Baseline Yield

The Baseline Yield is set at a fixed rate and automatically accrues onto each investor’s loan as represented by the redemption value of the RWIV token.

The Baseline Yield is protected by Baseline Yield Cover from Nexus Mutual that steps in to fill the shortfall in the unlikely case of insufficient returns from the underlying insurance products, or any process or smart contract failures.

Baseline Yield Setting

The yield is set at a level driven by a margin above 2-year and 5-year US Treasury yields — the driving force behind mass market insurance product returns. The VO aims to target a return ~2-3% above the monthly averages of those rates but is also entitled to respond to other macro or Insurance Partner changes.

The baseline yield can only be changed with a 90 day notice period by the VO by calling proposeBaseApyChange() onchain.

The current Baseline Yield can be found on the app.

Accrual

The Baseline Yield is applied to the value of the RWIV token programmatically, compounded per second. The value can be obtained by calling the convertToShares() function. Simplified calculation:

assetsPerShare = startAssetsPerShare * (1 + interestPerSecond) ^ secondsPassed

Here, startAssetsPerShare and secondsPassed are in reference to the values as at the last block where the Baseline Yield was changed.