Token Format¶

Energy Substantiation tokens are digital assets backed 1:1 by physical commodities.

Token Basics¶

Volumetric Energy Receipts (VER)¶

Each token is backed by a Volumetric Energy Receipt (VER) - a legal instrument representing ownership of physical energy.

What is a VER?¶

A VER represents an "undivided interest in commingled goods" - a recognized legal structure for commodity ownership. This is similar to how grain elevators or oil tank farms operate, where owners hold a share of a commingled pool rather than specific physical units.

• True document of title - Legal ownership of underlying energy
• Fungible ownership - Own a volume of energy, not specific molecules
• Bankruptcy Recognized - Ownership of energy is recognized if a supplier fails

The custodian holds the VER as bailor for the benefit of tokenholders. The supplier remains in physical possession of the commodity as bailee and must hold it free of liens and competing claims.

Custody and Auditing¶

VERs are held by a qualified third-party custodian who provides:

• Segregated custody - Volumetric Energy Receipt (VER) representing holder's stored energy is held separately
• Regular audits - Independent verification of backing
• Real-time transparency - Backing levels are reported continuously
• Physical verification - Confirms the commodity remains with the supplier at an approved location

The custodian holds the receipts and reports the corresponding physical energy held by suppliers as bailees.

Energy Denomination¶

VERs are denominated in BTU (British Thermal Units) - a standard measure of energy content. This provides flexibility:

• Different grades of the same commodity can back the same token
• Energy content is consistent regardless of physical form
• Enables cross-commodity products in the future

Each token type specifies how many BTUs back each token. See Available Tokens for specific conversion rates.

Reference Pricing¶

Each token uses a formula-defined Reference Price intended to track its commodity benchmark over time:

• Daily reference price calculated independently of Reference Exchange data
• Close benchmark relationship designed to remain within a small band of the reference-market close on most days
• Short-term differences possible, especially around derivative rollover days
• Zero roll costs - No futures positions to maintain
• Consistent methodology - Smooths pricing through derivative expiration cycles

Each token has its own Reference Price methodology. The token price may differ from the reference-market-derived spot price in the short term, although the methodology is designed to limit tracking error over time.

Fees¶

EnSub charges a small fee for minting (purchasing through the daily auction) and burning (redeeming) tokens, plus costs of delivery when tokens are redeemed for physical energy. These EnSub fees do not apply when purchasing tokens through secondary markets, although the secondary-market platform may charge its own fees. Holding tokens is free - there are no ongoing management fees or carry costs.

See Available Tokens for specific fee schedules for each token type.

Learn More¶

• Available Tokens - Token types, specifications, and fees
• Why Tokens? - Benefits of tokenization