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, lending assets, or participating in protocol incentives. On Ergo, yield opportunities depend on current active protocols and liquidity. Historical platforms such as Spectrum Finance are useful references, but should not be treated as active default yield venues. Yields are typically expressed as APY and can be much riskier than they look.
Key Points
- Returns earned on crypto holdings through DeFi
- Expressed as APY (Annual Percentage Yield)
- Sources: liquidity provision, lending, protocol rewards
- Ergo yield depends on current active protocols and liquidity
- 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 a current active venue
3
Lending assets on SigmaFi
4
Comparing DeFi opportunities
5
Understanding risk/reward tradeoffs
Technical Details
Yield on Ergo can come from liquidity provision, lending, or protocol incentives when current deployments are active. APY calculations assume compounding; APR does not. Real yields fluctuate based on trading volume, utilization rates, token prices, contract risk, and venue status.
Related Infographics
Related Articles
Frequently Asked Questions
Questions about Yield
Common questions about this topic
What can I do with Ergo?
Ergo supports a broad ecosystem: use SigmaUSD, explore historical and current DeFi references, mix transactions with ErgoMixer where lawful, collect NFTs, mine with GPUs, bridge to other chains via Rosen, and build dApps with ErgoScript. Always verify current project status before sending funds to a third-party app.
Explainer
Getting Started
How to provide liquidity on Ergo?
Providing liquidity on Ergo depends on the current active DEX or AMM venue. In general, you deposit equal value of two assets into a pool, receive LP tokens representing your share, and earn a portion of trading fees. Spectrum Finance is historical/frozen since February 2024, so verify the active venue, contracts, liquidity depth, and withdrawal process before depositing funds.
How-to
DeFi
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 a current exchange or verified venue, then make a small test transaction. After that, explore NFTs, mining, DeFi references, or the developer stack 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