What is NAV?
Net Asset Value (NAV) represents the per-share value of an investment fund. It is calculated by subtracting total liabilities from total assets, then dividing by the number of outstanding shares.
NAV Formula
NAV = (Total Assets - Total Liabilities) / Shares Outstanding
NAV in Tokenized Funds
For tokenized investment funds:
- NAV determines token redemption value
- Often updated daily or in real-time via oracles
- Premium/discount to NAV indicates market sentiment
- Smart contracts can automate NAV-based redemptions
Considerations
- Stale NAV can create arbitrage opportunities
- Illiquid assets make accurate NAV calculation difficult
- Oracle reliability affects on-chain NAV accuracy