People often think of finance as buying low and selling high. But something else has been quietly running global economies for centuries.

It’s called yield, and here’s a non-technical primer explaining what it is, how it works, and above all, why it matters.

Before getting into the nitty-gritty though, let’s visualize the concept with examples from everyday life.

You plant an apple orchard (or maybe just one tree).

Every fall, for years, apples grow and you can do whatever you like with the harvest: eat, sell, give some to your friends and family.

Maybe one day you’ll sell the orchard for a profit. But regardless of that, it gives back more value every season while you still own the trees.

A regular customer walks into a coffee shop, buys a latte, drinks it, and leaves. Transaction complete.

You, on the other hand, buy the membership card this shop is selling.

Now, every time someone buys a coffee from them, you get a tiny slice of the amount. And perhaps on top of that, you get early access to special coffee batches.

As the business grows and the shop sells more coffee, you get more benefits for being a member. Whereas the regular customer just got one coffee and that’s it.

Maybe they’ll come back, maybe they won’t, but either way a one-time value is all they get, even if it’s multiple times.

Now, imagine you bought a vintage painting instead of the vending machine or the coffee shop membership.

It’s a masterpiece that looks great on your wall. It even signals your status to peers, showing them you got great taste. And five, ten, twenty years later, someone might be willing to pay you double (or more) of what you paid for the artwork.

But today, hanging on the wall, it doesn’t produce any tangible economic value.

Unlike your apple orchard or coffee shop membership, the painting (no matter how valuable it is otherwise) doesn’t generate recurring value.

That is, it doesn’t generate yield — the ongoing flow of value that you get from something you own and hold.

Now that you understand what yield is, we can discuss why it’s such an important aspect of any financial system.

Think of it like this. You’ve got money sitting around. You could stuff it under your mattress. Or you could put it somewhere that generates ongoing benefits. Where do you put it?

• Somewhere super safe, generating small, steady benefits?

• Somewhere moderately risky, but generating better benefits?

• Somewhere riskier, with the potential to get the highest benefits?

The level of yield (i.e., benefits) tells you something about the opportunity. Higher yield usually means higher risk, but it also shows where that money is needed most urgently.

Financial systems channel money from people who have it to opportunities where it can be productive.

Yield is the signal that makes this whole system work.

And ultimately, better systems do a better job at generating yield and distributing it among different stakeholders. Yield flows reflect the health of financial systems in this sense.

You can earn yield in various ways, but in traditional finance, it usually shows up in the following forms:

• Savings account, where you get interest for depositing and keeping money in your bank. This is the simplest form of yield.

• Government and corporate bonds, where you lend money to the government or public companies. They use the money to fund ongoing or upcoming projects, and pay you an interest over time.

• Dividend-paying stocks, where you own equity in publicly-listed companies and essentially earn a tiny portion of the business they generate.

• Real estate, where you get rental yield on your house, office space, or any other property like that.

On the other hand, an extensive range of novel yield systems have emerged in crypto over the past 4–5 years. While these have varying levels of complexity, decentralization, and performance, the most common sources include:

• Staking, where you lock up (vs. selling) your tokens to secure Proof-of-Stake (PoS) blockchains like Ethereum or Solana, and earn yield in return. It’s pretty much the baseline for yield-generation in crypto, and also the simplest way.

• DeFi lending, where you deposit crypto into an onchain account (i.e., lending pool). Borrowers take loans from these pools and pay interest, from which you get a portion as yield.

• Liquidity provision, where you provide capital (tokens) to facilitate trading on decentralized exchange, earning a portion of the transaction fees as yield.

Crypto-based yield systems typically offer much higher yield than sources in traditional finance. But the risk is also much higher.

Also, while these systems solve many persistent pain points of legacy yield systems, they introduce new challenges like excessive market dependence, high volatility, or irrecoverable loss of assets. We’ll dive deeper into these in future blogs.

If you only take one thing from this article, take this: yield is about ongoing flow while you still hold the asset.

From the apple orchard and coffee shop membership to various forms of crypto-native yield, you get recurring value from your assets, without selling them. This last part is the most powerful aspect of yield; also the most defining one.

Rather than sitting idle, with untapped value, your assets become productive when they generate yield. This is the invisible force that runs financial systems globally, channeling capital to where it’s most needed. Businesses get funded. Infrastructure gets built.

Without yield, there would be no finance as we know it today. And that’s also why, to get financial systems that we want for the future, we must fix yield itself. Seasons is doing just that. Stay tuned to know more. 🫡

👇 Join us in transforming YieldFi: 👇

General Resources:
🌐 Website | ✳️ LinkTree | ⚫ Beacons | 📃 Docs

Connect with us and Join the community:
X (Twitter) | Telegram | Youtube | LinkedIn

People often think of finance as buying low and selling high. But something else has been quietly running global economies for centuries.

