# FeeCollector / BuybackManager

The Ledgity Protocol routes a portion of real yield into **LDY buybacks and staking rewards**, ensuring that token value is driven by **actual economic performance**, not emissions.

This mechanism is shared between **the Community (veLDY stakers)** and the **Ledgity Council (governance & stewardship multisig)**.

***

### **1. Performance Fees → FeeCollector**

Each vault generates cash-flow yield from short-duration RWA strategies.\
A share of this yield is allocated as a **protocol performance fee**, collected **on-chain** by the **FeeCollector** contract.

| Parameter | Value                                                    |
| --------- | -------------------------------------------------------- |
| Fee Type  | Performance fee (taken from real yield, never principal) |
| Fee Asset | Stablecoins (USDC/EURC)                                  |
| Custody   | Smart contract controlled (non-custodial)                |

No deposit fees.\
No withdrawal fees if user holds sufficient LDY / veLDY.

***

### **2. FeeCollector → BuybackManager**

The **BuybackManager** receives stablecoins and executes **market buybacks of LDY** in a controlled, automated, transparent process.

```
Performance Yield → FeeCollector → BuybackManager → LDY Buyback (on-chain)
```

***

### **3. Distribution Split: Community & Council**

After LDY is bought back, the tokens are distributed into **two staking pools**:

| Recipient Pool           | Allocation | Purpose                                                                                        |
| ------------------------ | ---------- | ---------------------------------------------------------------------------------------------- |
| **veLDY Community Pool** | **80%**    | Rewards users who stake LDY and lock long-term → governance participation + aligned incentives |
| **veLDY Council Pool**   | **20%**    | Funds governance stewards, strategic contributors & long-term protocol sustainability          |

**This structure ensures that:**

* **Users** who commit and govern the protocol receive the majority of the value.
* **The Council** is funded **without minting inflation** or selling tokens into the market.

**No new LDY is created.**\
**No dilution.**\
All value comes from **real yield**.

***

### **4. Optional Burn Program (DAO Controlled)**

Governance (veLDY) may choose to:

* Adjust the split over time,
* Redirect a portion to **burns** (reducing circulating supply),
* Or allocate part to treasury for strategic partnerships.

This ensures maximum **long-term flexibility**.

***

### **5. The Flywheel**

```
TVL Grows
   ↓
More Real Yield Generated
   ↓
Performance Fees Flow Into FeeCollector
   ↓
BuybackManager Purchases LDY On-Chain
   ↓
80% → veLDY Community Rewards
20% → veLDY Council Pool
   ↓
More LDY gets Locked → Reduced Circulating Supply
   ↓
Stronger Governance + Higher Capital Efficiency
   ↓
Protocol Attractiveness Increases → TVL Grows Again
```

This is a **self-reinforcing loop**, entirely powered by **cash-flow yield**, not speculative incentives.

***

### **In Summary**

| Mechanism                      | Result                                     |
| ------------------------------ | ------------------------------------------ |
| Real yield → FeeCollector      | Transparent revenue capture                |
| BuybackManager → LDY purchases | Market-aligned value conversion            |
| 80% → veLDY Community Pool     | User-aligned incentive structure           |
| 20% → Council Pool             | Sustainable governance funding             |
| Optional burn mechanism        | Long-term supply reduction                 |
| No token inflation             | Value is tied to real protocol performance |

> **LDY becomes more valuable as the protocol grows — not by printing tokens, but by redistributing real economic yield back to the stakeholders who contribute to the system.**