Yield Earning

Earn while you hold. Traditional investing often requires you to choose between growth and income. With Yield Earning Crypto Traded Funds (CTFs), you don’t have to make that choice. These innovative financial instruments let you capture both price appreciation and passive income from your crypto holdings, all while maintaining the diversification benefits of index investing.

Yield earning assets are indicated with a lightening bolt icon on INDX.

What Are Yield Earning Crypto Traded Funds?

Yield Earning CTFs are on-chain index funds that contain assets specifically selected for their ability to generate additional returns beyond price movements. Unlike traditional crypto traded funds that simply track price performance, these funds hold yield-generating tokens that actively earn income while you maintain your position.

Yield earning assets

Before we dig into the nuts and bolts of how it works, let’s take a look at the assets that enable us to earn yield.

Currently, INDX’s yield earning indexes primarily contain Yo Protocol assets (yoBTC, yoETH, and yoUSD), which are tokenized versions of major cryptocurrencies designed to generate yield. Yo Protocol acts as a Yield Optimizer that automatically moves funds across the best-performing pools across multiple blockchains, ensuring you’re always getting the highest risk-adjusted yield without the complexity of managing it yourself.

These aren’t just representations of the underlying assets—they’re productive assets powered by sophisticated yield optimization technology that works for you around the clock.

yoBTC

earns yield while representing exposure to Bitcoin, with Yo Protocol optimizing across the best Bitcoin yield opportunities

yoETH

generates returns while tracking Ethereum, automatically finding the highest-yielding ETH strategies

yoUSD

provides stable returns while maintaining dollar exposure, optimizing across stablecoin yield pools

How it works

When you hold positions in yield earning indexes, the underlying yoAssets are powered by Yo Protocol’s advanced yield optimization engine. This technology automatically scans and moves your funds across the best-performing pools on multiple blockchains, ensuring optimal risk-adjusted returns without you having to monitor or manage anything.

The beauty of this system is that Yo Protocol handles all the complex aspects of yield farming: researching opportunities, managing risks, paying bridging fees, handling slippage, and dealing with volatile yields that change constantly. You get the benefits without any of the headaches.

The Power of Bundled Yield Generation

Here’s where Yield Earning CTFs truly shine: portfolio-level yield optimization. While individual yield-generating tokens like those from Yo Protocol are powerful on their own, bundling them together creates compounding benefits that go beyond what any single token can achieve.

Multi-Asset Yield Capture

Instead of choosing between earning yield on Bitcoin, Ethereum, or stablecoins, Yield Earning CTFs let you capture optimized yields across all major cryptocurrency categories simultaneously. Each component asset (yoBTC, yoETH, yoUSD) continues to benefit from Yo Protocol’s individual optimization, but now you’re diversified across:

• Bitcoin exposure with yoBTC yield optimization
• Ethereum exposure with yoETH yield strategies
• Stable dollar exposure with yoUSD yield generation

Portfolio-Level Risk Management

This bundled approach provides superior risk management. While one asset class might experience temporary yield fluctuations, the diversified nature of the fund helps smooth out these variations, potentially providing more consistent overall returns than holding individual yield tokens.

One-Click Access to Multiple Yield Streams

Rather than managing separate positions across different yield-generating protocols and tokens, you get exposure to multiple optimized yield streams through a single, simple transaction.

A Practical Example: The Bundling Advantage

Let’s compare holding individual tokens versus bundled CTF exposure:

Individual Token Approach:

• Hold yoBTC separately: Earn yield on Bitcoin exposure only
• Hold yoETH separately: Earn yield on Ethereum exposure only
• Hold yoUSD separately: Earn yield on stable dollar exposure only
• Result: Three separate positions to manage, sector concentration risk

Yield Earning CTF Approach:

• Single position containing yoBTC, yoETH, and yoUSD
• Earn combined yield from all three asset categories
• Automatic rebalancing and diversification
• Result: Portfolio-level yield optimization with reduced risk

Practical Scenario: If you invest $1,000 in a diversified Yield Earning CTF, you might get exposure to:

• 30% yoBTC earning optimized Bitcoin yields
• 40% yoETH earning optimized Ethereum yields
• 30% yoUSD earning optimized stablecoin yields

After 6 months, each component has earned yield individually, but your single CTF position captures all of these returns automatically, rebalanced and converted to ETH when you exit—providing diversified yield generation that would be complex and expensive to achieve manually.

Getting Started with Yield Earning CTFs

Starting your yield earning journey is straightforward:

1. Prepare Your Wallet

   All you need is some ETH in a compatible wallet. INDX uses ETH as the core currency for all transactions, making the process simple and streamlined.

2. Choose Your Index

   Browse the available yield earning indexes on the INDX platform. Each index will display its composition, current yield rates, and performance metrics to help you make an informed decision.

3. Enter Your Position

   With a single transaction, you can enter any yield earning index. The smart contract automatically handles the complex routing and token purchases behind the scenes.

4. Monitor and Hold

   Watch your position grow not just from price appreciation but also from the automatic yield accumulation. The platform displays your expected ETH value, which includes both your principal and accumulated yield.

5. Exit When Ready

   When you’re ready to realize your gains, a single transaction will convert your entire position (including all accumulated yield) back to ETH.

The Future of Yield Earning

INDX plans to expand the yield earning indexes to include other yield-generating tokens and strategies, providing even more diversification opportunities and potentially higher combined yields.

Watch this space!

Wrapping up

Traditional yield farming requires you to constantly research opportunities, monitor multiple protocols across different blockchains, pay expensive bridging fees, and deal with unpredictable yields. Even with optimized individual yield tokens, you’re still limited to single-asset exposure and the complexity of managing multiple positions.

Yield Earning CTFs solve both the complexity problem and the diversification challenge. By partnering with proven yield optimization technologies like Yo Protocol and bundling multiple optimized assets together, you get the best of both worlds: sophisticated yield strategies with portfolio-level diversification.

This approach democratizes access to institutional-grade yield optimization while providing diversification benefits that individual yield tokens simply cannot match. Whether you’re a DeFi veteran tired of managing multiple yield positions or a newcomer wanting comprehensive crypto yield exposure, Yield Earning CTFs provide the complete solution.

The combination of index diversification, automatic yield generation, and seamless user experience represents the next evolution in crypto investing—where your money works as hard as you do, even while you sleep.

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Ready to start earning yield on your crypto holdings? Visit INDX to explore the available yield earning indexes and begin your journey toward passive income generation in DeFi.