These disclaimers and disclosures qualify the text of all articles posted on the Mars Medium Account and all other Mars-branded social media accounts maintained by Delphi Labs Ltd. or the Mars Joint Venture.
Before interacting with Mars (including participating in the MARS airdrop, MARS lockdrop , MARS LBA or otherwise using the Mars smart contract system), please carefully review these disclaimers, any applicable terms and conditions, and the open-source code of the relevant software. Use the technology only at your own risk, and do not rely on the Mars Litepaper or Medium Account for making any decisions.
Authorship. The documents and information on the Mars Medium account (the “Repository”) have been authored by participants in the joint venture which developed the Mars technologies (such joint venture and each of its participants, the “Mars Joint Venture”) or other participants in the Mars community, as applicable. The Mars Medium account is maintained by Delphi Labs Ltd., a British Virgin Islands company limited by shares.
Informational Purposes Only; No Warranties. The Repository is only a presentation of information regarding certain technologies. The statements contained in the Repository do not provide any advice, representation, warranty, certification, guarantee or promise relating to these technologies, any uses thereof or any of the other matters discussed in the Repository, nor does the Repository provide an offer or agreement to make such technologies available, maintain or update such technologies, or sell or buy any asset or enter into any transaction. You should not rely on the Repository as a basis for making any financial or other decision.
No Governmental/Regulatory Review or Approval. The Repository and the matters described in the Repository have not been reviewed, approved, endorsed or registered with any regulator or other governmental entity, and the authors of the Repository are not licensed by any regulator or other authority to provide any legal, financial, accounting, investment or other advice or services.
Uncertain Nature of Forward-Looking Statements; No Duty to Update. The forward-looking statements in the Repository are subject to numerous assumptions, risks and uncertainties, and thus the events described or predicted therein are subject to change or to fail to occur in accordance therewith. We undertake no obligation to update, supplement or amend any statement that becomes inaccurate or incomplete after the date on which the Repository is first published, or to alert the public as to any such inaccuracy or incompleteness, whether such inaccuracy or incompleteness arises as a result of new information we receive, changes of our plans, unanticipated events or otherwise.
Experimental Technology. The technologies and assets described in the Repository are highly experimental and risky, have uncertain and potentially volatile value, and should be directly evaluated by experts in blockchain technologies before use. Use them solely at your own risk.
No Ongoing Management. Consistent with the goals of community governance described in the Repository, after the public launch of Mars, the Mars Joint Venture and its members and service providers should not be expected to have a material ongoing role in Mars maintenance, research, development or promotion. The Mars Joint Venture and its members have not dedicated capital specifically to future Mars development and have no plans to raise capital dedicated specifically to Mars maintenance or development. The Mars Joint Venture will not continue as a joint venture after the public launch of Mars.
Builder MARS Allocations & Lack of Ongoing Governance and Management. The Mars Joint Venture is not making any representation, promise, guarantee or assurance that any MARS granted to its members or service providers, or any funding or resources of the members, will be held, used or spent for the benefit of the Mars community. Any sale or other transfer or distribution of MARS tokens by the Mars Joint Venture or its members or service providers could occur without warning. Any such transaction would increase the circulating supply of MARS tokens. Depending on the number of MARS sold, transferred or distributed, the terms of sale, transfer or distribution and the prevailing market conditions, such a sale, transfer or other distribution could have a material adverse effect on the price or value of, or demand for, MARS tokens.
The members of the Mars Joint Venture and their service providers will hold a substantial amount of MARS. Any use of such MARS to vote in Mars governance could affect governance outcomes. The members and service providers of the Mars Joint Venture are not promising to participate or to refrain from participating in Mars governance, whether by voting MARS or xMARS, or otherwise. The Mars Joint Venture and its members and service providers are not promising that, if any of them do participate in Mars governance, they will vote in any particular way, observe any standard of care or act in the best interests of Mars users, MARS holders or any other persons. The Mars Joint Venture or its members or service providers could have financial interests or other interests or incentives which could outweigh their respective interests and incentives (if any) relating to Mars.
