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TERMS AND CONDITIONS OF STAKING

 

Last Revised: September 19, 2024

 

THIS DOCUMENT CONTAINS IMPORTANT INFORMATION REGARDING RISKS, YOUR RIGHTS AND OBLIGATIONS, AS WELL AS CONDITIONS, LIMITATIONS, AND EXCLUSIONS THAT MAY IMPACT YOUR RIGHTS, INCLUDING AS TO HOW DISPUTES ARE RESOLVED. PLEASE READ IT CAREFULLY.

 

1. INTRODUCTION

 

1.1 These Staking Terms set out the terms and conditions by which you may voluntarily stake esXAI Tokens and Sentry Keys on the Xai Network. They form an integral part of the Terms of Use agreement that governs your use of the Website and our Services.

 

1.2 It is crucial that you read these Staking Terms carefully, along with the Terms of Use. Together they constitute a binding legal agreement between you and the Foundation. If you do not agree with any part of these Staking Terms or the Terms of Use, you should not participate in Staking.

 

1.3 By engaging in Staking on the Xai Network, you acknowledge that you have read, understood and agree to be bound by these Staking Terms, as well as the Terms of Use, including any future modifications that may be made. To the extent you own a Sentry Key, you further acknowledge and and agree that you have read, understood and agree to be bound by the Sentry Node Software Agreement.

 

1.4 The Foundation reserves the right to update or modify these Staking Terms at any time on the conditions set out in the Terms of Use. Your continued Staking of esXAI Tokens and/or Sentry Keys following any such changes constitutes your acceptance of any updated, modified or removed terms.

 

1.5 Unless otherwise set out below, all capitalised terms, names and definitions contained within these Staking Terms shall be understood and interpreted in accordance with the definitions set forth in the Foundation's Terms of Use. If a definition or term is defined both in these Staking Terms and in the Terms of Use, the meaning defined in the Staking Terms shall prevail insofar as the definition or term applies to Staking.

 

2. DEFINITIONS

 

2.1 As used throughout these Terms, the following terms have the following meanings:

 

  • "Arbitrum" means the Layer 2 (L2) scaling sidechain to Ethereum denoted by the letters ARB, including but not limited to Arbitrum One and Arbitrum Nova.

  • "Breakdown" means the allocation of Net Network Rewards among Sentry Key Holders, esXAI holders and the Pool Owner. A Breakdown is usually expressed as a percentage value.

  • "Challenge" means the hourly network challenge that invites assertions from operational Sentry Nodes that are verified with Sentry Keys.

  • "Cooldown Period" means a fixed period of time before which a certain action may take place with respect to a Staking Pool.

  • "Digital Wallet" means an Ethereum wallet that enables you to store, trade and use ether (ETH), and is compatible with Arbitrum.

  • "esXAI" or "esXAI"means the non-transferable utility Token of the XAI network.

  • "Ethereum" means the layer-1 blockchain denoted by the letters ETH.

  • "Emissions Schedule" means the emissions schedule of the Xai Blockchain.

  • "Foundation", "we", "us," or "our"means the XAI Foundation, a foundation company incorporated in the Cayman Islands, together with our personnel, affiliates and related companies.

  • "Genesis Key" means a Pool Owner's sole or last remaining Sentry Key in a Staking Pool.

  • "Lock Period" means any period of time during which esXAi is restricted from Redemption, as further explained in section 9.

  • "Network Reward" means the total quantity of new esXAI Tokens which are emitted at the time of each Challenge in accordance with the Emissions Schedule.

  • "Net Network Reward" means a pro-rata share of the Network Reward collected by or on behalf of a Sentry Key less Slashing Penalties, if any

  • "Participate" or "Participating"means to submit a proof on the XAI Blockchain and to collect Net Network Reward from the Referee. Each Sentry Key has a baseline 1% chance of Participating.

  • "Pool Contract" means a Smart Contract executed by a Digital Wallet on Arbitrum in respect of a decision to stake esXAI or Sentry keys to a Staking Pool associated with the Xai Network.

  • "Pool Owner" means a Sentry Key Owner that creates and oversees a Staking Pool

  • "Redeem" or "Redemption"means to burn esXAI or XAI in your custody at the conclusion of a Lock Period and to receive an equivalent number of XAI or esXAI less any Redemption Penalties.

