The Yield System

What are yields?

Kinesis introduced a yield system that rewards the active and passive users of the system as well as covers the costs of providing the system and secure storage and insurance of precious metals.

Whenever a transaction is made across the Kinesis system a small fee is taken. This fee is accumulated into what is known as the Master Fee Pool. The Master fee Pool is then distributed to the various participants of the system each month via the various yields. Importantly the yield is a share of fees generated, and not a debt yield that is made through charging interest on loaned amounts.

The yield on gold (KAU) was a whopping 6.99% for the year to 6th October 2021. You would expect this to decrease as the size of the Kinesis system increases. You can check out the current fee pools by opening a free Kinesis Money account.

Kinesis Money yield system. how fees are divided
  • Minter’s Yield – Reward for creating new KAU and KAG currencies.
  • Holder’s Yield – Reward for holding gold and silver within the Kinesis system.
  • Referrer’s Yield – Reward for inviting people into the system to help it grow.
  • Velocity Yield (previously depositor’s yield)- Reward for trading on the Kinesis Exchange or spending using the Kinesis debit card.
  • Kinesis Velocity Token (KVT) Yield – A Reward for proving capital to Kinesis system and driving participation.
  • Kinesis and Partners – Income for business operations including covering overheads, partners and white labellers.

Check out the Kinesis Yield guide here.

The power of the Kinesis Velocity Token

The Kinesis Velocity Token (KVT) essentially provides the holder a right to a share of 20% of the fees in the Master Fee Pool in exchange for providing funds to Kinesis. The funds are primarily used to build the system and provide capital while the system grows to a point where costs can be funded from Kinesis’ share of the Master Fee Pool (i.e. it becomes self sufficient).

The total fees the Kinesis system earns is dependent on both the amount of KAU and KAG in the system (metal in circulation) as well how often it is transacted (it’s velocity). This is because fees are taken every time there is a transaction. So the larger the amount of KAU and KAG to transact (metal in circulation), and the more often it is transacted (velocity) the larger the Master fee Pool will be.

KVT’s are capped at a maximum of 300,000, so each KVT will reward it’s holder with 1/300,000 of 20% of all the fees in the Kinesis system. Unlike all other yields, the KVT yield grows as the system grows.

Let’s take an example. If, for instance, you held 100 KAU out of a total 1,000 KAU in the Kinesis system, you would be entitled to 1/10th of the 15% holder’s yield. As the system grows and more KAU enters the system your 100 KAU will represent a smaller and smaller percentage of the total KAU, and you will therefore earn a smaller yield as time passes. However as the number of KVT’s are fixed, a KVT holder will continue to earn a set percentage of total fees, a total that will only increase as the system grows.

As you can see, KVT’s represent a compelling investment opportunity if you believe the Kinesis system will become widely adopted. Check out the FAQs for how to purchase discounted KVTs.

You can use this link to get started. Opening a Kinesis Money account is completely free.