# Yield

#### Yield mechanism

hBTC is designed to generate **BTC-denominated yield** by deploying into **on-chain DeFi strategies** and systematically converting all realized profits back into Bitcoin.

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Yield is **market-dependent** and may vary over time.
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#### Yield sources

hBTC may source yield from a range of DeFi primitives, including:

* **Basis strategies**
* **Lending markets**
* **Staking**
* **AMM liquidity provision**
* **Real-world assets (RWAs)** 

<figure><img src="https://2201013687-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fxp26OjT5H1o55M1QMDI4%2Fuploads%2F2jiqNza1PnDMYTQRmeSN%2FScreenshot%20from%202025-12-22%2017-14-22.png?alt=media&#x26;token=b1830b9b-68d2-49df-8e0b-bec2e78d1238" alt=""><figcaption></figcaption></figure>

#### Launch configuration

At launch, hBTC yield is primarily generated from:

1. **Basis strategies**, using **USDh** as the core yield mechanism
2. **Stacks Dual Stacking**, leveraging Stacks Proof-of-Transfer (PoX) consensus mechanism

Additional strategies may be introduced over time as the protocol expands.

#### Strategy governance and expansion

Hermetica continuously evaluates additional on-chain yield opportunities across DeFi. New strategies are introduced only after completing **technical diligence and risk review**.&#x20;

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Any strategy changes are **announced in advance** and take effect only after the **governance timelock** has elapsed.
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