Base Yield
Last updated
Last updated
A core part of Level USD's offering is the ability to stack yields. In addition to stackable AVS yields, Level USD can also generate a "base yield" from deploying underlying collateral to risk-minimized, on-chain lending protocols.
Before assets are restaked, Level deposits the underlying collateral into risk-minimized, on-chain lending protocols. Yield from these protocols will be used to mint more lvlUSD, which will then be rewarded into the slvlUSD contract.
Similar to other yield-bearing tokens like sUSDe and sDAI, slvlUSD is yield-accruing. In other words, the amount of lvlUSD that each slvlUSD can be redeemed for increases on every reward event. slvlUSD holders can realize the value of their rewards by unstaking, which has a 7 day cooldown period.
To mitigate sandwiching attacks, lvlUSD rewarded into the staked lvlUSD contract is vested over an 8 hour period.
lvlUSD must be staked to earn yield. Unstaked lvlUSD is non-yield-accruing.
Yield Sources
As a stablecoin, Level's primary goal is collateral preservation. We will currently restrict yield sources to lending protocols with a strong track record of security, billions in TVL, and multiple security audits.
Level currently utilizes the following protocols to produce a base yield:
USDC
Aave v3
USDT
Aave v3