Firstly, it is based on an algorithm with inputs from mainly VI1 & VI2. Those do not always reflect the same price/risk.
Secondly, the price pushes in extremes by design. This is partly due to speculative pressures on this instrument but also the nature of the algorithm and the short term nature of the security's link to it's underlying security, the VIX. It is similar to the theta price erosion seen on warrants over time.
Add to that the compounded 1.6% p/a administration fee the underwriter "removes" from price over time. This works out to far more than 1.6% per year in real terms.
Don't hang around too long in an ultra short term VIX ETN. It will burn you over time. But should the market be in your favour, it's one of the most profitable in nominal terms.