> For the complete documentation index, see [llms.txt](https://docs.gypsytoken.org/tokenomics/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.gypsytoken.org/tokenomics/tokens/lgpsy.md).

# LGPSY

LGypsy is a yield-bearing vault, which in DeFi are assets that provide some form of added gain on top of ordinary asset-holding. In the case of Gypsy, LGypsy is staked Gypsy tokens that earn rental income & home appreciation. Rental income is paid in the form of more Gypsy tokens. Therefore, every month LGypsy holders are earning compounding real estate equity which earns further rental income.

## ERC-4626 Standard

ERC-4626 is a standard to optimize and unify the technical parameters of yield-bearing vaults. It provides a standard API for tokenized yield-bearing vaults that represent shares of a single underlying ERC-20 token. ERC-4626 also outlines an optional extension for tokenized vaults utilizing ERC-20, offering basic functionality for depositing, withdrawing tokens and reading balances.

## Dividend payout

On the first of every month, Gypsy will send its dividend payment after expenses. Investors are sent 90% of the profits and Gypsy earns 10%. Gypsy is paid in USDG, while the Investors are paid in GPSY. \
\
In order to pay investors with Gypsy, the treasury mints new GPSY at the backing price of Gypsy and uses that Gypsy to send to investors. 

$$
GpsyMinted = \frac{dividendUSDG}{backingPriceGPSY}
$$

## Utility

### **Self-Repaying Loans**

In DEFI there are decentralized borrowing protocols that allow you to deposit a yield-bearing token as collateral and borrow stablecoins against the value of that collateral.

Examples:

* MakerDAO's and their DAI Stablecoin
* Abracadabra and their MIM Stablecoin

These tokens can then be exchanged for fiat-stablecoins and off-ramped through centralized exchanges. These loans often have low-interest rates (1-2%) while the yield of Gypsy will likely be higher. Therefore these loans will pay back themselves. This makes it an optimal asset to use as collateral for yield farming.