Superstate Launches USCC Tokenized Fund for Yield Generation

Superstate Launches Innovative Tokenized Fund with USCC Token

Blockchain-based asset management firm Superstate has unveiled a groundbreaking tokenized fund designed to generate yield through the widely recognized “cash and carry” investment strategy. The new USCC token, an ERC-20 token built on the Ethereum blockchain, aims to create a steady income stream for its holders by engaging in a dual strategy of purchasing spot bitcoin (BTC) and ether (ETH), while simultaneously taking equal-sized short positions on BTC and ETH futures contracts.

This approach enables investors to maintain a delta-neutral position, allowing them to profit from market movements without making any speculative bets on the price fluctuations of these cryptocurrencies. For instance, several hedge funds have adopted this strategy by acquiring shares of bitcoin exchange-traded funds (ETFs) while short-selling bitcoin derivatives on platforms like the Chicago Mercantile Exchange (CME).

The encapsulation of investment strategies such as the carry trade into a digital token represents a novel advancement in the rapidly evolving trend of tokenization within the cryptocurrency space. This trend aims to integrate traditional financial instruments like bonds, funds, and credit into blockchain technology. A notable example is Ethena Labs’ USDE token, which has successfully attracted over $3 billion in deposits during the first half of the year by also utilizing the carry trade to provide yield to its holders.

However, Superstate’s tokenized fund showcases several key differences in its structure compared to Ethena’s product. As explained by Superstate’s CEO, Robert Leshner, in an interview with CoinDesk, Ethena’s token primarily generates yield through the funding rates associated with perpetual futures, distributing income to those who choose to lock up or stake their tokens.

• In contrast, Superstate executes futures trades with specified maturity dates, resulting in a more predictable return for investors.
• The yield generated from these trades is distributed evenly among all USCC token holders.

Additionally, the USCC token targets qualified, whitelisted investors to ensure compliance with U.S. securities laws. It operates as part of a series of a Delaware Trust, a bankruptcy-remote entity distinct from Superstate, which adds an extra layer of security for investors.

Leshner emphasized, “[USCC] is a highly-regulated product, with lower risks but offering lower returns,” highlighting the balance between safety and yield potential.

To facilitate the execution of futures trades for this fund, Superstate has established partnerships with prominent prime brokerage firms, while the spot assets are securely held in custody by Anchorage Digital.

The launch of this innovative tokenized fund follows Superstate’s introduction of its first tokenized offering, which is comprised of short-term U.S. Treasury bills. Since its debut earlier this year, this previous fund has successfully amassed nearly $80 million in assets, according to data from rwa.xyz.