Yunus Taşlı 
On September 3, 2023, during the Coin Engineer – Ledgity AMA event, the project leader of Ledgity, where we conducted our AMA as Coin Engineer, engaged with the community, addressing our questions and offering insights about the project in a highly informative manner. Coin Engineer – Ledgity AMA was indeed an enlightening and interactive session.
You can access the AMA content and details here.
First, the Ledgity project representatives, whom we asked to introduce themselves, conveyed the following during the Coin Engineer – Ledgity AMA event:
“I am Pierre-Yves, the founder and CEO of Ledgity. I am joined by our CPO and DeFi Leader, @LilaRest. In total, we are an 8-person team based in France, combining over a decade of experience in TradFi and a deep understanding of how new technologies like blockchain and crypto will revolutionize the finance industry. We are very excited to share Ledgity’s vision with the community.”
Our AMA event as Coin Engineer started with some introductory questions we asked the Ledgity project representative and the questions asked and the answers provided were as follows:
Q1: What is Ledgity? Can you briefly introduce it?
A1: We are excited to present the Ledgity Yield Protocol. 💫 It’s a treasury management solution backed by Real World Assets, providing stable, reliable, and scalable yield solutions for stablecoin token holders.
Our vision is to develop a “stable yield for stablecoins” solution backed by RWA. This is perfect timing as the RWA market is booming, and it’s likely to play a significant role in the crypto market in the coming years. Wallets with Tokenized RWAs doubled in just a year. In just 2 months, RWA jumped from the 13th to the 8th position in the largest markets on DeFi Llama. Binance predicts the RWA market will be worth $16 trillion by 2030.
It’s the perfect market timing. The TradFi fixed-income market has been offering the best yield opportunities in the last 15 years. Our legal team has been working hard for over a year to be regulated by the French Financial Market Authority as a Digital Asset Service Provider. With one of the most advanced regulations for crypto assets worldwide, Ledgity Yield Protocol follows a similar approach to Lido for liquid Ethereum staking: users deposit USDC, receive LUSDC, and start earning yields in LUSDC. They can withdraw LUSDC to USDC whenever they want.
LUSDC is backed 1:1 by a diversified bond portfolio.
Q2: What is the current stage of the project?
A2: We successfully launched our Beta on Arbitrum and Linea just 2 weeks ago. Our technical and financial architecture is ready, and it’s time to spread the word and pave the way for a bright future for Ledgity Yield 🚀. We are forming partnerships with major projects and launching an intensive marketing campaign.
Soon, we will kickstart our Arbitrum Lockdrop, rewarding early adopters with the first $LDY tokens! Let’s replicate Lido’s success, but this time for stablecoin yield.
Q3: We’ll come back to the Lockdrop campaign shortly, for now, can you explain how the protocol works?
A3: From a regulatory perspective, i) users lend their stablecoins to Ledgity. ii) Ledgity swaps the USDC into fiat currency, secures the capital in a segregated bank account, and iii) invests the capital into a diversified bond portfolio. Also by pooling stablecoin capital together, Ledgity’s yield program allows stablecoin holders to benefit from a stablecoin yield solution with an institutional governance approach.
Funds are invested without a speculative spirit, and the investment rules align with the core objective of providing stable and attractive yields offered in the stablecoin. From a technical perspective, Ledgity’s financial team leverages Off/On ramps with partners like Circle to securely move funds to an off-chain RWA portfolio.
The Ledgity Yield application offers a series of smart contracts that act as a bridge between DeFi and TradFi, securing the flow of funds between users and Off/ramp partners, from reward distributions to deposit and withdrawal operations. When a user deposits USDC into the Ledgity Yield smart contracts, they receive LUSDC as proof of deposit in a 1:1 ratio.
Once a user holds some LUSDC, they start generating a yield on it. There’s no need to stake, lock, or claim anything; the user will see their LUSDC balance growing automatically over time. Shortly, users will be able to use their LUSDC as collateral on lending platforms, as liquidity on DEXs, and even in an auto-leverage vault to enhance their yields!
Q4: I heard that you will be sharing 13% of the 6-month supply through a Lockdrop campaign. I’m excited to get exposure to such an advanced RWA project! Can you provide more information about the campaign?
A4: The campaign will kick off on Arbitrum. So stay tuned, the official date will be announced soon. Additionally, participants of the Lockdrop will be the first to receive $LDY tokens. This is the only way to start receiving $LDY tokens from TGE. Other wallets will have no choice but to buy on the market (= no selling pressure at launch). TGE is expected to be completed by the end of October.
