> ## Documentation Index
> Fetch the complete documentation index at: https://www.diadata.org/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# Fundamental Feeds

> Derive asset values from their fundamentals rather than market prices. Ideal for stablecoins, synthetic assets, and yield-bearing tokens.

Fundamental Feeds provide an alternative to market-based pricing by calculating an asset’s value directly from its fundamentals.
Instead of relying on exchange trades or liquidity-driven mechanisms, these feeds derive price from objective on-chain or off-chain proofs of collateral, redemption logic, and reserve holdings.

This makes them particularly relevant for synthetic assets, stablecoins, yield-bearing tokens, and structured vaults.

# Features

* Independent of market volatility or liquidity distortions.
* Transparent methodology based on verifiable reserves, liabilities, and contract logic.
* Applicable across DeFi instruments ranging from liquid staking tokens to stablecoins and vaults.

# Methodologies

## Contract Exchange Rate

For tokens with built-in exchange logic (e.g. stETH, aUSDC, cDAI), price is calculated from the ratio of underlying assets to total shares:

$$
exchangeRate = totalUnderlying / totalShares
$$

## Reserve-Backing

For collateral-backed assets, reserves are divided by circulating supply to produce a backing-based fundamental value:

$$
fundamentalPrice = reserves / supply
$$

Reserves may consist of multiple assets held across wallets.

## Net Asset Value (NAV)

For vault-based tokens, price equals the value of assets minus liabilities, divided by outstanding tokens:

$$
fundamentalPrice = (assets - liabilities) / totalSupply
$$

## Redemption Value

For mint/burn models, the fundamental value corresponds to the amount of underlying assets received when redeeming one token. This is typically retrievable directly from the redemption contract.

## Proof of Reserves

For custodial or synthetic assets, feeds can publish the total value of reserves as reported by verified custodians or proof-of-reserve attestations:

$$
reserveValue = \sum_{i=1}^{n} (reserves_i \times price_i)
$$

# Architecture Flow Overview

<Frame caption="Fundamental Feed Flow">
  <img src="https://mintcdn.com/diadata/Ng3zDrRz-hX7CP86/images/data-products-and-tools/fundamental-feeds.png?fit=max&auto=format&n=Ng3zDrRz-hX7CP86&q=85&s=e5ecd560cd536e7e809a16720b0f73cb" width="2360" height="1164" data-path="images/data-products-and-tools/fundamental-feeds.png" />
</Frame>

* Each feeder is pulling balance sheets (reserves, supply).
* Lasernet is the ledger where all feeders submit their reports.
* The aggregator contract is consolidating those reports into one official number.
* The messaging layer is delivering that number to every chain where it’s needed.
* Protocols then rely on this official number to decide risk and operations.

# Use Cases

* **Stablecoins**: Validate peg integrity by comparing market price to backing-based fundamental value.
* **Yield-bearing Tokens (LSTs, aTokens, cTokens)**: Track accruing value through exchange rates.
* **Vaults and Structured Products**: Monitor NAV in real time to ensure accurate token pricing.
* **Synthetic Assets**: Ensure collateralization ratios remain healthy through reserve-backed valuations.

# Developer Notes

Fundamental Feeds can operate alongside traditional market price feeds. Protocols can consume both sources to implement safeguards such as:

* Depeg monitoring (triggering alerts if fundamental value diverges from market price).
* Fallback mechanisms to fundamental pricing when market feeds become unreliable.
* Enhanced transparency by exposing raw inputs such as reserve addresses or contract state.