Risk Pricing
The discount exists to compensate for one thing: how long until this token becomes USDC. If the answer is seconds, the discount is near zero. If the answer is 30 days, the discount is meaningful. Duration to USDC is the discount. Everything else is secondary.
Instant Liquidity Drives the Price
The oracle monitors issuer redemption contracts at the smart contract level. Sleeve balance, queue length, gate status, and the issuer's own redemption fee. All read directly from the contracts in real time.
The floor discount is always the issuer's redemption fee plus RAVA's spread. If Midas charges 1% off NAV for instant redemption, RAVA charges 1% + a spread on top. Below that, LPs lose money.
When instant liquidity is available, the discount sits near that floor. When the issuer's instant sleeve dries up and the vault has to wait for a queued redemption (30 days, 90 days, whatever the fund window is), the discount widens to compensate for the duration risk. The longer the wait, the wider the discount.
The oracle tracks when instant sleeves fill and drain. If a sleeve is trending toward empty, the discount starts widening before it hits zero.
Who Sells to the Vault
Holders who are whitelisted with the issuer can redeem directly. If instant liquidity is available, they should. The issuer's internal fee (i.e. 1% on mF-ONE) will be cheaper than the vault's discount.
The vault serves holders and protocols that are not whitelisted with the issuer and cannot redeem directly. It also serves whitelisted holders when instant liquidity is unavailable and they need USDC now rather than waiting for the queued redemption window.
Proxy Baskets
Tokenized RWAs have no price history. The underlying strategies do. A tokenized private credit fund carries the same risk as a publicly traded BDC. A tokenized trade receivables fund looks like a basket of direct lending CEFs.
The oracle maps each tokenized asset to a basket of publicly traded equivalents with decades of daily returns. That proxy basket is what the vault prices against when instant liquidity is unavailable and the vault has to hold duration risk.
CVaR
CVaR (Conditional Value at Risk) measures expected loss in the worst outcomes beyond a confidence threshold. Run it on the proxy basket and you get a number: how much this strategy could lose in a tail event. This matters when the vault is holding a token for days or weeks waiting for redemption.
CVaR 97.5 is the Basel III standard for bank capital requirements. The main vault uses this tier.
CVaR 90-95 is used for asset manager vaults where first loss capital absorbs the tail.
Adjustment Signals
Five signals feed the discount, ordered by impact:
- Instant liquidity. The primary driver. Monitored at the smart contract level. If the issuer's instant sleeve has funds, the discount is minimal. If it's empty, the discount ramps based on the queued redemption timeline.
- Redemption queue. How many holders are ahead of the vault in the queue. Longer queues mean longer waits, wider discount.
- Proxy basket risk. If the proxy basket CVaR increases (markets become more volatile), the discount widens to cover the increased risk during the holding period.
- NAV buffer. Cash reserves as a percentage of AUM. Lower buffer means the issuer has less capacity to honor redemptions quickly.
- Supply signal. Onchain token supply changes. Sudden minting or burning indicates structural shifts.
Example
Take mF-ONE (Midas Fasanara ONE), a tokenized private credit fund.
Proxy basket: BKLN (35%), HYG (20%), ARCC (25%), MAIN (20%). All publicly traded, all with years of daily return data.
Instant sleeve is full: Midas charges 1% for instant redemption. RAVA's discount sits at ~1.5% (issuer fee + spread). The vault buys, redeems instantly, LPs earn the spread.
Instant sleeve is empty, 30 day queue: Discount widens based on CVaR 97.5 applied to the proxy basket plus adjustments for queue length and NAV buffer. The vault is now holding duration risk for a month.
The discount moves on its own as conditions change. No governance vote. No manual override.