  • "Redemption Interface" means any software or application that may be used to facilitate a Redemption

  • "Redemption Penalty" means the penalty programmatically imposed on a user that Redeems esXAI within a Lock Period.

  • "Redemption Request Date" means the date on which a user submits a request to redeem esXAi for XAI.

  • "Referee" means the Referee Smart Contract that is responsible for managing and validating assertions made by Sentry Nodes with respect to a Challenge.

  • "Reward Multiplier" means the adjustment to the 1% baseline probability that a Sentry Key will collect a Net Network Reward from Participating in a Challenge.

  • "Reward Threshold" means the threshold number of esXai which must be staked to a Staking Pool in order to elevate the Reward Multiplier of the Sentry Keys within that Staking Pool.

  • "Sentry Key" means the unique non-fungible Key Token that is required to license and operate a Sentry Node on the XAI network. Each Sentry Key has a baseline 1% chance of Participating in a Challenge.

  • "Sentry Key Owner" means the owner of a Sentry Key who has accepted the Sentry Node Software Agreement and passed KYC.

  • "Sentry Node" means any observation node that submits a proof to the Referee on behalf of one or more Sentry Keys.

  • "Slashing" or "Slashing Penalty"means any penalty assumed by a Sentry Node, Sentry Key or Staking Pool for its unavailability or slow, incorrect or malicious performance on the Xai Network.

  • "Smart Contract" means a self-executing digital contract on a blockchain.

  • "Staking" or to "Stake"means to commit esXAI and/or Sentry Key(s) in your custody to a Pool Contract on Arbitrum. All Sentry Key(s) shall remain in your wallet. All esXAI esXAI will be held by the Pool Contract for the duration of your Stake.

  • "Staking Pool" or "Pool"means a group of Sentry keys and esXai staked to a Pool Contract in order to achieve a Reward Tier for the Sentry Keys within that group.

  • "Staking Terms" means these Terms and Conditions of Staking, as may be amended from time to time.

  • "Token" means any digital representation of value, whether or not that digital representation can be in any way digitally traded, transferred, used for payment or invested.

  • "Unstake" means to withdraw esXAI in your custody from a Staking Pool Contract.

  • "XAI" or "XAI Token"means the tradeable and transferable gas fee Token of the XAI Network, operating on both Arbitrum (L2) and the Xai Blockchain (L3).

  • "Xai Blockchain" means the AnyTrust Layer 3 (L3) blockchain overseen by the XAI Foundation built on Arbitrum Nitro and operating as an Arbitrum Orbit Chain.

  • "Xai Community" means the Xai Blockchain, and all associated licenses, protocols, processes, programs, services, software, Smart Contracts and Tokens (and any of them, a "Component").

  • "Xai Foundation" means the Cayman Islands foundation company serving as the custodian of the XAI Network.References to the word "include" or "including" (or any similar term) are not to be construed as implying any limitation, and general words introduced by the word "other" (or any similar term) shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things.

 

3. ELIGIBILITY AND PARTICIPATION

 

3.1 To be eligible to Stake esXAI or Sentry Keys within the Xai Ecosystem, you must satisfy the eligibility requirements set out in the Terms of Use, including with respect to the exclusion of U.S. Persons, Sanctioned Persons and the Risk Assessment Framework. Additionally, you must satisfy the following criteria:

 

(a) You must agree to and accept these Staking Terms, and to review them regularly so as to remain informed of any changes or modifications made.

 

(b) You must reside in a jurisdiction where participation in the Staking of Tokens is not prohibited or restricted by any applicable laws, regulations or sanctions.

 

(c) You must hold legal title to your esXAI and Sentry Keys and have the right to use and dispose of them as you see fit.

 

(d) You must possess an active and valid Digital Wallet, capable of supporting Staking and must meet and adhere to the conditions set out in Section 4 of these Staking Terms.

 

(e) You must agree to comply with all laws, regulations and guidelines applicable to you which relate to the Staking of Tokens, including but not limited to tax obligations and reporting requirements as the case may be.

 

(f) You must acknowledge and agree that you have sufficient knowledge of digital assets, blockchain technology, Staking and the Xai Ecosystem to understand the risks associated with Staking esXAI and Sentry Keys, including the risks outlined in Section 10 of these Staking Terms.

 

(g) You must ensure that you have access to, and control of, the technology that may be necessary to participate in Staking safely and securely (including hardware, software and internet connectivity, as the case may be).