Members and service providers of the Mars Joint Venture who hold MARS and choose to participate in governance will be required to use their own personal independent discretion and decision-making in doing so. The Mars Joint Venture and its members will not direct, manage or control how its members and service providers participate in Mars governance. As a result of the foregoing factors and the lack of any person or group of persons able to control and manage Mars, any discretionary decision-making related to Mars depends on the effectiveness of spontaneous group decision-making among participating MARS and xMARS holders. There may be disputes, differences of opinion, disagreements, conflicting incentives and a lack of extrinsic coordination among or between any or all governance participants, and such circumstances may adversely affect governance results.
Multisignature Controls Over Mars Smart Contract System
Multisig-Controlled Proxy Smart Contract Pattern. The MARS smart contract system (including the smart contracts involved in the Mars lockdrop) uses a so-called ‘proxy upgradeability’ pattern governed by a cryptographic multisignature smart contract stored on Terra (the “Multisig”). The Multisig, in turn, is administered by five natural persons who each hold a private key, any three of which may (by signing their respective private keys to the same transaction and broadcasting that transaction to Terra validators) instruct Terra validators to perform Multisig operations. Assuming Terra is operating in the ordinary course, it is possible for the Multisig key holders, through the Multisig, to change which smart contracts govern your locked tokens from the Mars smart contract code to any arbitrary smart contract code selected by three or more of the Multisig key holders. This discretion of the Multisig key holders constitutes a material risk, and could enable your tokens to be misappropriated by the Multisig key holders if at least three of them collude. Due to the limitations of existing multisignature smart contract architectures for Terra, there is no ‘timelock’ or other delay feature which would guarantee MARS users advanced notice of a code change initiated by the Multisig. There is a plan for reducing the powers of the Multisig in favor of direct governance by the Martian Council, within 60–90 days after the Mars protocol public launch.
Multisig Key Holders. The Multisig keyholders are service providers of Delphi Labs Ltd., a British Virgin Islands company limited by shares (“Delphi Labs”). These keyholders have signed a Multisignature Participation Agreement with Delphi Labs providing that they will use their signature authority in their independent judgment to foster Mars as a public good for the benefit of Mars users and others in the Mars community. The Multisignature Participation Agreement further provides that the Multisig keyholders will not use their signature authority to change or replace the MARS smart contract code except to the extent necessary to protect MARS participants from a clear and present security threat. However, the existence of the Multisignature Participation Agreement does not guarantee that the Multisig key holders will comply with its terms, and, due to the nature of private-key cryptography, Terra and other relevant technologies, the ability and willingness of Delphi Labs to timely and effectively enforce the terms of the Multisignature Participation Agreement against the Multisig key holders cannot be guaranteed and is subject to numerous risks and uncertainties. By using the Mars smart contract system, you agree to assume to all risks arising from the existence and operation of the Multisig.
Metaphorical Use of Financial Terms; Lack of Legal Recourse for Funds. When used in connection with Mars, the terms ‘debt,’ ‘lend,’ ‘borrow,’ ‘collateral,’ ‘credit,’ ‘leverage,’ ‘bank,’ ‘borrow’, ‘yield,’ ‘invest’ and other similar terms are not meant to be interpreted literally. Rather, such terms are being used to draw rough, fuzzy-logic analogies between the heavily automated and mostly deterministic operations of a decentralized-finance smart contract system, on the one hand, and the discretionary performance of traditional-finance transactions by people, on the other hand.
For example, ‘debt’ is a legally enforceable promise from a debtor to a creditor to pay an interest rate and eventually repay the principal. Therefore, ‘debt’ cannot exist without legal agreements and cannot be enforced without courts of law. By contrast, with Mars, there are no legal agreements, promises of (re-)payment or courts of law, and therefore there are no debts, loans or other traditional finance transactions involved in using Mars.
