General Terms & Conditions for FCS Staking Services
Note: These GTCs have been drafted in both German and English. In the event of any disputes arising between the two versions, the shall supersede and replace in its entirety any interpretation or ambiguity.
With each delegation of Crypto Assets or proxy rights to Validator Nodes operated by Finoa Consensus Services GmbH, Oberwallstrasse 6, 10117 Berlin, registered in the Commercial Register of the District Court of Berlin (Charlottenburg) under HRB 241364 B (“Validator”), the client accepts the following General Terms and Conditions for the use of Finoa Consensus Services Staking services (hereinafter " Finoa Consensus Services GTC").
Delegated proof of stake (DPoS) (sometimes known as nominated proof of stake (NPoS)) is a blockchain consensus mechanisms which allows owners of Crypto Assets (hereinafter described as "Infrastructure") to delegate Crypto Assets to third-party validators without transferring their Crypto Assets, whereby those third-party validators offer the corresponding technical infrastructure to the Crypto Assets owners to enable them to stake their Crypto Assets, thus potentially generating rewards (hereinafter described as “Staking Rewards”), which the Crypto Assets owners receive from the blockchain network.
The Validator is in the business of operating technical infrastructure, which helps to run certain chosen supported blockchain networks (hereinafter described as "Supported Networks”) and by doing so enables owners of Crypto Assets of Supported Networks to earn Staking Rewards (also described as “Validation Service”). The Supported Networks are listed on finoa.io/staking-delegation.
The Client owns Crypto Assets of at least one of the Supported Networks and wishes to delegate its Crypto Assets of this or more networks (hereinafter “Chosen Network”) to the Validator in order to exercise its staking rights and by doing so to qualify to receive future Staking Rewards from this network.
For the Validation Services Validator will receive a fee (hereinafter "Validation Fee”) from the Supported Networks. The Validation Fee is a compensation based on a “Validation Rate” also known as “Commisson”, which is a variable percentage applied to the Staking Rewards.
1. Mutual Obligations
1.1 During the term of this Agreement, the Validator shall:
• operate the hard- and software necessary to run and maintain infrastructure for each of the Supported Networks (hereinafter "Validator Nodes") to generally enable the Client to receive Staking Rewards. For the avoidance of doubt: it is in the discretion of Validator to choose the networks to support and to end the support of a Supported Network with adequate notice;
• use best efforts to be selected as Validator Node by the Supported Networks;
• publish its decision to end the support of a Supported Network with at least three Months in advance;
• provide the Validation Services in a diligent and professional manner. The Validator will use reasonable security safeguards to protect the performance and availability of the Validation Service;
• operate each Validator Node with an uptime of 99 % per month (hereinafter "Uptime Rate"). This means that there will not be more than 7.2 hours per month of unavailability per each Validator Node.
1.2 During the term of this Agreement, the Client shall:
• be responsible for maintaining the security of its accounts and keys at all times;
• allow the Validator to execute governance rights if applicable;
• allow Validator to serve as a proxy regarding the choice of a certain node and explicitly allows Validator to choose between Validator's own Validator Nodes and Validator Nodes of selected partners in order to increase the efficiency of the delegation if applicable;
• claim the Staking Rewards from the Chosen Network if necessary;
• be responsible for payment of all taxes, fees and surcharges, however designated, imposed on or based upon the use of the Staking Rewards obtained by the Client use of Validation Services;
• at all times comply with all laws relevant for the actions under this agreement, including but not limited to anti-money laundering obligations
• unstake its Crypto Assets in case that Validator publishes to end the support of a Supported Network. The Client understands that he will not be receiving any Staking Rewards after the end of the support of a Supported Network and that the Validator will not be liable for any missed rewards or slashing events after the end of the support of a Supported Network.
2. Acknowledgements of the Client
2.1. The Client acknowledges that Staking Rewards are only earned when a total amount of Crypto Assets is delegated to the selected node which is sufficient to keep this node active (hereinafter “Minimum Required Stake”). The Validator cannot guarantee that such a Minimum Required Stake is delegated to the nodes operated by Validator at all times. The Client also acknowledges that the amount of Staking Rewards to be earned is not guaranteed, but depends on various factors. For example, even if the Minimum Required Stake is delegated to a Validator Node, the amount of Staking Rewards to be distributed by the network depends on the total amount of Crypto Assets of a network being staked.
2.2. By participating in Staking, the Client can achieve relatively high returns in the form of the Staking Rewards compared to other investment products. It is explicitly pointed out that this is only possible due to the risks associated with staking. The risks associated with staking also essentially depend on the specifications of the respective network as well as the performance of the selected node. In general, however, the following risks are to be expected:
During staking, a (partial) loss of the Crypto Assets used or a loss of reward can occur. This is the case if the Validator Node violates the applicable rules or technical requirements of the respective blockchain network and is "punished" by the blockchain network for this. A "punishment" by the blockchain network is currently conceivable for the following:
• "Liveness error": A liveness error occurs, among other things, if the Validator does not ensure the necessary availability of the Validator Node it operates and misses the validation of individual or multiple blocks on the blockchain.
