Worked Example

Consider a Gulf family office, an eligible non-U.S. holder, that wants dollar exposure without full exposure to dollar debasement, held across a multi-year horizon. It commits $10 million.

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Step 1: Subscription and onboarding

The family office completes KYB and KYC at the Issuer: identity verification, sanctions and jurisdictional screening, source-of-funds review. Onboarding establishes it as holder of record, the status that later carries the redemption right. It wires $10 million.

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Step 2: Mint

Assume NAV per USAF share is $25.00 on the subscription date. The Issuer acquires 400,000 ETF shares ($10,000,000 divided by $25.00) and places them in segregated custody at BNY Mellon, ring-fenced from Issuer creditors. At the 1,000-tokens-per-share ratio, the Issuer mints 400,000,000 USAF+ tokens. NAV per token is $0.025, referencing NAV per share. The tokens settle to the family office’s onboarded wallet. The proof-of-reserve attestation reconciles: 400,000,000 tokens outstanding against 400,000 ETF shares in custody, published against the BNY Mellon record on the defined cadence.

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Step 3: The basket the tokens represent

The 400,000 shares are a claim on the USA First basket. Illustrative entry weights across the five sleeves:

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Step 4: A stress event, and how the engine responds

A geopolitical shock hits: a Hormuz-type energy disruption sends oil sharply higher, which transmits to inflation, which pressures the long end of the curve. This is the correlation cascade the whitepaper describes, where a war reprices energy, energy reprices inflation, inflation reprices debt. A single-sleeve holder is exposed to the cascade directly. The basket is built so each sleeve absorbs a distinct part of it. The Investment Committee, on the engine’s regime read, directs an illustrative defensive rotation: The point is not the specific weights. It is that the gold and commodity sleeves are designed to rise in value precisely as the Treasury sleeve comes under pressure, so the basket’s NAV is built to hold better than any one sleeve would alone. That offsetting behavior is the preservation property the token inherits. The rotation runs through the monthly review, or the fast-path protocol off-cycle, with Investment Committee sign-off before deployment. AI proposes the rotation; the Committee disposes.

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Step 5: What the holder owns through the event

The family office did nothing. Its 400,000,000 tokens still represent 400,000 ETF shares, and NAV per token continues to reference NAV per share daily. The rotation happened inside the fund, not at the token layer. As an illustrative path, NAV per share moves from $25.00 to $25.45 across the window, so NAV per token moves from $0.025 to $0.02545 and the position is worth roughly $10.18 million before fees. That figure is illustrative. What is not illustrative is the live record. Over its actual window of November 19, 2024 to March 31, 2026, a window that contained a tariff war and the Hormuz closure, the USAF basket returned 12.61% cumulative at a 4.31% maximum drawdown, with 6.23% annualized volatility and a 0.74 Sharpe ratio, independently calculated by the fund administrator. That is disclosed historical performance over a specific past period. It is not a forecast and not a return the holder in this example is promised. The point the example makes is structural. The holder preserved its position, and modestly grew it on the illustrative path, through a stress event by doing nothing, because the offsetting sleeves held NAV together. Preservation across the regime is the upside the instrument is built to deliver.

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Step 6: Redemption

A year later the family office redeems half its position. It surrenders 200,000,000 USAF+ to the Issuer. The Fund is not a party. The Issuer burns the tokens, releases the corresponding 200,000 ETF shares from segregated custody, and settles cash against the reserve under the token terms and VARA’s Recovery and Resolution framework. Settlement is subject to market hours and custody cutoffs. The redemption right attaches because the family office is the KYC’d holder of record. A secondary-market party holding the same tokens without completing onboarding would have economic exposure but no redemption claim until it onboards.

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Step 7: Fees, across the hold

Two fees, two layers, as set out in Section 3.5. The 75-basis-point annual management fee accrues at the ETF level on the underlying NAV, charged by Atlas as fund manager. The 60-basis-point issuance fee applies at the token layer, charged by the Issuer. On a $10 million position held one year, that is roughly $75,000 at the fund layer and $60,000 at the token layer in illustrative terms, $135,000 all-in. The comparison the whitepaper draws: a tokenized T-bill charges 15 to 50 basis points because it holds one asset and makes one promise. The spread here buys active multi-asset allocation, a registered fund, and a regulated issuer maintained in parallel across two jurisdictions.

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What the example shows

One subscription touched all three systems. Onboarding established the holder of record. The mint locked real ETF shares in segregated custody at a fixed ratio and produced tokens whose value references fund NAV. The allocation engine rotated the basket defensively under stress while the holder did nothing, and the offsetting sleeves are what held NAV together. Redemption burned tokens, released shares, and settled cash, with the Fund never a party and the redemption right gated to the onboarded holder. The token moved and composed freely on chain throughout; the preservation work happened in the basket beneath it.