 

4. CONNECTING A DIGITAL WALLET

 

4.1 In order to stake esXAI or Sentry Keys to the Xai Network, you must connect a Digital Wallet capable of supporting the Tokens. We have no access to, nor custody of, your Digital Wallets and you are solely responsible for the security and management of your Digital Wallets, including any private keys. We have no ability to help you access or recover your private keys and/or seed phrases for your Wallets. You are solely responsible for maintaining the confidentiality of your private keys, and for any transactions signed with your private keys. Any loss of access to your wallet due to lost, stolen or compromised keys (or for any other reason) will result in the permanent loss of any staked esXAI or Sentry Keys, for which we bear no responsibility.

 

4.2 The staking of esXAi and Sentry Keys to the Xai Network takes place within your connected Digital Wallet. You are solely responsibly for verifying all Staking that takes place from your Digital Wallet and for ensuring that such staking is securely and correctly executed. The Foundation will not be liable for any disputes or losses arising thereon.

 

4.3 If you Stake esXAi or Sentry Keys to the Xai Network, you acknowledge and agree that you are engaging directly with a Smart Contract and that any such Staking is not provided by us on your behalf. You further acknowledge and agree that:

 

(a) We do not and will not at any time take custody of any Tokens on your behalf, including in respect of any esXAI or XAI staked to a Smart Contract.

 

(b) We do not and will not offer safekeeping services for any Tokens on your behalf. You are solely responsible for the safekeeping of any Tokens in your Digital Wallet , including any XAI, esXAi or Sentry Keys in your Digital Wallet.

 

(c) We do not and will not administer, manage, or otherwise have control over any Tokens on your behalf, including XAI, es XAI or Sentry Keys.

 

5. OPERATION OF STAKING POOLS

 

5.1 All Tokens that are staked to the Xai Network from the date of these Terms shall be staked in accordance with a Staking Pool Contract that is created and operated by a Pool Owner who has accepted the Sentry Node Software Agreement. A copy of Sentry Node Software Agreement is available on the Xai.Games website and you should review that agreement alongside these Staking Terms if you wish to purchase a Sentry Key and operate a Staking Pool. The Foundation does not create, host, operate or own any Staking Pools of its own and is not responsible for the operation or performance of any Staking Pools created by the owner of a Sentry Key.

 

5.2 If you have purchased a Sentry Key and wish to create a Staking Pool, you agree to do so in accordance with these Terms, and our procedures and policies as may be amended from time to time. You further agree that you shall comply with applicable laws, including as may be applicable to the distribution of any Tokens generated by your Staking Pool. The Foundation disclaims any liability for the creation and operation of Staking Pools on the Xai Network.

 

5.3 Staking Pools did not exist prior to the Effective Date of these terms, therefore if you staked esXAI or Sentry Keys to the Xai Network before that date, you did not stake to a Staking Pool. It is up to you whether you decide to maintain your independent stake or to join a Staking Pool; however you agree that it will not be possible hereafter to add any additional independent esXAi stake to the XAI Network. Any new stake of esXAI or Sentry Keys will need to be staked to Staking Pool Contract.

 

5.4 If you choose to stake esXAI or Sentry Keys to a Staking Pool, it is up to you to select which Staking Pool you wish to join. A list of all available pools may be available on our website at the following URL,https://app.xai.games/staking or any other URL as we see fit (as may be amended from time to time).

 

5.5 Although the Foundation agrees to use reasonable endeavours to provide you with a list of active Staking Pools that comply with our policies, all such information is provided "as is" and we make no representations, warranties or guarantees as to the accuracy, completeness or reliability of the information presented in respect of the Staking Pools or any other matters. We do not offer investment or financial advice of any kind and nothing on our website, in these Terms, or elsewhere should be construed as such. The performance of Staking Pools is subject to many variables, and past performance is not indicative of future results. We encourage you to conduct research and, if necessary, to consult with advisors before making any decisions regarding Staking Pools.

 

5.6 All Staking Pools are subject to the following common parameters (as may be amended from time to time). Please review these parameters carefully to ensure you understand and accept them before you join a Staking Pool:

 

(a) A Pool Owner is responsible for determining the Breakdown of any Staking Pool that it creates. Each Breakdown will be coded into the Staking Pool Contract, and we assume no responsibility for its fairness, reliability or completeness.

