The T5 project was launched to answer the following question -

As digital asset markets surpass $3trn, led by the ubiquitous Bitcoin (BTC), why is adoption so limited in capital markets?

Capital markets are where the $400trn global wealth is built and transferred through funding and trade flows.

This is surpassed by the $2quadrillion ($999trn x2) swap markets which generate the liquidity to create robust markets, by allowing continuous netting across world assets and institutions.

On this basis, digital markets are not even scratching the surface.

It is without doubt that blockchain and digital asset markets ($3trn) are changing the wider financial landscape. (Incorrectly referred to as “crypto”, but this moniker serves to delineate the “pixie dust” and “crypto kitty” aspects of a more serious evolving body of work - the former refers to self-trading markets and zero sum fees the latter to the “memetic” pumping of value on the hope that a new future can be found once funded - EOS, Doge).

Fast digital asset markets are now proven as the fastest means to test innovations in finance. Ethena’s $19bn raise in 19 months, on a split token basis, USDe and ENA, and Fast Token (FTN) rigorous and incremental stepping up towards $2bn in 12 months belays the usual pumping and dumping seen in “meme coins”. The classic “meme coin”, Doge has visited $1bn $90bn $1bn $70bn now at $24bn.

Ripple requires special attention XRP the token and RippleNet ODL, the FX alternative or challenger FX network. In 2017 it broke all records by pumping to $200bn on the back of a promise to become the next generation SWIFT with 300 operators already signed up. However the 34,000% record pump was followed by a similar dump as markets realised that the operator network was not as scalable as originally thought and the SEC clamped firmly onto the fact that XRP was being operated as an unregulated “security”. This 7 year debacle ended in 2023 and 2024 with a partial ruling that XRP may be a “utility coin” if used correctly, but Ripple had exceeded this mandate and were required to settled 1,300 indictments with a $125m settlement, far below the $3bn sought by the SEC. It took a further few months for markets to respond and digest the $5bn war chest, $30bn market cap and 45bn in issued but unallocated XRP. Now it is back towards the anticipated $200bn. In the interim, Ripple has added digital custodial and many other financial services and central bank advisory in CBDC.

Now they need to show that they can materialize this balance sheet with solid, scalable RippleNet and ODL build out.

Finally, last years acceptance of both BTC and ETH ETFs allow main market investors a stable platform to enter and exit the volatile digital asset world.

THE T5 ANSWER preamble

Digital markets are the hotbed, the cutting edge of financial innovation, and the emerging, consensus pool standards, as democratization becomes ubiquitous. These are the modern day equivalent of the joint stock ventures in sailing fleets, in the Industrial Revolution and the railway networks. 

If this is the case, why is there hesitation in adoption. Well, it took over a century for agrarian and real estate dominance to be surpassed by liquid capital markets. Swap markets only took 3 decades to surpass equity and debt markets, and they continue to double every 7 years. 

Digital assets do not meet Tier One Common Equity (CET1) requirements for most balance sheets.

But they do match the requirements for Tier 3 collateral and are ideally structured to automate the collateral and margining demands created by the new derivative markets, exemplified by swaps.

Swaps, options and other derivatives carry complex credit, capital and collateralisation requirements. (IFRS9) 

If digital assets can traverse this space, they can boost the market growth to over $4quad especially as the wider G77 nations come on stream, beyond the G20.

The demand would be an initial $1trn in collateralised risk. This will double as India, which will match China’s spectacular growth over the last 3 decades (doubling income every decade for a population of 1.4bn), comes online. But India does not have the capital base of China. It will need to access global capital markets but this must be largely hedged into Rupees in order to avoid destabilizing the currency. FX swaps can deliver this outcome, but collateral mechanisms need a significant upgrade. Digital assets can bridge this gap as they can dynamically adjust on a continuous, yet decentralised and consensus basis. The REAL WEB3.0

THE T5 ANSWER solution

T5 addresses the key limitations of established digital asset classes. Stablecoins carry regulatory and stability issues. Pump coins carry volatility and stability issues. T5, a new digital asset class, uses tried and proven capital market methods, to create a hybrid asset class which is really a trading extension to the proven classes. A “scalable stablecoin” which tracks a fiat currency reference, but is allowed to scale, by simply stepping up the value by contracting the traded “packet size”, or clip size. So issuing at x100 and floating on the market at x10 generates a x10 capital lift.

Next, the volatility created by market generated pumping action, can be tamed by judicious capping, using the token minting process, while price discovery is achieved by auctioned burning of the token pool.

FTN achieved a similar result in their protocol adoption on the Ethereum blockchain.

Of course, all digital assets carry a level of pumping and “meme” action as they hit the levels of rapid adoption available in viral actions across the rich array of global communication networks. 

T5 is a new class of progressive meme, where the story carries, not only beyond a core concept, but across each new market segment in the G77 and across each new scaling of the capital and collateral base. T5 will effectively be extending the “meme” each quarter for the foreseeable future.

T5 will adopt the proven dual token approach, as used by Ethena, but will use a token pair that is not only fungible after full market launch, but allows staking into a synthetic stablecoin prior to convergence. This action is limited by “rights” of token holders to match 19% STR staking to the core stablecoin scaling.

T5 avoids classification as both a “security” and a stablecoin when placed into US and EU markets, as no enterprise value is generated in the risk waterfall which generates value by underwriting each new layer of swap risk, at a new asset level. The fiat asset reference, on which the scaling is based, is a compound index which optimised market demand for staked synthetic stablecoin value and core market evolution. (The XOX index)

Finally, as the coin pair converge, and new yield is generated by swap risk portfolio leverage, a 100% ROC is targeted based of proven portfolios.

The real WEB3.00

(CoinMarketCap.com has current info on the above assets.)

Footnote1 - while we recognise the many projects in regulated digital asset operations, these are almost entirely classed as “back office”, remittances or asset tracking facilities. They are isolated from the highly liquid, fast digital domains where new project creation is the priority, rather than the rigors of core market regulation and compliance.

JPMorgan Onyx and R3 are notable examples.

Footnote2 - while blockchain, the porting of Chip&Pin dual, digital authentication, onto the Cloud, is hailed as the future of the global financial system, it is by no means the first decentralised, consensus driven network in this arena. Both SWIFT, the correspondence banking network, and ISDA, the global swap framework, are also such networks. Beyond this domain, IEEE, which sources the hashing algorithms, such as SHA256 used in most blockchain meta-systems (the Merkle tree), is also a decentralised, consensus driven forum.