Carry Mechanism
The Hamilton system is built around one core principle: global dollars should reflect global productivity.
Behind every USDh and sUSDh lies a reserve structure that channels sovereign and money-market performance into a transparent onchain representation — what we call the carry mechanism.
This mechanism doesn’t create yield; it translates real-world capital performance into verifiable digital motion.
1. The Real-World Foundation
Hamilton’s reserves are deployed in short-term sovereign and institutional instruments across multiple jurisdictions. These instruments reflect the natural spread between where dollars are cheap to borrow and where they are productive to deploy — the global carry trade.
Reserves may include:
U.S. Treasury bills and USD money-market funds for liquidity and stability.
Short-dated sovereign bonds or term deposits in select emerging markets (e.g., Egypt, Brazil, Indonesia) for productivity.
Bank and dealer accounts managed through regulated institutional partners.
The system’s aggregate performance — after expenses, fees, and currency hedges — forms the base input for the reward multiplier that governs sUSDh.
2. Translating Reserves Into Onchain Rewards
Each reserve pool is continuously monitored and independently verified. As it accrues measurable results, those results are aggregated by Hamilton Global Ltd. and reported to Hamilton Treasury Inc., which adjusts the reward multiplier accordingly.
Process overview:
Reserve Performance Measured: Institutional partners provide verifiable performance data based on sovereign and money-market positions.
Multiplier Update: The total accrued performance is divided across all active sUSDh supply, increasing the multiplier. No distributions or payouts occur; the change is purely notional and reflected in redemption ratios.
Onchain Reflection: The updated multiplier is published onchain, allowing every holder to verify — in real time — how much USDh each sUSDh now represents.
User Experience: Users simply hold sUSDh in their wallets. Over time, as the multiplier increases, the amount of USDh they can redeem for each sUSDh rises transparently.
3. Example: Translating Global Carry
Imagine Hamilton’s reserves are split as follows:
70% in USD money-market instruments earning 5%.
30% in short-term sovereign notes in emerging markets averaging 15%.
After hedging, transaction, and custody costs, the aggregate reserve performance might net around 8% annualized.
Instead of distributing this as payments, Hamilton adjusts the reward multiplier so that the value of each sUSDh gradually represents a greater amount of USDh. This allows users to share in the system’s verified reserve productivity without any explicit yield distribution.
4. Dynamic and Self-Balancing
The carry mechanism is designed to be self-balancing across market conditions:
When global spreads tighten, the multiplier growth slows naturally.
When spreads widen, reserve productivity increases, accelerating multiplier growth.
If reserve performance is neutral, the multiplier remains stable.
No algorithmic promises, no fixed rates — just a transparent reflection of real-world capital conditions.
5. Transparency and Accountability
Every stage of the carry mechanism is governed by verifiable data and independent oversight:
Onchain Proof: Multiplier updates are executed through auditable smart contracts.
Offchain Verification: Reserve statements and attestation reports are published periodically by regulated custodians and independent auditors.
Governance Controls: Hamilton Foundation oversees policy decisions and discretionary allocations to ensure long-term sustainability.
This ensures users can verify both the sources and effects of reserve performance — turning trust into proof.
6. Why the Carry Mechanism Matters
Traditional carry trades are opaque, exclusive, and institution-only. Hamilton’s system redefines this dynamic by making it programmable, accessible, and transparent — without sacrificing prudence or regulatory integrity.
The carry mechanism is not speculation; it is the digital expression of global capital efficiency. It connects onchain users to the same macroeconomic forces that move the world’s money, in a form they can verify, understand, and participate in.
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