Treasury and Hard NAV

Hard Reserves

The Treasury holds the reserves behind ROTEO, and anyone can read them onchain. Hard Reserves are:

• Liquid USDG held by the Treasury, counted in full.
• Protocol-owned liquidity, the Treasury's share of the pool, valued as described below.
• The Strategy Sleeve, counted at 78.4% of its current attested mark. See Strategy Sleeve.

Roteo's operating liabilities, such as approved customer refunds and provider costs incurred but not yet paid, are settled before any net contribution is sent to the Treasury, so nothing owed is counted in Hard Reserves.

Hard NAV and floor-bid backing

Hard NAV per ROTEO is Hard Reserves ÷ ROTEO supply. It is the figure bonds, staking rewards and premium sales use.

Floor-bid backing is narrower: liquid USDG plus protocol-owned liquidity, divided by supply, with the whole Strategy Sleeve left out. The floor bid is priced from it, because a marked position can lose value without an onchain transaction.

The Hard Reserve cushion is the part above 1 USDG per token, Hard Reserves − ROTEO supply × 1 USDG. Staking rewards come from it. It is not floor-bid liquidity, since part of it can sit in the Strategy Sleeve.

How the pool is valued

When people buy ROTEO, the pool's USDG side grows, but that USDG leaves again when they sell, so it is not the protocol's to keep unless the Team Safe harvests it (see below). Until then the pool is valued at an assumed 1 USDG per ROTEO, a figure individual trades cannot move. Only the pool's trading fees grow it.

The two figures on the metrics page

The metrics page shows two per-token figures. Conservative NAV is Hard NAV as defined above, the figure the contracts use.

NAV counts everything the Treasury holds instead: its USDG, the Strategy Sleeve at what the Team Safe actually holds for it (each position valued onchain, such as the nnUSDG it holds in NetNet Credit), and the USDG in the pool the Treasury owns, divided by the ROTEO supply outside that pool. It is what Hard NAV would be after a harvest of the whole pool at today's reserves, so it moves with trading and is not a floor.

Money that also sits in the Team Safe and is not holders', the team's share of the tax and Roteo's gateway revenue, is listed on the page and counted in neither figure.

Liquidity harvest

The Team Safe can remove part of the Treasury's liquidity from the pool. Each harvest takes the Treasury's share of both sides of the pool, pro rata:

• The withdrawn USDG returns to liquid Treasury reserves, where it counts in full.
• The ROTEO is burned, or sent to the Team Safe for new pools and products, not for sale. That is the Team Safe's policy; the contract does not restrict it. ROTEO held this way never counts toward Hard NAV.

A harvest does not create value at market prices. It moves value from pool depth into reserves the Treasury holds outright, which is why Hard NAV per ROTEO can rise.

The contract refuses any harvest that would lower Hard NAV per ROTEO. There is no limit on how often or how much the Team Safe can harvest. A harvest takes both sides in proportion, so the price does not move, but the pool is thinner afterwards and each trade moves the price more.

What moves Hard NAV

Hard NAV per ROTEO can increase through the Treasury's share of the tax, bonds, premium sales, pool trading fees, successful liquidity harvests, a current Strategy Sleeve mark, and realized net contribution from Roteo once it settles onchain.

These never count: Roteo Serving Capacity, gross routed API volume, projected revenue and Operating Sleeve memo items.

Customer payments

A customer paying for a Roteo request is not Treasury revenue, and does not by itself increase Hard NAV. Only realized net contribution, after inference costs, routing and infrastructure costs, refunds and defined liabilities, can increase Treasury reserves, once it settles onchain.

The genesis sale

ROTEO launches through one genesis sale at a flat price of 3 USDG per ROTEO. The sale runs for up to 7 days with a hard cap of 100,000 USDG and a limit of 2,000 USDG per wallet. If it raises less than 25,000 USDG, every buyer can take their USDG back and the protocol does not start.

Buyers' ROTEO is released over 5 days. 70% of the raise goes to the Treasury; the other 30%, together with newly minted ROTEO, seeds the pool.

New supply

New ROTEO enters circulation in four ways, and leaves it in two:

• Bonds sell new ROTEO for USDG, released over 2 days.
• Premium sales sell new ROTEO into the pool, only above 2× Hard NAV.
• Staking rewards pay new ROTEO to stakers every 8 hours.
• The team option mints ROTEO at exactly 1 USDG each, paid into the Treasury.
• The floor bid buys ROTEO below backing and burns it.
• A liquidity harvest that burns its ROTEO takes it out of supply.

The team option

The team holds an option, pTEAM, to mint ROTEO at a strike of 1 USDG per token, with every USDG paid into the Treasury. Because the strike equals the 1 USDG backing line, exercising it never pushes backing below that line; it dilutes only the part of Hard NAV above it. The right vests over 30 days from the end of the genesis sale, and total exercise can never exceed the vested share of 15% of circulating supply. Every parameter is fixed in the contract.