1.7 k

Real Yield: The Top DeFi Tokens for Generating Actual Revenue

This year’s brutal bear market has claimed a sizable batch of crypto startups and nascent coins. To weather the volatility, the long-term believers in decentralized finance (DeFi) are in search of one thing: “Real Yield.”

The term has grown in popularity among those looking for hidden gems in the market for decentralized finance applications. More importantly, it marks an appetite for responsible crypto investment opportunities that can outlast a turbulent market cycle. 

So what exactly is “real yield” in the context of DeFi? Here’s a step-by-step guide on the concept of real yield, how to spot it, and the top DeFi tokens for investing in the sector. 

What is Real Yield in DeFi?

Real yield refers to yield accrued through the generation of actual protocol revenue, such as trading fees. Part of this yield may then be collected by holders of the protocol’s native token, much like a dividend stock.

In other words, investing in a “real yield” protocol is effectively a bet on its ability to retain users and volume over time. It’s a true value investment.

Sounds like ordinary, responsible money management right? Unfortunately, it’s taken a while for the crypto market to mature, and value such tried and true investment principles. 

Why Real Yield Matters

That’s because DeFi has long been distracted by tokens and services offering wildly inflated unsustainable, often triple-digit annual yield. Such a model was popularized as a shortcut for bootstrapping a protocol with liquidity, users, and high total value locked (TVL).

Sadly, while attractive to traders, these rates could only be upheld through “fake yield” – namely, token emissions. In other words, they required minting new units of the protocol’s native token, and dolling out rewards using said token. 

This requirement can be sidestepped to some degree as long as a token’s price continues rising to support its juicy APR. But this never happens in practice. Profit taking, sentiment changes, and more attractive yields on other DEXs all serve to stop – and often reverse – price momentum. 

The project is then forced to emit more tokens to prop up its yields and retain its ecosystem. However, this only devalues the token further, driving away more investors, and fueling the ecosystem’s death spiral. 

Projects that rely on “fake yield,” are prone to short lifespans and fatal collapse. Networks like Terra, and the accompanying collapse of TerraUSD and LUNA, are painful reminders of that fact.

Alternatively, real yield projects use value accrual mechanisms that rely on a real, steady and relatively loyal userbase.

How Do I Find Real Yield?

Identifying real yield in DeFi requires two easy tools: Token Terminal, and Messari. 

  • First, use Token Terminal to view a project’s total revenue and protocol revenue. From the site’s homepage, select “metrics”, then “Protocol Revenue”, and search the protocol you’d like to analyze. 
  • Then, use Messari to identify a project’s token emissions. Navigate to the profile for a given token, then select “token economics” followed by “supply schedule.” If Messari doesn’t provide this data, use CoinGecko or Dune Analytics as alternatives. 
  • Compare the token’s protocol revenue on token terminal with its emissions on Messari. Make sure to multiply a token’s emissions by its price to understand the total value its emissions create for stakers.
  • Revenue – Token Emissions = Real Yield

Note that this is not a perfectly accurate method, as it doesn’t provide the operational expenses of a given project. Nevertheless, it offers a general overview of how reliant a project is on token emissions for yield. 

Once you feel that you’ve identified a protocol that shows promising figures, make sure it possesses the following:

  • Product/Market Fit: People must have a fundamental desire to use the protocol, no matter the market conditions ot token incentives.
  • Onchain Revenue: If the protocol generates no revenue, then its not real yield! Ensure this revenue surpasses its token emissions + operating expenses.
  • Sound Money Payouts: Try not to be paid in unestablished, highly volatile, or inflationary altcoins. Payouts provided in BTC, ETH, or stablecoins are generally most reliable. 


Top 5 Real Yield Protocols in DeFi

For now, don’t worry about the research. We’ve provided five leading protocols and tokens below to introduce you to the world of real yield!

Note: Do not construe the following as expert financial advice, or trading advice. This article is meant solely for educational purposes.

  • DYDX

The Ethereum-based dYdX is the largest decentralized perpetual exchange in the world. It supports spot trading, but is mainly focused on providing derivatives and margin trading for users. 

