Ledgity Application: Arbitrum Treasury Diversification (STEP 2)

DAO Programs & Initiatives STEP Applications & Updates
1

Ledgity Yield Protocol – LUSDC

Partner: SARR Fund

I. Application Information

Field Details
Name Ledgity
Address (Headquarters) 61 avenue Simone Veil
City, State, Postal Code 06200 Nice
Country France
Website https://ledgity.finance
Primary Contact Name Pierre‑Yves Dittlot
Title CEO & Founder, Ledgity
Country France
Email / Telegram / Forum py@ledgity.com / @pydittlot / conseil.eth on Arbitrum forum

2. Key Information

  • Expected Yield:
    10% APY on USDC (net of fees)

  • Expected Maturity:
    Open-ended strategy. There is no maturity

  • Underlying Asset:

    • 80% of LUSDC reserves are invested in SARR Funds, a Luxembourg-based fund managing a Revenue-Based Financing (RBF) strategy.

    • 20% liquidity buffer, allocated as follows:

      • 5% in USDC to ensure immediate liquidity.
      • 15% Sky Savings Rate sUSDS to optimize yield while maintaining liquidity and flexibility.

  • Minimum/Maximum Transaction Size:
    No minimum investment; designed to scale from retail to institutional levels.

  • Current AUM for Product:
    The fund manager of the SARR Funds has managed the strategy since 2021 with $500M AUM.

  • Current AUM for Issuer:
    Currently Ledgity Yield protocol has $200k of AUM.

  • Volume of Transactions (LTM):
    Not applicable

  • Source of First‑Loss Capital:
    Sponsor equity provided by Ledgity and further supported by the SARR Fund’s capital.

3. Basics and Background

3.1 How will this Investment Improves Arbitrum’s RWA Ecosystem

  • Stable, Yield‑Bearing Asset:
    LUSDC converts ARB treasury funds into a USDC‑denominated, yield‑earning asset backed by one of the best risk adjusted return strategies. This offers stability and liquidity independent of crypto market volatility.

  • Transparency & On‑Chain Proof of Reserve:
    Utilizing Chainlink oracles (via the BUILD Program) and robust third‑party audits (Hacken), our solution provides full transparency.

  • Institutional‑Grade, Regulated Solution:
    Ledgity is a fully regulated French fintech (AMF & ACPR oversight) with extensive experience in both DeFi and traditional asset management.

  • Liquidity and Efficiency:
    Instant withdrawals (up to 5% of total AUM in USDC) and streamlined redemption processes ensure seamless liquidity for treasury management.

  • A unique opportunity to bring Revenue-Based Financing on-chain, enhancing diversification and strengthening Arbitrum’s RWA ecosystem with a new institutional-grade yield strategy.

3.2 Key Management Personnel & Third‑Party Expertise

  • Pierre-Yves Dittlot, CEO & Founder of Ledgity

Specialized in the Asset Management and Private Banking industry, Pierre-Yves Dittlot has held several positions over the past 18 years as fund manager and CIO for several asset management companies, private banks and family offices. Passionate about finance and technology, he founded Ledgity to drive the innovation at the convergence between DeFi and TradFi. In 2020, he collaborated with the Central Bank of Lithuania on a tokenization platform (proof of concept) for shares of investment funds. His mission, with Ledgity, is to contribute to modernizing the world of wealth management, blending expertise in blockchain, digital assets, and financial markets.

  • Jean-Baptiste Sicard, Vice Président of Ledgity

Jean-Baptiste Sicard is a seasoned entrepreneur in the financial sector. He founded and successfully developed a company before selling it to Euronext. More recently, he served as Head of Digital Asset Offering at Banque Delubac & Cie, leading the bank’s expansion into the digital asset space. With deep expertise in financial markets and fintech, he plays a key role in bridging traditional finance with blockchain innovation.

  • Supporting Team:

Our experienced team spans blockchain engineering, risk management, and financial operations.

  • Third‑Party Partners:
    • Custodian bank: Swissquote - Luxembourg
    • On‑Ramp/Off‑Ramp: Circle (USDC mint/burn services)
    • On-Chain: Gnosis Safe multisig for fund transfers
    • Auditor: Hacken (smart contract audit, March 2024)

3.3 Describe any previous work by the entity or its officers/key contributors similar to that requested. References are encouraged.

