Author
Superstate Inc., the Investment Manager on behalf of Superstate Short Duration US Government Securities Fund (USTB)
Summary
This proposal seeks to introduces USTB, Superstate's Short Duration US Government Securities Fund, delivering stability, liquidity, and Treasury Bill yield as reserves behind the stablecoin.
USTB is a tokenized (ERC-20) fund offering investors access to short-duration U.S. Treasury Bills. USTB’s investment objective is to seek current income as is consistent with liquidity and stability of principal, targeting returns in line with the federal funds rate.
USTB has daily liquidity, low management fees, no performance fee, transparent holdings, institutional custody, bankruptcy-remote structure, and crypto-native features that make it appealing as an asset behind Frax USD.
This proposal looks to introduce USTB as a collateral asset with an initial cap of $100mm.
Background and Motivation
[Please Check out the forum post for this section]
USTB Overview
USTB delivers T-Bill exposure for Frax by investing in short-duration U.S. Treasury Bills and targets return in line with the federal funds rate. Ownership in the Fund is issued as a yield-bearing ERC-20 token, USTB, or in the book-entry form. USTB is freely transferable between Ethereum addresses on the Allowlist. Purchases and redemptions are facilitated through USD or USDC, with liquidity each market day.
USTB has been selected through robust and rigorous RFP processes to provide compliant asset management solutions for crypto-native stablecoins and projects. Leveraging Superstate’s team’s deep expertise in DeFi, we have developed compliant asset management products that make managing and issuing digital assets secure and easy. To date, USTB is used to power the following projects:
- Mountain's USDM
- M^0 “M” Stablecoin
- Ethena’s USDe Reserve Fund
- Arbitrum’s Treasury
Beyond this, USTB is currently being evaluated as a yield source for Polygon’s PoS Bridge Assets and for reserves of Sky’s USDS. Additionally, USTB supports digital asset teams in many capacities such as a cash management tool or treasury assets.
Investment Mandate
USTB’s investment mandate ensures at least 95% of the portfolio is invested in short-duration U.S. Treasury Bills. Up to 5% of the portfolio at any time can be held in cash to facilitate liquidity; however, given the highly liquid nature of the portfolio, cash positions are kept at a minimum at all times. Additionally, USTB’s mandate is to maintain an average portfolio duration of one year or less.
The Fund is sub-advised by [Federated Hermes , an ~$800B AUM asset manager. The majority of the assets they manage are deployed in Money Market strategies. Susan Hill, CFA is the Portfolio Manager responsible for executing the Fund’s mandate. She brings three decades of investing experience managing assets for institutions and is specifically responsible for overseeing ~$300B in fixed-income assets.
Detailed Holdings
As of December 13, 2024, the table below outlines the current holdings. Full details are available for review on USTB's landing page.
| Security Name | Par | Base Value/Cost | Eff. Mat | Maturity | Current Yld | % of Fund | |
|---|---|---|---|---|---|---|---|
| U.S. Treasury Bill 12/17/2024 | 13,250,000 | 13,243,310 | 17-Dec-2024 | 17-Dec-2024 | 4.6421 | 8.30 | |