According to Token Terminal, dYdX raked in $63 million of protocol revenue in the past 90 days. Holders can stake dYdX get a slice of that revenue, and also be eligible for trading fee discounts.

Right now, staking rewards are received by a centralized party – though the project intends to change this by the end of 2022. 

It’s also worth noting that, while profitable, dYdX token has significant dilution ahead of it. Its circulating supply is currently 65 million, but its max supply is 1 billion. Its remaining supply will be distributed over the next four years – with only 2.5% going to existing dYdX stakers. 

  • GMX

GMX is Arbitrum’s top dapp, with $250 million in TVL. It offers up to 30x leverage on spot crypto trading pairs like BTC, ETH, and AVAX with low slippage.

The protocol is comprised of two tokens: GMX – the utility and governance token, and GML – the liquidity provider token. 

Staking GMX nets holders 30% of fees generated through swaps and leverage trading, while GLP holders get the other 70%. What’s more, is that these fees are paid out in ETH – a ‘blue chip’ crypto with relatively reliable long-term value.  

According to GMX’s website, both GMX and GML are earning over 19% APR on Arbitrum. However, some of these fees are paid out in escrowed GMX tokens (esGMX), a GMX equivalent that cannot be transferred to other wallets. 

GMX has a soft supply cap at 13.25 million (though this can change with governance vote in the future). CoinMarketCap estimates that about 7.8 million GMX are in current circulation

  • Redacted ($BTRFLY)

Redacted is a smart contract suite empowering cash flow for DeFi protocols. It centres around its meta-governance token BTRFLY, which is backed by a handful of the protocol’s other governance assets. 

BTRFLY can be staked and locked away for 16 to 17-month epochs in return for revenue-locked BTRFLY (rlBTRFLY). This token rewards holders with revenue generated by the Redacted treasury and product ecosystem, paid in ETH.

At present, it also grants holders rewards through inflationary BTRFLY emissions – though this model is on its way out. The newly launched BTRFLY v2 makes BTRFLY a limited supply token, and focuses on “producing real yield for rlBTRFLY holders.”


Another Arbitrum protocol, Umami is a market maker and liquidity provider that helps partner protocols rapidly scale their liquidity. It prides itself on providing “sustainable, risk hedged DeFi yield.” 

All of UMAMI’s products rely on sourcing revenue from on-chain revenue streams, rather than inflationary token models. UMAMI’s supply is hard capped at 1,000,000 tokens: 639,591 of which are circulating.

By depositing one’s Umami for mUmami, holders can earn 6% APR, denominated in WETH, from Umami’s treasury and protocol revenue. Though not as high as some other protocols, the project explicitly targets “real yield” as a strategy and rejects the “ponzu tokenomics” of its competition. 

“Each $UMAMI token represents a fixed claim on Umami’s governance and protocol revenues,” states its tokenomics page. “It can never be diluted away by inflationary emissions or capital raises.”


Finally, there’s SOVRYN – a DeFi protocol built atop the Bitcoin sidechain, Rootstock. Sidechains are one of many scaling solutions for Bitcoin attempting to increase its functionality, like Lightning and Taro

SOVRYN is focused on bringing a full suite of decentralized financial services to Bitcoin. These already include a spot exchange, margin trading, a lending pool, and Bitcoin-backed stablecoins.

All fees generated through swapping, lending, borrowing, and leveraging are used to reward holders of SOV – the protocol’s governance token. 

Bitcoin live price
price change

The SOV token supply is capped at 100,000,000, but only about 22% has been minted as of today. The remainder will be distributed over six more years to founders, developers, early funders, ecosystem builders, programmatic sales, and liquidity mining. None, however, are slated to reward existing SOV stakers. 

