero Foundation, ChainSquad GmbH or the BitShares Blockchain.

Do not hold HEROs if you do not have experience with, and an understanding of, the usage of blockchain‐based software systems and cryptographic tokens like Bitcoin. Holding HEROs carries with it a number of risks. Prior to using HERO, you should carefully consider the risks listed below and, to the extent necessary, consult an appropriate lawyer, accountant, or tax professional. If any of the following risks are unacceptable to you, you should not hold HEROs.

The Hero Foundation and ChainSquad GmbH each expressly disclaims any and all responsibility for any direct, indirect or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in this site; (ii) any error, omission or inaccuracy in any such information; or (iii) any action resulting therefrom. By holding HEROs and to the extent permitted by law, you agree to not hold the Hero Foundation and ChainSquad GmbH and their respective affiliates, subsidiaries, officers, directors, trustees, agents, partners, employees, shareholders and service providers, now or in the future, liable for any direct, indirect, special, incidental, or consequential losses, damages, expenses, costs or liabilities of any kind whatsoever arising out of, or in any way connected to the HEROs or the BitShares Blockchain.

Risk Factors

Risk of losing access to HEROs due to loss of private keys

Holders and Shorters of HERO must use a cryptographic key for signing transactions for their HEROs. Best practices dictate that users safely store their private keys in one or more backup locations geographically separated from the working location.

Risks associated with Graphene protocol

HEROs and the BitShares network are based upon the Graphene protocol. As such, any malfunction, unintended function or unexpected functioning of the Graphene protocol may cause the BitShares network or HEROs to malfunction or function in an unexpected or unintended manner.

Risks associated with governing by the DAC

The HERO is a product that runs on the BitShares network and thus may be adversely affected if the DAC governs the BitShares ecosystem maliciously or carelessly or members of the DAC disagree or are in conflict with one another. Further, the DAC may decide not to support funding proposals that are beneficial to the long‐term development of BitShares and the HERO. In this event BitShares may not be able to grow and the network and the HEROs may be adversely affected.

Risks associated with Market Pegged Assets

Being a collateralized financial product on BitShares, the HERO faces risks of a black swan event if the least collateralized position gows below a certain threshold. At this point in time, it will no longer be possible to borrow new HERO from the BitShares blockchain and holders of HERO mayb redeem a share in the BitShares platform in exchange for their HEROs at the call price of the least collateralized position. This may result in a financial loss for either the shorter, or the holder.

Risk of irrational markets

Please note that even though HERO does technically not pay interest, the HERO is supposed to appreciate in value by a certain percentage every year. From an economical point of view, the HERO itself, however, does not increase in value, but the underlying collateral is required to grow in value by +5% a year. Given the market mechanisms describe in the peg, the HERO is also supposed to grow in value by +5% (in USD terms) a year. There is no guarantee that HEROs will increase in value. HEROs may be subject to volatility in terms of price and HEROs may decrease in value.

Risks associated with login/wallet credentials

To minimize the risk of theft, holders should guard against unauthorized access to their electronic devices.

Risk of weaknesses or exploitable breakthroughs in the field of cryptography

Advances in cryptography, or technical advances such as the development of quantum computers, could present risks to cryptographic tokens and the BitShares platform, which could result in the theft or loss of HEROs.

Risk of lack of adoption or use of the BitShares network

While a HERO should not be viewed as an investment, it may have value over time. That value may be limited if the BitShares network lacks use and adoption. Any impediment to the growth, development, use and/or acceptance of the BitShares Blockchain may adversely affect the HEROs. If this becomes the case, there may be few or no markets upon the launch of the platform, limiting the use and value of the HEROs.

Risk of significant volatility in digital currencies

The value of cryptographic tokens, including bitcoin and the collateral of HEROs, is highly volatile and can be affected by a number of factors, including, without limitation, market sentiment, blockchain news, attacks and/or hacks, potential regulatory measures, global or regional political, economic or financial events and situations and the launch of new competing cryptographic tokens.

Risk of exchanges and an illiquid market for HEROs

There are currently no exchanges upon which HEROs might trade. Exchanges on which certain other cryptographic tokens like bitcoin currently trade are relatively new and are subject to unclear and uncertain regulatory oversight. Such exchanges may therefore be more exposed to fraud, security failures and other operational issues than established, regulated exchanges for other products. To the extent that the HEROs are listed on any exchanges in the future, and any exchange representing a substantial portion of the volume in HERO trading experiences fraud and/or operational or security failure, such an event could result in the loss of HEROs and/or a reduction in the value or liquidity of the HEROs. Even if HEROs are listed on an exchange, if there are very few people buying or selling HEROs, the market for HEROs could be illiquid.

Risk of uninsured losses

Unlike bank accounts or accounts at some other financial institutions, funds held using the BitShares or BitShares network are generally uninsured. In the event of loss or loss of value, there is no public insurer, such as the F.D.I.C., or private insurer, to offer recourse to the token holders.

Risk of dissolution of the BitShares project

It is possible that, due to any number of reasons, including without limitation, an unfavorable fluctuation in the value of bitcoin, unfavorable fluctuation in the value of HEROs, the failure of developers to complete projects or their unwillingness to complete projects, the failure of the DAC, the lack of people willing to act as directors of the Hero Foundation, ascendency of competitors and/or competing intellectual property claims, the BitShares network may no longer be a viable project and may dissolve or fail to grow.

Risk of taxation

HERO holders and shorters may be subject to adverse or unexpected tax implications or consequences in one or more jurisdictions if HEROs are held, HEROs may appreciate in value over time. You should consult your own legal counsel and tax advisor as to legal and tax matters concerning BitShares and the HEROs.

Unanticipated risks

Digital currencies and cryptographic tokens are new and untested technologies. In addition to the risks set forth herein, there are risks that cannot be anticipated. Risks may further materialize as unanticipated combinations or variations of the risks set forth herein.