YLDS

YLDS is an interest-bearing digital stablecoin native to the Provenance Blockchain. Legally structured as a transferable face-amount certificate, it is the first asset of its kind to be registered as a security with the U.S. Securities and Exchange Commission (SEC). It is designed to maintain a stable price while paying holders interest derived from a reserve of underlying securities, combining features of traditional stablecoins with the yield of money market funds. ^{[1] [2] [3]}

Overview

YLDS functions as a public fixed-income, daily accrual debt security. Its primary purpose is to serve as a yield-generating digital asset for both retail and institutional investors, offering an alternative to non-interest-bearing stablecoins like USDC and USDT. The asset is issued by Figure Certificate Company (FCC), a subsidiary of Figure Markets Holdings, Inc., and is regulated under the Investment Company Act of 1940. ^{[1] [2]}​

While marketing materials often describe YLDS as being pegged 1:1 to the U.S. dollar for user-facing simplicity, its legal structure is more specific. Each YLDS certificate is a share that seeks to preserve a value of 0.01 certificates. ^[2]​

Key Features and Mechanisms

Yield Generation

• Yield Source: The interest paid to YLDS holders is generated from a reserve of assets managed by Figure Investment Advisors, LLC. These reserves are invested in securities comparable to those held by prime money market funds, such as short-dated U.S. Treasuries, and may also be held as bank deposits. ^{[1] [2]}
• Accrual and Payout: Interest accrues for holders on a daily basis. The accumulated interest is then paid out once per month, on the first business day of the month. Payments are made in-kind, meaning holders receive additional YLDS tokens directly in their wallets. ^{[1] [3]}

Interest Rate Formula

The interest rate paid on YLDS is variable and is calculated based on a formula tied to a benchmark interest rate. According to the official prospectus and disclosures, the rate is determined by the Secured Overnight Financing Rate (SOFR) minus a spread of 35 basis points (0.35%). The interest rate has a floor, ensuring it cannot fall below 0.00%. ^[2]​

Transferability and Asset Recovery

A key technical feature enabled by the Provenance Blockchain is the ability to transfer YLDS peer-to-peer (P2P). Holders can send the asset instantly to other users on the blockchain via a wallet address or email address registered on the Figure Markets platform. The issuer claims YLDS is the only U.S. digitally native security that is P2P transferable. ^{[1] [3]}

Ecosystem and Associated Entities

• Parent Company: Figure Markets Holdings, Inc. is the parent company overseeing the subsidiaries involved in the YLDS project. ^[2]
• Issuer: Figure Certificate Company (FCC) is a subsidiary of Figure Markets Holdings and is the legal entity that issues the YLDS certificates.
• Reserve Custodian: UMB Bank, N.A., serves as the custodian for the reserve assets backing YLDS.
• Transfer Agent and Administrator: Figure Equity Solutions, Inc. acts as the transfer agent and administrator for YLDS, managing records of ownership and facilitating asset recovery processes.
• Auditor: KPMG LLP is the designated auditor for YLDS, providing external oversight.
• Regulator: As a registered security, YLDS falls under the regulatory purview of the U.S. Securities and Exchange Commission (SEC), specifically its Department of Investment Management. ^[1]

Trading and Accessibility

• Availability: The asset can be purchased and sold 24 hours a day, 7 days a week, 365 days a year on the Figure Markets platform.
• Tradable Pairs: Users can buy and sell YLDS using U.S. dollars and other stablecoins. The Figure Markets platform also supports direct trading between YLDS and Bitcoin (BTC). ^{[1] [2]}
• On-Ramp and Off-Ramp: Investors can purchase YLDS (on-ramp) with USD via bank transfers or with other stablecoins. To convert YLDS back into fiat currency (off-ramp), verified holders can redeem their assets for USD, a process available during U.S. banking hours.
• Eligible Investors: YLDS is available globally to both retail and institutional investors. All participants are subject to successful completion of the onboarding and identity verification process.
• Onboarding Process: To purchase YLDS, a user must first sign up for a Figure Markets Wallet, complete the required KYC identity verification, and then fund their account to purchase the asset.
• Minimum Investment: There is no minimum investment amount required to purchase YLDS. ^{[1] [4]}