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The AVM is Nirvana’s core mechanism, an on-chain market engine that governs how tokens are minted, redeemed, and priced. It is deterministic, meaning its logic is encoded in math, not managed by humans. There are no market makers, no oracles, and no discretionary levers. Depositing USDC into the AVM mints ANA, which can be redeemed back for USDC. The AVM guarantees that every Assured Value Asset is fully backed by reserves and enforces a non-decreasing floor price that can only rise over time through protocol fees and activity. When reserves grow, the AVM recalibrates the floor upward, locking in permanent gains. This structure ensures that liquidity is programmatic, value is structural, and redemption is guaranteed and independent of sentiment or secondary markets. The AVM replaces volatility with verifiability, transforming crypto from belief-based to mechanism-based value.

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Minting on demand

Each AVA is powered by its own AVM, which mints AVAs in exchange for a corresponding reserve asset. For example, avETH is minted with ETH. An AVA’s supply begins at zero and grows only through purchases from the AVM. The exchanged reserve asset is deposited directly into the AVM’s reserves, where it becomes immutable, protocol-owned exit liquidity for AVA sellers. When AVAs are sold back to the AVM, they’re burned, and sellers receive the reserve asset. This mint-on-demand model ensures that every AVA in existence was purchased fairly and that all tokens are backed by immutable, protocol-owned liquidity. There is no insider allocation.

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Price curve

The AVM sets each AVA’s market price through a deterministic price curve:
  • Buys push the price upward.
  • Sells push the price downward, but never below the floor.
The price curve is designed for sustainability and increasing liquidity depth. At higher prices, more capital is required to move the market, making AVAs progressively more resistant to volatility. The AVM’s price curve has three sections ( floor, shoulder, and main curve): AVMgraph.png This curve is determined mathematically using a continuous, piecewise linear function of supply: P(S)={f0<S<S1b1+m1SS1≤S<S2b2+m2SS≥S2P(S)= \begin{cases} f & 0 < S < S_1 \\ b_1 + m_1 S & S_1 \le S < S_2 \\ b_2 + m_2 S & S \ge S_2 \end{cases} Where:
  • PP is market price
  • ff is the floor price
  • SS is current supply
  • S1S_1 and S2S_2 are the supply thresholds where each section meets
What this means: The market price of an AVA is determined by inputting the current supply into the function above.
  • If supply is between 0 and the first supply threshold (s1), market price = floor price.
  • If the supply is in between the thresholds (s1 and s2), market price is calculated from the shoulder slope equation
  • If the supply is greater than the second threshold (s2), market price is calculated using the main curve slope equation
This function is continuous, meaning the market price can be determined given any supply input.  Due to the geometry required to enable floor raising, the slope of the shoulder (m1) must be steeper than the main curve (m2). The shoulder always maintains a slope 2.5x steeper than the adjacent section to its right.  When an AVA is sold into the floor, the first supply threshold (s1) adjusts to the current supply, meaning any buys at the floor price will immediately push price into the shoulder, creating positive price impact, and supporting an asymmetric setup.

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Solvency invariant

The AVM must be able to buy back every token in supply at the curve’s bids using its protocol-owned liquidity. That means the reserves R equal the area under the price curve up to the current supply S : R=∫0SP(s) dsR = \int_{0}^{S} P(s)\,ds When someone sells, they’re paid along the curve (the integral between the old and new supply). Therefore, whenever the curve is recalibrated, the area under the curve—and thus the reserves it represents— must stay exactly the same. And so the price curve and the bids it represents are forever beholden to the AVM’s protocol-owned liquidity. That’s the solvency invariant.
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