Risks Associated with Royal Song Tokens
Please read these Risks Associated with Royal Song Tokens very carefully, as they relate to your purchase, ownership, listing, sale, transfer and/or other disposition of Limited Digital Assets (“LDAs”), a type of nonfungible token (“Song Token”), that are purchased, listed or sold on any website, mobile application, web application, decentralized application, smart contract, API or other platform, application or service (collectively, the “Royal Platform”) offered by or associated with Royal Markets Inc., a Delaware corporation (“Royal”).
Royal Makes No Representations or Warranties
Royal makes no representations or warranties, express or implied, written or oral, made by or on behalf of Royal in connection therewith, including any representations or warranties of title, non-infringement, functionality, merchantability, usage, security, suitability or fitness for any particular purpose, workmanship or technical quality of any LDA or work, smart contract code, or software.
Further, Royal makes no representations or warranties regarding the value or performance of any LDA, the amount of royalties any LDA will accrue, if any, or the performance of any music underlying an LDA, including the amount a song or album may be streamed. All estimates, projections, or forecasts on the Royal Platform are for informational purposes only. Many factors, including but not limited to those discussed herein, could cause actual streaming results and royalty payouts to differ materially from any estimates contained on the Royal Platform.
Royal Does Not Provide Investment Advice
Royal does not provide any investment advice or make any investment recommendations to any persons, ever, and no communication through the Royal Platform or any other medium should be construed as such. All information provided on the Royal Platform is for information purposes only. You should not take, or refrain from taking, any action based on any information contained on the Royal Platform. To be clear: under no circumstances will the operation of all or any portion of the Royal Platform be deemed to create a relationship that includes the provision or tendering of advice.
The Purchase Price of Your LDA May Not be Fair and Royal Does Not Guarantee the Value of LDAs
The prices of digital assets are extremely volatile. You acknowledge and consent to the risk that the price of an LDA purchased on the Royal Platform may have been and/or will be influenced by activity outside of the control of Royal or the Royal Platform. For example, fluctuations in the price of other digital assets could materially and adversely affect the value of your LDAs, which may also be subject to significant price volatility. Further, you may be unable to sell your LDAs and there is no guarantee that the market for any LDA will be active and liquid or permit you to liquidate LDAs when desired or at favorable prices.
Digital assets could also be impacted by one or more regulatory inquiries, regulatory actions, or legislative policies (discussed further herein) which could impede or limit your ability to access or use your LDAs, the Royal Platform, or the blockchain networks on which LDAs are compatible, which may include, among others, Ethereum, Polygon, and Solana (“LDA Blockchain Networks”).
Royal does not represent, guarantee, or warrant the accuracy or fairness of the price of any LDA sold on the Royal Platform. You agree and acknowledge that Royal is not a fiduciary nor owes any duties to you, including the duty to ensure fair pricing of LDAs sold on the Royal Platform or to police user behavior on the Royal Platform.
You Acknowledge the Financial Risk of LDAs
Use of the Royal Platform, including the creating, buying, selling or trading LDAs, may carry financial risk. LDAs are, by their nature, highly experimental, risky, and volatile. Furthermore, transactions carried through the Royal Platform are irreversible and final. There are no refunds.
You acknowledge and agree that you will access and use the Royal Platform at your own risk. The risk of loss in acquiring digital assets can be substantial. You should, therefore, carefully consider whether creating, buying, or selling LDAs is suitable for you in light of your circumstances and financial resources. By using the Royal Platform, you represent that you have been, are, and will be solely responsible for making your own independent appraisal and investigations into the risks of a given transaction and the underlying LDAs. You represent that you have sufficient knowledge, market sophistication, professional advice, and experience to make your own evaluation of the merits and risks of any transaction conducted via the Royal Platform or any underlying LDA. You accept all consequences of using the Royal Platform, including the risk that you may lose access to your LDAs indefinitely. All transaction decisions are made solely by you. Royal accepts no responsibility whatsoever for your use of the Royal Platform for performing LDA transactions.
Royalties Associated with LDAs are Not Guaranteed
Royal cannot guarantee that owners of LDAs will receive royalty payments, and under no circumstance does Royal ever represent or guarantee that owners of LDAs will receive any particular royalty payment amount. Numerous factors could negatively impact your ability to receive a royalty payment in connection with your ownership of an applicable LDA, including, without limitation:
The music underlying your LDA may lose its record label and/or distributor and for a period of time, or in perpetuity, may not have any bona fide record label and/or distributor in place to distribute the music underlying your LDA.
