Liquidity Buffer & Withdrawal Queue

Ledgity is designed to provide stable yield without liquidity mismatch. To do this, the protocol combines a real-world yield portfolio with an on-chain liquidity buffer that supports withdrawals at any time.

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How Withdrawals Work

When users withdraw, L-Tokens are redeemed for the underlying stablecoin at the current PPS.

Withdrawals are processed in two layers:

Layer	Source of Funds	Purpose
Liquidity Buffer (on-chain)	Stablecoins held directly in protocol-controlled wallets	Supports instant withdrawals
RWA Settlement (off-chain)	Assets in the RWA portfolio (short-duration financing instruments)	Used for larger withdrawals

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Withdrawal Settlement Times

Withdrawal Size (relative to vault TVL)	Settlement Time	Notes
≤ 5%	Instant	Covered by the on-chain liquidity buffer
5% – 20%	~24–72 hours	Requires RWA repayment cycle / liquidity rotation
> 20%	Scheduled with coordination (typically 1–4 weeks)	Treasury team communicates timeline & execution steps

The withdrawal schedule is designed to match the liquidity profile of the underlying assets — avoiding forced selling or degradation of yield.

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Why This Matters

This structure prevents the two most common failure modes seen in RWA protocols:

Failure Mode	Without Liquidity Buffer	Ledgity’s Model
Liquidity Mismatch	RWA assets are long-duration → users can’t withdraw	Portfolio uses short-duration strategies + buffer
Forced Liquidation Under Stress	Selling assets during down cycles destroys yield	Withdrawals follow cash-flow cycles instead

Result:

Capital remains productive, yet always accessible.

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Buffer Management

The liquidity buffer is dynamically adjusted based on:

• Vault TVL size

• Withdrawal frequency

• Market conditions

• RWA cash flow schedules

Buffer levels are monitored continuously and rebalanced to ensure smooth withdrawal processing.

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Transparency

All withdrawal states are visible in the app:

Display	Meaning
Instant available	Amount withdrawable directly
Queued amount	Scheduled for next settlement cycle
Estimated settlement date	Based on RWA repayment calendar

Users always know where their withdrawal stands — no opacity, no guessing.

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In Short

The Liquidity Buffer enables instant withdrawals for day-to-day user activity, while the Withdrawal Queue ensures predictable settlements for larger exits — all without compromising yield stability.

This is the core principle: Real yield without liquidity traps