FAQs

Frequently Asked Questions

1. What is L4VA?

L4VA (Liquidity 4 Virtual Assets) is a protocol built to bring liquidity to non-fungible assets (NFTs, RWAs, and other illiquid assets) on Cardano. It allows users to fractionalize digital assets into governance tokens within customizable vaults.

2. What can I do with L4VA protocol?

You can create a vault, contribute Cardano native assets, acquire Vault Tokens (VT) with ADA, receive Vault Tokens (VT) and/or ADA for assets, chat with vault members, and participate in vault governance decisions such as selling, buying, or distributing assets.

3. What is a vault?

A vault is a smart contract that holds assets (NFTs or Cardano native tokens) and issues fractional vault tokens (VT) representing ownership and governance rights over those assets.

4. What are Vault Tokens (VT)?

Vault Tokens (VT) are fungible tokens distributed to vault contributors and acquirers based on the percentage of tokens offered in the vault to new acquirers vs. retained by asset contributors. They represent full governance over the assets in a vault until termination.

5. What is locking?

Locking occurs when ADA is sent during the Acquire phase and the Reserve is met, with ADA sent to asset Contributors and VT sent to Contributors and Acquirers based on the percent of tokens offered in the vault Settings.

6. What is the Reserve % in vault settings?

The Reserve is the percentage (%) value that must be surpassed by the sum of ADA sent during the Acquire phase (acADA), in order for a Vault to successfully lock.

Where, if acADA > [sum(asset value in vault) x (% of Tokens offered) x (Reserve%)], then vault will automatically lock. Then, all VT (net of liquidity pool (LP) tokens) will be distributed to Contributors and Acquirers pro-rata to the asset values or ADA they sent to the vault.

7. What are "Tokens for Acquirers (%)" in vault settings?

Tokens for Acquirers (%) is a vault setting where the creator sets the gross % of total token supply that will be available for VT acquirers to purchase with ADA during the Acquire phase (the net amount of tokens will be subject to deducting the LP Contribution (%)).

This the gross percentage of VT going to purchasers, meaning asset contributors will retain the inverse of this percentage (minus VT LP Contribution).

8. What is the role of governance?

Governance determines key vault actions — selling, liquidation, distribution, and staking (roadmap). Vault token (VT) holders vote to decide outcomes. VT holders with a sufficient % of token supply (see Vault Settings) can create proposals, and anyone with VT can vote on proposals.

9. Are there fees?

Yes, small protocol fees are applied to vault creation and transactions to sustain operations and reward governance.

10. How many vaults can I have?

You can create and manage any number of vaults simultaneously.

11. What are the supported assets?

L4VA supports Cardano native NFTs, tokens, and real-world-assets tokenized on-chain (RWAs).

12. What happens to remaining vault tokens (VTs) on termination?

For a vault to be terminated by governance vote, NFTs must be sold or burned. Then upon a successful termination vote, fungible token assets including ADA are distributed to VT holders in exchange for their burning of the VT in a transaction.

13. What is the difference between vault closure and unlocking?

Vault closure permanently ends vault activity; unlocking only allows asset access while governance can still act before closure.

14. What happens if the vault asset gets stolen or lost?

Assets are held on-chain. Assets cannot be withdrawn without a governance vote approval.

15. How is L4VA different from other protocols?

L4VA introduces a no-code, on-chain vault creation system that combines NFT/RWA fractionalization, governance, and liquidity automation on Cardano.

16. Where can I find more resources?

Visit L4VA.com, other links, or here in our other GitBook pages for documentation, guides, and updates.