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$KITE Check out my latest trade. Let's see if you can top it!

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The Vault Report Card: Why Your LP Token Value Isn't Always 1:1 Understanding Unit NAV: The Real-Time Value of Your Share What Does "Net Worth Per Share" Mean for Your Crypto? Introduction When you deposit assets into a yield vault, you receive LP (Liquidity Provider) tokens. While many people assume the value of one LP token stays fixed to the underlying asset, in a performance-tracking system like Lorenzo, it doesn’t. The value of your single LP token is constantly updated by a key metric: the Unit Net Asset Value, or UnitNAV. The Pizza Analogy for Vault Value Think of the vault's total holdings as a large pizza, which we call the NAV (Net Asset Value). Your LP tokens represent the number of slices (\text{LP}). The UnitNAV is simply the current value of one slice, calculated as: When the vault successfully generates trading yields (\Delta r), the total \text{NAV} (the pizza size) grows, but the total number of \text{LP} tokens (the slices) stays the same until the next user deposit or withdrawal. This means the value of each slice (\text{UnitNAV}) increases! This \text{UnitNAV} is crucial for new users. When someone deposits new tokens (\Delta T), they receive LP shares based on the current, higher \text{UnitNAV}, ensuring existing share holders are not diluted by previous profits. Action Tip A consistently rising UnitNAV signals successful vault performance and yield generation, increasing the worth of your LP tokens over time. A flat or falling UnitNAV warrants a deeper look into the vault’s strategy. When evaluating a DeFi yield vault, don't just look at the APY. Always check the UnitNAV history. A steady, upward-trending UnitNAV is a concrete sign that the vault is safely compounding returns and increasing the fundamental value of your holdings. Disclaimer: Not Financial Advice $BANK #lorenzoprotocol @Lorenzo Protocol

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