Yield Types

1. Fixed Yield

   1. Provides token holders with a predetermined, guaranteed rate of return (e.g., 5% annual yield).

   2. Importance:

      1. Attracts conservative investors seeking predictable returns.

      2. Simplifies financial planning for both issuers and investors.

      3. Often associated with debt instruments or structured income-sharing tokens.

2. Target Yield

   1. Sets a target rate of return, which is not guaranteed but aims to achieve a specific performance level.

   2. Importance:

      1. Appeals to investors looking for a balance between risk and return.

      2. Provides flexibility for issuers, as the return is performance-dependent.

      3. Suitable for tokens tied to revenue, profit-sharing, or variable financial outcomes.

3. No Yield (Growth-Oriented)

   1. Tokens do not generate a regular yield but are designed for capital appreciation over time.

   2. Importance:

      1. Focuses on asset growth, making it suitable for equity-like tokens or growth-stage projects.

      2. Attracts long-term investors aiming to benefit from price appreciation.

      3. Eliminates the need for periodic payouts, simplifying cash flow management for issuers.

4. Hybrid Yield (Fixed + Target Yield)

   1. Combines fixed yield (guaranteed return) with a target yield (performance-based return).

   2. Importance:

      1. Offers a balance between stability and performance incentives.

      2. Appeals to a broader investor base by catering to both conservative and growth-focused preferences.

      3. Works well for tokens linked to mixed asset classes or diversified financial strategies.

5. No Yield Projections (Future Estimation)

   1. No immediate yield is generated, but future projections indicate potential income streams based on asset growth or business development.

   2. Importance:

      1. Suitable for early-stage projects or assets with long-term growth potential.

      2. Provides flexibility for issuers to delay payouts until financial maturity.

      3. Encourages speculative or growth-focused investment behavior.

6. Dynamic (DeFi)

   1. The yield is variable and determined by decentralized finance (DeFi) mechanisms, such as liquidity pools or staking rewards.

   2. Importance:

      1. Appeals to tech-savvy investors seeking high returns through DeFi strategies.

      2. Allows for market-driven yield rates, making it adaptable to market conditions.

      3. Enhances token utility within DeFi ecosystems, encouraging participation in liquidity provision or staking programs.