RWA Risk

Ledgity’s yield is primarily generated through Real-World Assets (RWA) managed by the SARR Fund, a regulated investment vehicle. The objective is to produce stable, recurring cash-flow–based returns while minimizing capital and liquidity risk.

The strategy is built on short-duration, high-transparency credit exposure, without leverage or speculative instruments.


Asset Selection

The RWA portfolio only includes assets that meet the following criteria:

  • Short maturity and predictable repayment schedules

  • Clear and auditable cash flows

  • Verified and financially credible counterparties

  • Senior or secured position in the capital stack

  • Fully traceable through regulated intermediaries

If an asset category introduces long-term lockups, mark-to-market uncertainty, or opaque valuation, it is excluded.


Explicitly Excluded RWA Categories

To avoid liquidity mismatch and valuation risk, Ledgity does not invest in:

  • Real estate development or renovation loans

  • Long-duration bonds with multi-year duration

  • Structured or tranche-layered credit products

  • Synthetic or derivative-based yield

  • Any collateral dependent on speculative market conditions

This approach eliminates the failure patterns observed in many RWA protocols (frozen redemptions, repayment gaps, pricing opacity).


Portfolio Construction

  • Diversified across multiple issuers

  • Short-duration repayment cycles to support ongoing withdrawals

  • No leverage and no rehypothecation

  • Yield is generated by contractual repayment, not token incentives

The priority is capital stability, not maximizing APY.


Counterparty Monitoring

Each portfolio exposure undergoes:

  • Business and financial due diligence

  • Creditworthiness and repayment analysis

  • Legal enforceability review

  • Continuous monitoring during the entire lending period

Risk scoring is updated as cash flows occur, not only at onboarding.


Liquidity Alignment

The RWA portfolio is structured to align repayment frequency with on-chain withdrawal expectations. Short-duration cycles ensure capital continuously returns to the vaults.

This prevents the liquidity mismatch that occurs when long-term assets are used in products with daily withdrawals.


Reporting & Transparency

The SARR Fund provides periodic reporting and reconciliation, allowing the protocol to align:

  • RWA yield performance

  • Vault PPS (Price-Per-Share) growth

  • Liquidity planning for withdrawals

Yield observed on-chain is directly supported by real, documented economic activity.

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