Vault Factory & L-Token architecture
Ledgity vaults are built to provide stable, predictable real yield while remaining fully composable and non-custodial. The architecture is modular: each stablecoin vault is instantiated from a Vault Factory, and each vault issues its own L-Token, representing a claim on underlying assets.
Vault Factory
The Vault Factory is the contract responsible for deploying new vault instances (lyUSDC, lyEURC, future stable yield strategies, chain deployments, etc.).
Key Responsibilities
Deploy new vaults
Creates new L-Token vaults from a standardized implementation.
Register vault metadata
Keeps an on-chain registry of all active Ledgity vaults.
Parameter configuration
Sets initial parameters: stablecoin type, decimals, risk status, etc.
Access & safety controls
Ensures only governance-mandated vault deployments occur.
This allows Ledgity to:
Expand yield products to new stablecoins (e.g., USDC / EURC / USDT in the future)
Deploy the protocol across multiple chains
Maintain a single consistent logic base for all vaults
No vault is deployed manually. Vault creation always occurs through the Factory to ensure consistency, auditing, and governance control.
L-Token (lyUSDC / lyEURC)
When users deposit stablecoins into a vault, they receive L-Tokens. These tokens represent their share of the vault and automatically accrue yield via PPS (price-per-share) increase, not by minting additional tokens.
Core Properties
1:1 deposit / redeem ratio at entry
1 USDC → 1 lyUSDC on deposit
Non-rebase
Balance stays constant, PPS increases over time
ERC-20 standard
Fully composable across DeFi
Auto-compounding
Yield reflected directly in redeem value
Why PPS (Non-Rebase)?
The move from rebase tokens (V1) → non-rebase PPS tokens (V2) solves the main DeFi integration problem:
Rebase tokens (V1)
Changing balances break DeFi pools & LP math
Poor composability
PPS tokens (V2)
Yield reflected in share value, not token supply
Plug-and-play with all of DeFi
This makes lyUSDC / lyEURC integrable into:
DEX liquidity pools
Lending & borrowing markets (Euler, Morpho, etc.)
LP concentration strategies
Index products
Structured vaults
How Yield is Accrued
Yield does not come from emissions or token inflation. It comes from cash flows generated by short-duration RWA strategies and reflected on-chain:
Yield generated → Forwarded to Vault → PPS increasesUsers never need to:
Claim rewards
Stake separately
Compound manually
Holding the token = earning the yield.
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