Backing per MAT
This section is used for science popularization before the actual use of the SynAssets Assets (sAssets) functions. We will take sMatic, one of the functions, as an example in the following. MAT is the synthetic assets of sMatic.
Every MAT in circulation is backed by the sMatic treasury. The assets in the treasury can be divided into two categories: stablecoin and non-stablecoin.
The stablecoin balance in the treasury grows when bonds are sold. RFV is calculated differently for different bond types.
For reserve bonds such as DAI bond and FRAX bond, the RFV simply equals to the amount of the underlying asset supplied by the bonder.
For LP bonds such as MAT-DAI bond and MAT-FRAX bond, the RFV is calculated differently because the protocol needs to mark down its value. Why? The LP token pair consists of MAT, and each MAT in circulation will be backed by these LP tokens - there is a cyclical dependency. To safely guarantee all circulating MAT are backed, the protocol marks down the value of these LP tokens, hence the name risk-free value (RFV).