Onchain ETF Token

Products may reference crypto-native markets, tokenized assets, equity baskets, commodities, rates, thematic exposures or multi-asset strategies. Each product should define its eligible assets, rules, fees, valuation source, rebalancing process, liquidity path and redemption constraints.

Product materials should be read together with the relevant risk disclosures and custody overview. Access may be limited by jurisdiction, eligibility, liquidity conditions, operational controls or smart contract restrictions.

Users may access products through secondary market trading, RFQ routes or primary market create / redeem processes, depending on user eligibility and product rules.

Secondary market purchase may occur through DEX, wallet, exchange, aggregator or other front ends. Market price may differ from NAV.

RFQ routes may be used for medium-size orders, with quotes based on iNAV, execution cost, inventory cost, underlying market condition and risk spread.

Primary creation or redemption may be available to large users, institutions or authorized participants, subject to KYC, whitelist, market hours, liquidity and compliance limits.

Product value may change due to movements in underlying assets, crypto markets, equities, interest rates, commodities, FX, macroeconomic conditions, geopolitics, regulation, technology cycles and risk appetite.

Some products may depend on funding capture, basis carry, market-neutral exposure, spot-perp arbitrage, TradFi-DeFi arbitrage, thematic baskets, AI infrastructure, inflation hedge, short volatility, rebalance strategies or relative value strategies. These strategies can fail if market structure changes, correlations break, liquidity disappears, hedges fail or execution costs rise.

• Funding rates may reverse or basis spreads may widen.
• Hedging instruments may fail or become unavailable.
• Liquidity may disappear during stress events.
• Model assumptions or correlations may break.
• Execution costs may erode strategy returns.

NAV is an important valuation reference, but it is not a guaranteed trading price. NAV may be distorted by delayed data, incorrect price sources, stale prices, market-hour mismatch, insufficient underlying liquidity, corporate-action delays, unsettled trades, fee errors, oracle failure or delayed onchain updates.

Product tokens may trade above or below NAV. Even if a create / redeem mechanism exists, the market price is not guaranteed to remain close to NAV.

Users may be unable to buy, sell or redeem at the expected price or speed because of low DEX depth, AMM slippage, missing RFQ quotes, insufficient MM inventory, AP suspension, broker execution limits, underlying market closure, large order impact, small AUM, low trading volume or stress-market liquidity loss.

Products may rely on issuers, custodians, brokers, prime brokers, exchanges, APs, MMs, solvers, RFQ providers, oracle providers, stablecoin issuers, administrators, auditors, legal advisers and other service providers. Failure, default, bankruptcy, operational error or regulatory restriction affecting any party may impact product value, creation / redemption, liquidity or user rights.

Custody risks include private-key leakage, multisig error, custodian bankruptcy, account freeze, asset commingling, record error, redemption-priority dispute, unclear legal title, asset recovery difficulty and cross-border enforcement limits.

Technical risks include smart contract vulnerabilities, front-end errors, API failure, oracle update failure, database errors, chain congestion, gas price anomalies, failed transactions, upgrade errors, permission misconfiguration, hacking, DDoS and third-party service interruption.

Order execution may suffer slippage, partial fill, failure, delay, wrong routing, expired RFQ quote, market-maker withdrawal, broker rejection, onchain transaction failure, front-running or state mismatch between offchain and onchain systems.

Products may be affected by securities, commodities, fund, derivatives, stablecoin, AML, sanctions, tax, cross-border offering, suitability, data-protection and consumer-protection rules. Regulatory changes may restrict, suspend, delist, liquidate or limit access to products.

Disclosures may be delayed, incorrect, incomplete, inconsistent across sources, affected by translation differences or not comparable across historical periods.

Products may rely on models, parameters, rules or algorithms. Risks include overfitting, distorted backtests, parameter failure, uncovered extreme events, broken correlations, incorrect liquidity assumptions, market-structure changes and insufficient data samples.

Some products may be concentrated in a small number of assets, industries, countries, themes or strategies. Concentration may amplify returns but also amplify losses.