 

(b) Until further notice, the following limitations will apply to the Breakdown of Net Network Rewards within a Staking Pool:

 

(i) the allocation to Sentry Keys shall be capped at ninety-five (95) percent;

 

(ii) the allocation to staked esXAI shall be capped at eighty-five (85) percent;

 

(iii) the allocation to Pool Owners shall be capped at ten (10) percent.

 

In the interests of the Xai Network, we reserve the right to amend these limitations from to time. Please review our website for up-to-date information on any allocation limitations or contact us at the email address set out below.

 

(c) A Pool Owner is responsible for paying all gas fees associated with the operation of all Sentry Keys within a Staking Pool that it creates. If you are a Pool Owner, your Digital Wallet address will need to be funded with sufficient Arbitrum ETH to pay these gas fees, and you acknowledge and agree that you are liable for such fees. If you stake esXAI or Sentry Keys to a Staking Pool Contract, you accept that the Sentry Keys in that Staking Pool may not operate to Participate in a Challenge and collect Net Network Rewards if the Pool Owner has not maintained a sufficient amount of Arbitrum ETH in their Digital Wallet Address to cover the applicable gas fees, and that this may impact your ability to claim a distribution of Net Network Rewards in accordance with the Breakdown of your Pool. The Foundation is not responsible in any way for the operation of any Staking Pool.

 

(d) A Pool Owner may operate all of the Sentry Keys within their Staking Pool in unison, whether or not they own all Sentry Keys. A Pool Owner may also specify a "delegate" Digital Wallet Address to operate the Sentry Keys within their Staking Pool on their behalf. It is up to you to communicate with the Pool Owner regarding the operation of Sentry Keys, including any delegation as the case may be.

 

(e) The Xai Network caps the total amount of esXAI that may be staked on the Xai Network. This cap depends on the number of Sentry Keys in circulation. If the cap has been reached, you acknowledge and accept that you will not be able to stake esXAI on the Xai Network unless and until additional Sentry Keys enter circulation. Please review our website for up-to-date information on the current network caps or contact us at the email address set out below.

 

(f) The Xai Network caps the number of Sentry Keys and the amount of esXAI that may be staked to any given Staking Pool Contract. If the cap has been reached, you acknowledge and accept that you will not be able to stake your esXAI or Sentry Keys to a pool unless and until the number of stakers fall below the cap. Please review our website for up-to-date information on the current network caps or contact us at the email address set out below.

 

(g) Staking Pool Contracts may be upgraded in future as determined by the Xai Community or the Foundation acting on its behalf.

 

5.7 By accepting these terms, you acknowledge and accept that the staking of esXai or a Sentry Key to a Staking Pool does not grant to your benefit any right to any payment or reward of any kind, but merely a potential right to share a portion of the Net Network Rewards collected by a Participating Sentry Key (if any).

 

5.8 THE FOUNDATION DOES NOT GUARANTEE THAT A STAKING POOL YOU JOIN WILL OPERATE AS YOU INTEND OR MAKE ANY REPRESENTATION ABOUT THE PERFORMANCE OF ANY STAKING POOL. THE BREAKDOWN OF REWARDS AND THE OPERATION OF A STAKING POOL IS A MATTER FOR THE POOL OWNER AND NOT THE FOUNDATION. THE PARAMETERS OUTLINED ABOVE ARE DETERMINED BY THE UNDERLYING SMART CONTRACTS AND THE XAI NETWORK AND MAY FLUCTUATE OR OPERATE UNPREDICTABLY, INCLUDING BECAUSE THE UNDERLYING SERVICES ARE PERFORMED IMPROPERLY.

 

6. TIME COOLDOWNS APPLICABLE TO STAKING POOLS

 

6.1 To promote the proper and performant operation of Staking Pools, the following Cooldown Periods have been implemented in respect of all Staking Pools Contracts on the Xai Network. These Cooldown Periods are programmatically coded to each Staking Pool Contract. Please review these Cooldown Periods carefully and consider how they may apply to you. It is your sole responsibility to ensure you are adequately informed about the operation of Staking Pools:

 

(a) Changes to Breakdowns: If you are a Pool Owner, you are prohibited from initiating a change, modification or alteration to the Breakdown of Net Network Rewards applicable to a Staking Pool more than once in any fourteen (14) day period. In the event that such a change, modification or alternation is initiated by you, it shall take fourteen (14) days to take effect and any Net Network Rewards received by the Staking Pool during that fourteen (14) day period shall be distributed in accordance with the Breakdown in effect prior to the change, modification or alteration.

