Risk Management & Reporting
Ledgity applies institutional-grade risk controls to ensure that yield is stable, withdrawals remain predictable, and capital is protected across market cycles. The objective is simple:
Stable yield → without liquidity mismatch → with full transparency.
This is achieved through a combination of portfolio diversification, liquidity buffer coverage, counterparty evaluation, and ongoing monitoring.
1. Portfolio Construction Principles
Ledgity’s RWA strategy is built around short-duration, high-repayment-visibility credit.
Short duration
Capital cycles quickly, reducing liquidity and duration risk.
Recurring cash flows
Yield is generated through frequent repayment schedules.
Diversification
Exposure is spread across multiple borrowers, sectors, and instruments.
Senior secured positioning
Contracts structured to prioritize capital protection.
This avoids the liquidity mismatch risks seen in:
Real estate-backed lending (multi-year repayment cycles)
Long-duration bonds exposed to rate volatility
Illiquid private credit that cannot respond to withdrawals
2. Liquidity Management & Withdrawal Safety
Ledgity maintains a Liquidity Buffer on-chain to support instant withdrawals.
Up to available on-chain buffer
Direct smart contract liquidity
Instant
Standard withdrawal (typically < 10% TVL)
Scheduled RWA repayment cycle
Up to 72 hours
Large withdrawals (≥ 20% TVL)
Portfolio unwinding + dedicated coordination
1–4 weeks (with live communication)
This ensures:
No forced liquidation under stress
No redemption bans
No unpredictable gating
Withdrawals are predictable and transparent, not dependent on market price movements.
3. Counterparty & Credit Evaluation
Every RWA allocation undergoes a standardized due diligence process:
Screening
Regulatory status, financial history, credibility
Risk Assessment
Business model, repayment predictability, collateral structure
Credit Scoring
Quantitative & qualitative rating matrix
Ongoing Monitoring
Weekly repayment tracking + monthly performance review
In cases of deterioration:
Exposure is gradually reduced
Allocation is rebalanced
Collateral claims procedures may be activated (case-dependent)
4. Custody, Legal Structuring & Asset Segregation
Assets are held through a qualified EU custodian, and deployed via a segregated SPV (Luxembourg). This ensures that:
Assets are legally separated from Ledgity corporate balance sheets
Users retain beneficial ownership claim
Capital remains protected even in the event of company insolvency
This is the same structure used by institutional asset managers in traditional finance.
5. Reporting & Transparency
Ledgity provides multi-layer reporting to ensure traceability and user confidence:
Protocol Dashboard
Real-time
TVL, yields, PPS growth, deposits/withdrawals
App
Monthly Portfolio Report
Monthly
Allocation breakdown, performance metrics
Documentation / Dashboard
Custodian Balance Verification
Periodic
Proof of segregated holdings
Published proofs
Proof of Reserves (PoR)
In progress
Verifiable on-chain asset collateral reporting
Via Chainlink PoR framework
Chainlink BUILD supports our PoR and cross-chain transport layer: https://www.chainlinkecosystem.com/ecosystem/ledgity-yield
6. Incident Response
Ledgity maintains a protocol-wide emergency pause mechanism, allowing operations to be frozen across all chains if suspicious activity is detected.
Emergency actions:
Freeze malicious actors (via GlobalBlacklist)
Pause deposits/withdrawals temporarily (via GlobalPause)
Execute rapid asset protection procedures
This ensures rapid containment and user fund safety.
In Summary
Preserve capital
Senior-secured, short-duration RWA
Maintain liquidity
On-chain buffer + scheduled repayment flow
Deliver stable yield
Recurring cash flows from real economic activity
Guarantee transparency
Real-time dashboard + structured reporting + PoR roadmap
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