Ledgity, in partnership with bank Delubac applied to the spark tokenization grand prix : link

3.4 Has your entity or its officers/key contributors been subject to an enforcement action, criminal action, or defaulted on legal or financial obligations? Please describe the circumstances if so.

No

3.5 Describe any conflicts of interest for your entity and key personnel.

No conflict of interest

3.6 Insurance coverages, guarantees, and backstops Name of insurer or guarantor Per incident coverage Aggregate coverage

Not applicable

3.7 Historical tracking error in your proposed product, or similar to that being proposed Product 2024 2023 2022 2021

Not applicable

3.8 Please describe any experience your firm has in working with decentralized organizational structures

Not applicable

3.9 What is your entity’s current assets under management, assets held in trust, total value locked, or equivalent metric for your legal structuring?

Ledgity manages approximately $1.5 million in user-held crypto assets on Ledgity.com, its regulated crypto wealth app in France.

4. Plan Design

4.1 Please describe your proposed product, including a description of the underlying assets and, if more than one asset, the proposed allocation among assets and general investment guidelines. Where appropriate, include targeted maturity mix and credit quality. Attach supplementary documents as appropriate.

LUSDC is designed to provide stable and attractive yield opportunities by leveraging a risk-managed investment approach that combines institutional-grade TradFi strategies with blockchain efficiency. The investment approach ensures stability, strong risk-adjusted performance, and liquidity for users.

  • Asset Allocation
    • 80% of LUSDC reserves are invested in SARR Funds, a Luxembourg-based fund managing a Revenue-Based Financing (RBF) strategy.
    • 20% liquidity buffer, allocated as follows:
      • 5% in USDC to ensure immediate liquidity.
      • 15% Sky Savings Rate sUSDS to optimize yield while maintaining liquidity and flexibility.

SARR Fund is a private, non‑exchange traded fund that specializes in financing growth companies by purchasing future subscription revenues. With its innovative, data‑driven model, SARR Fund achieves a super‑senior position, employs mechanical recovery of refunds, and maintains low LTV ratios—all contributing to a drastic reduction in risk. Partnering with SARR Fund enables our solution to leverage their robust risk‑management framework, aligning perfectly with Arbitrum’s goals for stable, liquid, yield‑earning assets.

Key Advantages of SARR’s Investment Approach:

:one: In-Depth Knowledge of Financed Companies

  • Full transparency with real-time access to banking transactions, accounting data, and subscription revenues.
  • Only the top-performing 30% of analyzed companies are selected based on strict quantitative criteria.

:two: A New Asset Class – Super Senior & Secured

  • Not equity, not debt – SARR purchases the next 12 months of subscription payments from a company’s most reliable customers.
  • Highest repayment priority, even before banks and government claims.

:three: Automated & Secured Repayment Mechanism

  • Each month, double the expected repayment amount is requisitioned, ensuring full recovery even in the event of customer cancellations.

:four: Short-Term Financing with Fast Capital Recovery

  • Maximum exposure per subscription: 12 months.
  • After just 6 months, over 50% of the invested capital is already recovered.

SARR FUNDS DOCUMENTATION (Presentation and DDQ): on demand

4.2 Do investors have any shareholder, investor, creditor or similar rights?

4.2.1 Describe the legal and contractual structuring for your product including regulatory bodies overseeing your business and the product and identifying all legal jurisdictions interacting with your product. Attach supplementary documents as appropriate.

Ledgity operates within a regulated framework, ensuring transparency, security, and legal compliance for all investors.

  • Regulatory Status: Ledgity is registered as a Digital Asset Service Provider (PSAN) with the French Financial Markets Authority (AMF) under registration number E2022-040.
  • Jurisdiction: Ledgity’s operations are primarily governed under French and Luxembourg law, with Swissquote (Luxembourg) serving as the banking custodian.
  • Investment Structuring
    • Issuer & Product Structure:
      • Ledgity is the issuer of LUSDC, an on-chain yield-bearing stablecoin.
      • LUSDC represents a loan of USDC to Ledgity’s Special Purpose Vehicle (SPV).
      • The assets that backed the loan are segregated within an SPV, ensuring a bankruptcy-remote structure, protecting investors’ funds from operational risks.

4.2.2 Would Arbitrum’s assets be bankruptcy remote from your own entity and its officers/key contributors? If so, please explain the legal and contractual basis. On a confidential, non-reliance basis, provide any third party legal opinions to support the conclusions.

