Good questions,
These are tokenized synthetics that are designed to trade with correlation to the underlying based on yield-driven policy dynamics
- They are over-collateralized by LEO (backed by LEO on our balance sheet)
- They do not represent shares in the underlying (so they don't get dividends nor voting rights based on the underlying)
- They do receive yield based on the rate-driven policy. The yield is determined by weekly rate meetings where the rate is adjusted up or down based on how the tokenized synthetic is performing in terms of correlation to the underlying
For example: "xNVDA" would trade in correlation to NVDA but does not actually comprise NVDA stock. It would have a "2% yield" if the correlation is trading at par. If it is trading off of its peg (say, 10% below the peg), then the yield might be 8% until it regains the peg