> 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/overview/product-suite-overview/core-strategy-lyeur-and-lyusd.md).

# Core strategy (lyEUR & lyUSD)

The core yield strategy follows a **hybrid allocation model**, designed to balance **stability**, **liquidity**, and **return consistency**.

#### 1. SARR Investment Fund (Core)

The underlying assets are held inside a **regulated investment fund domiciled in Luxembourg**, focusing on **Revenue-Based Financing**. This approach targets short-dated, senior exposures backed by contractual recurring revenues.

Typical characteristics include:

* **Short duration** (often ≤ 12 months),
* **Senior positioning** across transactions,
* Underwriting based on recurring revenue quality (churn, concentration, cash-flow visibility),
* Progressive diversification across issuers and verticals.

#### 2. Digital Market Infrastructure Allocation (Complementary)

A smaller portion of the portfolio may be allocated to **high-quality overcollateralized lending markets** (blue-chip venues) to support liquidity management and enhance capital efficiency, within predefined risk constraints.

#### 3. Liquidity Buffer

A dedicated liquidity buffer may be maintained to support day-to-day redemption flows and operational settlement requirements.

#### 4. Liquidity Buffer

### **Asset Allocation Model**

Ledgity applies a diversified model combining regulated RWA with on-chain liquidity management:

* **80% - 90% — Off-chain regulated RWA**
  * Short-term fixed income
  * Corporate and government debt
  * High-grade receivables
  * Instruments managed inside the Luxembourg fund
  * Full due diligence + monthly NAV valuation
* **5%-15% — On-chain integrations**
  * Blue-chip DeFi money markets (e.g., Aave)
  * Capital-efficient liquidity optimizations
  * Always non-custodial
* **5% — Liquidity Buffer (instant withdrawals)**
  * Immediate liquidity for user redemptions
  * Allocated automatiquement in AAVE pool
  * Fully visible on-chain

This model allows Ledgity to deliver a **stable daily yield (\~9% APY)** with **controlled risk** and full transparency.

> Allocation bands may evolve depending on market conditions, liquidity needs, and AUM growth.

#### 5. **Custody & Valuation**

#### **Custodian**

The Luxembourg investment fund has its own **regulated custodian** responsible for:

* Safekeeping the assets
* Settlement of financial instruments
* Oversight of cash movements

#### **Valuation Agent**

The fund appoints an **independent valuation entity** responsible for:

* Monthly NAV calculation
* Pricing of assets
* Reporting to auditors and regulator

#### **Auditors**

Yes — the fund is **audited annually** by a certified external auditor.


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