TVL & LDY valuation
📈 How LDY Token Value Grows with TVL
Ledgity is committed to designing mechanisms that link the protocol’s growth (measured by TVL) directly or indirectly to the value of the LDY token. Two key mechanisms already in place are the Performance Fees and the Withdrawal Fees, both of which directly fuel demand for LDY through buybacks and staking rewards.
🔁 1) Performance Fees & Council Staking Program
Once the protocol reaches $10 million in TVL, Ledgity will introduce a 10% performance fee.
These fees are collected from the yield generated by deposited USDC or EURC.
100% of the collected fees are used to buy LDY tokens daily on the open market.
The purchased tokens are distributed to Council Stakers, creating buying pressure and rewarding active participants.
📊 Example with LUSDC
Assumptions:
TVL = $10O,000,000 USDC
Gross APY = 10%
Yield breakdown:
9% APY goes to LUSDC holders → $9,000,000/year → ~$25,000/day
1% APY (performance fee) → $1,000,000/year → ~$2,777/day
How this impacts LDY:
That $2,777/day is used to buy LDY tokens from the market.
As TVL grows, the amount of LDY bought daily increases proportionally.
This daily buyback creates sustained demand for LDY and reduces circulating supply, potentially increasing price over time.
💸 2) Withdrawal Fees
To prevent opportunistic or harmful behavior, a 0.3% withdrawal fee is applied when users exit the protocol.
Once TVL exceeds $10 million, 100% of these withdrawal fees will be used to buy LDY tokens on the market and distribute them to Council Stakers.
Example:
If the protocol processes $50 million in withdrawals over time, the 0.3% fee generates $150,000 USDC, which is entirely used to buy LDY tokens and reward Council participants.
🔄 Combined Effects
TVL ↑ → Higher performance and withdrawal fees ↑
More fees → More LDY token buybacks on the market ↑
Buybacks + staking rewards → LDY demand ↑ and sell pressure ↓
Incentivized staking → Loyal community and value alignment
🧠 What’s Next?
Additional mechanisms are currently under reflection and will be proposed to the Council Stakers for a vote.
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