Token & Howey Test

Token

Risks to Disclose

The following risks should always be disclosed or made available:

• Valuation Contingent on Disparate Characteristics: Unlike traditional assets, the valuation of Tokens is heavily dependent on characteristics that may have nothing to do with their inherent utility. For example, the macroeconomic crypto environment and the ability to stay relevant in the rapidly changing landscape of the internet culture may impact the Token’s value.

• Risk Profile: Due to their unregulated nature and the absence of a traditional value assessment framework, Tokens possess a unique risk profile that potential purchasers and holders should be fully aware of, recognizing the high potential for loss, including a complete loss.

• Indicator of Mass Emotional Response and Participation: Tokens can act as indicators of community sentiment, with their popularity often reflecting the collective mood and engagement level of their supportive community.

• Speculative Assets: The Tokens are Speculative Assets.

Permissible Uses

• $Developer is designed to support the Developer Camp community, which includes Partners offering $developer to incentivize hackathon participation and winning, to encourage and reward fellows, and to otherwise bolster community productivity and engagement.

• Partner may also donate its $Developer to Developer Camp to be used in similar ways.

• Partner must avoid using $Developer in any way that would undermine, disincentivize, or otherwise harm the Developer Camp community or create regulatory issues for the project.

Howey Test

Three elements of the Howey Test are used by the SEC to determine whether an “investment contract” exists (which would require compliance with the full panoply of securities regulations). All elements must be satisfied for a product to constitute an investment contract.

• Investment of money: if the digital asset is purchased or otherwise acquired in exchange for value.

• Common Enterprise: does a common enterprise exist among digital asset holders and/or between digital asset holders and an active participant in the issuance of the digital asset; in a common enterprise, the participants’ interests and economic outcomes are generally fully aligned.

• Expectation of profit or financial returns derived through the managerial efforts of others.