OpenEden TBILL Vault: Now Open to Whitelisted Investors

OpenEden
5 min readMay 25, 2023

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The OpenEden TBILL Vault is now open for minting! Whitelisted users who have completed KYC can start earning U.S. Treasury yields on-chain by minting TBILL tokens from the world’s first smart contract vault.

Here is what Web3 treasuries, DAOs, and crypto funds can expect from the Vault:

  • 24/7 instant liquidity. Mint and redeem TBILL tokens in real time, during Asia or Europe hours or on weekends, without the constraints of U.S. trading hours.
  • On-chain transparency. Our Chainlink integration will provide cryptographic proof that TBILL tokens are 100% backed by Treasury Bills and USD assets (USDC and US dollars).
  • Off-chain transparency. Daily custodian reports and monthly attestations from third-party accountants and fund administrators provide visibility on the Treasury Bills portfolio.
  • Direct Treasury Bills exposure. Instead of ETFs and structured products, investing directly in Treasury Bills offers deeper liquidity and better market access.
  • Regulatory compliance. The token issuer is a professional fund regulated in the British Virgin Islands. All investors are required to undergo KYC and AML screening before being onboarded.
  • Asset segregation. A qualified custodian holds the underlying Treasury Bills in fully-segregated accounts for the benefit of token holders, removing the risk of commingling with OpenEden’s or the custodian’s balance sheet.
  • No fees. Our mission is to democratise access to Treasury Bills, so we will be waiving all fees for the foreseeable future.

All transaction costs will be absorbed by OpenEden during the launch phase, allowing investors to enjoy the highest yield in the market. These costs are incurred for maintaining the Vault across on-chain and off-chain venues and include Ethereum gas fees, bank wire fees, fiat conversion fees, and brokerage fees.

In the interest of transparency, we would also like to address some frequently asked questions from our users:

What are the advantages of direct exposure to U.S. Treasury Bills versus synthetic products?

Certain “tokenized” offerings are structured as unsecured debt obligations or a fund-of-fund wrapper, which are typically inefficient structures for direct exposure. Accessing U.S. Treasury Bills via instruments such as ETFs adds another layer of fees and introduces tracking error.

Why is investing in U.S. Treasury Bills directly superior in terms of liquidity?

U.S. Treasury Bills trade 24/6 (from 8:00am Tokyo to 5:00pm New York), with an average daily trading volume of around $190 billion. Synthetic products such as ETFs typically trade during U.S. trading hours only, with a daily trading volume of less than $400 million.

How are TBILL tokens a hedge for stablecoin de-peg risk?

TBILL tokens are denominated in USD as most of the underlying assets are U.S. Treasury Bills. The TBILL token price in USDC is based on the prevailing USDC/USD market exchange rate. Should there be a USDC de-peg, then the price of TBILL tokens in USDC terms will rise accordingly. TBILL token holders also have the option to redeem their tokens for other digital assets should USDC be unavailable for redemption.

How is the Vault compliant with regulations?

The TBILL token issuer is a professional fund regulated by the British Virgin Islands Financial Services Commission. TBILL tokens are only offered to “professional” and “accredited” investors in eligible jurisdictions.

What is the timeline for redeeming funds from the Vault?

If there is sufficient USDC liquidity in the Vault, then settlement will be instantaneous. If there is insufficient USDC liquidity, then settlement will take up to T+1 business days or up to T+2 business days during weekends and extended bank holidays. There are OTC market makers and other venues for secondary liquidity if instant redemption is required.

What are the main risks of using the Vault?

Smart contract risk: A small portion of USD stablecoin deposits is kept in the Vault to facilitate instant redemptions, which could be subject to exploitation. To mitigate this, our smart contracts are fully audited and are secured by multi-sig access.

Default risk: Treasury Bills are secured by the “full faith and credit” of the U.S. government. The prices of Treasury securities could decline if the U.S. government defaults on its debt.

For other risk disclosures, please refer to our documentation.

What if the Vault’s custodian becomes insolvent?

The Vault holds U.S. Treasury Bills with a qualified custodian, which has a full banking licence from the Swiss Financial Market Supervisory Authority. Under Swiss regulations, licensed banks are required to hold client assets in segregated accounts from the bank’s own balance sheet, which means the bank cannot use client assets to pay its own debt or obligations, and it must keep those assets separate to protect client interests.

Why hold TBILL tokens instead of actual Treasury Bills?

Unlike off-chain Treasury Bills, on-chain TBILL tokens provide full transparency to the stakeholders and community of crypto-native projects, funds, and DAOs. In addition, TBILL tokens offer 24/7 settlement, composability, and lower fees. The onboarding process for the Vault is also seamless, with whitelisting taking as little as 24 hours. In contrast, opening a brokerage account with a traditional financial institution could take weeks or months.

Further information:

About OpenEden

OpenEden is building the bridge to a new financial system. Our mission is to bring real-world assets on-chain to unlock trillions of dollars in value. We believe that internet-native money and decentralisation will open up access to real-world assets for everyone on a global scale, creating a more inclusive, permissionless, and free-flowing economy. Hill Lights International Ltd, the TBILL token issuer, is a professional fund established under the British Virgin Islands Securities and Investment Business Act 2010.

Disclaimer: The information presented above is not intended to solicit you to purchase any financial product(s) directly from us. TBILL tokens are not offered by us or any affiliated entity of ours directly to the public, and will only be offered to “Professional Investors” and “Accredited Investors” in non-restricted jurisdictions.

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OpenEden

First smart contract vault to offer direct access to U.S. Treasury Bills.