Yes, the SPV will be created and dedicated for this RFP. Ledgity will provide legal opinions and all the legal documents. Arbitrum’s assets within the Ledgity Yield Protocol would be bankruptcy remote from Ledgity and its officers/key contributors. This is ensured through a segregated legal structure, regulatory oversight.

Legal & Structural Safeguards:

  • Special Purpose Vehicle (SPV) Structure
    • LUSDC represents a loan of USDC to Ledgity’s SPV, which operates under a bankruptcy-remote framework, ensuring assets are legally segregated from Ledgity’s balance sheet.
    • This structure ensures that even in the event of Ledgity’s insolvency, the assets remain protected.
  • Regulated Custody & Asset Segregation
    • Swissquote Bank, a FINMA-regulated institution, acts as the custodian of the SARR Fund shares (80% of TVL), ensuring assets are held in segregated accounts.
    • The remaining 20% of the TVL is held on-chain on behalf of users, ensuring liquidity and security.
    • Ledgity is regulated as Digital Asset Service Provider under French financial market regulations (AMF - PSAN registration E2022-040), ensuring compliance with strict asset safeguarding requirements.

4.3 How are Arbitrum’s assets protected vis-a-vis the bankruptcy of the brokerage or applicable financial institution (e.g., bank deposit insurance, securities insurance, etc.)?

The SPV will be created and dedicated for this RFP. Ledgity will provide legal opinions and all the legal documents needed. This structure provides bankruptcy remoteness, meaning that even in the unlikely event of Ledgity’s insolvency, the assets remain protected and segregated from corporate liabilities.

  • Investment Vehicle – SARR Fund

The SARR Fund is a Special Limited Partnership (SLP) in Luxembourg, a jurisdiction known for its strong investor protection regulations.

The SLP structure ensures that the fund assets remain legally separate from Ledgity and other entities, mitigating counterparty risk.

  • Swissquote Luxembourg

Funds are not held as bank deposits, eliminating any exposure to bank insolvency risks. Instead, assets are securely invested and segregated, ensuring full protection even in the event of a bank’s bankruptcy.

4.4 Does the Issuer issue more than one asset? If so, what is the priority relationship between different asset classes?

Yes, Ledgity offers the same strategy on EURC

4.5 Provide a detailed cash flow diagram that shows the flow of funds from ARB/Fiat conversion, investment in underlying asset, payment of expenses, sale of underlying asset, and repayment (Fiat/ARB conversion), including the counterparties and legal jurisdictions involved.

1196×546 32.8 KB

4.6 Describe anticipated tax consequences (if any) in transacting on the underlying and/or receipt of yield.

No tax consequences

4.7 Describe the process and expected timeline for liquidation of assets, if given instructions to do so by Arbitrum governance.

Investors can redeem LUSDC to USDC instantly 7/24 up to 5% of the total AUM on Ledgity.finance. Between 5% and 20% the redemption will take up to 6 hours. Above 20% of the total AUM, it will take between 1 to 3 weeks.

4.8 Describe the liquidity and stability of the proposed underlying assets, including anticipated settlement times from the sale of the underlying to the repayment of ARB.

The SARR Fund, structured as a Luxembourg SLP, ensures liquidity and stability through short-term (6-12 months) Revenue-Based Financing (RBF). The fund purchases future subscription revenues at a discount, generating predictable cash flows. On top of that, Ledgity has a preferred agreement with SARR Fund with privileges regarding the liquidity.

Settlement times in case of liquidation of the position: between 1 to 3 weeks

4.9 Does the product rely on any derivative product (swaps,OTC agreements?

No

4.9.1 List all the third party counterparties linked to your assets including and not restricted to prime broker if any, custodian, reporting agent, banks for derivatives or loans and provide primary contact details for the third party counterparties

  • Custodian Bank:
    • Swissquote Bank (Luxembourg) – Holds the shares of the SARR Fund, ensuring institutional-grade custody.
  • Fund Structure & Management:
    • SARR Fund (Luxembourg SLP) – The primary investment vehicle utilizing Revenue-Based Financing (RBF).
  • Stablecoin On/Off-Ramp Provider:
    • Circle – Facilitates the conversion between USD and USDC.
  • On-Chain Security:
    • Gnosis Safe – Implements an m/n multi-signature approval process for secure fund movements.

4.9.2 Can you explain how is risk management (inv and operational) being done? Can you provide a copy of your risk management policy?

