Overview
| Problem |
CEF discount/premium to NAV |
| Solution |
Tokenization of CEF shares |
| Mechanism |
NAV-pegged tokens, redeemable 1:1 |
| Tokenomics |
Dynamic supply, NAV-based pricing, burn on redemption |
| Benefits |
Improved liquidity, transparency, distribution |
| Supply |
Dynamic, adjusts with NAV and redemption activities |
| Demand |
Driven by arbitrage opportunities between CEF discounts and NAV tokens |
| Issuance |
Minted when NAV increases or shares converted |
| Distribution |
To investors during offering or conversions |
| Utility |
Redeemable at NAV, tradeable |
| Incentives |
Arbitrage opportunities |
| Burn |
Tokens burned upon redemption |
| Liquidity |
Maintained through trading and redemption mechanisms |
| Pricing |
Token Price = NAV / Share |
Matrix
| Customer |
Problem |
Solution |
| CEF |
Fixed share count trades at volatile premiums/discounts to NAV |
Second layer of liquidity |
| Neobanks |
Limited retail access to alternatives |
Tokenize assets and quote at NAV on platforms |
| CEF |
Sparse NAV exit opportunities + liquidity for underlying assets |
Orderbook for alternative assets |
| Blockchain |
Global regulatory and adoption variance |
Geoledgers, token wrapping, regulatory oracle |
FAQs
- Stable Pricing: Aligns closed-end fund market price with NAV.
- Investor Confidence: Guarantees NAV exits, attracting capital.
- Initial token supply = Initial NAV × # of fund shares
- Each token represents proportional fund ownership.
Pricing
- Token Price = NAV / Share
- Token Price = NAV of Fund / Total Token Supply
