Smart Contract Tokenomics: NAV-Based Fund Shares

When people talk about fungible tokens on blockchains, they often mean simple ERC-20/SIP-010 style coins — fixed supply, fixed decimals, no real-world link to value.

PoolMind’s PLMD token is different.
It represents actual shares in a pooled arbitrage fund, and its price (Net Asset Value — NAV) changes based on the performance of the pool. That means holding 100 PLMD today might not be worth the same in STX tomorrow — and that’s by design.

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How It Works

Think of PLMD as a digital share certificate.

• When you deposit STX into the fund, the contract mints PLMD tokens based on the current NAV.

• When you withdraw, the contract burns your PLMD tokens and gives you STX at that same NAV rate.

• The NAV itself changes whenever the fund makes or loses money — an admin updates it to reflect the new value per share.

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Core Concepts in the Contract

1. NAV Tracking

In the contract, NAV is stored as uSTX per token, with 6 decimal precision:

(define-data-var net-asset-value uint u1000000) 
;; 1.000000 STX per token by default

If the fund grows, the admin calls an update function to increase NAV — making each PLMD token worth more STX.

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2. Deposit Function

When a user deposits STX, we calculate how many PLMD tokens to mint:

;; tokens-to-mint = (deposit * TOKEN_PRECISION) / NAV

This ensures you get fewer tokens when NAV is high (since each token is more valuable) and more tokens when NAV is low.

We also deduct an entry fee:

(define-data-var entry-fee-rate uint u5) ;; 0.5%

This fee goes directly to the treasury before minting tokens.

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3. Withdraw Function

Withdrawing burns tokens and sends you STX:

;; stx-to-return = (tokens * NAV) / TOKEN_PRECISION

Again, an exit fee is applied:

(define-data-var exit-fee-rate uint u5) ;; 0.5%

This keeps the fund sustainable.

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4. Precision Handling

We define:

(define-constant TOKEN_PRECISION u1000000) ;; 6 decimal places

This prevents rounding errors in NAV calculations and ensures accurate payouts, especially as the fund grows and fractional shares appear.

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5. Admin Controls

The admin can:

• Update NAV to reflect pool performance.

• Pause deposits/withdrawals in emergencies.

• Toggle token transferability (since PLMD is non-transferable by default — it’s a share, not a tradeable coin).

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Why This is Different From a Basic Token

A standard SIP-010 token just gives you an amount. PLMD’s value is denominated in STX and changes over time. This introduces:

• Dynamic supply changes — tokens minted/burned based on deposits and withdrawals.

• Performance-based pricing — NAV ties token value directly to the pool’s success.

• Built-in fee structure — entry/exit fees on every movement.

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Example Flow

Let’s say:

• NAV = 1.000000 STX

• You deposit 100 STX

• Entry fee = 0.5% → 0.5 STX taken as fee

• Remaining deposit = 99.5 STX

Tokens minted:

tokens = (99.5 * 1,000,000) / 1,000,000 = 99.5 PLMD

If NAV later rises to 1.200000 STX and you withdraw all 99.5 PLMD:

STX returned = (99.5 * 1,200,000) / 1,000,000 = 119.4 STX
Exit fee = 0.5% → 0.597 STX  
Final payout = ~118.803 STX

You made a profit simply because the NAV increased.

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Key Takeaways

1. NAV is king — all mint/burn logic revolves around it.

2. Precision matters — fixed-point math avoids costly rounding mistakes.

3. Fees are built-in — sustaining the pool without manual deductions.

4. It’s not just “a token” — PLMD is a share with built-in valuation logic.