Applicant information
Etherfuse looks forward to participating in Ethena’s allocation. We can help diversify by allocating a portion of the fund to safe, high-yield Mexican treasuries.
Expected APY :
The expected APY is between 9.25% and 10%. CETES earn up to 10.4% to 11% yields. In compliance with the government, we withhold taxes, brokerage fees, and a management fee and return the user a 9.25% to 10% yield.
Underlying asset(s):
The underlying assets are 100% invested in CETES, Mexican short-term treasuries that earn up to an 11% yield. Our CETES tokens rebase weekly and compound.
Minimum/Maximum transaction size:
We have automated flows from tokenization to purchase through our brokerages and custodians. Using the Mexican rails called SPEI, we can settle orders as small as 1 Peso to 100MM+ USD in under 2 minutes.
Proposal Summary
We are the only company in the world with regulatory ability, access, and compliance infrastructure to tokenize Mexican government debt or any asset in the Mexican market. The Mexican bond market is one of the strongest in LATAM, with 600B+ liquidity. Mexican Cetes are BBB+ rated government debt, with 11% APY, denominated in the top-performing currency 2023.
Etherfuse will improve Ethena’s reserve fund by exposing it to a high-performing and safe asset. CETES are not abstracted behind a fund, ETF, or Money Market but instead purchase the bond 1:1.
Basics and Background
How will this allocation improve the diversification or capital efficiency of Ethena’s Reserve Fund and backing assets?
We will enable Etherna to diversify into one of the biggest markets in terms of both existing size and potential for growth: the top-performing currency of 2023 against USD and the highest yielding (11%) BBB+ rated asset backed by the 12th largest nation in the world.
Please describe any experience your firm has in working with decentralized organizational structures
We have been working in a decentralized structure with regulatory operations in LATAM since 2019.
Legal design
Do holders of your product have any shareholder, investor, creditor, or similar rights?
No, these assets are categorized as digital assets and do not have shareholder, investor, creditor or similar rights.
Describe your product’s legal and contractual structuring, specifically naming any regulatory bodies overseeing the product, if applicable.
We have worked with The Ministry of Finance and the CNBV to design this protocol in compliance with Mexican Law. We have retained interpretations of the law specific to our company and product directly from the CNBV, detailing how they are viewed and interpreted under Mexican law.
How would the proposed allocation be treated in a bankruptcy or insolvency situation?
We can return 100% of the assets to all wallet holders as a revenue model based on yield earned, not fees. All assets are 100% backed.
Smart Contract/Architecture
Is the asset/product permissioned? If so, how are you managing user identities? Any blacklisting/whitelisting features?
These assets have no restrictions and are freely transferable and tradeable. To mint/burn directly from Etherfuse a user would need to pass KYC and create an account at app.etherfuse.com
Is the asset/product present on several chains? Are there any cross-chain interactions?
Currently on Solana. Availability to wrap for otherchains.
Are the applicable tokens being used in any other protocols? Please describe the various components of the ecosystem.
CETES are used as collateral for lending, pools, and to issue synthetic tokens.
How are trusted roles/admins managed in the system? Which aspects of the solution require trust from users?
The only trust our users require is regarding the custody of our assets and through our brokerages. To reinforce this trust, we have public weekly attestations by a third party to declare and attest to the assets under management.
Further, we use trusted institutions (BBVA, Kuspit, and Actinver) as brokerages, which are the primary forces behind the Mexican bond market and handle billions in assets.
Is there any custom logic required for your token/product? If so please give any details.
No they are standard SPL tokens.
Supporting Documentation: