Resonate Announces Success of RWA Pilot
We are thrilled to share the success of our recent pilot launch with Hashnote, Arbelos Markets, and CipherChain Capital. The results have been outstanding, enabling us to continue scaling with additional capital deployments!
Objectives Achieved in the Pilot:
Our pilot with Hashnote, Arbelos Markets, and CipherChain Capital had two primary objectives:
- Validate our UI/X and tech stack.
- Demonstrate product market fit by matching institutional counterparties:
- Arbelos Markets deposited their short-duration asset-backed tokens into Resonate, receiving an immediate payout on their potential future yield. While Arbelos historically avoided direct exposure to digital assets due to its firm delta-neutral stance, the principal-protected nature of Resonate empowered Arbelos to utilize future yields, rather than principal capital, to speculate on call options.
- CipherChain capitalized on the spread between the upfront payment to Arbelos and the yield generated by Arbelos’ assets over time.
- Hashnote provided KYC/AML and tokenization services to our partners through their novel USYC token.
Success Stories and Feedback:
The pilot yielded success for all parties involved. Shiliang Tang, co-founder of Arbelos Markets, remarked, “The pilot was a success for Arbelos, enabling us to leverage the yield paid upfront into more profitable strategies going into the Bitcoin ETF launch. The product was easy to use, track, and transparent.”
Arbelos Markets strategically deployed their upfront yield to invest in call options, a tactical move that provided exposure to the delta of volatile assets, allowing Arbelos to outperform the base rate of USYC. Additionally, the upfront yield component enhanced capital efficiency with regards to option premiums. According to feedback from both current and potential partners, leveraging the upfront yield payments for call options is the most favored application thus far. Using an options strategy headed into the BTC ETF, Arbelos was able to realize a return of 8.31% APR, with modeling suggesting that monthly compounding, with similar success, could yield up to 29% APY. This strategic approach allowed Arbelos to venture further along the risk curve, pursuing higher returns while enjoying the complete principal protection that Resonate enables. Arbelos has committed to further capital deployments.
Learnings and Future Enhancements:
We are thrilled to implement improvements to the UI/UX, drawing insights from the valuable feedback received during the pilot phase.
Our technical design choices have been reaffirmed through flawless execution of our code, architecture, oracles, and protocol mechanics during this experience.
As we embark on the journey of scaling, the paramount importance of security remains at the forefront of our focus. In a decisive move to bolster institutional confidence in our platform, we are actively undergoing a supplementary audit by Quantstamp. Quantstamp, an industry leader with over 250 clients and 700 audits securing assets exceeding $200 billion, will further strengthen our commitment to a secure and reliable system.
Looking Ahead to Q1:
We are gearing up to scale trade volumes through Resonate in Q1. This collaborative effort marks the beginning of a transformative journey, and we’re excited to achieve even greater milestones with each step forward.
Shiliang Tang shares our enthusiasm, stating, “We’re looking forward to growing the size of the ecosystem for payers and depositors, and exploring other strategies for the paid upfront yield so we can continue to increase our demand.”
LinkedIn Breakdown:
For a deeper dive into the current and future state of RWAs, make sure to check out our LinkedIn RWA Panel, published earlier today. Rob, our CEO, joined other industry leaders including Tama Churchouse (Cumberland Labs), Gabriel Coleman (Hashnote), Shiliang Tang (Arbelos Markets), and Asad Khan (Centrifuge) to discuss the state of RWAs, Revest, and our recently concluded pilot.
About the Teams:
Arbelos Markets
Arbelos Markets is building a durable principal trading business for the next crypto cycle. We are focused on re-establishing the bilateral trust lost in a post-FTX world. We are specialists in derivatives liquidity and market structure, from the high-touch to the programmatic.
CipherChain Capital
Cipher Chain Capital is an emerging leader in decentralized finance market-neutral capital management. Operating as a 506(c) Hedge Fund, CipherChain specializes in DeFi orientated Capital Management, Market-Making, and Delta-Neutral Strategies.
Hashnote
Hashnote is an on-chain-first financial technology firm focused on fully regulated and compliant institutional investments. Best known for its institutional-grade service, on-chain structured products, and KYC/AML practices. Hashnote prioritizes regulatory compliance and on-chain transparency while providing institutional investors with a full-service gateway into DeFi.
The Hashnote Short Duration Yield Fund invests in short-term U.S. Treasury Bills and performs repo/reverse repo activities against the underlying asset in the USYC token. USYC earns short-term overnight funding rate returns. The fund benefits from the transaction speed, transparency, and composability of tokenization while eliminating virtually all of the protocol, custody, regulatory, and credit risks associated with other token projects.
Hashnote is regulated by the CFTC (Commodity Futures Trading Commission) as a CPO (Commodity Pool Operator) in the US, while offshore funds are regulated by CIMA (Cayman Islands Monetary Authority).
Resonate
Resonate is a marketplace where users can lend their variable rate assets to receive fixed rates (or provide fixed-rates to obtain boosted variable rates). Through tokenizing positions with Revest’s Financial NFTs (FNFTs) engine, Resonate is able to offer this interest exchange with fully customizable liquid lockups and zero-slippage.
Resonate enables low-to-no risk asset managers to maintain their secure gains from US Treasuries while tapping into DeFi yields and assets without jeopardizing their initial principal. It empowers asset managers to leverage their existing fixed-income portfolios, unlock hidden value within these assets, and access digital assets in a compliant, principal-protected manner.
This groundbreaking solution is enabled by the unique valuation of short-duration fixed-income assets. Short-term fixed-duration assets typically lack strips, meaning they are purchased at a value lower than their face value and realize that face value upon maturity. Resonate facilitates the realization of this value at any point during the maturity process by lending against the unrealized value. This decouples interest from the underlying asset, allowing borrowers to deploy the borrowed capital into DeFi and digital asset strategies.