The Ledgity Yield Protocol implements a comprehensive risk management framework covering both investment and operational risks, ensuring capital preservation, liquidity, and compliance.

  • Investment Risk Management: deep risk analysis on SARR FUND
    • Strict Asset Selection – The SARR Fund only finances top-tier European companies using quantitative screening.
    • Short-Term Exposure – Revenue-Based Financing (RBF) strategy ensures monthly liquidity and 50% capital recovery within six months.
    • Diversified Portfolio – Funds are allocated across multiple companies and industries to minimize concentration risk.
    • Automated Repayment Mechanism – Ensures priority repayment before other creditors.

Please refer to the SARR FUND DDQ (on demand)

  • Operational Risk Management
    • Regulated Structure – Ledgity is registered as a Digital Asset Service Provider (PSAN) with the AMF.
    • Custody & Segregation – Assets are held at Swissquote Bank (Luxembourg) through a SPV bankruptcy remoteness. The onchain assets are held under the regulatory framework in France via the registration as Digital Asset Service Provider.
    • Multi-Signature Security – Gnosis Safe secures all on-chain fund movements with an m/n multi-signature approval process.
    • Liquidity Buffer – 20% allocation (5% in USDC, 15% in Sky Savings Rate) ensures instant or almost instant withdrawals.

5. Performance reporting

5.1 What are your proposed performance benchmarks? If this is substantially different from the underlying assets, please explain why.

  • Target APY: 10% on USDC
  • This APY take into consideration:
    • the liquidity buffer: 5% in USDC + 15% in sUSDS
    • Management fees: 0,5%

5.2 Who provides the performance reports in respect of the underlying assets?

SARR Fund will provide the performance of the fund to Swissquote our banking custodian

6. PRICING

6.1 Fee summary: Inclusive of the full scope of services requested. Product Fee schedule If asset based Fee calculation for our plan if asset based Annual fee if flat fee Any other fees (including redemption or minting fees)

  • Fee: 0,5%. This fees includes :
  1. Management fees
  2. Administrative and custodian fees
  3. Subscription and minting fees
  4. SPV fees
  5. Transaction fees

The yield provided through the protocol is net of fees.

  • Withdrawal fees: 0,3%
    1. the withdrawal fees are free as soon as the user stake 15,000 LDY locked for 12 months

6.2 Describe frequency of fee payment and its position vis-a-vis payment priority compared with other expenses (i.e., cash waterfall)

Fees are paid on daily basis

7. Smart Contract/Architecture

7.1 How many audits have you had and name of auditors? Please provide a copy of reports.

Hacken audit : Ledgity audit by Hacken

7.2 Is the project permissioned? If so how are you managing user identities? Any blacklisting/whitelisting features?

The project is permissionless. And yes there is a blacklist features for onchain AML enforcement. There is no KYC

7.3 Is the product present on several chains? Are there any cross chain interactions?

The product is present on Base and Linea as well. Arbitrum is our main chain, so the only interaction we may have is to bring USDC from Linea to Arbitrum to manage the buffer of liquidity

7.4 Are the RWA tokens being used in any other protocols? Please describe the various components of the ecosystem

Ledgity is committed to bridging the gap between decentralized finance (DeFi) and traditional finance (TradFi). We combine DeFi and TradFi expertise with a focus on efficiency, compliance and investor protection.

To enhance liquidity and market accessibility, we’re looking to integrate our products with DeFi protocols, such as dex and lending protocols, to offer additional layers of liquidity and market efficiencies.

7.5 How are trusted roles/admins managed in the system? Which aspects of the solution require trust from users?

  • Multi-Signature Security: All administrative actions require multi-signature approvals via Gnosis Safe, ensuring no single entity can unilaterally control assets.
  • Role-Based Access Control: Smart contracts are designed with minimal admin privileges, limiting intervention to essential functions such as upgrades and parameter adjustments.
  • Custody & Fund Management: Swissquote Bank securely holds the SARR Fund shares, while Circle facilitates stablecoin on/off-ramping.

User Trust Requirements

  • Fund Allocation: Users trust Ledgity to manage investments according to the strategy combining 80% exposure to Revenue-Based Financing strategy and 20% onchain safe/liquid assets.
  • Liquidity Management: Withdrawals follow predefined rules

7.6 Is there any custom logic required for your RWA token? If so please give any details.
No

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