 

(b) Unstaking Cooldown Period: If you stake esXAi or Sentry Keys to a Staking Pool, you may submit a request to Unstake at any time, however the staked esXai or Sentry Keys shall be released only after a period of seven (7) days from the date of your request, (or a period of sixty (60) days in the case of a request to Unstake a Genesis Key). During the Unstaking Cooldown Period, Staked esXAi and Sentry Keys will continue to be Staked to the Staking Pool Contract. Upon its expiry, any esXAI or Sentry Keys associated with the Unstake request will be made available to be claimed and will continue to be staked until claimed.

 

6.2 There is no guarantee that the Cooldown Periods currently in operation will continue to apply in respect of future Staking Pool Contracts. The Xai Community or the Foundation on its behalf may determine that the Cooldown Periods shall be altered or modified in the interests of the XAI Network.

 

7. NETWORK REWARDS

 

7.1 The Participation of a Sentry Key in a Challenge is governed by a predefined, programmatic process integral to the Xai Network's protocol. This programmatic process is intended to create a fixed Network Reward at the time of each Challenge. The amount of each Network Reward is determined by the Emissions Schedule of the Xai Blockchain and shall be divided equally amongst all Participating Sentry Keys as a Net Network Reward.

 

For more information about Network Rewards and the operation of Sentry Nodes, please refer to the Sentry Node Software Agreement (https://xai.games/sentry-node-agreement).

 

7.2 By agreeing to these Staking Terms, you acknowledge and accept the following terms:

 

(a) The creation, division and distribution of Network Rewardsis a fully automated process, governed by the protocols of Arbitrum and the Xai Blockchain. The Foundation disclaims any responsibility or liability for its operation, performance and functionality.

 

(b) As with any technology, the automated process for distributing Network Rewards is subject to risks. These include but are not limited to, software bugs, errors in the smart contracts, network failures or unforeseen exploits. Such issues could potentially lead to delayed, diminished or failed distributions of Network Rewards. Further risks are outlined in Section 10.

 

(c) We make no guarantees or representations regarding the availability or amount of Network Rewards that may be generated by Challenges to the Xai Network. The ability of Sentry Keys – and as a result, Staking Pools – to collect Net Network Rewards is contingent upon numerous factors, including the reliability of the smart contracts, the performance of the Sentry Nodes, the operation of the Sentry Keys, network conditions and stability, adherence to protocols, the operation of protocols, and the functioning of the Xai ecosystem.

 

(d) The Foundation shall not be liabile for any loss, damage or inconvenience suffered by you as a result of any failure, delay, or error in the distribution of Network Rewards, regardless of the cause. You agree to indemnify and hold the Foundation harmless against any claims related to the non-receipt or insufficiency of Network Rewards (or part thereof).

 

(e) The Slashing Penalties imposed to Network Rewards, if any, are outside of the Foundation's control and you assume all risk associated with Slashing Penalties.

 

(f) By accepting these Staking Terms, you acknowledge and accept the inherent risks and limitations of the creation, division and distribution of Network Rewards by the Xai Network. The Foundation bears no responsibility for such risks and advises you to conduct your own due diligence before engaging in staking on the Xai Network.

 

7.3 THE FOUNDATION DOES NOT GUARANTEE THAT YOU WILL RECEIVE NET NETWORK REWARDS, OR ANY OTHER REWARDS. REWARDS ARE DETERMINED BY THE UNDERLYING SMART CONTRACTS AND THE XAI NETWORK AND MAY FLUCTUATE OR OPERATE UNPREDICTABLY, INCLUDING BECAUSE THE UNDERLYING SERVICES GENERATING REWARDS ARE PERFORMED IMPROPERLY.

 

8. EFFECT OF STAKING POOLS ON SENTRY KEY PARTICIPATION

 

8.1 At the time of a Challenge, the Referee Smart Contract determines the probability that any given Sentry Key will Participate in a Challenge and collect a Net Network Reward. At present, the Referee Contract makes this determination with reference to the following criteria:

 

(a) If the Sentry Key is staked to a Staking Pool which contains fewer than 30,000 esXAI, the Referee will assign a "Bronze" Reward Tier to the Sentry Key, and it will have a one percent (1%) probability of Participating in the Challenge. Bronze Tier is the default Tier for all Sentry Keys.