• "Security error": A security error occurs, among other things, when the same blocks are signed twice or more often. Such security errors are also referred to as "double- baking", "double signing", or "double-endorsing".
• During the staking, the Client usually cannot initiate any transfers of the Crypto Assets that are staked, so that he e.g. cannot react to changes in the value (exchange value, value in money), by selling the staked Crypto Assets. Instead, the Client must normally first unstake the delegated Crypto Assets - subject to deadlines and other conditions - before it is possible to transfer the Crypto Assets again.
2.3. The Client acknowledges that Validator only supports non-custodial staking and the Parties hereby agree that the Validator shall in no event become, act as, or be deemed as the custodian of the Crypto Assets staked by the Client. In case that one of the Supported Networks changes to custodial staking, Validator is entitled to terminate the support of that Supported Network immediately.
2.4. The Validator is not an asset manager or investment adviser to the Client. The Validator does not make any recommendations to the Client in relation to financial services, investments, taxation, legal matters or accounting. In particular, the technical support of a specific network is not to be understood as a recommendation to buy Crypto Assets of this network.
2.5. As staking is a relatively new mechanism, it is currently not foreseeable whether or in which cases Validators or other third parties interposed by the Validator will require a license from the German Federal Financial Supervisory Authority (BaFin) or the corresponding authorities in their home countries. Currently, validators do not have such a permit as they see themselves as information technology (IT) providers. Therefore, the Validator is currently not holding a license for validation services.
2.6. The Supported Networks, like other decentralized, open-source blockchains networks, may be subject to "forks." Forks occur when some or all persons running the software clients for a particular blockchain network adopt a new client or a new version of an existing client that: (a) changes the protocol rules in backwards-compatible or backwards-incompatible manner that affects which transactions can be added into later blocks, how later blocks are added to the blockchain, or other matters relating to the future operation of the network; or (b) reorganizes or changes past blocks to alter the history of the blockchain. Some forks are "contentious" and thus may result in two or more persistent alternative versions of the network or blockchain, either of which may be viewed as or claimed to be the legitimate or genuine continuation of the original. The Validator may not be able to anticipate, control or influence the occurrence or outcome of forks of the network, and does not assume any risk, liability or obligation in connection therewith. Without limiting the generality of the foregoing, the Validator does not assume any responsibility to notify the Client of pending, threatened or actual forks. The Validator will respond to any forks as the Validator determines in its sole and absolute discretion and shall not have any obligation or liability to the Client if such response benefits the Validator to the detriment of the Client. Without limiting the generality of the foregoing, the Validator's possible and permissible responses to a fork include, among others: (i) continuing to serve as a Validator on both networks; (ii) serving as a Validator only on one network; (iii) ceasing to be a Validator on both networks; or (iv) switching from serving as Validator on one such network to serving as a Validator on the other, or vice versa, based on various factors. In the event of a fork of the network, it is possible (but not guaranteed) that the same number of Crypto Assets that were delegated to Validator on the original network will by default be delegated to Validator on the forked network. In the event that the Validator does not choose to support both networks, Client's validation rights and voting rights may go unexercised on the network the Validator does not support, and the Client may temporarily or permanently lose Crypto Assets, staking rewards or transaction fees on the unsupported network. The Client assumes full responsibility to independently remain apprised of and informed about possible forks, and to manage Client's own interests in connection therewith, including by potentially retracting a delegation to the address of Validator's node on a fork that Validator does not support.
2.7. The Client further acknowledges that:
• it has knowledge of blockchain technology, staking, validation, accounts, keys, and details of the services provided by the Validator;
• it has adequately informed himself/herself about the Staking and the risks associated with it, has decided solely based on this information whether to participate in the staking and acknowledges that it is its responsibility to keep himself/herself informed about possible changes in the risks associated with the staking;
• it is the sole responsibility of the Client to monitor staked Crypto Assets and, if necessary, to actively initiate measures to unstake its Crypto Assets in a timely manner and in compliance with specified deadlines.
• the technologies and activities involved in the blockchain are novel, experimental and speculative and that there is significant uncertainty regarding the application of law thereto;
• it has conducted its own thorough investigation of the Validation Service provided under this Agreement, the blockchain network for which the Validator provides its services, and any other matters that are relevant to offer and receipt of services under this Agreement;
• nothing in the cooperation between Validator and Client creates any corporate body, joint venture, partnership, or other form of joint enterprise, employment, franchise, or fiduciary relationship between the Parties. Neither Party has any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any obligation, contract, agreement, or undertaking with any third party.
3. Limitation of Liability
3.1. Liability for damages, irrespective of the legal grounds, in particular for impossibility, delay, breach of contract, breach of duties during contractual negotiations and tort, shall be limited in accordance with the provisions of this section 3 if fault is involved.
