> 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/technical-information/yield-mechanics/pps-model-non-rebase-real-yield.md).

# PPS Model (Non-rebase real yield)

L-Tokens follow a **Price-Per-Share (PPS)** model to account for yield.\
Instead of increasing your token balance, the **value of each token increases over time** as the vault generates returns.

No rebasing. No claiming. No restaking loops.

***

### **How PPS Is Calculated**

```
PPS = Vault Net Asset Value / L-Token Supply
```

* Vault value increases as yield is collected.
* L-Token supply remains constant.\
  → **PPS goes up.**

Your yield is reflected directly in the **exchange value** of the token.

***

### **Example**

| Time              | lyUSDC Balance | PPS    | Redeemable Value |
| ----------------- | -------------- | ------ | ---------------- |
| Initial Deposit   | 1,000 lyUSDC   | 1.0000 | 1,000 USDC       |
| After \~3 Months  | 1,000 lyUSDC   | 1.0184 | 1,018 USDC       |
| After \~12 Months | 1,000 lyUSDC   | 1.0920 | 1,092 USDC       |

Your **balance** stays the same.\
Your **claimable value** increases.

***

### **Why PPS Instead of Rebasing?**

| PPS Model                         | Rebasing Model                     |
| --------------------------------- | ---------------------------------- |
| Value increases, balance stable   | Balance fluctuates                 |
| Safe for LPs, lending, collateral | Often breaks DeFi accounting       |
| No custom integrations needed     | Requires protocol-specific support |

PPS makes L-Tokens **plug-and-play** across DeFi.

***

### **Withdrawals**

When you withdraw:

```
Withdrawn USDC/EURC = L-Token Balance × Current PPS
```

If PPS has increased, you redeem **more stablecoins** than you deposited.

Withdrawals are processed using:

* **On-chain liquidity buffer** for instant settlements
* **RWA settlement process** for large requests\
  (covered in the next section)

***

### **Key Benefits**

* **Auto-compounding**
* **No inflation / no emissions**
* **Fully auditable on-chain**
* **Composability preserved**

PPS ensures yield is **clean, transparent, and portable**.


---

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