It’s called yield, and here’s a non-technical primer explaining what it is, how it works, and above all, why it matters.

Before getting into the nitty-gritty though, let’s visualize the concept with examples from everyday life.

You plant an apple orchard (or maybe just one tree).

Every fall, for years, apples grow and you can do whatever you like with the harvest: eat, sell, give some to your friends and family.

Maybe one day you’ll sell the orchard for a profit. But regardless of that, it gives back more value every season while you still own the trees.

A regular customer walks into a coffee shop, buys a latte, drinks it, and leaves. Transaction complete.

You, on the other hand, buy the membership card this shop is selling.

Now, every time someone buys a coffee from them, you get a tiny slice of the amount. And perhaps on top of that, you get early access to special coffee batches.

As the business grows and the shop sells more coffee, you get more benefits for being a member. Whereas the regular customer just got one coffee and that’s it.

Maybe they’ll come back, maybe they won’t, but either way a one-time value is all they get, even if it’s multiple times.

Now, imagine you bought a vintage painting instead of the vending machine or the coffee shop membership.

It’s a masterpiece that looks great on your wall. It even signals your status to peers, showing them you got great taste. And five, ten, twenty years later, someone might be willing to pay you double (or more) of what you paid for the artwork.

But today, hanging on the wall, it doesn’t produce any tangible economic value.

Unlike your apple orchard or coffee shop membership, the painting (no matter how valuable it is otherwise) doesn’t generate recurring value.

That is, it doesn’t generate yield — the ongoing flow of value that you get from something you own and hold.

Now that you understand what yield is, we can discuss why it’s such an important aspect of any financial system.

Think of it like this. You’ve got money sitting around. You could stuff it under your mattress. Or you could put it somewhere that generates ongoing benefits. Where do you put it?

• Somewhere super safe, generating small, steady benefits?

• Somewhere moderately risky, but generating better benefits?

• Somewhere riskier, with the potential to get the highest benefits?

The level of yield (i.e., benefits) tells you something about the opportunity. Higher yield usually means higher risk, but it also shows where that money is needed most urgently.

Financial systems channel money from people who have it to opportunities where it can be productive.

Yield is the signal that makes this whole system work.

And ultimately, better systems do a better job at generating yield and distributing it among different stakeholders. Yield flows reflect the health of financial systems in this sense.

You can earn yield in various ways, but in traditional finance, it usually shows up in the following forms:

• Savings account, where you get interest for depositing and keeping money in your bank. This is the simplest form of yield.

• Government and corporate bonds, where you lend money to the government or public companies. They use the money to fund ongoing or upcoming projects, and pay you an interest over time.

• Dividend-paying stocks, where you own equity in publicly-listed companies and essentially earn a tiny portion of the business they generate.

• Real estate, where you get rental yield on your house, office space, or any other property like that.

On the other hand, an extensive range of novel yield systems have emerged in crypto over the past 4–5 years. While these have varying levels of complexity, decentralization, and performance, the most common sources include:

• Staking, where you lock up (vs. selling) your tokens to secure Proof-of-Stake (PoS) blockchains like Ethereum or Solana, and earn yield in return. It’s pretty much the baseline for yield-generation in crypto, and also the simplest way.

• DeFi lending, where you deposit crypto into an onchain account (i.e., lending pool). Borrowers take loans from these pools and pay interest, from which you get a portion as yield.

• Liquidity provision, where you provide capital (tokens) to facilitate trading on decentralized exchange, earning a portion of the transaction fees as yield.

Crypto-based yield systems typically offer much higher yield than sources in traditional finance. But the risk is also much higher.

Also, while these systems solve many persistent pain points of legacy yield systems, they introduce new challenges like excessive market dependence, high volatility, or irrecoverable loss of assets. We’ll dive deeper into these in future blogs.

If you only take one thing from this article, take this: yield is about ongoing flow while you still hold the asset.

From the apple orchard and coffee shop membership to various forms of crypto-native yield, you get recurring value from your assets, without selling them. This last part is the most powerful aspect of yield; also the most defining one.

Rather than sitting idle, with untapped value, your assets become productive when they generate yield. This is the invisible force that runs financial systems globally, channeling capital to where it’s most needed. Businesses get funded. Infrastructure gets built.

Without yield, there would be no finance as we know it today. And that’s also why, to get financial systems that we want for the future, we must fix yield itself. Seasons is doing just that. Stay tuned to know more. 🫡

👇 Join us in transforming YieldFi: 👇

General Resources:
🌐 Website | ✳️ LinkTree | ⚫ Beacons | 📃 Docs

Connect with us and Join the community:
X (Twitter) | Telegram | Youtube | LinkedIn