An artist’s account with their record label and/or distributor may be or become unrecouped. If an artist is unrecouped, royalty payments may not be paid to the artist or LDA owners until the artist is recouped under their respective deal.
An artist’s record label and/or distributor may have the right to withhold an artist’s royalties if the record label and/or distributor receives a third-party claim that is related to any recording under the artist’s agreement. Further, if an artist is found to be infringing on a third party’s copyright (whether rightfully or wrongfully) or settles such a claim, the artist may lose a portion of their copyright (and corresponding income interest), which may have a corresponding impact on any royalty payments.
You Are Responsible for Your Own Taxes
You are responsible to pay any and all sales, use, value-added and other taxes, duties, and assessments now or hereafter claimed or imposed by any governmental authority, associated with your use of the Royal Platform (including, without limitation, any taxes that may become payable as the result of your ownership, purchase, transfer, sale, or creation of any LDAs). You are solely responsible for determining what, if any, taxes apply to your transactions through the Royal Platform. You acknowledge and agree that Royal is not responsible for determining the taxes that apply to such transactions.
Increases in Digital Asset Prices and Transaction Volume Has Attracted Tax Authority Attention
As the laws governing digital assets are still evolving, the tax treatment of digital assets in various jurisdictions is subject to change. As there is considerable uncertainty over the taxation of digital assets, Royal cannot guarantee that digital assets like your LDAs will not be subject to further taxation in the future, including but not limited to additional taxes and increased tax rate. These events could reduce the economic return and increase the holding costs of digital assets, which could materially and adversely affect your LDAs.
Artists Are Not Obligated to Promote Any LDA
Artists have no obligation to take any actions to promote any LDAs. The value of LDAs, and the royalties associated with them, if any, are determined by fan interest and by the streaming popularity of the music associated with the LDA based on algorithms created and utilized by streaming platforms such as Spotify and Apple Music. Royal cannot ensure and does not represent that any LDA will generate any amount of royalty payments, if any.
Royal Cannot Guarantee the Performance of Additional Benefits, Perks, or Experiences Associated with an LDA
The terms of certain LDAs may provide the holder of such LDAs with access to special or curated experiences or other benefits or perks (the “Additional Benefits”). You acknowledge that Royal cannot, and does not, make any guarantee as to the satisfaction or performance of the Additional Benefits associated with any LDA acquired via the Royal Platform and that there is a risk that the Additional Benefits associated with an LDA may not be fully performed or satisfied or performed or satisfied at all. The performance of many Additional Benefits is completely outside of Royal’s control.
The Royal Platform Does Not Store, Send, or Receive LDAs
The Royal Platform does not store, send, or receive LDAs. This is because LDAs exist only by virtue of the ownership record maintained on supporting LDA Blockchain Networks. Any transfer of LDAs occurs within the supporting LDA Blockchain Network and not on the Royal Platform. Transactions in LDAs (including to and from Royal digital wallets) may be irreversible, and, accordingly, losses due to fraudulent or accidental transactions may not be recoverable. Some transactions shall be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that you initiated the transaction.
Internet Based Assets Are Inherently Risky
There are risks associated with internet based assets, including but not limited to, the risk of hardware, software and internet connections, the risk of malicious software introduction, and the risk that third parties may obtain unauthorized access to information stored within your wallet. A significant disruption in internet connectivity could disrupt the networks’ operations until the disruption is resolved and could have an adverse effect on the value of your LDAs. In addition, blockchain-based networks have been subjected to a number of denial-of-service attacks, which led to temporary delays in transactions. It is possible that such an attack could adversely affect the Royal Platform and your LDAs, including their value. You accept and acknowledge that Royal will not be responsible for any communication failures, disruptions, errors, distortions or delays you may experience when using the Royal Platform or interacting with your LDAs, however caused.
Royal Is Not Responsible for Technical Errors on Any LDA Blockchain Network
ROYAL IS NOT RESPONSIBLE FOR LOSSES DUE TO BLOCKCHAINS OR ANY OTHER FEATURES OF ANY LDA BLOCKCHAIN NETWORK OR THE METAMASK ELECTRONIC WALLET OR ANY LDA BLOCKCHAIN NETWORK-COMPATIBLE BROWSER OR WALLET, INCLUDING BUT NOT LIMITED TO LATE REPORTS BY DEVELOPERS OR REPRESENTATIVES (OR NO REPORT AT ALL) OF ANY ISSUES WITH THE BLOCKCHAIN SUPPORTING THE APPLICABLE LDA BLOCKCHAIN NETWORK, INCLUDING FORKS, TECHNICAL NODE ISSUES, OR ANY OTHER ISSUES HAVING FUND LOSSES AS A RESULT.
