Documentation
Legal
1. Introduction
This crypto-asset white paper has not been approved by any competent authority in any Member State of the European Union (“EU”). KyrosDAO LLC (the “Issuer”), the issuer of the crypto-asset KYROS is solely responsible for the content of this crypto-asset white paper.
The crypto-asset referred to in this white paper may lose its value in part or in full, may not always be transferable and may not be liquid. Participation in the Kyros ecosystem and acquisition of KYROS tokens involve significant risks, and potential investors may lose all or part of their investment.
The crypto-asset referred to in this white paper is not covered by the investor compensation schemes under Directive 97/9/EC of the European Parliament and of the Council.
The crypto-asset referred to in this white paper is not covered by the deposit guarantee schemes under Directive 2014/49/EU of the European Parliament and of the Council.
No public offering of this crypto-asset has been made by the Issuer in the European Union or elsewhere. This white paper has been prepared for the purpose of transparency. This document does not constitute an offer or solicitation to purchase financial instruments. Any such offer or solicitation may only be made by means of a prospectus or other offer documents in accordance with applicable national law.
This crypto-asset white paper does not constitute a prospectus as referred to in Regulation (EU) 2017/1129 of the European Parliament and of the Council, or any other offer document pursuant to Union or national law.
The Issuer certifies that, to the best of its knowledge, the information contained in this white paper is complete, fair, clear, and not misleading. This document is for informational purposes only and does not constitute legal, financial, tax, or investment advice. Persons considering participation should consult independent professional advisors regarding the suitability of KYROS for their circumstances
2. Characteristics of the crypto-asset
The Kyros protocol (the “Protocol”) operates as a decentralized autonomous organization (“DAO”), KyrosDAO LLC, leveraging futarchy via MetaDAO for governance decisions, including control over DAO funds and the KYROS mint authority.
KYROS is the governance token of the Protocol, an SPL-standard token on the Solana blockchain, designed to empower community management of Protocol aspects and future growth through. The token enables holders to participate in governance decisions related to DAO reserves and minting, but does not provide economic rights such as interest, yield, or claims on underlying assets. KYROS does not represent ownership in any legal entity, nor does it confer rights to dividends, profits, or redemption. The Issuer is not currently authorized as a credit institution, electronic money institution, or crypto-asset service provider (“CASP”) under EU Regulation (EU) 2023/1114 (“MiCA”).
There are no underlying assets securing KYROS. Rather, it functions as a utility and governance token for Protocol interactions, including staking to receive kyKYROS for restaking rewards. Holders of KYROS are entitled to participate in governance processes through futarchy markets on MetaDAO, influencing decisions on Protocol development, treasury allocation and mint authority. Holders have no rights to financial returns, redemption, or liquidation from the Issuer. Future community rewards and liquidity provisions may involve additional terms for eligibility, such as Protocol contribution metrics, but these do not create enforceable claims against the Issuer. The Issuer reserves the right to modify Protocol terms via governance, potentially affecting token utility.
3. Risks
3.1 Issuer-Related Risks
The Issuer is not regulated in the EU and is not subject to EU investor protection regimes. As a Marshall Islands Limited Liability Company, it is subject to Marshall Islands law but may not offer the same degree of transparency or legal recourse available in EU jurisdictions. There are no financial obligations, ongoing business activities, or legal commitments tied to the token.
Regulatory Compliance Risks: Issuers of crypto assets must adhere to a wide array of regulatory requirements across different jurisdictions. Non-compliance can result in fines, sanctions, or the prohibition of the crypto asset offering, impacting its viability and market acceptance.
Operational Risks: These include risks related to the Issuer's internal processes, personnel, and technologies, which can affect their ability to manage crypto-asset operations effectively. Failures in operational integrity might lead to disruptions, financial losses, or reputational damage.
Financial Risks: Issuers face financial risks, including liquidity, credit, and market risks. These could affect the Issuer's ability to continue operations, meet obligations, or sustain the stability or value of the crypto-asset.
