Composability and DeFi

What scrip can do in AMMs, lending markets and vesting contracts, and what its transfer restrictions and compliance powers cost in integrations.

A Ledger Entry Token (LET) names its holder and carries restriction legends, so DeFi protocols built for interchangeable ERC-20 units cannot use it. Scrip is the form they can use.

Scrip can sit in pools, lending markets and vesting contracts

A LiquiLeX pool on Uniswap v4 quotes scrip against USDC continuously, and its MetalexIssuerFeeHook splits swap fees between the issuer and MetaLeX, so the company earns a share of every swap in its own scrip. Like USDC, scrip is an ERC-20 with optional compliance powers, so lending protocols that accept such tokens can list it as collateral. A standard ERC-20 vesting or streaming contract handles scrip as long as the scrip's transfer hooks admit it, and buybacks and other payments to holders can be made in scrip or settled against it. What a scrip holder is owed on the shares behind the scrip, dividends included, depends on the scrip's terms (see Ledger Entry Tokens and scrip).

Each compliance choice narrows where scrip can go

A transfer hook limits the venues

Scrip with a WhitelistTransferHook moves only between whitelisted addresses, and many integrations, permissionless ones especially, reject it. A company chooses between an open model (no transfer hook, compliance at conversion into a LET) and accepting that its scrip flows only through whitelisted venues.

Compliance powers show even when unused

Force transfer, force burn and per-account freeze are opt-in powers chosen when the scrip is deployed, and the company's admins exercise them. Their presence is visible onchain whether or not anyone uses them, and some lending protocols decline to list any ERC-20 that has them. The scrip's one-way switches (disableForceTransfer, disableForceBurn, disableFreeze) let a company commit, irreversibly and verifiably, to an open posture.

Registered ownership lives on the LET

A LET's holder of record is the registered owner of its units, and holding scrip registers no one. An integration that needs registered ownership, for voting, dividends to record holders or a DGCL §219 stockholder list, has to read the LET layer.

Whitelisted and open LiquiLeX pools

Whitelisted pool

Open pool

Check on each swap

Transfer-hook whitelist (credentialed addresses only)

Optional zkPassport (sanctions, Reg S)

Who can hold LP positions

Whitelisted addresses only

Anyone

Effect of trades on the register

None

Gate at conversion into a LET

Standard

Standard, and the main compliance point

Suited to

High-touch private credit and Reg D issuers

Reg S issuances and widely traded scrip