Earn Agreement
1. General Provisions
1.1. Description of the service
BLOX B.V. (“BLOX”), in close cooperation with BLOX Earn, a trade name of Coinmerce Earn B.V., a separate legal entity belonging to the same group, facilitates the Yield Service. The Yield Service enables Users with an Earn Account to lend their Crypto Assets to BLOX Earn. BLOX Earn uses the Crypto Assets made available by you to generate returns by, for its own account, lending these Crypto Assets onward to carefully selected third parties or by staking them. The Yield Service is further described in Article 3.1 “Earn” of this Earn Agreement.
Users who choose an Earn Account opt for the Yield Service by accepting the User Agreement and this Earn Agreement.
BLOX emphasizes that the Yield service does not fall under the Markets in Crypto-Assets Regulation (“MiCAR”) and the associated supervision of the Netherlands Authority for the Financial Markets (“AFM”). This means that the service does not have the same safeguards as MiCAR-regulated services offered by BLOX.
There are significant risks associated with the Yield Service, as set out in the risk disclaimer. For more information on how the Yield Service is offered, you should carefully review this Earn Agreement and the risk disclaimer.
1.2. Earn Agreement
This Earn Agreement and all other documents referred to herein or incorporated herein constitute a legally binding contract between you, as a User of the Yield Service, and BLOX Earn.
By accepting the Earn Agreement and using the Yield Service, you enter into a Earn Agreement with BLOX Earn. As a result, you agree to make your current and future crypto assets available to BLOX Earn.
When you enter into this Earn Agreement, you are deemed to have read, understood, and agreed to this Earn Agreement in addition to the User Agreement. This Earn Agreement forms an integral part of the User Agreement that applies to your Earn Account.
Unless otherwise stated, the definitions in this Earn Agreement have the same meaning as in the User Agreement. In the event of any conflict between this Earn Agreement and the User Agreement with respect to the Yield Service, the terms of this Earn Agreement shall prevail.
2. Use of the Yield Service
BLOX reserves the right at any time to suspend and terminate access to the Earn Account in accordance with Article 21 of the User Agreement.
3. The Returns Service
3.1. Earn
BLOX facilitates the Yield Service. With this service, users with an Earn Account can generate returns on the crypto assets made available to BLOX Earn. Your crypto assets are transferred from Stichting BLOX Custody to BLOX Earn on the basis of this Earn agreement. For these crypto assets made available, you will receive the compensation communicated to you via the BLOX environment.
If you want to sell the crypto assets you have made available to BLOX Earn, you instruct BLOX Earn, by initiating a sell transaction via the BLOX Environment, to transfer the crypto assets back from BLOX Earn to Stichting BLOX Custody. Article 8.4 of the User Agreement applies to the transfer of your crypto assets to Stichting BLOX Custody and to the temporary safekeeping and management of these crypto assets performed by Stichting BLOX Custody on your behalf.
3.2. Crypto assets made available
As a GGebruiker with an Earn Account, you agree that your crypto assets will be lent to BLOX Earn. BLOX Earn will hold part of your crypto assets made available in the custody and management of Stichting BLOX Custody to meet the liquidity needs of GGebruikers. Not all of your crypto assets are used to generate returns through BLOX Earn. This does not affect the returns agreed between you and BLOX Earn via BLOX.
3.2.1. Earn via BLOX Earn
BLOX Earn lends the crypto assets you make available and is at all times your counterparty. BLOX Earn is obliged, at your request, to return the same amount and type of crypto assets to Stichting BLOX Custody as the crypto assets you from time to time lend to BLOX Earn under the Yield Service. In addition, BLOX Earn has the obligation to pay out the agreed yield on a weekly basis for as long as this agreement lasts.
The crypto assets made available are not held or managed in Stichting BLOX Custody, except for the portion reserved by BLOX Earn for users’ liquidity needs. This means that you have a claim (in the form of a right to delivery) against BLOX Earn.
3.2.2. Activities of BLOX Earn
BLOX Earn aims to generate a higher return on the crypto assets you have made available to BLOX Earn than was agreed with you. To achieve this, BLOX Earn may deploy the crypto assets you have provided for staking or on-lending. It has been agreed between BLOX Earn and BLOX that the crypto assets you have provided will only be used for these purposes.
