Investment Objectives & Strategy

Investment Objective

The digital asset space has witnessed investors gravitating towards high returns, be it through high APYs via liquidity mining or ICO speculations. However, post-2022, it became evident that the potential risks of such investments were often overlooked. As the crypto industry evolves and attracts more sophisticated participants, there's an increasing need for a balanced focus on both returns and risk management.
This is why tfBILL is designed with the simple goal of providing low-risk yield, anchored by stable, liquid, Short-Term US Treasuries:
  • tfBILL's Exposure: A pool of short-dated U.S. Treasury securities
    • Class / Token: tfBILL
    • Asset Exposure: US Treasuries
    • Target Yield: Effective Federal Funds Rate (currently ~4-6%)
    • Liquidity: Daily

Investment Process

  1. 1.
    USDC to USD Conversion: When you invest your USDC in tfBILL, the first step is to exchange the USDC for USD.
  2. 2.
    Asset Purchase: The USD is utilized to acquire short-term government securities.
  3. 3.
    Token Minting: Corresponding to your investment, new tfBILL tokens are minted and transferred to your wallet.
  4. 4.
    Yield Reinvestment: As the underlying assets generate yield, this yield is reinvested to acquire additional assets, effectively auto-compounding your returns.
  5. 5.
    Redemption: If you decide to redeem your investment, your tfBILL tokens are burned, and you are returned the equivalent value in USDC.

Focus on Capital Preservation

Both Short-Term US Treasuries and investment-grade corporate bonds have historically been low-risk investments. Their primary objective is capital preservation, ensuring the principal remains intact while generating some yield.
For context, consider the performance of various assets from Nov 2021 - Nov 2022. During this period, major indices like the S&P 500 and NASDAQ saw significant drops, and even BTC experienced a substantial decline. In contrast, specific Short-Term US Treasuries ETFs, like the example provided, saw a positive return.