Legal Risks: Legal uncertainties, potential lawsuits, or adverse legal rulings can pose significant risks to issuers. Legal challenges may affect the legality, usability, or value of a crypto-asset.
Reputational Risks: Negative publicity, whether due to operational failures, security breaches, or association with illicit activities, can damage an Issuer's reputation and, by extension, the value and acceptance of the crypto-asset.
Technology Management Risks: Inadequate management of technological updates or failure to keep pace with technological advancements can render a crypto-asset, or the project it is connected to, obsolete or vulnerable to security risks.
Dependency on Key Individuals: The success of some crypto projects can be highly dependent on the expertise and leadership of key individuals. Loss or changes in the project’s leadership can lead to disruptions, loss of trust, or project failure.
Counterparty Risks: Risks associated with the Issuer's partners, suppliers, or collaborators, including the potential for non-fulfillment of obligations that can affect the Issuer’s operations.
3.2 Crypto-Assets-Related Risks
KYROS is a speculative digital asset with no intrinsic value or utility. Key risks include extreme price volatility, potential illiquidity, vulnerability to market manipulation, and reliance on third-party infrastructure (e.g., decentralised exchanges). There are no backing assets, redemption rights, or technical safeguards protecting token holders. Token value is driven by narrative and market sentiment alone.
Market Risk: Crypto-assets are notoriously volatile, with prices subject to significant fluctuations due to market sentiment, regulatory news, technological advancements, and macroeconomic factors.
Liquidity Risk: Some crypto-assets may suffer from low liquidity, making it difficult to buy or sell large amounts without affecting the market price, which could lead to significant losses, especially in fast-moving market conditions.
Custodial Risk: Risks associated with the theft of crypto-assets from exchanges or wallets, loss of private keys, or failure of custodial services, which can result in the irreversible loss of crypto-assets.
Smart Contract Risk: Crypto-assets might be connected to or be issued with the help of smart contracts. Smart contracts are code running on a blockchain, executing the programmed functions automatically if the defined conditions are fulfilled. Bugs or vulnerabilities in smart contract code can expose blockchain users to potential hacks and exploits. Any flaw in the code can lead to unintended consequences, such as the loss of crypto-assets or unauthorized access to sensitive data.
Regulatory and Tax Risk: Changes in the regulatory environment for crypto-assets (such as consumer protection, taxation, and anti-money laundering requirements) could affect the use, value, or legality of crypto-assets in a given jurisdiction.
Counterparty Risk: In cases where crypto-assets are used in contractual agreements or held on exchanges, there is a risk that the counterparty may fail to fulfill their obligations due to insolvency, compliance issues, or fraud, resulting in loss of crypto-assets.
Reputational Risk: Association with illicit activities, high-profile thefts, or technological failures can damage the reputation of certain crypto-assets, impacting user trust and market value.
3.3 Project Implementation-Related Risks
There is no formal project implementation roadmap associated with KYROS. It is not tied to future deliverables, milestones, or product developments. Any perceived alignment with the KYROS ecosystem is informal and non-binding. Risks include the discontinuation of community interest, lack of Issuer engagement, and the failure of associated brand projects to maintain relevance or visibility.
3.4 Technology-Related Risks
KYROS is built on the Solana blockchain network and [Jito]. Risks include smart contract vulnerabilities, chain outages or failures, and reliance on third-party infrastructure. Although no upgradeable logic exists, external exploits or changes in base-layer protocol behaviour may affect token availability, functionality, or security.
Private Key Management Risk and Loss of Access to Crypto-Assets: The security of crypto-assets heavily relies on the management of private keys, which are used to access and control the crypto-assets (e.g. initiate transactions). Poor management practices, loss, or theft of private keys, or respective credentials, can lead to irreversible loss of access to crypto-assets.
