Real yield refers to returns generated from actual protocol revenue rather than inflationary token emissions. Unlike emission-based rewards that dilute existing holders, real yield comes from sustainable sources like trading fees, lending interest, and service revenue.
DeFi protocols like Aave, Hyperliquid, and GMX distribute real yield through token buybacks — using protocol revenue to purchase tokens from the open market, effectively returning value to holders.
Understanding Buyback Yield
Buyback yield measures the annualized value of token buybacks as a percentage of market cap. For example, if a protocol with a $100M market cap executes $5M in annual buybacks, the buyback yield is 5%. Higher yields indicate stronger capital returns — similar to dividend yields in traditional stocks.
Types of Deflationary Mechanisms
- 🔥Buyback and Burn: Tokens are purchased and permanently destroyed, reducing total supply. Used by protocols like Binance (BNB) and Maker.
- 🔄Fee Switch: Protocol fees are redirected to token holders or used for buybacks. Uniswap governance can enable this mechanism.
- 📤Revenue Distribution: Protocol revenue is distributed directly to stakers, as seen with GMX and Gains Network.
- 🏦Treasury Accumulation: Bought-back tokens are held in DAO treasury, removing them from circulating supply.
Why Track Token Buybacks?
Tracking buyback data helps investors identify protocols with sustainable tokenomics and real cash flows. Projects with consistent buyback programs often demonstrate:
- ✓Proven product-market fit with actual revenue
- ✓Commitment to returning value to token holders
- ✓Deflationary pressure on token supply
- ✓Alignment between protocol success and token value
Start Tracking Buybacks
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