Economics
Beginner
Updated 1/15/2025
What is
Yield?
Returns earned on cryptocurrency holdings through activities like liquidity provision, lending, or other DeFi strategies - expressed as APY (Annual Percentage Yield).
Yield in cryptocurrency refers to the returns earned on holdings through various DeFi activities. Unlike traditional savings accounts, crypto yield comes from providing liquidity to DEXs (earning trading fees), lending assets (earning interest), or participating in other protocol incentives. On Ergo, yield opportunities exist through Spectrum Finance liquidity pools, SigmaFi lending, and other DeFi protocols. Yields are typically expressed as APY (Annual Percentage Yield) and can range from a few percent to much higher for riskier strategies.
Key Points
- Returns earned on crypto holdings through DeFi
- Expressed as APY (Annual Percentage Yield)
- Sources: liquidity provision, lending, protocol rewards
- Ergo yield: Spectrum Finance pools, SigmaFi lending
- Higher yields often mean higher risks
- Not the same as staking (Ergo is Proof of Work)
Use Cases
1
Earning passive income on ERG holdings
2
Providing liquidity on Spectrum Finance
3
Lending assets on SigmaFi
4
Comparing DeFi opportunities
5
Understanding risk/reward tradeoffs
Technical Details
Yield on Ergo primarily comes from: 1) Liquidity provision on Spectrum Finance - earning ~0.3% of trading fees proportional to pool share. 2) Lending on SigmaFi - earning interest from borrowers. 3) Protocol incentives - some projects distribute tokens to participants. APY calculations assume compounding; APR does not. Real yields fluctuate based on trading volume, utilization rates, and token prices.
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Frequently Asked Questions
Questions about Yield
Common questions about this topic
What can I do with Ergo?
Ergo supports a full ecosystem: trade on Spectrum DEX, use SigmaUSD stablecoin, mix transactions with ErgoMixer, collect NFTs on SkyHarbor, mine with GPUs, lend/borrow on DuckPools, bridge to other chains via Rosen, and build dApps with ErgoScript. It's a complete platform for decentralized finance and applications.
Explainer
Getting Started
How to get started with Ergo?
Start by getting a wallet (Nautilus for browser, Terminus for mobile). Back up your seed phrase securely offline. Get some ERG from an exchange (Gate.io, KuCoin) or DEX (Spectrum). Make a test transaction. Then explore: try DeFi on Spectrum, check out NFTs, or dive into the technology if you're a builder.
How-to
Getting Started
Is Ergo a good investment?
This is not financial advice. Ergo has strong fundamentals: fair launch (no VC dump risk), innovative technology (eUTXO, Sigma Protocols, NiPoPoWs), active development, and a cypherpunk ethos. It's a smaller market cap project with higher risk/reward than established chains. Research thoroughly, understand the technology, and never invest more than you can afford to lose.
Comparison
Getting Started
How to use Spectrum DEX on Ergo?
Connect your Nautilus wallet to Spectrum Finance, select tokens to swap, review the rate and slippage, then confirm. Spectrum uses AMM liquidity pools for instant trades. You can also provide liquidity to earn fees. All trades are atomic - they complete fully or not at all, with no front-running possible.
How-to
DeFi