Yield Mechanics
Real yield from cross-chain settlement fees.
Where Yield Comes From
Sova vault yield is generated from cross-chain settlement fees. When users swap assets across blockchain networks through Sova, solvers use vault liquidity to execute these transactions and earn fees.
This is real yield from actual economic activity — not token emissions or inflationary rewards.
Fee Flow
When a user initiates a cross-chain swap, solvers fulfill the intent using vault liquidity. A 0.5% settlement fee is captured on each transaction. These fees accrue to the vault, causing the svBTC exchange rate to increase over time.
Sustainable Returns
Yield scales with swap volume. More users swapping = more fees = higher APY.
How Yield Reflects in svBTC
Sova uses a share-based accounting system. When you deposit, you receive svBTC tokens. Over time, the redemption value of each token increases as fees accrue.
No claiming
Yield auto-compounds via exchange rate
On-chain NAV
Transparent and verifiable
Dashboard
Track performance in real-time
Simple Concept
Your svBTC balance stays constant. Its cbBTC redemption value grows.
Exchange Rate Example
Day 0 (Deposit)
1 svBTC = 1.0000 cbBTC
1.0000 svBTC
1.0000 cbBTC
Month 6
1 svBTC = 1.0425 cbBTC
1.0000 svBTC
1.0425 cbBTC
Year 1
1 svBTC = 1.0850 cbBTC
1.0000 svBTC
1.0850 cbBTC
After 1 year at ~8.5% APY, your 1 svBTC redeems for 1.085 cbBTC.
Note
This is illustrative. Actual yields vary based on swap volume and market conditions.
Yield Factors
Swap Volume
Higher volume = more settlement fees
Network Activity
More cross-chain demand = better utilization
Solver Competition
Efficient solvers maximize fee capture
Vault Size
Larger vaults can serve more settlements
Market Conditions
Volatility often increases swap activity
Capital Efficiency
Vault liquidity is deployed efficiently across settlement routes. When an intent is detected, liquidity is accessed, the settlement is completed, and capital returns to the vault with fees. This cycle repeats continuously, creating a yield loop where capital is constantly working.
Fee Structure
Settlement Fee
0.5%
Vault (yield to depositors)
Management Fee
0%
—
Performance Fee
10%
Protocol (on profits only)
Deposit/Withdrawal
0%
—
Aligned Incentives
Protocol only earns when depositors earn. No fees on principal, only on profits generated.
Comparison
Sova Vaults
Settlement fees
Scales with usage
DeFi Farms
Token emissions
Dilutive, unsustainable
CEX Lending
Rehypothecation
Counterparty risk
Staking
Inflation rewards
Network-dependent
Sova yield is backed by real transaction volume, not tokenomics.
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