Instead, Mars consists of software (including embedded game-theoretic incentives and assumptions) through which people can share their tokens with other people or smart contract systems and, under normal and expected conditions and subject to various assumptions regarding the behavioral effects of incentives, probably get their tokens back eventually, plus extra tokens, most of the time or in most cases. Unlike in traditional lending, the ‘lender’s’ financial return does not depend primarily on the creditworthiness, solvency or financial skill of the ‘borrower’ or on legal nuances such as the perfection of liens or the priority of creditor claims in a bankruptcy — it depends primarily on the incentive model assumed by the software design and how reliably the software implements that model.
Unlike a debtor, people who ‘borrow’ tokens from the Mars smart contract system are not required to, and have not promised to, pay the tokens back. Therefore, if the ‘borrowers’ never pay the tokens back, no promise has been broken, no legal agreement has been breached and the token ‘lenders’ cannot sue the ‘borrowers’ to get their tokens back. Instead, by not repaying the borrowed tokens, the token ‘borrowers’ merely demonstrate either that they lacked sufficient incentive to want to do so — for example, because their smart-contract-bound ‘collateral’ was worth much less than the ‘borrowed’ tokens — or that a technical issue — such as congestion of Terra — prevented them from doing so. Regardless, the ‘borrowers’ do not have an obligation to repay tokens when they do not want to or cannot do so, and there is no legal remedy available for damaged ‘lenders’ when insufficient incentives or technical problems result in a token shortfall.
When Mars is used to ‘lend’ tokens to a third-party smart-contract system, the situation is even less like traditional debt: The ‘borrowing’ smart contract has not posted ‘collateral’ and could malfunction or suffer a loss that results in complete or partial failure to return the ‘borrowed’ tokens to the Mars smart contract system and its token ‘lenders’. In this case, the token ‘lenders’ could suffer loss of tokens, but they will not have a legal remedy against the ‘borrowing’ smart contract or the Mars smart contract. Smart contracts are not persons, are usually not under the full control of any person or group of persons and may be impossible to repair, debug, update, pause or reverse. You should assume that a malfunctioning, exploited or underperforming smart contract which is not under the discretionary control of a single person or entity cannot be forced (in court or otherwise) to pay the ‘borrowed’ tokens back.
The Mars protocol incentivizes MARS holders to provide a potential partial remedy to token ‘lenders’ when token ‘borrowers’ fail to pay their tokens back. Mars users who stake their MARS in the Mars Safety Fund’ can increase their share of the economic benefits of the Mars smart contract system, but at the cost that, when there is a shortfall in the protocol’s tokens, all or a portion of the staked MARS may be redistributed to Mars lenders. Assuming MARS holders adequately respond to this incentive and that MARS has monetary value, the Mars Safety Fund can be used to partially or completely compensate Mars token ‘lenders’ who suffer shortfalls when token ‘borrowers’ fail to repay tokens or the value of ‘borrowers’’ liquidated collateral is too low. But, remember: the Mars Safety Fund, like the Mars credit protocol, is merely a smart contract, not a person or insurance company — if the Mars Safety Fund fails to provide MARS to the damaged token ‘lenders’, or if MARS have insufficient monetary value to compensate for such damages, there has been no breach of a legal agreement and the damaged token ‘lenders’ will not have a legal remedy.
Any ‘rate,’ ‘APR,’ ‘APY,’ ‘yield,’ ‘interest rate,’ ‘ROI’ or other form of return stated in connection with Mars for lending, borrowing, depositing, staking or otherwise transacting in a given token, strategy or smart contract system, (the ‘Rate’) is denominated in terms of a specific relevant token, not in terms of U.S. Dollars or other fiat currencies. Each Rate is a forward-looking projection based on a good faith belief of how to reasonably project results over the relevant period, but such belief is subject to numerous assumptions, risks and uncertainties (including smart contract security risks and third-party actions) which could result in a materially different (lower or higher) token-denominated ‘rate,’ ‘APR,’ ‘APY,’ ‘yield,’ ‘interest rate,’ or ‘ROI.’
