Imagine you’re investing in U.S. government bonds, a super-safe type of financial asset. Typically, when you put your money in these investments through funds, you have to wait a day or more to see your money actually start earning interest. This delay is due to the “settlement cycles” in traditional finance (TradFi). But what if there was a way to start earning returns as soon as you invested, without waiting for these cycles to finish?
What Superstate is Doing Superstate, a company that uses blockchain technology to improve traditional finance, has introduced a groundbreaking feature called “continuous pricing” for their USTB fund. This fund tracks U.S. Treasury Bills (T-bills)—basically short-term loans the U.S. government takes that are considered super reliable. With “continuous pricing,” the fund’s value updates constantly, so investors can start earning interest immediately after they invest.
Why This Is Huge In the traditional finance world, interest usually starts accruing after a specific time—like the next business day. But with continuous pricing, USTB holders don’t have to wait. This feature could change how people think about investing because it removes a big friction point: the wait time to see your money grow.
Key Terms to Remember:
- Tokenization: Converting real-world assets into digital tokens on a blockchain.
- ERC-20 token: A type of cryptocurrency token that runs on the Ethereum blockchain, known for being easily tradable and programmable.
- Continuous pricing: Updating an asset’s value in real-time so that changes are instantly reflected.
- Interest accrual: How and when your investment starts earning money.
- T-bills: Short-term U.S. government debt securities with predictable returns.
Why You Should Care Understanding this concept helps you get why blockchain technology isn’t just about crypto coins; it’s about revolutionizing finance. Superstate’s move brings the speed and logic of blockchain to a traditional asset, blending the best of both worlds. This could make investments in assets like T-bills more accessible and efficient, drawing more people to digital finance without giving up the stability of traditional assets.
The Bigger Picture Founder Robert Leshner believes that bringing real-time features like continuous pricing into finance could push DeFi (Decentralized Finance) to a new level. For example, if USTB and other similar assets have real-time pricing, they can be more easily integrated into DeFi apps and protocols. Imagine a world where DeFi tools could use T-bills as a reliable, instant-paying asset to back up loans or provide returns.
What’s Next? Right now, continuous pricing is limited to T-bills because their returns are stable. It wouldn’t work for more volatile assets, like Superstate’s other fund that deals with bitcoin and futures, since those prices change too much in real-time. But this move sets the stage for further innovation, like near-instant “atomic minting and redemptions”—the creation and trading of tokens in one quick, efficient step.
Why It Matters for You If you’re looking to learn more about how blockchain can change traditional investments, this is a big deal. The financial world is slowly but surely being transformed by blockchain technology, making it more efficient and adaptable. This means opportunities for young investors like yourself are evolving. With this knowledge, you’re not just following trends—you’re understanding how and why finance is changing and how you can potentially leverage these shifts for your own growth.
