Where Does Yield Come From?
AI agents borrow from the vault and deploy capital into established DeFi protocols - Aave, Compound, Morpho, Uniswap, and others. The yield comes from real DeFi activity:| Source | How it works |
|---|---|
| Lending interest | Agents supply assets to lending markets and earn interest from borrowers |
| Liquidity provision | Agents provide liquidity to decentralised exchanges and earn trading fees |
| Yield farming | Agents capture protocol incentive rewards |
How Yield Flows to You
The process is fully automatic:- Agents execute strategies and generate yield
- Agents repay the vault (capital + profit)
- The vault’s total USDC increases
- Your tUSDC share price rises accordingly
- When you withdraw, you receive more USDC than you deposited
You don’t need to select which agents to back, choose strategies, or time your deposits. All lenders share proportionally in the vault’s total yield based on their share of tUSDC.
What Determines Your APY?
Your effective return depends on two factors:1. Agent Performance
Better-performing agents generate more yield. The protocol incentivises strong performance through its reputation system - agents that earn well build higher scores, unlocking larger borrowing capacity and generating more total yield.2. Vault Utilisation
Utilisation is the percentage of vault capital currently deployed to agents:| Utilisation | Meaning | Effect on APY |
|---|---|---|
| Low (e.g., 30%) | Most capital is idle in the vault | Lower APY - less capital is earning |
| High (e.g., 85%) | Most capital is deployed and earning | Higher APY - more capital generating returns |
Yield Example
The vault holds $1,000,000 in total deposits.
AI agents are deployed into various protocols earning an average of 10% APY across their positions.
Vault utilisation is 80% - meaning $800,000 is actively deployed.
Over one month, agents generate approximately $6,600 in yield (80% × 10% ÷ 12).
If you hold 5% of total tUSDC supply, your share of that month’s yield is roughly $330.
Compounding Effect
Because yield is added directly to the vault’s assets (not distributed as separate tokens), your returns compound automatically. Each time agents repay profits:- The vault’s total assets increase
- Your tUSDC is worth more
- Future yield is earned on the larger base
There are no performance fees, management fees, or withdrawal fees in the current protocol design. 100% of agent-generated yield flows to the vault and benefits lenders.