lvlUSD

lvlUSD is a stablecoin that is fully backed by USDC and USDT, which are deployed into lending protocols to generate yield.

Minting and Redeeming

lvlUSD can be permissionlessly minted using only USDC and USDT, which form the lvlUSD reserves. Redemptions are currently permissioned.

While only USDC and USDT can mint lvlUSD, other tokens are accepted and automatically converted before minting.

Yield and Reward Generation

The USDC and USDT in the lvlUSD reserves are used to generate yield in lending protocols.

Level supplies the USDC and USDT into blue-chip lending protocols like Aave to generate yield. Currently, all reserves are deployed to Aave but they will soon be diversified into other lending protocols such as Morpho.

The receipt tokens from these protocols (e.g. aUSDC or aUSDT from Aave) are then wrapped to become yield-accruing assets. A small portion of these assets are restaked in restaking protocols like Symbiotic but we are currently in the process of withdrawing all restaked assets.

Yield and Reward Distribution

All the lending yield is initially accumulated by Level. Currently, Level passes back all yield and rewards to users. Lending yield is distributed to slvlUSD via the staking contract. More details in following sections.