$USH Collateral Pool
What is the $USH Collateral Pool?
The Collateral Pool is the portfolio of real-world assets that back $USH tokens. It's a transparent, efficient mechanism so investors understand what assets back $USH. The Collateral Pool consists of 100% of the interests in Manifest’s asset holding vehicle, U.S. Asset Holding Co., a Delaware C corporation. All HEIs backing $USH will be owned by U.S. Asset Holding Co. or trusts in which U.S. Asset Holding Co. owns 100% of the beneficial interests. Additionally, any cash held for working capital or liquidity in the Collateral Pool will be held by U.S. Asset Holding Co.
For ease of description, we will describe the Collateral Pool as the set of assets held by U.S. Asset Holding Co.
How does the Collateral Pool back $USH?
In the event of a redemption of $USH, the Collateral Pool will be liquidated for cash to redeem $USH tokens. Every asset in the Collateral Pool is made visible with data onchain, providing unprecedented transparency into the collateral backing $USH.
What types of assets are in the Collateral Pool?
The Collateral Pool contains HEIs in U.S. residential, owner-occupied properties. These are carefully selected for quality, location, growth potential, and risk characteristics. As Manifest expands, new Collateral Pools may be created for new asset backed tokens. Some working capital assets in the Collateral Pool may be held as cash or cash equivalents.
How is the Collateral Pool managed?
The Collateral Pool is managed through a combination of asset management by the Manifest team and decentralized governance through $USA token holders. Management includes sourcing investments, optimizing portfolio composition, implementing risk management strategies, and maximizing returns for $USH holders.
How transparent is the Collateral Pool?
The Collateral Pool offers unprecedented transparency for a real estate investment vehicle. Data on every asset in the Collateral Pool is recorded onchain, allowing investors to verify portfolio composition, asset values, collateral health, and performance metrics in real-time. This transparency creates trust and accountability previously impossible in traditional real estate investments.
How does the Collateral Pool generate returns?
The Collateral Pool generates returns through the appreciation and maturation of the underlying HEIs.
What happens if assets in the pool decrease in value?
Our HEI terms create a substantial buffer against housing market downturns due to the Equity Multiple. Additionally, our diversification across multiple properties and regions mitigates concentration risk.
If the values of HEIs in the Collateral Pool fall, the $USH backing value will fall, which will likely lead to a decrease in $USH value on the secondary market.
How is the Collateral Pool different from other RWA backing mechanisms?
The Collateral Pool differs from other RWA backing mechanisms through:
Focus on equity-based real estate exposure rather than debt,
Real estate assets (HEIs) with built in downside protection due to the Equity Multiple,
Complete onchain transparency of all assets, and
Governance input from $USH and $USA token holders on strategic portfolio decisions.
What risk management strategies are applied to the Collateral Pool?
The Collateral Pool is managed by governance of the protocol. Governance uses a buy box to help ensure all HEI assets in the Collateral Pool meet the criteria for purchase. Manifest has contractual rights to obtain replacement assets if the assets originally delivered do not fit in the buy box. Governance can change the buy box rapidly if there are changes in the marketplace that need to be addressed.
How does the Collateral Pool scale?
The Collateral Pool scales efficiently through our streamlined process for sourcing and acquiring HEIs. Unlike traditional real estate that faces scaling challenges due to management overhead, our HEI approach allows us to tap into the $35 trillion U.S. home equity market without operational constraints, enabling virtually unlimited scaling potential.
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