# Collateral & Custody

### Custody Overview

The collateral backing every SHIFT Series Token is held off-chain through regulated brokerage and banking rails. Each token is backed 1:1 by a real position in the corresponding leveraged or inverse ETF. No synthetic exposure, no fractional reserves.

{% hint style="info" %}
Series Tokens are not synthetic. Behind every token in circulation, SHIFT holds a corresponding 1:1 position in the underlying ETF, in custody.
{% endhint %}

#### Why a regulated venue

The collateral backing SHIFT consists of TradFi assets, leveraged and inverse ETFs traded on U.S. exchanges. Acquiring and holding these assets requires direct access to the regulated brokerage and banking system. SHIFT operates through institutional partners that provide this access via API, enabling fast, automated mint and burn against the underlying holdings.

#### Custody flow

{% stepper %}
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### A user buys a Series Token

A user buys a Series Token on Jupiter; the trade is filled by a market maker.
{% endstep %}

{% step %}

### Inventory is depleted

As market-maker inventory is depleted, the market maker mints additional Series Tokens through SHIFT's protocol endpoints.
{% endstep %}

{% step %}

### ETF purchase is triggered

Each new mint triggers a corresponding ETF purchase through SHIFT's brokerage rails.
{% endstep %}

{% step %}

### ETF is held in custody

The ETF is delivered into segregated custody held against the new tokens.
{% endstep %}

{% step %}

### Proof-of-Reserves registers the position

The position is registered with the Proof-of-Reserves, which publishes the verified reserve state.
{% endstep %}

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### Burn runs in reverse

On burn, the process runs in reverse; tokens are burned, the ETF is sold, and proceeds settle through the brokerage rails.
{% endstep %}
{% endstepper %}

#### Segregation and protection

* **Segregated accounts:** ETF holdings are held in dedicated accounts, separate from operational balances and from other clients' assets.
* **Regulatory oversight:** backing is held with FINRA-registered, SEC-regulated brokerage partners, subject to standard U.S. brokerage requirements.
* **Off-balance-sheet:** the underlying ETFs are not on the protocol's balance sheet; they are held in custody on behalf of the Series.
* **Mint constraints:** the SHIFT smart contract cannot issue tokens in excess of verified reserves; mint operations are gated by PoR feed.

### Transparency

SHIFT publishes real-time visibility into reserves, capital deployment, and protocol metrics. Every Series Token in circulation is verifiable on-chain.

#### Chainlink Proof-of-Reserves

Chainlink PoR runs continuously, verifying that every Series Token in circulation is backed 1:1 by the corresponding ETF in custody. The feed publishes the verified reserve state on-chain, every block.

→ Proof-of-Reserves dashboard \[TO BE UPDATED]

#### App dashboard

The SHIFT app provides a view into protocol-level metrics: total reserves, reserve ratios, supply by Series, and a breakdown of the underlying ETFs backing each Series.

→ App dashboard [shift-rwa.vercel.app/app](https://app.shiftrwa.xyz/coming-soon)

#### Dune Analytics

On-chain trading volume, liquidity, and price data.

→ Dune dashboard \[TO BE UPDATED]

#### Third-party attestation

\[TO BE UPDATED]


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