Upgrades to a LDA Blockchain Network, a hard fork to such LDA Blockchain Network, or a change in how transactions are confirmed on such LDA Blockchain Network may have unintended, adverse effects on all blockchains using the ERC-20, ERC-721 or ERC-1155 standards, including the Royal Platform.
Your LDAs May be Subject to Malfunction or May Function in Unexpected or Unintended Ways
Your LDAs, and any network with which your LDAs are interacting may malfunction or may function in unexpected or unintended ways. This may be caused by your LDAs, other networks, or a number of other causes, some of which are unforeseeable. Any malfunction or unintended function could result in the complete loss of your LDAs.
Royal and Your LDAs May be Subject to Security Weaknesses, Hackers, and Theft
Hackers or other groups or organizations may attempt to interfere with Royal, your LDAs and/or your digital wallet in any number of ways, including denial of service attacks, Sybil attacks, spoofing, smurfing, malware attacks, or consensus-based attacks. There is a risk that your LDAs and the technology infrastructure may include security weaknesses or bugs, which may interfere with the use, or cause the complete loss, of your LDAs. Advances in cryptography may present risks to cryptocurrencies, digital tokens (including Native Tokens), LDA Blockchain Networks, your LDAs, and Royal’s technology infrastructure, which may result in the theft or complete loss of your LDAs.
You Acknowledge the Risk of Smart Contracts and Blockchain Technology, and Assume the Risk of Interacting with Smart Contracts and Blockchain Technology
Transactions on the Royal Platform, including but not limited to primary sales, secondary market sales, listings, offers, bids, acceptances, and other operations on the Royal Platform utilize experimental smart contract and blockchain technology, including non-fungible tokens, cryptocurrencies, consensus algorithms, and decentralized or peer-to-peer networks and systems. You acknowledge and agree that such technologies are experimental, speculative, and inherently risky. You acknowledge and agree that the Royal smart contracts may be subject to bugs, malfunctions, timing errors, hacking and theft, or changes to the protocol rules of LDA Blockchain Networks (i.e., "forks"), which can adversely affect the smart contracts and may expose you to a risk of total loss, forfeiture of your digital currency or LDAs, or lost opportunities to buy or sell LDAs. Royal assumes no liability or responsibility for any such smart contract or related failures, risks, or uncertainties.
Further, you hereby acknowledge and assume the risk of interacting with and participating in transactions on the Royal Platform and take full responsibility and liability for the outcome of any transaction you initiate, whether or not the smart contracts, the Royal Platform, or other participants on the Royal Platform behave as expected or intended. You hereby represent that you are knowledgeable, experienced and sophisticated in using blockchain technology, the Royal Platform, and in initiating LDA Blockchain Network-based transactions.
YOU FURTHER REPRESENT AND WARRANT THAT YOU UNDERSTAND AND ARE WILLING TO ACCEPT THE RISKS ASSOCIATED WITH CRYPTOGRAPHIC AND BLOCKCHAIN-BASED SYSTEMS SUCH AS THE SMART CONTRACTS, LDA BLOCKCHAIN NETWORKS, NON-FUNGIBLE TOKENS, AND THE INTERPLANETARY FILE SYSTEM AND THAT YOU HAVE A WORKING KNOWLEDGE OF DIGITAL ASSETS. SUCH SYSTEMS MAY HAVE VULNERABILITIES OR OTHER FAILURES, OR OTHER ABNORMAL BEHAVIOR. ROYAL IS NOT RESPONSIBLE FOR ANY ISSUES WITH SUCH SYSTEMS, INCLUDING FORKS, TECHNICAL NODE ISSUES OR ANY OTHER ISSUES AS A RESULT. YOU ACKNOWLEDGE THAT THE COST AND SPEED OF TRANSACTING WITH CRYPTOGRAPHIC AND BLOCKCHAIN-BASED SYSTEMS SUCH AS LDA BLOCKCHAIN NETWORKS ARE VARIABLE AND MAY INCREASE AT ANY TIME. YOU FURTHER ACKNOWLEDGE THAT ROYAL IS NOT RESPONSIBLE FOR ANY OF THESE VARIABLES OR RISKS AND CANNOT BE HELD LIABLE FOR ANY RESULTING LOSSES THAT YOU EXPERIENCE WHILE ACCESSING THE ROYAL PLATFORM. ACCORDINGLY, YOU UNDERSTAND AND AGREE TO ASSUME FULL RESPONSIBILITY FOR ALL OF THE RISKS OF ACCESSING AND USING AND INTERACTING WITH THE ROYAL PLATFORM.
