Rewards Distribution
Last updated
Last updated
As a way to provide a simple and seamless experience to users and to facilitate integration of L-Tokens in other DeFi protocols, Ledgity Yield introduces innovative rewards distribution mechanisms.
Ledgity Yield's vision is that stablecoins yields should be accessible even to DeFi beginners. This contrasts with most of the complex processes in the DeFi space that require users to pool, stake, lock, monitor, and claim tokens.
To realize our vision, the Ledgity Yield protocol introduces L-Tokens as a kind of "yield-bearing" tokens.
In more precise terms, it means that as soon as a wallet holds some L-Tokens, it starts generating yield. There is no need to lock, stake or claim anything.
Rewards are automatically distributed, and users see their L-Tokens balances growing through time to reflect their rewards in real-time.
Also, rewards are stable and automatically auto-compounded over time, meaning users doesn't even need to monitor or manage their positions.
Another interesting mechanism brought by the Ledgity Yield protocol is the ability for users to redirect their distributed rewards to another wallet.
Chained rewards redirection are also supported, enabling one DAO to redirect its rewards to another DAO, a parent to redirect its rewards to its children's wallet, and so on.
It's worth mentioning, however, that the deeper a reward redirection chain, the more gas it will consume when distributing rewards.
If above-mentioned use cases are interesting, the main initial usage of the rewards direction mechanism will be to integrate L-Tokens into other DeFi protocol.
In a DEX for example, by redirecting rewards from L-Tokens' pools to farm contracts, we ensure that rewards are not stuck into the pools contracts and are properly distributed to users.
The yield-bearing mechanism provides a seamless experience for users, and rewards redirection one may allow in some cases, L-Tokens to be used in other DeFi protocols. However, there are scenarios where none of the above solutions are suitable, which is why Ledgity Yield will deploy wrapped L-Tokens.
Wrapped L-Tokens are similar to those in Lido where wstETH is a wrapper for stETH. The wrapped version allows any DeFi protocol to accept Lido's ETH as any other ERC20 token without any special configuration.
Instead of rewards being distributed directly to users wallets, wrapped L-Tokens will require a manual claiming process for users to obtain their rewards.
The deployment of wrapped tokens is scheduled for Q1 2024, but this may vary depending on community demand.