Stay up to date with our latest articles

More posts

Here are the Benefits of Auditing Your Smart Contract with SolidProof

Auditing a smart contract is vital to ensure that the code functions as intended. SolidProof offers a wide range of services to help with this process. The company guarantees a sound audit process and an experienced team of auditors.  Here are the benefits of auditing a smart contract with a reputable company such as SolidProof: A wide range of services: SolidProof offers a wide range of services to help with the audit process, including code review, security analysis, and more.…

Smart Contracts Vulnerabilities Specific to The DeFi Space

As the financial world moves increasingly online, it's becoming more and more essential to ensure that all transactions run securely. One way this is possible is through the use of smart contracts.  Smart contracts are computer programs that automatically execute the terms of a contract. They provide a secure way to conduct transactions without relying on third-party intermediaries.  While the use of smart contracts offers many advantages, they are also vulnerable to attack. In this blog, we will explore how…

Real Yield: The Top DeFi Tokens for Generating Actual Revenue

This year’s brutal bear market has claimed a sizable batch of crypto startups and nascent coins. To weather the volatility, the long-term believers in decentralized finance (DeFi) are in search of one thing: “Real Yield.” The term has grown in popularity among those looking for hidden gems in the market for decentralized finance applications. More importantly, it marks an appetite for responsible crypto investment opportunities that can outlast a turbulent market cycle.  So what exactly is “real yield” in the…

Get Top Notch Smart Contract Audit and KYC Services for your Crypto Project with Solidproof

Solidproof is one of the top auditors in the crypto industry with an increasing offer of smart contract auditing, KYC, and marketing services. The German company has developed quickly since its inception in 2021, building a vast portfolio of prestigious and successful clients. The DeFi space is a nourishing environment for crypto and decentralized finance projects. However, it is also a breeding ground for scammers, multi-million hacks, fraud, and money laundering. Protocols running on faulty codes risk exposure to cybercriminal…

How Does KYC Work in the DeFi Space?

Decentralized finance (DeFi) has the potential to reach mainstream adoption and empower people worldwide financially. However, without regulations and identity control, it can easily become a platform for scams, fraud, and money laundering. The paradox is that by introducing stricter control on who can access DeFi products, the industry loses its "decentralization" factor. After all, this is what set it apart from traditional centralized finance (CeFi) in the first place. This is where KYC (Know Your Customer) standards come in…

The Importance of Smart Contract Auditing

Smart contracts are the innovation that propelled blockchain technology to where it is today. This invention fulfills the agreement between all the parties in a deal without the need for intermediaries. As a result, it boosts the security and immutability of a blockchain network, allowing numerous and diverse applications to develop. Unfortunately, smart contracts are not flawless and could lead to million-dollar losses if hackers can exploit their tinniest loopholes. For example, some famous attacks on smart contract code glitches…

How Smart Contract Audit and KYC Secures the DeFi Space

The decentralized finance (DeFi) space has developed substantially in the past three years. However, the threat of hacks and scams still looms large on the horizon, leading to FUD (fear, uncertainty, and doubt) in users and projects. Fortunately, smart contract audit and KYC services can tilt the balance towards a secure, more lucrative future for this sector. Auditing companies ensure that investors get behind real and feasible projects. Moreover, KYC standards guarantee the reliability of development teams and reduce malicious…

How SolidProof Ensures Transparency and Security through Audit and KYC Systems

Solidproof is among the most trusted blockchain security and smart contract auditing companies in the crypto market today. The Germany-based company has its objectives to fix the security and transparency issues smothering the crypto space. Unfortunately, as the industry attains more progress, so do the opportunities for bad actors to victimize honest investors. According to a yearly report on crypto crimes by Chainalysis, $14 billion of all transactions in crypto in 2021 were associated with scams or money laundering. These…

Top 10 DeFi Tokens To Invest In 2022

DeFi or decentralized finance tokens continue to be the center of attention in the crypto realm. Many individuals have started to make the most out of DeFi coins. After all, DeFi coins make it possible to address outdated issues in the financial sector. The truth is that DeFi coins have had consistent demand, and this trend continues to head in an upward direction. But once you’re interested in investing in decentralized finance, the key is to choose the “right” DeFi…

Understanding Doxxing in the Crypto World

When experts claim “data is the new oil”, it may be hard to understand all the statement's implications. But, in short, information and data are receiving a higher valuation on the market year after year. A few decades ago, Wall Street saw energy-related companies among those with the highest market cap. Today, the attention has moved towards data-based companies, such as social networks. Of course, the other side of the data-coin is that information online is becoming more sensitive. Unfortunately,…