One of the critical principles of treasury optimization is diversification, which involves spreading investments across different asset classes, product structures, banking systems, regulatory regimes, and security types.
By diversifying across various dimensions, treasury managers can mitigate risks, achieve better returns, and meet liquidity demands more easily if required.
In parallel to diversification, an even more important consideration is yield generation. Ensuring the company's treasury is productive is essential to generate healthy returns and protect from inflation.
Over the last few years, crypto companies and projects resorted to a straightforward treasury management method: stablecoins.
Within a crowded field, three projects stood out to dominate the category: USDT, USDC, and DAI.
USDT is currently the leader in market capitalization but has never provided full transparency on its reserves, leading to questions about its trustworthiness. DAI is the smallest of the three main projects, fully decentralized but reliant on USDC to cover most of its collateral needs.
USDC has proved itself as the most scalable and trustworthy stablecoin, becoming the de-facto "safe haven" asset in the space and, thus, the most used Treasury management tool. Issued by Circle, it successfully brought stability to the on-chain treasury management process - in an area where reference assets like BTC and ETH are highly volatile - but, conversely, it does not create much value in terms of yield generation and diversification.
Even for a successful and transparent project like USDC, recent events have shown that having a single point of failure could be incredibly risky for the entire ecosystem. So despite the short-lived panic surrounding USDC's de-pegging, crypto has learned a valuable lesson.
In addition, USDC is fundamentally based on a single regulatory regime and banking jurisdiction and, consequently, on a single banking ecosystem (the U.S.).
Similarly, the yield generation of existing on-chain treasury solutions is much lower than current off-chain solutions: 'risk-free' yield on-chain floats ~1-2% (with USDC providing 0%). Meanwhile, U.S. treasury bonds (the standard risk-free asset for the world of finance) pay ~4-5%.
In summary, most current crypto companies and projects managing on-chain treasuries do not have access to banking services to hedge and diversify their USD holdings. The ones that do find these services don't provide adequate remuneration for their risk. This exposes them to increased counterparty risk and inflation.
New projects must emerge to bridge traditional financial assets on-chain if the blockchain space is to progress. These would bring more scalability, diversification, and stability to the crypto ecosystem.
Backed issues tokenized trackers that allow market participants to get exposure to stocks and bonds on-chain via ERC-20 tokens that are backed 1:1 with their underlying securities.
We are a Swiss company incorporated and operating in a stable regulatory environment and one of the most robust banking systems in the world.
The underlying assets for our products are not cash deposits (which ultimately are loans to the banks) but book-entry securities, which are not part of the bank's balance sheets and are bankruptcy remote, meaning they are not part of the liquidation process of the bank in case of insolvency.
Our assets track the value of the underlying security on-chain, so for instance, if an accumulating ETF such as IB01 offers a 5% yield, this yield will also be accrued by the ERC-20.
We are proud to announce our first fixed-income products, bIB01 and bIBTA.
The Backed IB01 $ Treasury Bond 0-1yr (bIB01) is a tracker certificate issued as an ERC-20 token. bIB01 tracks the price of the iShares $ Treasury Bond 0-1yr UCITS ETF (the underlying).
You can find more information about bIB01 and the investment objective and key benefits of the underlying in the bIB01 Product Factsheet.
View bIB01 on Etherscan.
The Backed IBTA $ Treasury Bond 1-3yr (bIBTA) is a tracker certificate issued as an ERC-20 token. bIBTA tracks the price of the iShares $ Treasury Bond 1-3yr UCITS ETF (the underlying).
You can find more information about bIB01 and the investment objective and key benefits of the underlying in the bIBTA Product Factsheet.
View bIBTA on Etherscan.
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These products are issued according to a base prospectus approved on 20th December 2022. The prospectus and all other legal documentation can be found at https://backedassets.fi/legal-documentation
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This is an advertisement per Article 22 Prospectus Regulation.
Backed's products are only sold directly to qualified investors and licensed resellers.
Backed DOES NOT sell its tokens to U.S. Persons or for the account or benefit of U.S. Persons, and tokens are not marketed, offered, or solicited in the U.S. or in any other prohibited jurisdiction.