3.2. The Validator is not liable in the case of simple negligence of its organs, legal representatives, employees or other vicarious agents, insofar as it does not involve a breach of essential contractual obligations.
3.3. Insofar as the Validator is liable on the merits for damages in accordance with § 3 (2), this liability is limited to damages which the Validator foresaw as a possible consequence of a breach of contract at the time of conclusion of the contract or which he should have foreseen by exercising due care. Indirect damage and consequential damage are also only eligible for compensation insofar as such damage is typically to be expected when the Validation-Service is used for its intended purpose. The above provisions of this Paragraph 3 shall not apply in the event of intentional or grossly negligent conduct on the part of members of the Validator's executive bodies or senior employees.
3.4. In the event of liability for simple negligence, the Validator's liability to pay compensation for damage to property and further financial losses resulting therefrom shall be limited to an amount equal to the Validation Fee earned by Validator in the contractual relationship with Client in the 12 months prior to the damaging event per case of damage, even if it is a breach of essential contractual obligations.
3.5. The above exclusions and limitations of liability shall apply to the same extent in favour of the organs, legal representatives, employees and other vicarious agents of the Validator.
3.6. Insofar as the Validator provides technical information or acts in an advisory capacity and this information or advice is not part of the contractually agreed scope of services owed by the Validator, this shall be done free of charge and to the exclusion of any liability.
3.7. The limitations of this section 3 do not apply to the Validator's liability for intentional conduct, for guaranteed characteristics, for injury to life, limb or health or under the Product Liability Act.
4. Staking Rewards, Validation Fee, and Payout
4.1. The Validation Fee is calculated on the basis of the Staking Rewards, which the Validator enabled for the Client multiplied with the Validation Rate also known as “Commission” applicable for the Chosen Network. The Validation Rate applicable for each Supported Network is published on finoa.io/staking-delegation. In some cases, the Validation Fee is calculated independently of the Staking Rewards and/or distributed in other Crypto Assets from the Network.
4.2. Staking Rewards and the Validation Fee are automatically generated and assigned to the Validator and the Client by the Chosen Network or in some cases need to be actively claimed from the Chosen Network by Client.
4.3. Validator may and upon request of the Client shall invoice the Client for the fees in Crypto Assets of the Chosen Network including an equivalent in Euro (EUR). On the Client's request, he may invoice the fees - possibly for an additional fee - in other currencies.
4.4. If it is necessary under this Agreement to calculate the value for the Crypto Assets in EUR, the value shall be based on the market prices determined by CoinGecko (https://www.coingecko.com/) at the end of the monthly payment period, even if calculated retrospectively.
The Client shall indemnify, defend, and hold the Validator and its officers, agents, employees, and affiliates harmless from and against all claims, causes of action, damages, fines, third-party claims, penalties, losses, expenses, costs (including reasonable attorney’s fees), and liabilities the Validator incurs which relate to or arise out of any breach of this Agreement by the Client or of any express or implied representation or warranty by the Client, or any negligent or wilful acts or omissions of the Client or its Personnel.
6. Term, Termination, Obligations upon Termination of the Contract
6.1. This Agreement may - after expiry of any minimum term - be duly terminated by either of the Parties at any time with a notice period of three months by notification in text form (sec. 126b BGB) to the other party.
6.2. Either Party may terminate this Agreement for cause with immediate effect.
6.3. If an event which prevents one Party from providing a service and for which it is not responsible (§ 276 BGB) lasts for more than fifteen consecutive calendar days, the other Party may terminate this Agreement with a notice period of fifteen days.
7. Final Provisions
7.1. Amendments to the FCS GTC shall be offered to the Client in text form (sec. 126b BGB) no later than two months before the proposed date of their entry into force. The offer may also be sent to an e-mail address provided by the Client to the Validator for communication purposes. The Client may either agree or reject the changes before the proposed date of their entry into force. Insofar as the changes are necessary due to legal or technical developments and they do not affect the mutual cardinal obligations, the Client shall be deemed to have given consent if no notification of rejection is made before the proposed date on which the changes are to take effect. The Validator shall specifically draw the Client’s attention to this effect of approval in its offer.
7.2. The contractual relationship between Validator and Client shall be governed by German law to the exclusion of the United Nations Convention on Contracts for the International Sale of Goods of 11.4.1980 (UN Sales Convention). Place of jurisdiction is Frankfurt am Main, Germany.
7.3. Should any provision of the FCS GTC be or become invalid, the validity of the remaining provisions shall not be affected thereby. The parties shall immediately replace the invalid provision with a valid provision that comes as close as possible to the economic purpose of the invalid provision. The same shall apply if a gap requiring supplementation becomes apparent during the execution of the FCS GTC.
7.4. These GTCs have been drafted in both German and English. In the event of any disputes arising between the two versions the German version shall supersede and replace in its entirety any interpretation or ambiguity.