ROYAL WILL NOT BE RESPONSIBLE OR LIABLE TO YOU FOR ANY LOSSES YOU INCUR AS THE RESULT OF YOUR USE OF ANY LDA BLOCKCHAIN NETWORK OR THE METAMASK ELECTRONIC WALLET OR ANY OTHER COMPATIBLE WALLET, INCLUDING BUT NOT LIMITED TO ANY LOSSES, DAMAGES, OR CLAIMS ARISING FROM: (A) USER ERROR, SUCH AS FORGOTTEN PASSWORDS OR INCORRECTLY CONSTRUED SMART CONTRACTS OR OTHER TRANSACTIONS; (B) SERVER FAILURE OR DATA LOSS; (C) CORRUPTED WALLET FILES; (D) UNAUTHORIZED ACCESS OR ACTIVITIES BY THIRD PARTIES, INCLUDING BUT NOT LIMITED TO THE USE OF VIRUSES, PHISHING, BRUTE-FORCING OR OTHER MEANS OF ATTACK AGAINST THE ROYAL PLATFORM, LDA BLOCKCHAIN NETWORKS, THE METAMASK ELECTRONIC WALLET OR OTHER LDA BLOCKCHAIN NETWORK-COMPATIBLE BROWSER OR WALLET.
A Valid Network Address is Required to Participate in the Distribution of LDAs, and You May Not Have the Skills Necessary to Secure LDAs or Collect Royalty Distributions Associated with LDAs
The LDAs will be delivered when and if an issuance on the applicable LDA Blockchain Network protocol occurs to a digital wallet address indicated by you at the time of purchase. The address you designate is the only address that will be allowed to claim LDAs at the time of distribution. If you lose access to the wallet address designated at the time of purchase, you may be unable to receive your LDAs. You will be required to claim LDAs in order to receive any royalty distributions. Royal will provide instructions to you about how to claim your LDAs prior to any royalties being distributed. If your are unable to follow those instructions, you may be unable to claim such royalty distributions.
Purchasing LDAs may require technical skill beyond what you possess. Securing or trading your LDAs or collecting royalty distributions relating to the LDAs requires working knowledge of blockchain technology, blockchain assets and their attendant systems and processes.
Royal Is Not Responsible for Your Digital Wallet on the Royal Platform
For certain qualified users of the Royal Platform, Royal may offer digital wallets or other custodial solutions, hosted by a third-party wallet provider, for such qualified users’ LDAs. Royal does not have custody or control over such wallets. You are solely responsible for the security of your Royal digital wallet, and any LDAs held in such Royal digital wallet. ROYAL WILL NOT BE RESPONSIBLE OR LIABLE FOR ANY LOSSES YOU INCUR AS A RESULT OF YOUR USE OF YOUR ROYAL DIGITAL WALLET, INCLUDING BUT NOT LIMITED TO ANY LOSSES, DAMAGES OR CLAIMS ARISING FROM (I) USER ERROR, SUCH AS FORGOTTEN PASSWORDS OR INCORRECTLY CONSTRUED SMART CONTRACTS OR OTHER TRANSACTIONS; (II) SERVER FAILURE OR DATA LOSS; (III) CORRUPTED WALLET FILES; OR (IV) UNAUTHORIZED ACCESS OR ACTIVITIES BY THIRD PARTIES, INCLUDING, BUT NOT LIMITED TO, THE USE OF VIRUSES, PHISHING, BRUTE-FORCING OR OTHER MEANS OF ATTACK AGAINST THE ROYAL PLATFORM, ANY ROYAL DIGITAL WALLET OR ANY LDA BLOCKCHAIN NETWORK.
