Operational Details

Token Holder Rights¶

There are two classes of token holders:

• Users

• Investors

Users

• Any person or entity that holds a token. Tokenholder can be a smart contract

• Legal relationship governed by General Terms and Conditions

• No need to do AML/KYC. No address whitelisting

• Token issuers undertakes to use funds for investment in underlying

• Limited legal recourse

  • No right to convert tokens

  • Token issuer subject to anti-fraud/anti-scam laws

  • Token holder entitled to share of underlying assets in case of liquidation

• Tokenholder rights analogous to structured product or LP in fund

• No restrictions on transferability

• No trust, fiduciary, or beneficial ownership relationship

Investors

• Token holders must be legal persons ( for example a natural person or corporation). Cannot be a smart contract or an unowned wallet address

• Special contract executed between the token issuer and the token holder to give token holder legal rights to convert tokens to underlying

• Legal relationship governed by contract

• Token holders must undergo AML/KYC. Address for tokens must be whitelisted

• Token holders rights analogous to cash settled options or futures contract. Token issuer can physically settle the conversion if cash settlement is impossible.

• Strong legal recourse

  • Investors have the legal right to convert tokens to cash

  • Token holders have creditor rights against token issuer include right to force involuntary administration

  • Legal right enforceable via arbitration award through international recognized arbitration panel

  • Token issuer subject to anti-fraud/anti-scam laws

  • Token holder entitled to share of underlying assets in case of liquidation

• No restrictions on transferability

• No trust, fiduciary, or beneficial ownership relationship

Liquidation Rights¶

The intention is that in case of liquidation of the fund that both users and investors have equal rights. We have written the terms and conditions so that users will become creditors of the fund on equal terms with the investors if the fund goes into liquidation. However, should the fund go into liquidation, the final distributions of assets will be subject to the administration process.

Bankruptcy remote¶

We have set up our legal structure with the intention that the funds are in an SPV that is legally separate and bankruptcy remote from the operations of the fund. Details on our legal structure are available in the legal documentation.

NAV / Price Discovery and Transparency¶

One challenge in tokenization is price discovery and transparency. The underlying asset calculates the NAV of the underlying once a month and the NAVs are only available with approximately a one month delay. The underlying fund provides estimated NAV once a week, and these estimates can be used to provide a weekly estimate of the token value.

In addition, AXC Labs will provide a reference pricing model to aid in price discovery by which users can model the instant price of the token based on historical prices, historical volatilities, and proxy assets.

Deposit options¶

All deposits go through the same path by which the tokens are split into user wallet and underlying

AXC Labs may have a portion of the funds provided for purchase of the underlying to provide instant liquidity. We will provide mechanisms by which holders of the tokens will be able to instantly convert tokens to stablecoins with a discount. The mechanism by which we intended to provide additional liquidity

• We will set aside liquidity to redeem shares either through secondary Defi markets

• We will arrange with the underlying fund facilities to perform instantaneous buybacks at a discount

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Withdrawal options¶

AXC provides the following option for exiting holdings

The following chart illustrates the operational flows for deposit and or withdrawal requests:

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Timelines for deposit¶

The deposits are based on a monthly deposit period. For in this example we will begin with a deposit period in January

1. Deposit period opens: Jan 1st - January subscription period begins. Users submit purchase requests (e.g., subscribe for $10k, initial default $1k = 10 shares).

2. Payment Completion: Must be completed by Jan 15th.

3. Earnings Calculation Begins: Starts Feb 1st (next month), using $1k default NAV. No earnings for remaining days in Jan.

4. Monthly NAV Calculation & Disclosure: Calculated from Mar 1st, disclosed by Mar 20th. If 1% return, Feb NAV = $1010. User sees earnings for the first time here.

Timelines for standard withdrawal to stablecoin¶

Standard exit requests processed only on Jan 1st, Apr 1st, Jul 1st, Oct 1st each year.

1. AXC Prepares withdrawal Request: Apr window needs 60 business days notice (Jan 6th). AXC can initiate early, then adjust/cancel closer to April based on user request.

2. User Submits withdrawal Request: Jan purchasers can request redemption as early as Feb 1st, latest Mar 28th, to meet Apr 1st window.

3. Await Quarterly Processing Window: Regardless of submission time, processing starts in April (1st of the quarter).

4. Calculate & Lock Settlement Price: Apr 1st processing uses March NAV as final settlement price.

5. Confirm Monthly NAV: Around Apr 20th, March NAV calculation complete (assuming 1% return, March NAV = $1020.1). Actual redemption amount known, funds processed.

6. Funds Received: Within ~15 calendar days after March NAV confirmation.