> For the complete documentation index, see [llms.txt](https://docs.midas.app/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.midas.app/resources/methodology-and-definitions.md). # Methodology & Definitions

Fees

{% hint style="info" %} When reviewing the fees associated with Midas mTokens, we highly recommend starting by verifying the specific product documentation. In particular, always check the Pricing Supplement for the individual product you are interested in, as the exact fee structures, percentages, and configurations are defined there. {% endhint %} ^{*Here is a breakdown of the fees that we may charge at the product level.:*} * ^{***Management Fees:***}^{* *}^{*The product may charge a management fee, which represents a specific percentage of the strategy's net asset value over a given period. If applicable, management fees accrue with each NAV pricing update.*} * ^{***Performance Fees:***}^{* *}^{*The product may charge a performance fee based on a percentage of its positive returns. This is calculated using a "high-water mark" system. Simply put, a high-water mark is the highest historical peak in value the strategy has reached over a certain time period. The performance fee is only charged on profits made above this peak, ensuring you do not pay a fee twice for recovering past losses. Please note that how often this high-water mark is evaluated or reset (its periodicity) depends on the specific underlying strategy.*} * ^{***Instant Redemption Fees:***}^{* *}^{*Standard redemptions are always free of charge. However, you have the option to use an instant redemption feature for accelerated settlement. If you voluntarily choose this option, an instant redemption fee (typically ranging from 20 to 100 basis points) may be charged to compensate liquidity providers for the costs of immediate settlement.*} * ^{***Minting (Issuance) Fees:***}^{* *}^{*While minting is usually free, Midas may occasionally apply a small fee if you choose to subscribe using less common payment tokens. Whenever this happens, we will always offer a free alternative payment method. Any potential fees are fully transparent and will be clearly shown on the subscription page before you finalise your transaction.*} ^{*Additional fees, transaction costs, and other deductions may also accrue within the underlying assets themselves, which can indirectly impact the overall returns of the strategy.*}

Annualised Percentage Yield (APY) & Rewards

^{*When evaluating the performance of your mTokens, it is important to understand the distinction between the core Annual Percentage Yield (APY) and the additional ecosystem rewards that may accrue.*} ^{**Understanding APY**} ^{*The core APY reflects the annualised historical growth of the token’s Net Asset Value. For example, our Trailing 7-Day APY is calculated by determining the percentage change in the NAV over the past seven calendar days. This 7-day return is then annualised by compounding it over a full year, estimating what the annual percentage yield would be if that recent performance continued for a full 12 months.*} ^{*Please note that this APY is a strictly historical metric. Past performance is not a reliable indicator of future performance. Because mTokens are based on actively managed strategies, returns will fluctuate based on the risk manager's discretionary decisions and market conditions. The displayed APY does not constitute a simulation, projection, or forecast of future yields you might expect.*} ^{**How Rewards Work**} ^{*mTokens issued by Midas allow token holders to earn additional ecosystem rewards through the underlying strategy's allocations. Because mToken strategies are deployed across various DeFi protocols and ecosystems, they often qualify for incentive programs like points, token emissions, or multipliers.*} ^{*These rewards are not included in the reported APY. Any reference to ecosystem rewards does not represent a guaranteed entitlement or financial return; they are contingent benefits that vary based on third-party protocol conditions and the risk manager’s strategic allocations.*} ^{**When Rewards Are Realised and Distributed**} ^{*Rewards are not factored into the token’s ongoing price updates until they are "crystallised", meaning they have been successfully received, unlocked, and (if necessary) converted into stablecoins by the risk manager.*} ^{*Once crystallised, these stablecoins are used to mint additional units of the respective mToken. These newly minted tokens then become claimable via the Midas frontend. Crucially, your share of these rewards is distributed on a pro-rata basis depending on your holding period.*} ^{*Depending on their size and frequency, crystallised rewards may be:*} * ^{***Incorporated into the APY calculation:***}^{* *}^{*If the rewards are marginal or recurring.*} * ^{***Distributed separately:***}^{* *}^{*If the rewards are significant or one-off, they are distributed retroactively as claimable mTokens on the respective ecosystem chain.*} ^{*Note: Crystallisation and reward distribution are subject to execution, operational, and market risks.*} ^{**How Rewards Are Displayed**} ^{*Each mToken’s product page dynamically displays its known reward exposure based on current strategy allocations. This transparent view includes the protocols where the strategy is active and the corresponding points multipliers or reward categories. As strategies shift (entering or exiting positions) this display is updated accordingly.*} ^{*Only verifiable, active reward exposures are shown. Midas does not speculate on the value of uncrystallised rewards or publish estimates of future potential earnings.*} ^{**About Merkl**} ^{*To make reward distribution seamless and highly efficient, Midas utilises Merkl, a platform designed to distribute rewards based on on-chain snapshots and off-chain calculations.*} ^{*Traditional reward systems often require users to lock or stake their tokens in specific smart contracts, which costs gas fees and limits how you can use your assets. Merkl changes this by tracking token balances and DeFi activities automatically. This means you can simply hold your mTokens in your wallet or deploy them across supported DeFi protocols, and Merkl will track your eligibility in the background.*} ^{**Special Rewards**} ^{*In certain instances, mTokens may become eligible for Special Rewards. To ensure clarity, we group all non-standard incentives under this single category (which includes what might occasionally be referred to as "bonus" or "deposit-to-earn" rewards).*} ^{*Special Rewards are those not part of standard public points programs. They may stem from custom agreements, early-stage ecosystem contributions, or specific campaign participation (e.g., depositing an mToken into a specific summoning campaign to earn bonus ecosystem tokens). These Special Rewards follow the exact same crystallisation and distribution process:*} * ^{*Minor Special Rewards may be incorporated into regular price updates once crystallised.*} * ^{*Major Special Rewards are converted to the respective mTokens and distributed retroactively via Merkl after crystallisation.*}

