# 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.

{% hint style="info" %}
Yield is **market-dependent** and may vary over time.
{% endhint %}

#### 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="/files/DYddi4eJQlDDUXraobdW" 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;

{% hint style="info" %}
Any strategy changes are **announced in advance** and take effect only after the **governance timelock** has elapsed.
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