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Vault Net Asset Value

How Vault share price is calculated and updated.

In OctoVault, the price of the vault share is injected into the smart contract by the Distributor Account.
The accuracy of this value is crucial since it determines:

  • The amount of shares a user will get
  • The amount of assets a user will get at redemption
  • Management and performance fee mechanism: Currently no explicit fees, but Curators could deduct their own fees from the share price

Valuation Process​

The valuation process to determine the share price is offchain. It is a critical factor in ensuring the vault's correct operation.

It’s essential that the vault curator establishes a robust offchain process for validation of price updates before calling the update_price (updt_price) function:

  • The valuation must exclusively contain the positions held on the curator address at the moment of the call
  • Vault valuation must not take into account pending requests

The Net Asset Value (NAV) of a vault at time t is calculated as:

NAVt=Total Assetst−Liabilitiest−FeestTotal Sharest\text{NAV}_t = \frac{\text{Total Assets}_t - \text{Liabilities}_t - \text{Fees}_t}{\text{Total Shares}_t}

Where:

  • Total Assets = value of all positions held by the curator address (on Stellar)
  • Liabilities = obligations such as outstanding borrower debt or protocol obligations
  • Fees = management/performance fees deducted (if applicable)
  • Total Shares = circulating vault share tokens (SAC tokens) at time t