What are L-Tokens?

When users are depositing stablecoins (e.g., USDC), the Ledgity Yield app issues a particular kind of wrapped ERC20 tokens called "L-Tokens".

The aim of this page is to teach you all you need to know about these L-Tokens.

Wrapped stablecoin

Every single L-Token wraps an underlying stablecoin token in a 1:1 ratio (e.g., 1 LUSDC = 1 USDC). At any time, a wallet can unwrap (a.k.a. withdraw) L-Tokens to redeem the underlying stablecoins.

The price of an L-Token aims to be pegged to the one of its underlying stablecoin. The community is incentivized to contribute in maintaining the peg thanks to arbitrage opportunities.

Like their underlying stablecoins, L-Tokens can be used in a variety of ways, including to make payments, to be lent, to serve as collateral for loans, to be exchanged, staked and so on.

Yield-bearing

In addition to wrap the value of certain stablecoins, L-Tokens are a sort of "yield-bearing" tokens.

Which means that they inherently make their holders eligible to a yield over time (6-7% APR).

In fact, the L-Tokens balance of holders will automatically grow through time to reflect their yields. There is no need to stake, lock or claim anything.

Backed by RWA

The generated yield are backed by revenue from a Real World Asset (RWA) portfolio.

In contrast to risky DeFi yield farming, Ledgity Yield provides stablecoins holders with high and stable yields thanks to Ledgity's institutional-grade custody and RWA management.