Value Capture (Buyback Flywheel)

The LDY token is designed as a value capture asset: as the protocol grows, real yield generated from the RWA portfolio flows back to LDY stakers.

Yield does not come from emissions or inflation. It comes from performance fees generated by real economic activity.

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How the Flywheel Works

1. Users deposit stablecoins (USDC / EURC) into Ledgity vaults

2. The collateral is allocated to short-duration, diversified RWA strategies

3. These assets generate real cash flows (yield)

4. The protocol collects performance fees on that yield

5. Fees are used to buy LDY on the open market

6. Purchased LDY is distributed to stakers (veLDY) or burned, depending on governance decisions

Deposits → Real Yield → Fees → Buybacks → Distributed to stakers → More incentive to stake & hold

This links protocol growth → token demand → staker rewards directly.

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Fee Flow Structure

Step	Flow	Description
1	Performance fees collected	A fixed % of yield generated from the portfolio
2	Fees sent to FeeCollector	Held transparently in stablecoins
3	BuybackManager executes buys	Purchases LDY from the open market
4	LDY is allocated to two pools	veLDY Community Pool & veLDY Council Pool

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Allocation Breakdown

Destination	% of Buybacked LDY	Purpose
veLDY Community Pool	80%	Distributed to users who stake LDY and contribute to governance
veLDY Council Pool	20%	Aligns Council incentives with long-term protocol performance

Stakers always receive the majority of value capture.

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Why This Model Is Sustainable

Feature	Result
Real yield → No inflation	Rewards do not dilute holders
Buybacks come from revenue	Higher TVL = higher buyback pressure
veLDY locking reduces circulating supply	Creates natural supply scarcity
No reliance on speculative incentives	No “farm and dump” dynamics

Economic Impact

Metric	Effect on LDY
TVL Growth	Increases buyback volume
Higher Staking Participation	Reduces circulating supply & increases governance weight
Protocol Longevity	Reinforces token utility and long-term alignment

In other words:

The more the protocol is used, the more LDY is bought, locked, and distributed to aligned participants.