Superstate Enters Sky’s $1 Billion Tokenized Treasury Competition

Superstate, a company specializing in tokenized assets, recently entered Sky’s Tokenized Treasury Competition. Sky (formerly called MakerDAO), known for its $5 billion stablecoin DAI, is looking to invest $1 billion of its funds into tokenized U.S. Treasuries and is scouting for partners through this contest.

According to the announcement, Sky’s goal is to find partners that not only offer good pricing and liquidity and fit well with SparkDAO’s strategic vision — they are also looking to boost innovation and promote financial inclusion in the DeFi world.

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SparkDAO is a decentralized autonomous organization that manages the Sky protocol.

This initiative is set to significantly enhance the assets under management (AUM) of major players within the field. Superstate, alongside other leading tokenized treasury protocols such as BlackRock, Securitize, and Ondo Finance, is poised to be a key contender. Currently, Superstate manages over $100 million in its tokenized treasury fund - USTB and is working on integrations with multiple Web3 players.

The Superstate Short Duration U.S. Government Securities Fund (USTB) primarily invests in short-duration U.S. Treasury and Agency securities. Catering to qualified purchasers, the fund seeks to deliver returns aligned with the federal funds rate. Ownership in the fund is denoted by an ERC-20 token, USTB, which presently provides an annual percentage yield (APY) of about 5.3%.

In addition to Sky, the project has been focusing on integrating with other stablecoins. Recently, Superstate announced that USTB has been whitelisted to join the USDM Reserves. USDM is a stablecoin developed by Mountain Protocol. This protocol recently raised $8 million from some big cryptocurrency investors, including Multicoin Capital, Bankless, and Coinbase Ventures.

Moreover, the company is discussing potential collaborations with the Ethena stablecoin and has already bagged a significant partnership with Arbitrum for its treasury diversification plan. Arbitrum DAO has committed $25 million to invest in stable, liquid, and yield-bearing products, and USTB secured a robust $3 million allocation from them.

Amid these developments, Superstate introduced the Crypto Carry Fund (USCC), which uses a cash-and-carry strategy to exploit the price differences between spot and future prices on Ethereum and Bitcoin.

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In traditional finance, the cash-and-carry trade involves an investor purchasing a security or commodity while simultaneously selling a futures contract on the same asset at a higher price.

Launched just at the end of July, the fund already manages over $27 million, offering an attractive APY of approximately 12.74%.

Superstate was co-founded by former executives from the crypto lending platform Compound Finance. Robert Leshner, one of the co-founders who previously served as the founder and CEO of Compound, has played a vital role in developing smart contracts for both platforms.