Settlement

Net Asset Value (NAV) settlement is the process by which deposits and redemptions are priced and executed. All Vault transactions settle against the current NAV per share, ensuring restakers enter and exit at fair value.

The Aleph AVS uses a synchronous deposit-and-redeem mechanism, ensuring instant settlement. This is achieved by relying on the Vault's most recently updated NAV per share.

Net Asset Value (NAV)

Net Asset Value represents the total value of Vault assets divided by outstanding shares. It's the price of one Vault share at a given point in time.

The price per share increases as the Vault’s underlying NAV grows through successful trading strategies and accrued yield. As the Manager's strategies generate yield, total assets grow while share count stays constant. This increases NAV per share, which is how restakers realize gains.

NAV Update

NAV updates are submitted by the oracle and posted on-chain for an auditable trail.

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The Role of NAV in Deposit/Redeem flows

Deposit (Allocation)

When an Operator allocates LST to a Vault, shares are minted based on the current NAV per share:

$$\text{Shares Minted} = \frac{\text{LST Amount}}{\text{NAV per Share}}$$

The AVS then mints equivalent alETH within the same transaction. The restaker's claim on the Vault is proportional to the shares received at their entry NAV.

Redeem (Unallocation)

When a restaker redeems alETH, shares are burned and LST is returned based on the current NAV:

$$\text{LST to Redeem} = \text{Shares Burned} \times \text{NAV per Share}$$

The calculated LST is transferred synchronously to the Aleph AVS within the same tansaction, completing the redemption and subsequent return of LST to the Operator's ETHStrategy.

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Expiry

To protect restakers from executing against outdated prices, Each NAV has a validity window measured in blocks. Once expired, the Vault treats the NAV as stale and reverts any settlement attempts.

• The Vault's internal function logic includes a check to ensure the last reported NAV update occurred within a specific time window (e.g., last 24 hours).

• If the NAV is deemed expired (stale), the synchronous deposit/redeem transaction will revert. This prevents Operators from settling at an outdated price that does not reflect the current performance of the underlying assets.

Synchronous Execution

Aleph Vaults use synchronous settlement for AVS-initiated transactions. When an Operator calls allocate(), the entire operation - NAV check, share mint, alETH mint, LST transfer - executes atomically in a single transaction.

For unallocation, the process is split into two steps:

• Step 1 (requestUnallocate): Burns alETH and requests redemption from the Vault synchronously

• Step 2 (completeUnallocate): Withdraws redeemable LST and deposits to EigenLayer synchronously once funds are available

This two-step approach allows the Vault to process redemption requests asynchronously while maintaining synchronous execution for each individual step.