Fund Custody & Risk Management
Last updated
Last updated
Astherus works with Ceffu for the custody of USDF and underlying funds USDT, and to prepare funds for the execution of asUSDF yield strategies.
Ceffu provides institutional-grade crypto asset management solutions, focusing on security and efficient technology. They offer a variety of services such as cold storage, off-exchange settlement, and multi-party computation to secure digital assets. Ceffu is designed to meet the needs of institutions by providing custody, liquidity solutions, and compliance with rigorous security standards.
Advanced technologies like multi-party computation (MPC) and multi-signature wallets are utilized. They manage crypto assets using private key encryption, which is stored securely in hardware devices or cryptographic vaults. Ceffu’s custody solutions are compliant with institutional standards, offering features like custom governance controls and robust security measures for managing and protecting digital assets.
Ceffu's MirrorX function plays a crucial role in generating staked USDF (asUSDF) yields. MirrorX is a solution by Ceffu that allows projects to deploy their capital on Binance instantaneously while keeping their assets in Ceffu’s independent custody. This service enables a 1:1 balance delegation from a Ceffu account to a designated Binance sub-account, with assets always remaining in Ceffu’s custody. Trades are settled off-exchange, minimizing counterparty risk. Withdrawals can be made directly from the Binance account, triggering a T+1 settlement. This setup combines deep liquidity with heightened security. Read more.
Through MirrorX, the Astherus account on Ceffu supports the execution of a delta-neutral strategy by providing a seamless off-exchange settlement mechanism, optimizing returns while upholding institutional-grade security measures. The account buys spot assets on Binance, then shorts the corresponding perpetual contracts to maintain delta-neutral positions.
Before deploying any asset, Astherus conducts a rigorous evaluation to assess market fit and potential risks.
USDF Audit report
As with any asset, it is important to consider potential risks and understand what actions can be taken to mitigate risk. There are general risk factors and risks associated with a yield-bearing stablecoin like USDF.
Smart contract risk refers to the chance for malicious actors to exploit loopholes in the protocol’s smart contracts. Astherus engages reputable security firms to conduct audits on all smart contracts and maintains a robust risk monitoring system. However, as exploiters become more sophisticated, there remains a minimal risk of unexpected exploits. To mitigate this, Astherus works with security and blockchain partners to stay abreast of the newest developments in crypto and DeFi security. We also regularly liaise with these partners’ in-house risk monitoring teams.
When a user stakes USDT, they mint USDF at a 1:1 ratio. USDT is also used as trading collateral to maintain delta-neutral positions. Thus, underlying asset risk refers to the potential risks associated with USDT — the most salient involving the risk of price depegging and ensuring a robust reserve backing for USDT. These risks are disclosed by Tether (the issuer of USDT) in their Legal Terms. To see current USDT balances, reports and reserves, please visit https://tether.to/en/transparency/?tab=usdt.
Astherus relies on Ceffu for the custody of USDF underlying funds. There may be custodial partner risk if operations on Ceffu fail — such as lack of accessibility, availability of asset transactions and the failure of operational duties like frequent PnL settlements for open positions. There is also risk if Ceffu falls short of compliance, security or data privacy standards, leading to a temporary or permanent shutdown. Due to the above, Ceffu solutions are ISO 27001 and 27701 certified and SOC 2 Type 1 & 2 compliant. These qualifications mean auditors have analyzed Ceffu’s cybersecurity and privacy controls. Ceffu is also part of the Global Travel Rule (GTR) Alliance to comply with the Travel Rule (officially known as the Financial Action Task Force’s (FATF) Recommendation 16), which is set to become the universal standard in compliance reporting. Aside from these, Astherus takes a proactive stance to react quickly in the event of custodial partner risk.
The Astherus-Ceffu account maintains delta-neutral positions to generate asUSDF yields. USDT assets continue to be kept in Ceffu’s independent custody and trades are settled off-exchange. There is exchange partner risk if the Binance exchange becomes insolvent, which will render the delta-neutral positions ineffective. Astherus takes a proactive stance in monitoring to react quickly in the event of exchange partner risk.
Perpetual shorts are used in the delta-neutral strategy for hedging. In the process, the Astherus-Ceffu account may earn funding fees which reflects in asUSDF’s net asset value. If there are consistently negative funding rates, the Astherus account on Ceffu may be required to pay more funding fees, thus affecting asUSDF APY. That said, it is normal for funding rates to fluctuate especially in periods of volatility. Even though negative funding rates directly affect APY, perp markets are usually designed to balance long and short open interest. This means that negative funding rates usually return back to a positive mean.
When there are perpetual positions involved, there is a risk of liquidation. This risk may arise when the underlying spot asset price changes significantly in a short period of time, causing positions to be automatically liquidated if collateral falls short of margin requirements. This risk is minimal as the Astherus account on Ceffu regularly monitors existing positions and frequently settles PnL.
During periods of market downturns, USDF presents a reliable option for those seeking steady returns. A yield-bearing stablecoin, minting and holding USDF earns holders 20x Au points for the Astherus token airdrop. Holding USDF also opens additional channels for earning when users stake USDF to get asUSDF, its yield-bearing token. asUSDF currently generates yield through two primary channels: APY from delta-neutral strategies and Au points.
There is huge market potential for USDF and asUSDF. Consider the integration of real-world assets (RWAs) like US Treasury Bonds, thus allowing Astherus to develop new avenues for yield. The protocol also continually explores new arbitrage strategies, RWA and onchain strategies to boost capital efficiency and yield generation. Thus, Astherus’ aim is always access to safe and productive investment options even in less favorable economic conditions.