| U.S. Treasury Bill 12/24/2024 | 30,925,000 | 30,882,250 | 24-Dec-2024 | 24-Dec-2024 | 4.6158 | 19.35 | |
| U.S. Treasury Bill 12/26/2024 | 7,500,000 | 7,487,680 | 26-Dec-2024 | 26-Dec-2024 | 4.6611 | 4.69 | |
| U.S. Treasury Bill 12/31/2024 | 8,000,000 | 7,981,635 | 31-Dec-2024 | 31-Dec-2024 | 4.6964 | 5.00 | |
| U.S. Treasury Bill 01/02/2025 | 7,950,000 | 7,930,169 | 02-Jan-2025 | 02-Jan-2025 | 4.5993 | 4.97 | |
| U.S. Treasury Bill 01/07/2025 | 17,000,000 | 16,947,583 | 07-Jan-2025 | 07-Jan-2025 | 4.5360 | 10.62 | |
| U.S. Treasury Bill 01/09/2025 | 10,550,000 | 10,514,222 | 09-Jan-2025 | 09-Jan-2025 | 4.6265 | 6.59 | |
| U.S. Treasury Bill 01/14/2025 | 11,300,000 | 11,259,371 | 14-Jan-2025 | 14-Jan-2025 | 4.4749 | 7.06 | |
| U.S. Treasury Bill 01/16/2025 | 4,100,000 | 4,082,745 | 16-Jan-2025 | 16-Jan-2025 | 4.5680 | 2.56 | |
| U.S. Treasury Bill 01/21/2025 | 3,100,000 | 3,084,760 | 21-Jan-2025 | 21-Jan-2025 | 4.6593 | 1.93 | |
| U.S. Treasury Bill, 01/23/2025 | 11,600,000 | 11,541,684 | 23-Jan-2025 | 23-Jan-2025 | 4.5252 | 7.23 | |
| U.S. Treasury Bill 01/28/2025 | 4,600,000 | 4,573,639 | 28-Jan-2025 | 28-Jan-2025 | 4.5993 | 2.87 | |
| U.S. Treasury Bill 02/04/2025 | 8,000,000 | 7,948,678 | 04-Feb-2025 | 04-Feb-2025 | 4.4648 | 4.98 | |
| U.S. Treasury Bill 02/11/2025 | 6,000,000 | 5,959,483 | 11-Feb-2025 | 11-Feb-2025 | 4.3950 | 3.73 | |
| U.S. Treasury Bill 02/13/2025 | 2,000,000 | 1,984,776 | 13-Feb-2025 | 13-Feb-2025 | 4.5444 | 1.24 | |
| U.S. Treasury Bill 02/18/2025 | 2,000,000 | 1,983,548 | 18-Feb-2025 | 18-Feb-2025 | 4.5603 | 1.24 | |
| U.S. Treasury Bill 02/20/2025 | 6,000,000 | 5,948,595 | 20-Feb-2025 | 20-Feb-2025 | 4.6063 | 3.73 | |
| U.S. Treasury Bill 02/25/2025 | 2,000,000 | 1,981,726 | 25-Feb-2025 | 25-Feb-2025 | 4.5865 | 1.24 | |
| U.S. Treasury Bill 02/27/2025 | 3,300,000 | 3,269,242 | 27-Feb-2025 | 27-Feb-2025 | 4.5387 | 2.05 | |
| U.S. Treasury Bill 03/04/2025 | 1,000,000 | 990,033 | 04-Mar-2025 | 04-Mar-2025 | 4.5708 | 0.62 | |
| U.S. Treasury Bill 03/06/2025 | 3,000,000 | 2,969,567 | 06-Mar-2025 | 06-Mar-2025 | 4.5237 | 1.86 | |
| U.S. Treasury Bill 03/11/2025 | 1,000,000 | 989,220 | 11-Mar-2025 | 11-Mar-2025 | 4.5498 | 0.62 | |
| U.S. Treasury Bill 03/13/2025 | 2,000,000 | 1,978,500 | 13-Mar-2025 | 13-Mar-2025 | 4.4197 | 1.24 | |
| U.S. Treasury Bill 03/18/2025 | 1,000,000 | 988,468 | 18-Mar-2025 | 18-Mar-2025 | 4.5080 | 0.62 | |
| U.S. Treasury Bill 03/25/2025 | 1,000,000 | 987,590 | 25-Mar-2025 | 25-Mar-2025 | 4.5184 | 0.62 | |
| U.S. Treasury Bill 04/01/2025 | 1,000,000 | 986,708 | 01-Apr-2025 | 01-Apr-2025 | 4.5289 | 0.62 | |
| U.S. Treasury Bill 04/08/2025 | 2,000,000 | 1,972,192 | 08-Apr-2025 | 08-Apr-2025 | 4.4504 | 1.24 | |
| U.S. Treasury Bill 04/15/2025 | 1,500,000 | 1,478,977 | 15-Apr-2025 | 15-Apr-2025 | 4.3719 | 0.93 | |
| U.S. Treasury Bill 06/05/2025 | 1,000,000 | 979,192 | 05-Jun-2025 | 05-Jun-2025 | 4.4741 | 0.61 |
Income
USTB generates income through 24/7/365 interest accrual via Continuous Pricing, ensuring Frax begins earning interest immediately and continues accruing until redemption. This method allows interest to accumulate 24/7 and provides real-time, on-chain visibility of the stablecoin's backing value, offering a more crypto-friendly alternative to monthly dividends.
