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USAF is the ETF. USAFi is the token. Both rest on the same fund, the same basket, and the same NAV. The fund holds the assets; the token is their expression on chain.
USAFi is pre-launch. Atlas AI Labs holds VARA In-Principle Approval and will issue the token on conversion to a full Issuance License. The mechanics below describe the design at issuance.

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The fund and the token

The two layers play different roles and carry different rights.
An SEC-registered, actively managed ETF listed on Nasdaq, operating under the Investment Company Act of 1940. It holds the basket, strikes a daily NAV, and custodies its assets at BNY Mellon, with distribution through Foreside. Any brokerage account that supports U.S. ETFs can hold it.

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Backing and NAV

Every USAFi token is backed by USAF ETF shares that the Issuer holds in segregated custody at BNY Mellon, ring-fenced and bankruptcy-remote from the Issuer’s operations, not commingled with the Issuer’s assets, and reserved exclusively for token holders. The backing runs at one thousand tokens per ETF share, and each token’s NAV references the fund’s NAV per share, so the token’s value moves with the basket. Distributions follow the ETF’s schedule.

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What you hold

A USAFi holder owns a contractual claim against the Issuer, not a share of the Fund. That claim is backed by the ring-fenced, bankruptcy-remote ETF shares described above, reserved for token holders and not available to the Issuer’s creditors, with redemption under VARA’s Recovery and Resolution framework. Tokenholders are not Fund shareholders and have no direct claim on the Fund.
Tokenholders hold contractual rights against the Issuer only. They are not Fund shareholders and have no direct claim on the Fund.

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Issuance and redemption

Mint and burn are Issuer-level mechanics. The Fund is never a party to a token transaction.

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Issuance

1

Onboard

A buyer completes KYC and AML onboarding and is screened for eligibility.
2

Fund

The buyer deposits cash, and the Issuer acquires the matching USAF ETF shares.
3

Mint

The Issuer mints USAFi against those shares and locks them in segregated custody.

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Redemption

1

Request

The holder of record initiates redemption on chain.
2

Burn

The Issuer validates the transfer and burns the surrendered tokens.
3

Settle

The Issuer releases the underlying ETF units and settles the holder in cash.
Redemption is issuer cash settlement: it can be initiated on chain at any time, but settlement follows market hours and custody cutoffs. Any secondary liquidity provided by third-party market makers is not issuer redemption and carries no guarantee of execution, price, hours, or availability. The right to redeem attaches to the KYC’d holder of record at the Issuer: a secondary holder carries the economic exposure but cannot redeem until completing onboarding.
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Verification

The token registry lives on chain. An independent verifier (named at launch) produces proof-of-reserve attestations on a defined schedule, reconciling the on-chain token supply against the off-chain BNY Mellon custody record, and Atlas publishes each one, so the backing can be checked rather than trusted. Before mainnet deployment, an independent auditor reviews the smart contracts, and Atlas publishes the report. Initial DeFi access runs through a curated vault on an established lending venue, with parameters set jointly with the curator and reviewed by the Investment Committee.