# NAV Calculation

The Net Asset Value (NAV) of Hypurr Vault is calculated hourly by an automated keeper bot that values all vault assets—both liquid HYPE tokens and NFT holdings—to determine a fair price per share. Understanding this calculation helps you make informed investment decisions.

## NAV Calculation Formula

### Total NAV Formula

```
Total NAV = (Vault HYPE - Pending Deposits) + Vault Manager HYPE + NFT Portfolio Value
```

### NAV per Share

```
NAV per Share = (Total NAV × 10¹⁸) ÷ Total Shares Outstanding
```

The NAV per share determines how many shares you receive when depositing or how much HYPE you receive when redeeming.

### Components

#### Liquid Assets

HYPE tokens held in both the vault contract and vault manager wallet, minus any pending deposits awaiting processing.

#### NFT Portfolio

All Hypurr NFTs held by the vault manager, valued using our weighted average floor price methodology.

#### Share Conversion

NAV is expressed in wei (10¹⁸ units per HYPE) for precise calculations when minting or burning shares.

## NFT Valuation: Weighted Average Floor Price

The most critical component of NAV calculation is accurately valuing the NFT portfolio. We use a sophisticated weighted average floor price methodology that emphasizes recent market activity.

### How It Works

#### 1. Recent Sales Window

The oracle queries the most recent NFT sales from the past 30 days, collecting up to 100 sales transactions for analysis.

#### 2. Linear Decay Weighting

Each sale is assigned a weight based on recency. The most recent sale receives maximum weight, with older sales receiving progressively less weight in a linear decay pattern.

#### 3. Outlier Detection

Statistical analysis identifies and flags potential outliers using standard deviation techniques, ensuring that unusual transactions don't distort the floor price.

#### 4. Weighted Average Calculation

The final floor price is computed as a weighted average of the cleaned dataset, giving you a market-responsive yet stable valuation.

### Why This Approach?

* ✓ **Market Responsive:** Recent sales are weighted more heavily, ensuring NAV reflects current market conditions
* ✓ **Manipulation Resistant:** Outlier detection prevents single unusual transactions from distorting valuations
* ✓ **Transparent:** The methodology is deterministic and auditable via on-chain inputsCommit hashes

## Confidence Scoring

Every NAV report includes a confidence score (measured in basis points) that indicates the reliability of the valuation. Higher confidence means more recent and liquid price data.

### Confidence Factors

#### Base Confidence

Starting confidence level set by protocol parameters.

**Value:** Configurable

#### Recency Penalty

Applied when floor price data is stale. The penalty increases as the most recent sale ages beyond 30 days.

**Max Penalty:** Up to -3,000 bps

#### Coverage Penalty

Applied when there are fewer than 10 recent sales, indicating insufficient market activity for robust valuation.

**Max Penalty:** Up to -1,000 bps

### Interpreting Confidence Scores

{% hint style="info" %}
Low confidence doesn't necessarily mean inaccurate NAV—it indicates that market data is limited or dated. During periods of low confidence:

* NAV calculations may be based on older sales data
* Price discovery might be slower to reflect market changes
* The vault may pause deposits/redemptions if confidence falls below protocol thresholds
  {% endhint %}

## NAV Update Process

NAV is calculated and updated automatically by an keeper bot on a regular schedule:

### 1. Asset Query

Keeper fetches current holdings from the vault contract and vault manager wallet, including both HYPE tokens and NFT inventory.

### 2. Sales Data Collection

Recent NFT sales are retrieved from marketplace APIs and on-chain transaction logs covering the past 30 days.

### 3. Floor Price Calculation

Weighted average floor price is computed using the methodology described above, with outlier detection and recency weighting applied.

### 4. NAV Computation & Validation

Total NAV and per-share values are calculated. The oracle validates that NAV drift is within acceptable bounds compared to the previous report.

### 5. On-Chain Submission

The NAV report is signed by the keeper wallet and submitted to the vault contract, incrementing the epoch counter and enabling queue processing.

### 6. Snapshot Storage

The vault stores an epoch snapshot containing NAV per share, confidence, and an inputsCommit hash for auditability of the calculation inputs.

## Built-In Safety Mechanisms

### 🛡️ Drift Bounds

The vault contract enforces maximum drift limits—if NAV changes too dramatically between reports, the submission is rejected to prevent manipulation or errors.

### ⏱️ Staleness Protection

NAV reports include expiration timestamps. If a report is too old or the vault hasn't received an update within the staleness threshold, deposits and redemptions are paused.

### 🔐 Signed Reports

All NAV reports must be cryptographically signed by the authorized oracle address. The vault verifies signatures before accepting updates, preventing unauthorized manipulation.

### 📝 Audit Trail

Each NAV report includes an inputsCommit hash—a cryptographic commitment to the calculation inputs that allows retrospective verification of NAV accuracy.

## Ready to Invest in Hypurr Vault?

Learn more about how the vault works or start your first deposit today.

* [How to Deposit/Redeem](https://docs.rip.xyz/hypurr-vault/deposit-redemption)
* [Understand NAV](https://docs.rip.xyz/hypurr-vault/nav-calculation)
* [Open Vault](https://www.rip.xyz/rhypurr)