 

(b) If the Sentry Key is staked to a Staking Pool which contains between 30,000 and 1,999,999 esXAI, the Referee will assign a "Silver" Reward Tier to the Sentry Key, and it will have a one point five percent (1.5%) probability of Participating in the Challenge.

 

(c) If the Sentry Key is staked to a Staking Pool which contains between 2,000,000 and 3,999,999 esXAI, the Referee will assign a "Gold" Reward Tier to the Sentry Key, and it will have a two percent (2%) probability of Participating in the Challenge

 

(d) If the Sentry Key is staked to a Staking Pool which contains between 4,000,000 and 7,999,999 esXAI, the Referee will assign a "Platinum" Reward Tier to the Sentry Key, and it will have a three percent (3%) Probability of participating in the Challenge.

 

(e) If the Sentry Key is staked to a Staking Pool which contains 8,000,000 esXAI or more, the Referee will assign a "Diamond" Reward Tier to the Sentry Key, and it will have a six percent (6%) probability of Participating in the Challenge.

 

All quantities above are expressed in whole Tokens for ease of understanding only and expressly include any portion of a Token up to eighteen (18) decimal places.

 

8.2 We reserve the right to upgrade or amend the Reward Tiersin future, as determined by the Xai Community or the Foundation acting on its behalf.

 

8.3 Sentry Keys that are selected to Participate in a Challenge will collect a Net Network Reward only if their associated Sentry Node submits a proof. In the case of Staked Sentry Keys, the Net Network Reward shall be distributed to the applicable Staking Pool Contract (for distribution in accordance with the Pool's Breakdown). In the case of unstaked Sentry Keys, the Net Network Reward shall be distributed directly to the Digital Wallet of the Sentry Key holder. The distribution of Net Network Rewards will take place approximately one hour after the completion of the Challenge. We provide no guarantee of the proper and performant operation of this process which is programmatic and not controlled by us. You agree to release, indemnify and hold harmless the Foundation from any claims, actions, losses or damages relating to the distribution of Net Network Rewards or the failure to distribute Net Network Rewards. Staking is subject to the risks outlined in these Staking Terms including the risks described in Section 10.

 

9. REDEMPTION OF NETWORK REWARDS

 

9.1 All Network Rewards on the Xai Network are esXAI Tokens. esXAI cannot be traded or transferred and may only be redeemed from the Xai Network in accordance with the redemption process set out in this Section 9. Please review this section carefully to understand the implications of redeeming esXAI from the Xai Network.

 

9.2 If you hold esXAI, you are eligible to Redeem your Tokens for XAI during designated Lock Periods as follows: 15 days after the Redemption Request Date, 90 days after the Redemption Request Date and 180 days after the Redemption Request Date. To do so you must submit a Redemption request and pay any associated gas costs. You must also successfully complete our Know Your Customer (KYC) verification process, as may be amended from time to time. Redemption requests will not be processed until our KYC verification process is fully completed and approved. You acknowledge and accept that under no circumstances shall esXAI be immediately redeemable for XAI. During each of the designated Lock Periods, the following restrictions shall apply:

 

(a) 15 Day Redemptions: If you choose to Redeem XAI for esXAI fifteen (15) days after submitting a Redemption request, you acknowledge and accept that you will only be entitled to receive 0.25 Xai for every 1 esXai redeemed. You also acknowledge and agree that the XAI you are entitled to receive will be minted at the conclusion of the Lock Period and made available for you to claim. It is your responsibility to claim these Tokens. The remainder of the esXAI will be burnt as a Redemption Penalty.

 

(b) 90 Day Redemptions: If you choose to Redeem XAI for esXAI ninety (90) days after submitting a Redemption request, you acknowledge and accept that you will only be entitled to receive 0.625 Xai for every 1 esXai redeemed. You also acknowledge and agree that the XAI you are entitled to receive will be minted at the conclusion of the Lock Period and made available for you to claim. It is your responsibility to claim these Tokens. The remainder of the esXAI will be burnt as a Redemption Penalty.

