> For the complete documentation index, see [llms.txt](https://kaiainvestmentpartners.gitbook.io/kaiainvestmentpartners-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://kaiainvestmentpartners.gitbook.io/kaiainvestmentpartners-docs/how-it-works/token-mechanics.md).

# Token Mechanics

## Tokenization: Pruv (D3Labs)

Tokenization is handled by Pruv (D3Labs), which processes investor KYC. Tokens are first minted on the Pruv network, then bridged to Kaia, where they are held, transferred, and redeemed. Because KYC sits in the tokenization step, issuance follows a verified process even though distribution is open.

## Token standard and yield: ERC-4626

Both Yield8 and Yield5 follow the ERC-4626 vault standard. The token represents a proportional right to the product's yield, and that yield is reflected by the per-token value (share price) rising rather than by the token count increasing. The same number of tokens comes to represent more underlying value over time. On deposit, an investor receives tokens at the then-current share price; on redemption, they settle at the then-current share price.

## NAV

The reference for token value is NAV. The administrator calculates the product's net asset value, and an external party verifies it on a regular basis (currently weekly). Per-token NAV is that value divided by the tokens outstanding; as asset values move, per-token NAV moves with them. Token value is therefore not fixed.

## Verification

Per-token NAV can be checked against the product's reported asset composition. This is the basis for KIP describing itself as "structured to be verifiable.


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