Adapt3r Digital has recently submitted a proposal introducing tfBILL, an innovative on-chain treasury bill product designed to enhance Frax's treasury management strategies in support of FXBs.
This submission follows the approval of FIP-308, which allows Frax to engage with Centrifuge, another manager of RWA's.
tfBILL only invests in spot T-Bills, which have a significantly higher global daily volume ($700 billion) compared to ETFs. This approach promises better liquidity and reduced risks of slippage, essential for managing a treasury the size of Frax's, as it potentially could expand to the billions in the future. Moreover, tfBILL's structure is designed to minimize regulatory risks, allowing for flexible operations both domestically and internationally. tfBILL has both US and offshore structures that can facilitate
tfBILL offers a straightforward process access to US Treasuries. USDC is deposited into a smart contract vault, in return for tfBILL tokens, representing a Limited Partner interest in a fund that exclusively holds treasury bills. The platform utilizes TrueFi's secure smart contracts and is accessible through Archblock’s marketplace, ensuring both security and ease of access for users. Once the funds are deposited, the USDC is converted to cash and then used to purchase T-Bills through a regulated prime broker.
The proposal has a tiered fee structure that is more competitive than Centrifuges, with .30% p.a. charged on assets up to $50, then .2% up to $100m, and .1% on any value above that. The fee will be paid in stablecoins or potentially in FXS, and the effective fee is rebated from Adapt3r back to Frax on an ongoing basis.
Adapt3r designed their product to meet the stringent requirements of relevant regulations, targeting qualified non-US investors while also planning for a US feeder fund to accommodate US-based entities like Frax through a Reg D offering.
Net Asset Value attestations, CUSIPs and annual audits are published daily, providing clear insights into the fund's performance and holdings. These attestations are uploaded on-chain to IPFS and are visible for any party to review.
Adapt3r is run by the team at MJL Capital, a large investor in Frax's FXS governance token.