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T-Bills, or short-term U.S. treasuries, are considered the risk-free rate and are secured by the full faith and credit of the United States government. Today, a 6 month T-Bill yields 4.93%. This led to the proliferation of companies like Backed Finance (and others) who have tokenized U.S. treasuries on-chain.
The purchased Backed bIB01 tokens are 100% backed by the Blackrock-managed ETF, which is a portfolio composed of US Dollar denominated government bonds issued by the US Treasury, with remaining maturities between zero and one year.
The issuer (Backed Assets GmbH) is a bankruptcy-remote, special purpose vehicle (“SPV”) with the sole business purpose of the issuance of financial instruments, such as the IB01 tracker certificate. Assets are ringfenced from the parent company’s (Backed Finance) balance sheet which limits financial risk and further protects the entity’s obligations towards the token holders.
Backed Finance is integrating with Chainlink’s Proof of Reserves to enable seamless, decentralized, and autonomous proof of reserves attestations by verifying collateral amounts and posting that data on-chain. This ensures that the bIB01 tokens are indeed backed 1:1 by securities in the custodian bank.