5. The rFund Token
RAVA issues rFund tokens that reference the RAVA Yield Index. Each rFund token is a tokenized yield contract that represents exposure to future changes in the index. The price of an rFund token, denoted Pₜ, forms through continuous trading in open markets and reflects the collective expectation of realized performance:
Pₜ = 𝔼[Iₜ ∣ ℐₜ]
where ℐₜ represents all information available to the market at time t. The rFund token has no ownership claim on any underlying asset. It represents a contractual right to cash settlement that depends on movements in the RAVA Yield Index and on verified yield received by the Treasury.
Each trade in the rFund market generates fees. These fees flow back to the LPs who contributed their yield rights to RAVA. The LP's locked token now produces verified trading fee income. This enables collateral based lending backed by actual cashflow rather than projected NAV.
The total number of rFund tokens is determined by the notional value of yield rights that RAVA has acquired from RWA holders. Let Vᴿ denote the total value of yield rights held by the RAVA Treasury, and let each rFund token represent one unit of notional exposure v₀. The total token supply Nᵣꜰ is given by
Nᵣꜰ = Vᴿ / v₀
where v₀ defines the nominal unit of exposure, such as one USDC. This creates a one-to-one relationship between issued tokens and the real yield collateral that backs them. If RAVA holds ten million dollars of yield rights and each token represents one dollar of exposure, exactly ten million rFund tokens are minted.
When RAVA receives verified distributions from RWA holders, the RAVA Yield Index updates to reflect the new realized yield, and the Treasury uses those proceeds to settle outstanding rFund positions in USDC. Settlement occurs upon liquidity events and always references confirmed fund distributions. This design converts verified real yield into a fully collateralized derivative instrument that can be traded, hedged, or shorted continuously on-chain, providing transparent and perpetual exposure to real world performance without any transfer of asset custody.