Income is realized through USTB shares, issued as a yield-bearing ERC-20 token, USTB token, or Book Entry shares. Each USTB token represents one share in USTB, with the number of shares minted based on the Purchase Amount divided by the Net Asset Value per share (NAV/S) on Market Days.
The NAV/S starts at $10 and increases continuously, reflecting the Fund's accruing interest. NAV/S is calculated by the reputable third-party, NAV Fund Services. Investors can redeem USTB for USDC or its USD equivalent based on the current NAV/S value.
USTB Investor Eligibility
USTB is only open to Qualified Purchasers who must be KYC’d. Finres has already been deemed eligible to invest in this fund.
KYC/AML Compliance and Whitelist
The Fund and USTB tokens are available to "whitelisted" (aka Allowlist) investors who have passed checks for the suitability, AML/KYC verification, and register their corresponding addresses. Only the whitelisted users can subscribe for or acquire tokens on the secondary market. The Allowlist address check is part of the USTB token’s code and occurs each time a transaction is attempted. If the receiving or sending address is not present on the Allowlist, the transaction will fail.
Tokens
Ownership in the Fund are issued as a yield-bearing ERC-20 token, USTB, on Ethereum or in Book Entry (not tokenized) form. USTB is freely transferable between Ethereum addresses on the Allowlist. Purchases and redemptions are facilitated through USD or USDC, with liquidity each market day.
Legal / Operational Details
Legal Structure USTB is a separate series of Superstate Asset Trust (a Delaware Statutory Trust). USTB is a private fund pursuant to Section 3(c)(7) of the Investment Company Act. USTB is only available to a limited subset of potential investors that meet the criteria outlined in the Private Placement Memorandum. Investors must undergo AML, KYC, and sanctions compliance checks.
USTB is bankruptcy-remote from Superstate Inc. as a separate Series of Superstate Asset Trust, a Delaware Statutory Trust under the Delaware Statutory Trust Act (“DSTA”). This structure ensures that shareholders’ investments are both separate from Superstate Inc.'s balance sheet and are siloed from other series.
Fund Mechanics Investors may purchase Shares of USTB via USDC or USD (“cash”) which may be issued in the form of ERC-20 tokens. This tokenized ownership is composable and transferable where one Share is represented by one USTB token on Ethereum. Transferring the USTB token effectively transfers ownership of the underlying share of the Fund. Investors who complete onboarding may identify Ethereum addresses to an AllowList, a smart contract managed by Superstate Inc. that approves KYC’d entities to interact with USTB tokens.
NAV/S per second (also available onchain via Chainlink), transparent holdings, yield, and more are available via the Investor Portal or by visiting USTB's Fund page.
Purcahses and Redemptions
[Please Check out the forum post for this section]
Liquidity
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Fees
[Please Check out the forum post for this section]
Investor Portal
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Service Providers Overview:
[Please Check out the forum post for this section]
About Superstate
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Key Personnel Biographies
[Please Check out the forum post for this section]
Voting:
- For: Invest USD or USDC reserves in USTB to back Frax USD with an initial cap of $100mm.
- Against: Do nothing.
Off-Chain Vote
Timeline
Dec 26, 2024Proposal created
Dec 26, 2024Proposal vote started
Dec 31, 2024Proposal vote ended
Nov 21, 2025Proposal updated