How USH works

USH is the Token of the Truly HEI fund. Truly's tokenization entity sells USH to raise capital and deploys that capital into the acquisition of HEIs on U.S. residential properties in large metro areas.

The HEIs rise in value, and as they mature, their assets are either reinvested or returned to investors.

The value of the USH tokens is backed by the value of the HEIs Truly's entity holds. Truly can repurchase tokens from investors when HEIs mature and it creates more value for investors to return capital.

Backing Value

USH is backed by real world collateral. These collateral include:

1. Bank accounts

2. Exchange accounts

3. Home equity investments

USH is not backed by treasury Tokens.

Each of the collateral assets is valued at its Net Present Value (NPV). The NPV calculation is important because it allows assets with future cash flows (like HEIs) to be valued alongside assets like cash.

Truly uses third-party forecasts of the values of the underlying homes, estimates of propensity to prepay (CPR), tax rates, and forecasts of future interest rates to model future cash flows from individual HEIs. These cash flows are then valued at their NPVs and reported as Backing Value.

Note: Taxes are estimated and subtracted from Backing Value. However, when taxes are successfully deferred, Backing Value reflects the results of deferred taxes and the increased value of compounded assets.

Note: NPV calculations are dependent on the choice of discount rate (an estimate of the time cost of money). Truly uses a discount rate that is equal to the top end of the U.S. Federal Reserve Target Range + 5%. This is done to represent a high cost of capital. As the Federal Reserve changes interest rates, the NPV will change too.

Maintaining Soft-peg to Backing

Truly monitors the market price of USH tokens in comparison to the backing value of the underlying HEIs.

Truly can engage in strategic buying and selling of USH Tokens. When the price of USH Tokens falls below the Backing Value of the backing assets, Truly will buy back Tokens from USH Tokenholders. This action reduces the supply of USH in circulation, helping to boost the per Token Backing Value. Conversely, if the Token's price exceeds the Backing Value, Truly may sell additional USH Tokens, and use the proceeds to acquire new assets at a discount to their NPV and thus grow the Backing Value per Token.

This approach of continuously seeking to grow the Backing Value per Token via strategic Token issuances and repurchases may lead to increased long term value for Tokenholders.