Mechanics

Mint and Redemption

Mint and redemption occur directly against the ERC-20E contract reserve.

Mint Function

Upon minting, the user deposits collateral into the contract and receives newly issued tokens at the prevailing NAV.

A total fee of 125 basis points (1.25%) is applied to the deposited collateral, composed of:

• 100 basis points (1.00%) protocol fee

• 25 basis points (0.25%) issuer fee

The 0.25% issuer fee is transferred directly to the designated issuer address upon receipt and prior to reserve reconciliation. This amount never enters the contract reserve and therefore does not affect Total Value Locked (TVL) or the NAV calculation.

The 1.00% protocol fee is retained within the contract reserve. Because this amount increases reserves without increasing supply, it contributes positively to NAV.

The remaining 98.75% of the deposited collateral constitutes minting principal and is divided by the prevailing NAV to determine the quantity of tokens issued.

Redemption Function

Upon redemption, the user burns tokens and receives collateral at the prevailing NAV.

A total fee of 125 basis points (1.25%) is applied, composed of:

• 100 basis points (1.00%) protocol fee

• 25 basis points (0.25%) issuer fee

The gross redemption amount is first calculated by multiplying the redeemed token quantity by the prevailing NAV.

The 1.00% protocol fee is retained within the contract reserve. Because supply is reduced by the full redeemed amount while a portion of collateral remains in reserves, NAV increases for all remaining holders.

The 0.25% issuer fee is transferred to the designated issuer address after the NAV-based redemption amount is computed. The issuer fee is assessed on the redemption proceeds and does not alter the NAV calculation itself.

The net collateral delivered to the redeemer equals 98.75% of the NAV-derived gross redemption value.

Issuer fees may vary between primary assets and derivative assets. Learn more

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NAV Chart

Every ERC-20E asset listed on Elevado Markets displays a NAV chart computed directly from on-chain state.

Every ERC-20E-derived NAV chart is a stepwise, monotonic non-decreasing function.

Because ERC-20E contracts enforce reserve-backed accounting and retain protocol fees within TVL without inflating supply, NAV can only remain constant or increase following state transitions. There exists no contract-level mechanism capable of reducing NAV.

Graphically, this produces an upward-stepping curve – never downward-sloping – reflecting deterministic, cryptographically enforced value accretion. The result is a chart that, by mathematical construction and smart contract invariants, can only move upward.