[FIP - 427] WTGXX as reserve asset for Frax USD

Author WisdomTree

Summary This proposal seeks to introduce the WisdomTree Government Money Market Digital Fund (“WTGXX” or “Fund”) as an on-chain, reserve (backing) asset for Frax USD with exposure to U.S. dollar yield.

WTGXX is a tokenized money market digital fund, regulated under the U.S. Investment Company Act of 1940 (“1940 Act”), designed to provide investors with a high level of current income consistent with preservation of capital and liquidity and the maintenance of a stable $1.00 net asset value (“NAV”) per share. The securities purchased by the Fund are subject to the quality, diversification, and other requirements of Rule 2a-7 under the1940 Act, and other rules adopted by the Securities and Exchange Commission (the “SEC”). This product can be utilized by crypto-native institutions and investors to support the reserves of stable assets.

Benefits of utilizing WTGXX as a reserve backing asset:

• Competitive Yield via U.S. Treasury and government securities exposure
• U.S. Regulatory Compliance, Transparency, and Standardization
• 1940-Act Fund Structure and Bankruptcy Remoteness
• Liquidity and Redemption Efficiency and Optionality (primary market mint/redeem and peer-to-peer transactions)
• Institutional-grade investment platform
• Partnering with industry leaders – including Voya Investment Management, Fireblocks, and Bank of New York

Background and Motivation Due to character limitation for Snapshot proposals please find this section on forum post here

WisdomTree Bio: Due to character limitation for Snapshot proposals please find this section on forum post here

Proposal Details

General Overview: WTGXX invests in a portfolio of U.S. Treasury and government securities. Such securities may include: U.S. Treasury Notes (both fixed and floating rate), U.S. T-Bills, U.S. Government Agency Notes, including Discount Notes, that are either fixed or floating rate and issued by government agencies such as the Federal Home Loan Bank System, Federal Home Loan Mortgage Corporation (“Freddie Mac”), Federal National Mortgage Association (“Fannie Mae”) or the Federal Farm Credit Bank. The Fund may invest in repurchase agreements collateralized fully by U.S. Treasury securities, U.S. Government Agency securities or cash. The Fund may also invest in other investment companies that are government money market funds to the extent permitted under the Investment Company Act of 1940, as amended (the “1940 Act”).

The Fund has adopted a non-fundamental investment policy in accordance with Rule 35d-1 under the 1940 Act to invest under normal circumstances, at least 80% of the value of its net assets, plus the amount of any borrowings for investment purposes, in government securities and repurchase agreements that are collateralized by government securities.

The securities purchased by the Fund are subject to the quality, diversification, and other requirements of Rule 2a-7 under the1940 Act, and other rules adopted by the Securities and Exchange Commission (the “SEC”).

Please see the Prospectus and SAI (see supplementary documents) for additional information, including additional strategy information and risk factors.

As an ERC-20 token, digital representations of WTGXX’s shares can be maintained by any wallet provider that operates on the Ethereum public blockchain. The tokenized shares of WTGXX are expected to soon be available natively on Arbitrum, Avalanche, Base, and Optimism.

As of 3/4/2025, cumulative AUM across chains is $112.32M. Additionally, as of 3/4/2025, WTGXX has processed over 8,300 transactions with over $114.5M in total volume.

Asset Eligibility: Due to character limitation for Snapshot proposals please find this section on forum post here

Fee Considerations: The expense ratio is 0.25%. There are no transaction, subscription or minting fees or other service fees. Investors are responsible for gas fees for their transfers of tokens to another wallet, such as utilizing USDC via the Stablecoin Conversion Service and potentially stablecoin burn fees.

Fees and Expenses of the Fund The following table describes the fees and expenses you may pay if you buy, hold, and sell shares of the Fund. The fees are expressed as a percentage of the Fund’s average net assets.

Column 1	Column 2
Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expense (expenses that you pay each year as a percentage of the value of your investment)
----- Management Fees	0.25%
----- Distribution and / or Services (12b-1) Fees	None%
----- Other Expenses	0.00% 1
Total Annual Fund Operating Expenses	0.25%

• “Other Expenses” are based on estimated amounts for the current fiscal year.

Other notes:

• All fees are described above and in the Fund’s Prospectus. Unlike many other types of investment vehicles and funds, which may charge investors a variety of “other” expenses, the Adviser provides investment advisory services and pays the Fund’s operating expenses in return for a “unitary fee”, and pays such other expenses, with certain limited exceptions.
• Secondary market transfers or sales may incur gas fees and are subject to potential price fluctuations, including premiums or discounts, which can be unpredictable.

Permissioning: Due to character limitation for Snapshot proposals please find this section on forum post here

Subscription and Redemption Overview: Due to character limitation for Snapshot proposals please find this section on forum post here

Subscription and Redemption Timing: Due to character limitation for Snapshot proposals please find this section on forum post here

Liquidity Vehicles: Due to character limitation for Snapshot proposals please find this section on forum post here

Tokenholder Rights: Due to character limitation for Snapshot proposals please find this section on forum post here

Future Roadmap: Due to character limitation for Snapshot proposals please find this section on forum post here

Key Parties: Due to character limitation for Snapshot proposals please find this section on forum post here

Voting

• For: Add WTGXX as a reserve (backing) asset for Frax USD
• Against: Do nothing