> For the complete documentation index, see [llms.txt](https://docs.ledgity.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ledgity.finance/history-and-evolution/vault-strategy.md).

# Vault Strategy

Ledgity’s yield model is built on **real economic activity**, not token incentives or leverage cycles.\
The objective is to deliver **stable, recurring, and liquid yield** while preserving **capital integrity and on-chain accessibility.**

***

### **Strategy Principles**

The RWA portfolio is structured around three core principles:

| Principle                 | Meaning                                                                             |
| ------------------------- | ----------------------------------------------------------------------------------- |
| **Short Duration**        | Capital cycles frequently to support withdrawal liquidity and reduce duration risk. |
| **Diversified Exposure**  | Yield does not rely on a single asset class, issuer, or sector.                     |
| **Transparent Cash Flow** | Yield is generated from contractual, identifiable, and recurring payments.          |

> The strategy is designed to behave **independently from crypto market cycles**.

***

### **Portfolio Allocation Model (Target)**

| Allocation | Exposure Type                                         | Purpose                                                        |
| ---------- | ----------------------------------------------------- | -------------------------------------------------------------- |
| **80%**    | **Short-duration Real-World Yield Portfolio**         | Core yield generation — diversified, recurring payments.       |
| **15%**    | **Low-Risk On-Chain Strategies** (Aave, Morpho, etc.) | Liquidity efficiency & flexibility while maintaining security. |
| **5%**     | **On-Chain Liquidity Buffer**                         | Supports **instant withdrawals** and operational settlement.   |

#### **80% — Real-World Yield Portfolio**

The core portfolio includes diversified exposure to:

* Trade finance flows
* Short-term corporate receivables
* Treasury and cash management instruments
* Tokenized money market alternatives
* Factoring and revenue-based financing in select cases

All positions are:

* **Short duration** (typically 30–180 days)
* **Collateralized or secured by senior claims**
* **Audited and monitored** through institutional reporting frameworks

#### **15% — Secured On-Chain Yield**

Low-risk, liquid DeFi instruments used only where:

* Smart contracts are audited
* Protocols have battle-tested track records
* Collateral is high-quality & liquid

This component ensures on-chain composability and immediate redeployment flexibility.

#### **5% — Liquidity Buffer**

Maintained **on-chain**, enabling:

* Instant withdrawals for most users
* Low operational friction
* Linearity between inflows and outflows

Large withdrawals are processed through **scheduled liquidity windows** to preserve asset integrity.

***

### **Risk Management Framework**

| Risk Dimension                 | Controls in Place                                               |
| ------------------------------ | --------------------------------------------------------------- |
| **Counterparty Risk**          | Due diligence, financial scoring, performance tracking          |
| **Duration Risk**              | Short-duration instruments with predictable repayment cycles    |
| **Liquidity Risk**             | On-chain liquidity buffer + rolling maturities                  |
| **Collateral / Asset Backing** | Collateralization or senior-secured structures where applicable |
| **Smart Contract Risk**        | Independent audits + battle-tested integrations                 |

Risk is not eliminated — but it is **identified, quantified, and managed transparently**.

***

### **Reporting & Transparency**

Ledgity provides:

* **Portfolio allocation breakdowns**
* **PPS (Price Per Share) valuation transparency**
* **On-chain valuation view for liquidity buffer**
* **Periodic reporting for institutional clients**

Institutional company will allow:

* Yield statements (CSV / PDF)


---

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