Total Value Locked (TVL)

^{*TVL (Total Value Locked) describes the outstanding supply of all mTokens and Midas-powered Vault Tokens valued in USD.*}

Net Asset Value (NAV)

^{*The NAV (Net Asset Value) per mToken represents the current value of one mToken expressed in its base currency. It is defined as the total value of the reference portfolio that the mToken tracks, divided by the number of mTokens outstanding.*}

#### Frequently Asked Questions

I don't manage to reconcile the total TVL shown on your website. Why?

^{*The TVL (Total Value Locked) displayed on th Midas website sums up the outstanding supply of all mTokens and Midas-powered Vault Tokens valued in USD. Individual Vault Token TVLs are available via the respective partners.*}

How does an mToken accrue rewards?

^{*Rewards are earned through the risk manager’s allocation of the mToken strategy collateral into protocols that offer ecosystem incentives (e.g., points, token emissions). Example: If a strategy's collateral is allocated to Ethena, it accrues SATs (points), which in past seasons were later converted into ENA tokens.*}

How does an mToken holder earn rewards?

^{*mToken holders participate in the performance of the respective reference strategy via the development of the mToken price. Additionally, tokenholders may be eligible to additional rewards that are distributed ex-post via Merkle based on eligibility. Both hold true even if users deposit their mTokens as collateral on lending platforms.*}

How are rewards being distributed?

^{*Once crystallised, rewards are converted into additional mTokens and made claimable on midas.app. Example: mMEV holders will be able to connect their wallet and claim their additional mMEV tokens directly.*}

How long do token holders have to claim rewards?

^{*Rewards are available to be claimed for 6 months after their accrual.*}

How often are rewards distributed?

^{*There is no fixed schedule. Distributions occur dynamically when rewards are crystallised and processed.*}

Can I track how much I’ve earned?

^{Unfortunately n}^{*ot at the moment. Tracking is currently limited to showing known reward exposures and multipliers on the product page.*}

How do I know if I can claim rewards?

^{*Visit midas.app and connect your wallet; any eligible, crystallised rewards will automatically appear on the website for you to claim.*}

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