Rates are not offers, promises, agreements, guarantees or undertakings on the part of any person or group of persons, but depend primarily on the results of operation of smart contracts and other autonomous or semi-autonomous systems (including third-party systems) and how third parties interact with those systems after the time of your deposit. Even if a particular projected Rate is achieved, you may still suffer a financial loss in fiat-denominated terms if the fiat-denominated value of the relevant tokens (your deposit and any tokens allocated or distributed to you pursuant to the Rate) declines during the deposit period. Projected Rates are not interest rates being paid on a debt.
Thus, the transactions you can perform by using the Mars ‘credit protocol’, although they are superficially similar to traditional financial transactions in some ways, are in fact very different. ‘DeFi’ and ‘TradFi’ each pose their own unique set of costs, benefits, risks and protection mechanisms. Please bear this fact in mind when reading about Mars, and do not use Mars without a sufficient understanding of how doing so differs from traditional financial transactions. The only way to fully understand such factors is to have a strong understanding of the relevant technical systems and the incentive design mechanisms they embody — we strongly encourage you to review Mars’s technical documentation and code before use.
Mars Website. The website at https://marsprotocol.io/ is subject to it own set of Terms and Conditions which should be read before using the website.
Irreversibility of Transactions and Lack of Remedies and Insurance for Damages. Transactions on Terra are, under normal conditions, irreversible. Any tokens you deposit into Mars-related smart contracts are subject to potential risk of permanent disablement, impairment, loss or forfeiture in the event of any exploits, bugs or malfunctions of the relevant smart contracts or Terra itself, and no remedy will be available from any person due to any damages you may suffer in connection with your participation in the Mars smart contract system or use of any of the relevant technologies.
No Investment or Lending; No Contract Rights; Absence of Counterparties. Your transactions utilizing the Mars smart contract system (including, without limitation, any participation in the Mars lockdrop or LBA) are not intended to be an investment, a capital-raising transaction for an enterprise, a sale of your tokens to any person or group of persons or a purchase of MARS from any person or group of persons. They are also not intended to be a loan, consignment or deposit of your tokens to or with, or a service provided to you by, any person or group of persons. Your deposited and/or locked tokens will not be owned by or under the control of any person or group of persons involved in creating Mars, but will be under the control of permanent smart contract code on Terra. These smart contracts are operated on an unaffiliated basis by the proof-of-stake block validators for Terra. However, these validators also do not have individual ownership or control of the relevant smart contracts or Terra, and such validators lack any obligation or readily available method to coordinate a reversal or mitigation of any adverse results or damages you may suffer as a result of the operation of such smart contracts. There is no ‘transaction counterparty’ or intermediary which has the discretionary power to reverse your transactions or recover your tokens or other assets, or which has made you a promise to return or refund any disabled, impaired, lost or forfeited assets. There is also no private or governmental insurance (on the part of the creators of the Mars smart contract system, Terra validators, any nation-state or any other person) available to compensate you for any such losses or other adverse circumstances relating to Mars transactions.
Technical Risks; Independent Due Diligence Required. The technologies and assets involved in the Mars smart contract system are highly experimental and risky, have uncertain and potentially volatile value, and should be directly evaluated by experts in blockchain technologies before use. Use them solely at your own risk. You must not rely on any articles, summaries or published code audits as an accurate description or evaluation of the Mars smart contracts or Terra or for purposes of making any financial or other decision. Instead, you must only participate in the Mars smart contract system after thoroughly reviewing and understanding the code of the relevant smart contracts and Terra in your own independent due diligence process.
Lack of Governmental Oversight. The Mars smart contract system, the MARS lockdrop and LBA and all related facts and circumstances have not been reviewed, approved, endorsed or registered with any regulator or other governmental entity. The creators of the Mars smart contract system and Terra are not licensed by any regulator or other authority to provide any legal, financial, accounting, investment or other advice or services.
No Ongoing Entrepreneurial Efforts. Mars is intended to be community-governed. After the public launch of Mars, none of the persons who created all or any part of the Mars smart contract system should be expected to have a material ongoing entrepreneurial role in Mars research, development or promotion. Certain relevant parties may elect to undertake limited ministerial activities directly or indirectly related to Mars, such as maintaining availability of the Mars web interface, but no promise, guarantee or assurance of such ministerial efforts or any other efforts is being made, and any such efforts which do occur may be abandoned at any time, with or without advanced notice. There is no ‘Mars enterprise’, ‘Mars company’ or ‘Mars business’ and there is no capital dedicated to future Mars marketing, research, development or maintenance.
