Tokenized Asset Manager Superstate Debuts New Fund to Profit From Bitcoin, Ether ‘Carry Trade’

Blockchain-based asset management firm Superstate has introduced a new tokenized fund that will provide yield based on the popular “cash and carry” investment strategy.

The USCC token, an ERC-20 token on the Ethereum blockchain, will generate yield for holders by buying spot bitcoin (BTC) and ether (ETH) and taking an equal size of short positions of, or selling, BTC and ETH futures. The trade offers a delta-neutral position, profiting from the market without taking any directional bets on price changes. For example, several hedge funds pursue this strategy by buying spot bitcoin exchange-traded fund (ETF) shares and selling bitcoin derivatives on the Chicago Mercantile Exchange (CME).

Wrapping investment strategies like the carry trade into a digital token is a novel form of crypto’s red-hot tokenization trend, which puts traditional investments like bonds, funds and credit on blockchain rails. Ethena Labs’ “synthetic dollar” USDE token, which attracted more than $3 billion of deposits in the first half of the year, also provides yield to holders via the carry trade.

However, there are several differences between how Superstate’s and Ethena’s product are structured, Superstate CEO Robert Leshner told CoinDesk in an interview.

Ethena’s token generates yield from perpetual futures’ funding rates and passes on the income to those who lock-up or stake, the token. Meanwhile, Superstate sells futures with certain maturity dates providing a more predictable return, and distributes the yield to all token holders, Leshner said. USCC also targets qualified, whitelisted investors to comply with U.S. securities laws and operates as a series of a Delaware Trust, a bankruptcy-remote entity from Superstate, he added.

“[USCC] is a highly-regulated product, with lower risks but offering lower returns,” Leshner noted.

To execute the futures trades for the fund, Superstate has partnered with prime brokerage companies, while spot assets are held at custodial partner Anchorage Digital.

The asset manager’s new offering comes after it rolled-out first tokenized fund, which holds short-term U.S. Treasury bills. The previous fund has gathered nearly $80 million of assets since debuting earlier this year, according to rwa.xyz data.