Token price logic

The token price is adjusted when specific events happen:

  • New plan initiated
  • Monthly payment plan is paid
  • Plan default

When a new plan is initiated, the loaned amount of ETH is booked as 'deployed capital', and as re-payments are made every month, this amount decreases. This concept is very similar to the accounting procedure found in traditional finance.

On every repayment, the deployed capital portion is reduced by the repayment principal amount, and the interest portion is booked into the 'undeployed capital' bucket. Undeployed capital is the idle ETH, ready to deploy for a new BNPL or Pawn plan.

In the event of a plan default, the deployed capital is marked to zero. The defaulted NFT is moved into the Vault, and is marked at the current appraisal value.

The end result for the token price is thus:
( Deployed capital + Undeployed capital + Defaulted NFT value ) / Token supply = Token Price

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Good to know

One way to think of the token price is as a net asset value (NAV) of the Vault. It is calculated by adding the cash balance, loans owed, and cumulative marked values of defaulted NFTs within the Vault.