There are Risks to Digital Wallets and Storing Private Keys
You may also create and maintain your own digital wallets, such as MetaMask, which may be used to hold your LDAs. Vulnerabilities or errors in the computer code operating digital wallets can, and have in the past, resulted in the permanent loss of any digital assets held in those wallets. Vulnerabilities and exploits may permit bad actors to irreversibly transfer assets out of the wallet. Similarly, code errors and poorly constructed smart contracts underlying the operation of digital wallets have in the past resulted in the ‘locking’ of wallets, freezing assets in place permanently. This may effectively destroy the value of your LDAs held in your wallets, and such errors may never be reversible, or the assets rendered irretrievable. Further, physical or digital records of the private keys corresponding to digital wallets that store your LDAs should be safeguarded by using physical secured storage or encrypted digital storage methods. Any loss or theft of such records and/or backup records would adversely affect your LDAs.
The Ledger Showing the Distribution of LDAs Will Be Publicly Available
The distributed ledger that will be used to record distributions of LDAs will be available to the public. The personal identity information necessary to associate a public key of an LDA with the owner may be maintained by Royal in a system that is not exposed to the public. Thus, distribution data with respect to LDAs can be viewed on any public blockchain explorer. Security breaches could result in theft of the information necessary to link personal identities with public keys, and the stolen information could be used to determine your complete LDA purchasing history.
Risk of USDC’s Value Diverging from USD
You understand that USDC is pegged to USD, although it trades independently of such peg across multiple trading venues. The Royal Platform assumes the value of USDC to be $1 and disregards the current trading price of USDC in such venues. If the price of USDC diverges from that of USD, the display of USD values on the site from the conversion of USDC will be incorrect. You acknowledge and understand that Royal is not responsible for the value of USDC or any deviation of value between USDC and USD, and cannot be held liable for any resulting losses due to such deviation.
Risk of Delayed or Incorrect Price Quotations
You understand that Royal utilizes asset price quotes from third parties for the calculation of USD value on the Royal Platform for certain assets, including ETH, MATIC, and USDC. Royal uses commercially reasonable efforts to keep such asset price quotes up to date, but such third parties are not controlled by Royal and Royal is not responsible for any losses caused by any price delays or errors in the asset price quotes, or from Royal’s use of such asset price quotes in its calculation and display of USD value, from such third parties.
Gas Fees Fluctuate and are Unpredictable
Certain transactions on the Royal Platform, including without limitation minting, tokenizing, bidding, listing, offering, purchasing, or confirming, are facilitated by smart contracts existing on LDA Blockchain Networks. Each LDA Blockchain Network generally requires the payment of a transaction fee (a “Gas Fee”) for every transaction that occurs on such LDA Blockchain Network, and thus such transaction occurring on the Royal Platform. If you initiate a transaction on an LDA Blockchain Network you may have to pay fees in the form of such LDA Blockchain Network’s native token (“Native Tokens”). These Gas Fees are paid to validate a transaction. The value of the Gas Fees change (often unpredictably), will vary from transaction to transaction, and is entirely outside of the control of Royal or the Royal Platform. Royal does not establish the amount of Gas Fees required to complete a transaction and there is no limit on the Gas Fees a transaction may need to complete in a timely manner.
You acknowledge that under no circumstances will a contract, agreement, sale, offer, bid, or other transaction on the Royal Platform be invalidated, revocable, retractable, or otherwise unenforceable on the basis that the Gas Fee for the given transaction was unknown, too high, or otherwise unacceptable to you. You also acknowledge and agree that gas is non-refundable under all circumstances.
Regulations Governing Blockchain Technologies, Tokens, and Other Digital Assets Are Uncertain
Regulation of blockchain technologies and digital assets is evolving, varies significantly among international, federal, state, and local jurisdictions, and is subject to significant uncertainty. Various legislative and executive bodies in the United States and in other countries may adopt laws, regulations, guidance, interpretations, or other actions which may severely impact the development, growth, adoption, and support of your LDAs. Such actions may materially and adversely impact the value of the currency in which your LDAs may be exchanged, the liquidity of your LDAs, the ability to access marketplaces or exchanges on which to trade your LDAs, and the structure, rights, and transferability of your LDAs.
Regulation of blockchain technologies and digital assets is also uncertain and subject to change in many foreign jurisdictions in which LDAs may be bought or sold. Foreign jurisdictions may adopt laws, regulations, interpretations, or directives that affect your LDAs. Such laws, regulations or directives may conflict with those of the United States. Any future regulatory change could have materially adverse effects on the development, growth, adoption, and support of your LDAs.
IN ADDITION TO THE RISKS LISTED ABOVE, RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN, OR WHICH ARE NOT SUMMARIZED ABOVE, MAY ALSO HAVE AN ADVERSE EFFECT ON YOUR PURCHASE AND OWNERSHIP OF YOUR LDAS.