 

(c) 180 Day Redemptions: If you choose to Redeem XAI for esXAI one hundred and eighty (180) days after submitting a Redemption request, you acknowledge and accept that you will be entitled to receive 1 Xai for every 1 esXai redeemed. You also acknowledge and agree that the XAI you are entitled to receive will be minted at the conclusion of the Lock Period and made available for you to claim. It is your responsibility to claim these Tokens. The redemption will not be subject to a Redemption Penalty

 

9.3 If you hold XAI, you are eligible to Redeem immediately for esXAI at a ratio of 1:1 without any Redemption Penalty or other restriction, but subject to availability. You acknowledge and agree that the esXAI you are entitled to receive will be minted immediately and made available for you to claim.

 

9.4 We may, from time to time, impose redemption limits, alter redemption penalties, or pause redemptions entirely, based on frequency or volume of requests, slashing penalties, or for whatever reason we deem appropriate in our discretion and in the interests of the XAI Ecosystem.

 

9.5 To initiate a redemption request, you may either submit a request through the the Redemption Interface or interact directly with the underlying Smart Contract on Arbitrum. We will endeavour to provide continuous, uninterrupted access to the Redemption Interface, however, downtime may occur due to issues such as technical failures, software bugs, or external disruptions, The Foundation cannot and does not guarantee uninterrupted access to the Redemption Interface. The Foundation shall not be liabile for any loss or damage resulting from your inability to use the Redemption Interface during periods of downtime. All Redemption requests are contingent on the limitations of the underlying Layer 1 and Layer 2 blockchains, including withdrawal queues, for which the Foundation is not responsible.

 

10. RISKS

 

10.1 The staking of Tokens on the XAI network involves a significant degree of risk. By staking esXAi or Sentry Keys, you acknowledge and accept that:

 

(a) The Xai Network is comprised of a number of smart contracts. Smart contracts are generally selfexecuting once deployed and make use of experimental cryptographic technology. Smart contracts may not function as intended, may contain flawed or imprecise code, may be exploited, may be difficult to change or remediate due to a lack of centralised control, and may be subject to as yet unknown risks. You acknowledge and accept that smart contract risks could affect adoption, continued use, or functioning of the Xai Network, as well as the utility and value of any staked esXAI or Sentry Keys

 

(b) The Xai Network is envisioned to be an open-source project with Network governance collectively controlled by the Community. However, at this time, the Foundation has control of certain multisignature wallets relating to the Network and its control of those wallets can enable certain upgrades and transactions. Under current plans, and over time, the Foundation will not have control over these wallets and the Network, and it will not be able to control the actions of the community of users. The gradual decentralisation of the XAI network brings inherent risks and may have unintended and adverse consequences.

 

(c) Transactions on the Xai Network may be subject to slashing conditions. There is no guarantee that you will view slashing rules or conditions as precise, objective, fair, or fairly applied, nor that any governance to mediate slashing events will be fair or impartial, if it exists at all. The application of certain slashing rules and conditions may be challenging and/or ambiguous and your Tokens may be partially or completely slashed despite your best efforts to validate transactions and respond to conditions as expected. When you choose to stake on the XAI network, you acknowledge and accept that these risks are external to the Foundation and beyond our control.

 

(d) The Xai Network relies on active engagement by users to function. The Foundation makes no assurance that the Network will generate enough interest and user engagement to be viable or continue to be viable. It is not possible at this time to evaluate whether sufficient users will participate in the Network and whether those users will sustainably and sufficiently engage with and use the Network for it to function as intended. Network users could mismanage, misuse, or misappropriate aspects of the Network or Token in a manner that is detrimental to you, the Network, and the Xai Community. This may be adverse to you or your staked esXAI or Sentry Keys.

 

(e) The network operates as an Arbitrum Orbit chain on Ethereum. Certain types of changes to Arbitrum or Ethereum could present significant or even existential risks to the Network that could make it difficult, costly, or impractical for the Xai Network to function as intended. Contagion risks could result in the substantial or total loss of any staked esXAI or Sentry Keys.

 

(f) The Network may be exploited to facilitate illegal activity including fraud, money laundering, gambling, tax evasion, sanctions evasion, and scams. This could negatively impact the development, growth, and utilization of the Network, including the value or uses of any Tokens thereon.