Users are responsible for understanding products, reading documents, judging risks, confirming eligibility, managing wallets and private keys, complying with laws, handling taxes, evaluating trading prices and bearing investment outcomes.

This methodology explains the NAV calculation framework for ETFT / ETF-style products on the Alloco platform. NAV is a core reference for issuance, redemption, secondary market anchoring, RFQ pricing, risk control, disclosure reporting and exception handling.

The methodology may apply to crypto-native products, TradFi-linked products, thematic baskets, quantitative strategy products, RWA exposures and other structured products. Each product may define specific parameters based on underlying assets, market hours, custody structure, data availability and legal requirements.

Total NAV is generally calculated as:

NAV per Token is generally calculated as:

Asset value may include spot assets, equities, ETFs, derivatives, perpetual-contract margin, swap exposure, stablecoins, treasury bills or cash. Liabilities may include pending redemptions, accrued fees, trading costs, financing costs, taxes, custody expenses, audit fees or other product-level obligations.

Official NAV is used for formal settlement and reporting. The process may include locking the valuation time, collecting prices / positions / cash / fees / liabilities / corporate actions, reconciling onchain supply and custody records, calculating assets and liabilities, applying adjustments, generating a NAV report, and publishing summary fields or report hash to the product page or onchain records.

iNAV is an intraday or active-market reference used for secondary market anchoring and RFQ quotes. It prioritizes tradability, explainability and timely updates smaller than audit-level completeness. It may use bid / ask mid, 60-second TWAP, multi-exchange median price, broker quote or other reliable sources.

Alloco-related products may be supported by SPVs, SPCs, segregated portfolios, fund entities or other applicable legal vehicles. The purpose is to separate a specific product’s underlying assets, cash, receivables, payables and rights / obligations from the Alloco operating company and other products.

• The operating company may provide technology, front end, protocol, data, product operation or service support.
• The SPV / SPC or asset pool may hold or arrange to hold underlying assets, cash and related rights.
• Custodians, brokers, administrators, managers or other service providers may provide custody, execution, valuation and reporting support.
• The product token acts as an operational record and transfer rail. Its legal nature depends on product documents and user eligibility.

Onchain assets

Onchain assets may be held through vault contracts, multisig wallets, MPC custody wallets, compliant wallets or smart contract structures. Controls should address transparency, permissions, upgrade safety and asset security.

• Vault contracts should limit mint / burn, asset transfer, fee collection and emergency pause permissions.
• Multisig or MPC wallets should use signing thresholds, operation logs, address whitelists and amount limits.
• Major upgrades should use timelock, multisig approval or guardian mechanisms.
• Onchain balances should be reconciled with NAV reports, product supply and user share records.

Offchain assets

Equities, ETFs, cash, treasury bills, broker positions, swap exposure or other traditional assets may be recorded and managed through custodians, brokers, administrators or SPV / SPC asset pools.

When underlying assets trade only during specific market hours, onchain products may still show or offer limited interaction, but execution, NAV updates and large create / redeem flows should respect market hours, stale-price risk and risk-control rules.

Custody arrangements should cover the complete asset flow for subscriptions and redemptions, including receipt of USDC / cash or other subscription assets, execution of underlying assets or strategies, NAV calculation after execution and fees, minting or recording product shares, locking or burning tokens during redemption, preparing settlement assets and updating product ledgers.

Alloco should maintain layered reconciliation such as onchain supply versus vault records, vault balance versus blockchain data, broker holdings versus internal ledger, custodian report versus NAV report, cash balance versus pending subscriptions / redemptions, strategy positions versus CEX / broker / perp account statements, fees versus product rules and reportHash versus original NAV report.

Custody and operating permissions should follow least-privilege principles. Material operations should require approval, logs and review.

• Multisig or MPC controls for large asset transfers, contract upgrades and emergency pauses.
• Role separation across product operation, NAV publication, risk control, asset transfer and compliance approval.
• Single-transaction, daily, product-level and address-level limits.
• Whitelist controls for custody accounts, brokers, APs, MMs and critical contracts.
• Alerts for abnormal transfers, NAV deviation, redemption spikes and price-source outages.
• Audit logs recording operator, time, reason, approver, transaction hash and report link.