Rewards Mechanism Explanation

How USDi accrues rewards

The net asset value (NAV) of the SeaBlocks synthetic asset is updated daily to reflect the total valuation of all managed assets. This includes revenue generated from multiple strategies such as delta-hedging funding and basis spreads, liquidity provision in decentralized exchanges (DEXs), and staking rewards.

Each day, the NAV calculation incorporates:

• Funding and basis spread earnings from delta-neutral derivatives strategies.

• Liquidity incentives and trading fees earned from participation in DEX liquidity pools.

• Staking rewards generated from the protocol’s allocation of assets to proof-of-stake networks.

The automatic integration of these revenue streams ensures that the synthetic asset maintains an accurate valuation, fully reflecting all economic activity within the protocol. Investors benefit from the aggregated returns of these strategies while maintaining exposure to a delta-neutral asset.