MusIQ Network Risk Disclosures

Taking part in the MusIQ Network involves real risks. Read this page in full before you buy a MusIQ Node Software License, subscribe to MusIQ Membership, join the Referral Partner program, or otherwise participate. By participating you acknowledge and accept the risks described here. These disclosures are not exhaustive, and risks that are not described here may also arise.

Nature of the Network

The MusIQ Network is a participation-based digital infrastructure made up of smart contracts deployed on the Gnodi EVM Layer 1 blockchain (chain ID 46634). It is designed to enable engagement, verification, and reward distribution across music and cultural ecosystems. LyrIQ (LYRIQ) digital rewards are designed for use within the network and do not represent equity, ownership, or any financial interest in any entity.

No Investment Intent

Participation in the MusIQ Network does not constitute an investment. LYRIQ is not offered as a security, commodities contract, or financial instrument, and there are no token sales. A MusIQ Node Software License is a license to operate software, not an investment contract. Participation does not involve an expectation of profit derived from the efforts of others, and you should not participate if you are seeking a financial return.

No Offer or Solicitation

Nothing on this website is an offer to sell, a solicitation of an offer to buy, or a recommendation of any financial product, instrument, or transaction. Access to network components, including software licenses and infrastructure participation, is governed by separate agreements.

Regulatory Risk

Regulation of blockchain technology and digital assets is still developing and differs between countries. Interpretive guidance issued in March 2026 by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission provides additional clarity on distinctions between certain digital assets, including functional and participation-based tokens. The MusIQ Network has been designed as a participation-based system, and LYRIQ is intended to function as a utility reward within the ecosystem.

However, that guidance may be revised, withdrawn, or interpreted differently by regulators or courts, and other countries and U.S. states may take different views. A change in law or interpretation could require the network, the Foundation, or Block Reign to change how LYRIQ or node licenses work, restrict access in some places, or stop offering certain features altogether. No assurance can be given about how any authority will classify LYRIQ, node licenses, or network participation now or in the future.

Technology and Smart Contract Risk

The network relies on software, including node software and smart contracts, that may contain bugs or vulnerabilities. Risks include:

• Software defects or vulnerabilities in the node client, applications, or smart contracts;

• Exploits, hacks, or unauthorized access that could cause rewards to be miscalculated, misdirected, or lost;

• Network outages or degraded performance;

• Failures or unexpected behavior in protocol logic, including reward calculation and attestation;

• Upgrades that change functionality or introduce new defects.

Smart contracts may not be fully audited, and audits do not eliminate risk.

Dependency on the Gnodi Layer 1

MusIQ Network is not its own blockchain. It depends on the Gnodi EVM Layer 1, which operates independently of MusIQ Network, the MusIQ Forward Foundation, and Block Reign. If Gnodi experiences downtime, congestion, a security incident, a contentious upgrade or fork, changes in fees, or a loss of validator support, MusIQ Network may be slowed, disrupted, or unable to operate. No party guarantees Gnodi’s performance, uptime, or continued existence.

Adoption and Ecosystem Risk

The usefulness of the MusIQ Network depends on artists, listeners, partners, application developers, and node operators choosing to take part. There is no guarantee that enough participation will occur to sustain or grow the network, that partner applications such as the MusIQ listening platform will launch or continue, or that LYRIQ will be accepted for any particular experience or benefit.

Reward Variability and Declining Emissions

LYRIQ rewards are not fixed. They are distributed from fixed pools — Proof of Action (60%), Proof of Contribution (30%), and Protocol Commitment (10%) — and each participant’s share depends on their activity relative to everyone else’s. As participation grows, each unit of activity may earn less. Annual issuance follows a declining emission schedule, so total rewards available fall over time, toward the 1,000,000,000 LYRIQ maximum supply.

Examples and illustrations in the litepaper or elsewhere are hypothetical and are not projections. Your actual rewards may be much lower or zero.

No Secondary Market or Liquidity

LYRIQ is not redeemable for fiat currency, and MusIQ Network does not operate, sponsor, or support any exchange or market for it. There may never be a way to sell or exchange LYRIQ, and LYRIQ should be assumed to have no value outside the MusIQ ecosystem. MusIQ Node Software Licenses are non-transferable unless the Foundation permits a transfer, so you may be unable to resell or recover what you paid.

Node Operation Risk

Operating a MusIQ Node involves technical, operational, and compliance responsibilities. You will bear hosting, electricity, bandwidth, and maintenance costs, which may exceed any rewards. Hardware and software requirements may increase. Downtime, misconfiguration, outdated software, or a hosting provider’s failure may reduce or eliminate your rewards. Operating a node does not guarantee any level of reward, and rewards depend on network activity, protocol rules, and system performance.

If you purchase before mainnet node operations launch, you cannot run a node until launch, launch may be delayed, and no rewards accrue before then.

Third-Party Dependencies

Applications, integrations, and services that interact with the MusIQ Network may be built and run by independent third parties, including hosting providers, payment processors, wallet providers, and music platforms. These parties may suffer outages, data errors, security incidents, or business failure, or may change their terms, all beyond the control of the network.

Governance Risk

Network parameters, protocol rules, and the Foundation charter may change through governance, including votes by node-license holders. Changes may affect reward rates, eligibility, requirements, or other features in ways you do not agree with. Governance participation may be low or concentrated, and outcomes may not reflect your preferences. Governance rights do not give you ownership, equity, or financial rights.

Wallet and Key Risk

You are responsible for your wallet and private keys. If you lose your keys, link the wrong address, or your wallet is compromised, your LYRIQ may be lost permanently. MusIQ Network, the Foundation, and Block Reign cannot recover lost keys or reverse transactions.

Tax Risk

The tax treatment of node licenses and digital rewards is uncertain and may change. Receiving LYRIQ may be treated as taxable income at the time you receive it, even though it cannot be redeemed for fiat. You are solely responsible for determining and paying any taxes and should consult a qualified adviser.

Immutability

Data recorded on public blockchains is immutable. Once a transaction or attestation is confirmed on the Gnodi blockchain, it cannot be altered, reversed, or deleted, including transactions sent in error.

Jurisdiction and Compliance

You are solely responsible for understanding and complying with the laws that apply to you. The MusIQ Network or some of its components may be restricted or unavailable in certain countries or regions, and access may be withdrawn if laws change.

No Guarantees

No representation or guarantee is made about network performance or uptime, participation outcomes or reward levels, ecosystem growth or adoption, launch timing, or future functionality. All participation is voluntary.

Forward-Looking Statements

Materials about the MusIQ Network, including the litepaper, may contain forward-looking statements about planned development, functionality, adoption, and reward models. These are based on current expectations and are subject to risks and uncertainties that may cause actual results to differ materially. The litepaper is under compliance review and subject to ratification by MusIQ Node Software License holders, and its contents may change.