 

(g) Cyberattacks and security breaches of the Network, our Website, or our services, or those of third parties such as decentralized applications or crypto wallets that interact with the Network could cause you to lose staked esXAI or Sentry Keys or adversely impact the Network. The Network could be vulnerable in a variety of ways, including but not limited to, malware attacks, denial of service attacks, consensus-based attacks, Sybil attacks, smurfing and spoofing, governance attacks, exploitable code, or any number of other currently known or novel methods of exploit. Additionally, upgrades or changes to the Network, which may be proposed, coded, and/or implemented by parties other than the Foundation, could introduce new vulnerabilities or otherwise have unintended or malicious adverse effects. The Network and its associated smart contracts generally execute automatically when certain conditions are met and typically cannot be stopped or reversed, so any vulnerabilities that may arise can have significant adverse effects to the Network and any Tokens thereon.

 

(h) There are risks surrounding the ongoing development of regulatory frameworks governing blockchain technology all over the world, and as the blockchain, crypto, and web3 industry continues to grow, and regulatory scrutiny increase across jurisdictions over time. The Foundation and/or the Network and/or any Tokens may be found to be subject to certain laws or regulatory regimes that could adversely impact you, the Network, or any Tokens you hold. Additionally, laws or interpretations thereof may change and the Foundation or the Network or any Tokens may be subject to new or changed laws or regulations in the future. Uncertainty in how the legal and regulatory environment will develop could negatively impact the development, growth, and utilization of the Network and therefore the value or uses of any Tokens thereon.

 

(i) Cryptographic tokens and blockchain-based networks are new and relatively untested technologies. In addition to the mentioned risks, there may be other risks associated with Staking, including those which we cannot anticipate or have not specifically enumerated here. Such risks may further materialize as unanticipated variations or combinations of the risks discussed. Further, new risks may be created as the Network is developed (including by parties other than us) or third parties integrate our Tokens or the Network or into their products.

 

10.2 We bring the aforementioned risks to your attention for informational purposes only and any reliance you place on such information is strictly at your own risk. The Foundation expressly disclaims any liability for any direct, indirect, incidental, punitive, or consequential damages of any kind with respect to the use of this information, Staking Keys or the Xai Network generally.

 

11. INCORPORATION OF TERMS OF USE

 

11.1 By accepting these Staking Terms you acknowledge and accept that any and all terms and conditions of the Terms of Use, including but not limited to any agreements, acknowledgements, disclaimers, indemnifications, limitations, releases, representations and warranties, shall apply equally to these Staking Terms as if such terms and conditions are incorporated in full in this section of the Staking Terms. Please review the Terms of Use carefully, including the Arbitration Agreement contained therein.

 

12. ACKNOWLEDGEMENTS AND DISCLAIMERS

 

12.1 By accepting these Staking Terms, you acknowledge and agree that:

 

(a) The information provided in these Staking Terms does not constitute financial, investment, legal or tax advice. The decision to participate in staking involves risk and should be based on your own due diligence and assessment of risk. You may wish to consult appropriate third parties in making any Staking decisions. The Foundation, its affiliates and its partners accept no responsibility for any loss or damage that may arise directly or indirectly from any Staking decisions you make based on information contained within the these Staking Terms.

 

(b) The Foundation is not responsible in any way for any failure by the Xai Network to transfer rewards (including any risks of Slashing) or for the loss, destruction, or transfer of rewards to the incorrect wallet address.

 

(c) The Foundation does not guarantee uninterrupted or error-free operation of the Xai Network or that it will correct all defects or prevent third party disruptions or unauthorised third party access.

 

(d) Staking is not an investment and staking esXAI or Sentry Keys does not entitle you to any equity interest in the Xai Foundation, the Xai Network or to any other entity or asset whatsoever.

 

(e) You acknowledge and agree that, to the fullest extent permitted by applicable law, in no event shall the Foundation, any of our affiliates, nor any of the officers, directors and employees of the Foundation or our affiliates, be liable for any claim, damages or any other form of liability, whether in action or in tort, arising from or in connection with staking on the Xai Network. We further disclaim all liability arising from any reliance you placed on any materials we or our affiliates issue in relation to Staking.

 

13. SEVERABILITY

 

13.1 If any term, clause or provision of these Staking Terms is held invalid or unenforceable, it will be so held to the minimum extent applicable and required by law, and all other terms, clauses, waivers, warranties, representations and provisions of these Terms will remain valid and enforceable.

 

14. CONTACT

 

14.1 If you have any questions about these Staking Terms or otherwise need to contact us for any reason, you can reach us at: [email protected]