3.2.3. Risk management framework
There are risks associated with making cryptoassets available under this Earn Agreement. The activities of BLOX Earn, including staking and on-lending, are not without risk. If BLOX Earn makes your cryptoassets available to a third party through on-lending, there is a risk that this third party will not be able to fulfill its return obligation. As a result, BLOX Earn may lose the cryptoassets you have lent. This may mean that BLOX Earn is unable to pay your yield and/or return all or part of the cryptoassets you have lent. Therefore, you may lose some or all of the cryptoassets you have lent. If you do not (no longer) wish to bear these risks, you can opt for a Custody Account in accordance with Article 5 of the User Agreement.
To manage this and any other risks, BLOX Earn implements a comprehensive risk management framework. This framework seeks to limit the risks associated with the Yield Service as much as possible. For example, BLOX Earn assesses the creditworthiness of third parties, requires third parties to provide collateral in the event of on-lending, monitors for early signs of default or bankruptcy, maintains a diversified investment policy, requires staking validators to hold slashing insurance, and establishes procedures to recover your crypto assets in the event of default or bankruptcy.
It is strongly recommended to carefully read the risk disclaimer pertaining to the Yield Service. By accepting the User Agreement, the Earn Agreement, and the risk disclaimer, you confirm that you have read and understood these documents and accept the risks associated with the Yield Service.
3.2.4. Rewards for lending your crypto assets
Users with an Earn Account are entitled to a weekly reward for the crypto assets made available to BLOX Earn under this Earn Agreement. You receive these rewards in your vault in the BLOX Environment. BLOX facilitates the crediting of this reward paid out by BLOX Earn to your Account in the BLOX Environment. That means that you immediately re-lend the received reward to BLOX Earn because all your crypto assets are lent out.
The rewards vary by crypto asset and may change from time to time due to changes in market conditions. The rewards associated with the crypto assets you have made available are published by BLOX on the designated information pages on the website and in the BLOX application. BLOX reviews at least every quarter whether the reward agreed with you per crypto asset should be adjusted as a result of changes in market conditions. If the yield that BLOX Earn receives is higher than the yield agreed with you, the difference between BLOX Earn and BLOX will be shared. Depending on market conditions, this may amount to up to 80 percent of the annual yield achieved.
Changes (both positive and negative) in your rewards will be actively communicated to you in advance. This means that if you do not agree with your new yield, you can choose a Custody Account in accordance with Article 5 of the User Agreement.
3.2.5. No restrictions in the Crypto Asset Services
To meet your daily liquidity needs, BLOX Earn returns part of the crypto assets you have made available to BLOX Earn under this Earn Agreement to Stichting BLOX Custody. That means you can always make use of the full range of services provided by BLOX.
It is important to know that BLOX Earn does not provide crypto asset services to you within the meaning of MiCAR. That is done by BLOX. BLOX Earn is only your counterparty as borrower under this Earn Agreement. All communication and administration relating to this Earn Agreement take place exclusively between you and BLOX in your Account via the BLOX application.
3.2.6. Costs and rewards based on the Yield Service
The returns generated by BLOX Earn are, in principle, used to pay out the rewards for the crypto assets you have provided. If the return exceeds the reward agreed with you, the difference is split between BLOX Earn and BLOX. BLOX Earn uses these returns, among other things, to cover the operational costs incurred as a result of its risk management framework. BLOX is entitled to a fee for the costs incurred as a result of facilitating the Yield Service. For more information about these (implicit) costs, BLOX refers to its published pricing policy on the website and in the BLOX app.
3.2.7. Termination of the Yield Service
The Yield Service is offered without a notice period. You can sell all crypto assets lent via this service to BLOX Earn at any time. You also have the option at any time to change your account type to a Custody Account or terminate the User Agreement. Both actions automatically terminate this Earn Agreement with BLOX Earn and the offering of the Yield Service.
BLOX Earn may terminate the Yield Service at any time. In principle, BLOX Earn will inform you of this prior to termination and observe a 30-day notice period. If there are exceptional circumstances, BLOX Earn may terminate the Earn Agreement without prior notice.
For the avoidance of doubt: termination of the Yield Service does not necessarily affect the continuation of the other services that BLOX offers you. If BLOX terminates the User Agreement and/or the Account, the Yield Service automatically ends as well.