Question 1

What is Hashnote?

Accepted Answer

Hashnote is a digital asset manager focused on bringing short-duration, dollar-denominated fixed-income strategies on chain for institutions. Its flagship strategy is the Hashnote International Short Duration Yield Fund Ltd. (SDYF), a Cayman Islands mutual fund that invests in short-term US Treasury Bills and undertakes repo/reverse-repo secured by US government collateral. USYC is the on-chain representation of shares in SDYF and connects the fund’s traditional market activity to blockchain rails with on-chain transparency and operational efficiency.

Question 2

What is Hashnote USYC (USYC)?

Accepted Answer

USYC is a permissioned ERC-20 token that represents an interest in SDYF. The fund targets short-term Federal Reserve rate returns by allocating primarily to T-Bills and reverse repo. Tokens represent fund shares: holders are recorded in the transfer agent’s SDYF share registry, and the on-chain token supply is kept in sync with that registry.

USYC is issued by Circle International Bermuda Limited, regulated by the Bermuda Monetary Authority (BMA). The underlying fund is a Cayman Islands mutual fund licensed by the Cayman Islands Monetary Authority (CIMA). Asset custody sits in segregated accounts at the prime broker, providing direct recourse for shareholders.

Question 3

What is USYC used for?

Accepted Answer

- **On-chain cash management:** Hold a tokenised claim on a short-duration US dollar strategy that accrues the underlying yield rather than remaining static at par.
- **Collateral and treasury operations:** Post USYC as on-chain collateral while retaining exposure to short-term yield; move between USYC and USDC to match settlement and payment needs.
- **Programme-matic workflows:** Integrate price, access and lifecycle events into applications via a smart-contract oracle and Web2 APIs, enabling automated treasury, reporting and reconciliation.
- **Interoperability with stablecoin rails:** Subscribe and redeem in USDC to bridge between a yield-bearing asset and a widely used settlement token.

Question 4

Eligibility & Onboarding (Institutions only)

Accepted Answer

USYC is available only to eligible institutional investors who are **not** US Persons (as defined under Regulation S) and who meet a minimum investment of **US$100,000**. Access requires onboarding to SDYF:

1) Create an account in the Investor Portal  
2) Complete the onboarding questionnaire  
3) Undergo KYC/AML checks by the fund administrator  
4) Undergo wallet screening; the wallet address is then allowlisted  
5) Receive confirmation of onboarding success

Only allowlisted wallets associated with KYC’d entities may hold, transfer, subscribe or redeem USYC.

Question 5

Liquidity, Subscription & Redemption

Accepted Answer

- **24/7/365 access via Smart Contract Teller:** Onboarded wallets subscribe and redeem USYC using USDC at any time. The on-chain process is atomic; same-day (T+0) subscription and redemption into USDC are supported, subject to operational windows.
- **After-hours handling:** Each stablecoin has an after-hours threshold. Subscriptions submitted after **2:00 pm ET** are processed at the **effective subscription price** for the next business day.
- **Private Liquidity Teller (PLT):** For specific use cases, a PLT can be configured to maintain up to **100% instant USDC liquidity**, including defined windows such as weekends. Additional fees apply.

**Workflows**

- **Subscription:** After allowlisting, the investor sends USDC to the Smart Contract Teller. Hashnote allocates capital at the prime broker into T-Bills and repo/reverse-repo; USYC is minted to the investor wallet in an amount equal to `USDC deposited ÷ current USYC price`.
- **Redemption:** Allowlisted wallets redeem USYC to USDC through the Teller at the latest reported price. The fund administrator updates the SDYF share registry to reflect the burn.

Question 6

Pricing, NAV & Oracle

Accepted Answer

- **Daily price publication:** USYC’s price is reported on chain **once per business day**, typically around **06:45 ET**, after the prime broker reconciles the prior day’s activity. Trading occurs Monday–Friday, excluding US federal holidays; results are reflected the following morning.
- **Price calculation:** `USYC price = Prime brokerage account NAV ÷ Total USYC supply`.
- **Effective subscription price:** Redemptions occur at the current USYC price. Subscriptions between the daily price report and **2:00 pm ET** occur at the current price; subscriptions after **2:00 pm ET** are priced at a forecast of the next report to align with whether capital could earn that day’s yield.
- **Interest and APR data:** The USYC Oracle publishes principal and interest each update, enabling computation of APR and overnight rates, including multi-day accruals (e.g., weekend repo).
- **Transparency:** Price reports are available via a Chainlink-style aggregator on chain and mirrored through JSON endpoints for current and historical data.

Question 7

Who created USYC?

Accepted Answer

USYC reflects Hashnote’s SDYF strategy and is **issued by Circle International Bermuda Limited** under BMA oversight. SDYF is a Cayman-regulated mutual fund linked to Hashnote’s short-duration fixed-income strategy. Core service providers include a prime broker (segregated custody accounts), bank partners, fund administrator and auditor, KYC/AML providers and an MPC wallet provider. Governance and controls include:

- **Entitlements & permissions:** Only allowlisted, KYC-approved wallets may hold or receive USYC; transfers check roles against an Entitlements contract.  
- **Sanctions screening:** The Entitlements contract queries a Chainalysis on-chain oracle for OFAC sanctions matches.  
- **System halt:** In case of suspected abuse, the allowlist can halt transfers; normal operation resumes once resolved.

**Fees:** A performance fee on yield and bps-level subscription/redemption fees apply. Tiered fees are available for PLT configurations. Fixed-income assets such as Treasury Bills may lose value.