Locking will only be open for 30 days and will distribute approximately 13% of the 6-month $LDY supply. Users can lock any amount of USDC for 3, 6, or 12 months. The longer the lock, the more $LDY a user will receive. Please note that the Lockdrop will be limited to the first 5M USDC, and it’s first-come, first-served, so don’t miss out on the opportunity! Lastly, it’s worth mentioning that Lockdrop participants will earn $LDY only for 6 months, with the majority of other emissions occurring over 48 months!
Get notified when the locking process begins by joining our Discord: https://discord.gg/ledgityyield
Q5: Great, but can you provide us with more information about the $LDY Token?
A5: Great question. $LDY is the utility and governance token of the Ledgity ecosystem. $LDY resides at the heart of the ecosystem and offers many benefits and advantages to $LDY token holders, such as unlocking the leverage vault, 0% withdrawal fees, and extra yield on stablecoins through features like L-Boost.
It’s important to note that this is a community-centric token and will primarily be distributed as an incentive to our community members. 5% of protocol revenues accumulate in stablecoins to support the token price by buying back $LDY tokens during bearish periods. Inflation increases, decreasing over the years until reaching the maximum supply (4 years).
After the questions posed by the Coin Engineer within the scope of the project were answered by the Ledgity representative, questions from 10 Twitter and Telegram users were selected during the Coin Engineer – Ledgity AMA event and were subsequently addressed by the Ledgity representative in the Coin Engineer – Ledgity AMA.
TWITTER QUESTIONS
Q1: You allow users to lend and borrow cryptocurrencies at fixed rates. How does this compare to traditional finance? (@ErmanlarSelim)
A1: Hey @ErmanlarSelim, thanks for your question. We don’t allow users to borrow. We offer a yield protocol on a stablecoin with an attractive yield backed by RWA to benefit from its stability. So in a way, we’re multiplying what you have in tradfi when you invest cash in an investment solution like a bond portfolio, but for the web3 industry. The stablecoin market is currently massive, with around 120 billion dollars. It’s somewhat similar to what Lido Finance does but for stablecoins.
Q2: The founders of Ledgity have experience in the financial sector and believe in the future of cryptocurrencies. What forms the basis of this belief? (@Atakan_Yaavuz)
A2: The best use case for blockchain technology is in the finance industry. This is because the finance industry deals with ledger management, and blockchain technology disruptively innovates ledger management. When you understand how the banking system works, you can easily identify the benefits of using blockchain technology.
So, crypto and blockchain will definitively reshape our financial infrastructure, bringing greater efficiency, faster settlement times, and reduced intermediary costs. We are at the forefront of this innovation, and the Ledgity Yield Protocol is a great example.
The best way to see this in action is by joining our Discord: https://discord.gg/ledgityyield
Q3: Your platform will be fully usable by the end of 2023. What does this mean for users? What can we expect? (@atar_abdullahh)
A3: Dear community, there’s a lot in store for you. First and foremost, the upcoming Arbitrum Lockdrop campaign will distribute the first $LDY tokens to our earliest community members. After that, we’re preparing leverage vaults and L-Boosts that will allow you to further boost stablecoin yields, integrated with other protocol opportunities. But most importantly, our incentive campaigns!
We aim to distribute 65% of the $LDY supply to our community over the next 4 years! This will be in the form of enhanced vaults, $LDY staking, incentives, and more. The best part is that these rewards will be distributed linearly over 4 years, so the earlier you join, the less you’ll share these rewards with other users.
Q4: As a team, do you analyze your competitors and chart your course accordingly? How much contribution will locking USDC make? (@HknylmzHakann)
A4: We continually conduct competitor analyses. It’s an ongoing process to provide our community with a unique value proposition and to continue being one of the most competitive protocols in our space. By locking your USDC, also you’ll receive a portion of the first $LDY tokens. And after the lock period, you get your USDC back 100%! Lock-drop participants will be the first to receive $LDY tokens. This is the only way to start receiving $LDY tokens from TGE. Other wallets will have no choice but to buy on the market (= no selling pressure at launch). TGE is expected to be completed by the end of October.
Q5: An exciting project for the future of cryptocurrencies. How do you envision this project playing a role in the use of cryptocurrencies? (@ZaferYellow4)
A5: For a long time, stablecoins have served as a haven in the crypto space amidst volatility and for intermediary value transfers. However, until now, the yield offered on stablecoins has mostly been volatile, requiring users to constantly readjust their positions. The first role Ledgity Yield will play is to provide stablecoin holders with a real and stable yield.
