About Tranched Value Securities (TVS)

One Marketplace - Thousands of opportunities.

Tranched Value Security™ (patent pending) is a security whose income payments and value are derived from and collateralized (or "backed") by the value of a single asset, group of assets, stream of cash-flows or any other entity or product possibly having a determinable value (and / or price). Value of TVS™ is derived either from a value share of a specific underlying, or from a minimum contract value, which can equal to the value share of a specific underlying at the contract initiation, given that a higher-level (or “prior”) TVSs™ are satisfied.

Assets transformed by a single equation!

TVS_i,t=min(S_t-TVS_i-1,t, max(w_i, S_t, X_i))

You can trade cryptocurrencies on as.exchange through a new, innovative type of contract called Tranched Value Security (TVS) which is aimed at transforming the underlying spot market performance in a way that investor has a complete control over the possible results. This product might have or might have no expiry date and is able to significantly magnify the underlying performance, while able to assure that investor’s holdings do not drop in value while the underlying market declines.

The product suits traders who prefer to hold positions for a long and short time and do not want their positions to fluctuate in value due to large swings in basis, or aim at exploiting expected price movements without using leverage, which is subject to additional fees.

Split one asset into thousands of opportunities!

Split a single underlying asset into multiple independent securities – TVSs and earn different returns from each one of them. They are “independent” because they will still be driven by the same fundamental factors as the underlying, but due to their unique features and seniority conditions, each TVS will earn different return. Moreover – TVS issued with your Bitcoin (for example) today, can have totally different returns from TVSs issued by your friend with the same Bitcoin tomorrow.

Underlying

$6,000

Bitcoin

Senior

Price: max($3,000, 50% x $6,000) = $3,000

Junior

Price: min($6,000 - Senior, max($3,000, 50% x $6,000)) = $3,000

How does it work? Quite simple! Imagine that you have one Bitcoin (assume the price is $6,000) and issue 2 TVSs backed by it – Senior TVS, and Junior TVS. Each TVS can have a value claim of 50% of market price of Bitcoin, or 50% x 6,000 = $3,000, and minimum $3,000. So far, they are same, right? Yes, and here innovation would step in, if there’s no additional feature for each TVS (be it Senior or Junior) to claim value share of Bitcoin, a higher level TVS’s claim must be satisfied first (in this case Senior is the most and only senior tranche). So, it means that before Junior TVS can make a claim, Senior’s must be satisfied first.

In such a simple setup, see below what happens: When the price declines, Junior tranche loses first. However, when price starts increasing afterwards, Junior is compensated by magnified return. At the same time Senior one does not decline below its minimum value, unless the value of underlying is completely wiped out, but still earns positive return when Bitcoin goes up.

Underlying

$6,300

Bitcoin

Senior

Price: max ($3,000, 50% x $6,300) = $3,150
Return: $3,150 / $3,000 = 5.00%

Junior

Price: min ($6,300 - $3,150, max ($3,000, 50% x $6,300)) = $3,150
Return: $3,150 / $3,000 = 5.00%

Underlying

$5,700

Bitcoin

Senior

Price: max ($3,000, 50% x $5,700) = $3,000
Return: $3,000 / $3,150 = -4.76%

Junior

Price: min ($5,700 - $3,000, max ($3,000, 50% x $5,700)) = $2,700
Return: $2,700 / $3,150 = -14.29%

Underlying

$6,500

Bitcoin

Senior

Price: max ($3,000, 50% x $6,500) = $3,250
Return: $3,250 / $3,000 = 8.33%

Junior

Price: min ($6,500 - $3,250, max ($3,000, 50% x $6,500)) = $3,250
Return: $3,250 / $2,700 = 20.37%