Settlement and Transaction Finality: By design, a blockchain’s settlement is probabilistic, meaning there is no absolute guaranteed finality for a transaction. There remains a theoretical risk that a transaction could be reversed or concurring versions of the ledger could persist due to exceptional circumstances such as forks or consensus errors. The risk diminishes as more blocks are added, making it increasingly secure over time. Under normal circumstances, however, once a transaction is confirmed, it cannot be reversed or cancelled. Crypto-assets sent to a wrong address cannot be retrieved, resulting in the loss of the sent crypto assets.
Scaling Limitations and Transaction Fees: As the number of users and transactions grows, a blockchain network may face scaling challenges. This could lead to increased transaction fees and slower transaction processing times, affecting usability and costs.
Economic Self-sufficiency and Operational Parameters: A blockchain network might not reach the critical mass in transaction volume necessary to sustain self-sufficiency and remain economically viable to incentivize block production. In failing to achieve such an inflection point, a network might lose its relevance, become insecure, or result in changes to the protocol’s operational parameters, such as the monetary policy, fee structure and consensus rewards, governance model, or technical specifications such as block size or intervals.
Network Attacks and Cyber Security Risks: Blockchain networks can be vulnerable to a variety of cyber-attacks, including 51% attacks, where an attacker gains control of the majority of the network's consensus, Sybil attacks, or DDoS attacks. These can disrupt the network’s operations and compromise data integrity, affecting its security and reliability.
Consensus Failures or Forks: Faults in the consensus mechanism can lead to forks, where multiple versions of the ledger coexist, or network halts, potentially destabilizing the network and reducing trust among participants.
Bugs in the Blockchain’s Core Code: Even with thorough testing, there is always a risk that unknown bugs may exist in a blockchain protocol, which could be exploited to disrupt network operations or manipulate account balances. Continuous code review, audit trails, and having a bug bounty program are essential to identify and rectify such vulnerabilities promptly.
Smart Contract Security Risk: Smart contracts are code running on a blockchain, executing the programmed functions automatically if the defined conditions are fulfilled. Bugs or vulnerabilities in smart contract code can expose blockchain networks to potential hacks and exploits. Any flaw in the code can lead to unintended consequences, such as the loss of crypto-assets or unauthorized access to sensitive data.
Dependency on Underlying Technology: Blockchain technology relies on underlying infrastructures, such as specific hardware or network connectivity, which may themselves be vulnerable to attacks, outages, or other interferences.
Risk of Technological Disruption: Technological advancements or the emergence of new technology could impact blockchain systems, or components used in it, by making them insecure or obsolete (e.g. quantum computing breaking encryption paradigms). This could lead to theft or loss of crypto-assets or compromise data integrity on the network.
Governance Risk: Governance in blockchain technology encompasses the mechanisms for making decisions about network changes and protocol upgrades. Faulty governance models can lead to ineffective decision-making, slow responses to issues, and potential network forks, undermining stability and integrity. Moreover, there is a risk of disproportionate influence by a group of stakeholders, leading to centralized power and decisions that may not align with the broader public’s interests.
Anonymity and Privacy Risk: The inherent transparency and immutability of blockchain technology can pose risks to user anonymity and privacy. Since all transactions are recorded on a public ledger, there is potential for sensitive data to be exposed. The possibility for the public to link certain transactions to a specific address might expose it to phishing attacks, fraud, or other malicious activities.
Data Corruption: Corruption of blockchain data, whether through software bugs, human error, or malicious tampering, can undermine the reliability and accuracy of the system.
Third-Party Risks: Crypto-assets often rely on third-party services such as exchanges and wallet providers for trading and storage. These platforms can be susceptible to security breaches, operational failures, and regulatory non-compliance, which can lead to the loss or theft of crypto-assets.
3.5 Mitigation Measures
No formal mitigation measures are in place. The KYROS token is immutable and has no administrative privileges - security relies on the robustness of the Solana blockchain network. Holders are advised to take precautions such as using hardware wallets, avoiding phishing scams, and understanding the risks of interacting with decentralised platforms.