The yield on stablecoin is like an interest-bearing current account. It’s essential for the democratization of stablecoin usage in a healthy DeFi ecosystem and international value transfer. We can identify significant demand for stable yield in stablecoins from DAOs, Foundations, VCs, and more.
Thank you. Don’t forget to join us on Discord (https://discord.gg/ledgityyield) to help us build a leading protocol for yield on stablecoins. Also, mention that community members can participate in Zealy’s “Ledgity Game” campaign to win NFTs and much more.
TELEGRAM QUESTIONS
Q1: I think Legity Yield will be very beneficial for DeFi users. How can I invest in your project? Can you provide information about your token sale process and early investment opportunities?
A1: There won’t be any token sale (ICO, etc.), the only LDY tokens in existence will be those distributed through the DEX liquidity pool (300k $LDY tokens) and via the Arbitrum Lockdrop campaign. The selling pressure will be very low, so our Lockdrop campaign will be quite interesting for our early community members. So, the only way to get exposed to the growth of Ledgity Yield is actually to put some USDC into the Lockdrop campaign. But it’s limited to 5M USDC, so be quick! Join our Discord server to get notified when the Lockdrop starts 🚀 https://discord.gg/ledgityyield
Q2: I’d like to know the benefits of holding $LTY tokens as a long-term investment. How will demand for $LTY tokens increase in the future? What steps are you taking to increase demand? Can you tell me how you plan to attract more partnerships to your project?
A2: I think 😉 this is one of the most important questions. The RWA portfolio backing the Ledgity Yield protocol consists of 4 buckets:
- 5% remains in stablecoins to provide instant withdrawal capability for users.
- 30% is allocated to short-term US Treasury bonds.
- 30% in short-term investment-grade and high-yield bonds.
Q3: Terra, also known as Luna coin, had the highest market cap project recently due to its high APR rates, and its collapse caused a revolution in the crypto market (in a bad way). What measures are you taking to avoid bad outcomes when adjusting these APR rates for stablecoins? (@serdarsst)
A3: That’s a good question. Terra Luna had a completely different mechanism, relying solely on the value of Luna Tokens, which was highly volatile. The Ledgity Yield protocol, on the other hand, provides a secure yield solution on stablecoins primarily because it relies on real-world assets. Bonds have been around for decades in TradFi. They represent the most significant asset class, representing trillions of dollars in the financial sector. For example, if you invest in bonds issued by the U.S. government, you can be assured of receiving your yield and capital. We are applying the same corporate standards as asset managers and investment funds in TradFi.
Q4: How exactly do L-Tokens function as “yield-bearing” tokens and what technical mechanisms allow them to earn yields without the need for traditional DeFi processes like staking or locking? (@tolgaozek)
A4: Hey, that’s a nice question about our innovative reward distribution system! In essence, LUSDC rewards are claimed right before someone is about to use them (in the same transaction). It’s a completely transparent process for users who think they don’t have to claim anything. It also eliminates the need for rebase mechanisms and allows for advanced functionalities like redirecting rewards. For example, enabling a DAO to redirect its rewards to another DAO, a parent redirecting rewards to their children’s wallets, etc.
Q5: Ledgity Yield platform, what risk management policies do you use to protect the stablecoins and loans provided by investors? (@zanioloricardo)
A5: We implement strict risk management policies regarding the management of the protocol treasury. The RWA portfolio backing the Ledgity Yield protocol consists of 4 buckets:
- 5% remains in stablecoins to provide instant withdrawal capability for users.
- 30% is allocated to short-term US Treasury bonds.
- 30% in short-term investment-grade and high-yield bonds.
- 30% in U.S. factoring. We also work with leading partners with a long history in TradFi. We monitor daily: default risk, liquidity risk, and rate risk. We can leverage over a decade of experience in fixed-income fund management.
Q6: You’ve launched Ledgity Yield on Arbitrum. Are you planning to implement Ledgity Yield on other ecosystems like BSC, ETH, and Polygon? (Erick || Community Manager (CM))
A6: We aim to cover as many stablecoin holders as possible. So yes, we do plan to expand the protocol to other networks (Hedera and Avalanche are planned) and as many stablecoins as possible. Currently, we support USDC on both Linea and Arbitrum, but we plan to support many more stablecoins in the future. EUROC stablecoin is next in line.
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