NAV Calculation

The Net Asset Value (NAV) of sGRID represents the total economic value of all assets held by the protocol, expressed per outstanding sGRID. It determines the minting and redemption price of sGRID. New sGRID is minted at the prevailing NAV when GRID is staked, and sGRID can be redeemed for GRID at this NAV during redemption windows.

NAV computation is deterministic and executed directly onchain. All components of NAV—stablecoin balances, carrying value, recognized revenues, redemptions, and protocol fees—are parameterized within contract code.

NAV is updated monthly immediately prior to processing redemptions and published onchain.

NAV is calculated as:

$$\text{NAV} = \text{Stablecoin Balance} + \text{Carrying Value of Assets} + \text{Net Revenues} - \text{Redemptions}$$

Each component is defined as follows:

Stablecoin Balance

Represents the protocol’s current stablecoin holdings, denominated in GRID. These balances are sourced from yet to be invested deposits, as well as monthly inflows from protocol revenues. The stablecoin balance increases as new revenues are collected and decreases when reinvested into new projects or distributed to redeemers.

Carrying Value of Assets

Represents the amortized book value of the protocol’s deployed energy assets. Each project’s total cost is amortized linearly over its expected life—currently standardized at 25 years (300 months) based on the life of the contracts. This ensures a consistent and transparent approach to asset valuation over time, similar to depreciation schedules used in traditional energy finance.

Net Revenues

Represents cumulative revenues recognized since the prior NAV update, net of any operating costs and fees. These revenues primarily derive from monthly electricity sales, grid participation, and performance-based incentives. Protocol fees are used to support the Reserve Fund and future growth and development of the protocol.

Redemptions

Reflects the total value of sGRID redeemed for underlying GRID during the current epoch. When redemptions are processed through Daylight’s QEV (Queue and Epoch Valuation) mechanism, sGRID is burned against the prevailing NAV, preserving value for remaining holders.

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The NAV per sGRID token is calculated by dividing total NAV by the number of outstanding sGRID tokens at epoch close. This figure represents the fair economic value of each sGRID and forms the basis for minting, redemption, and accounting across DayFi's capital markets layer.