MARS Builder Allocation & Associated Risks. Mars was researched, developed and deployed by an unincorporated joint venture of various persons and entities who collectively received approximately 30% of the total maximum supply of MARS (the “Joint Venturers” and “Joint Venture”). No representation, promise, guarantee or assurance is being made that any MARS retained by the Joint Venturers or any of their own respective funding or resources will be held, used or spent for the benefit of the Mars community. Any sale or other transfer or distribution of MARS tokens by the Joint Venturers could occur without warning. Any such transaction would increase the circulating supply of MARS tokens. Depending on the number of MARS sold, transferred or distributed, the terms of sale, transfer or distribution and the prevailing market conditions, such a sale, transfer or other distribution could have a material adverse effect on the price or value of, or demand for, MARS tokens.
Any use of MARS by the Joint Venturers could affect governance outcomes. No promise is being made by any Joint Venturer to participate or refrain from participating in Mars governance, whether by voting MARS or xMARS or otherwise. No promise is being made that, if a Joint Venturer does participate in governance, that such Joint Venturer will vote in the best interest of MARS or xMARS holders or the Mars community or observe any standard of care. Any Joint Venturer could have financial interests or other interests or incentives which could outweigh its interests and incentives (if any) relating to Mars.
Joint Venturers who hold MARS or xMARS and choose to participate in governance will be required to use their own personal independent discretion and decision-making in doing so. Neither the Joint Venture nor any of the Joint Venturers will direct, manage or control how each Joint Venturer participates in Mars governance. As a result of the foregoing factors and the lack of any person or group of persons able to control and manage Mars, any discretionary decision-making related to Mars depends on the effectiveness of spontaneous group decision-making among participating MARS and xMARS. There may be disputes, differences of opinion, disagreements, conflicting incentives and a lack of extrinsic coordination among or between any or all of such persons, and such circumstances may adversely affect governance results and the value of MARS or xMARS or the use of the Mars smart contracts.
Certain Mars Lockdrop and LBA Risks
Mars Lockdrop and LBA Risks. Participation in the two-phase Mars lockdrop and Liquidity Bootstrapping Auction (LBA) token launch process, hereafter referred to as the “Mars lockdrop”, involves significant risks and uncertainties. Please be advised that all relevant technologies are being provided on an as-is basis, without representation, warranty, insurance or indemnity, and that all participation is solely at your own sole risk. You should carefully review and understand the Mars lockdrop code and all relevant technologies before participating in the Mars lockdrop transactions. As noted below, in the event of security threats, such code is subject to change after launch by action of the Multisig. You should always ensure that you understand the specific smart contracts on Terra mainnet (columbus-5) blockchain system (the “Terra”) that are in control of your tokens — the addresses of these smart contracts on Terra can be found through the Mars changelog, as it may be updated from time to time.
UST is an experimental algorithmic stablecoin. During the lockup, your locked UST could potentially lose its peg of $1 USD: 1 UST and you would be unable to convert your locked UST to LUNA using Terra’s native stability mechanism.
Nature of Token Deposits and Locking. When you deposit any tokens into Mars-related smart contracts, you are committing such tokens to the sole and absolute control of those smart contracts as operated on Terra until such time as you withdraw such tokens from such smart contracts. Once your tokens are “locked “in the Mars smart contract system, you will not be able to withdraw them until the lockup period you selected has expired. During the lockup period, you will lose all powers over and benefits with respect to the locked tokens, other than the specific uses that the Mars smart contract systems will make of the locked tokens during the lockup period. For further detail regarding when deposited tokens become irrevocably locked in the Mars smart contract system for the user-selected period pursuant to the MARS lockdrop process, as well as details regarding the specific uses that will be made of the locked-up tokens by the Mars smart contract system while the tokens are locked, see “MARS Distribution Plan: The MARS token launch, lockdrop and more”.