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.

INDX’s yield earning indexes contain two types of yield earning assets, we will break them down below.

Yo Protocol assets

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.

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

Beefy CLM vaults (coming soon)

Beefy CLM vaults are not released yet, but will be soon.

Beefy is a decentralized, multichain yield optimizer that allows users to earn compound interest on their crypto holdings. Beefy earns you the highest APYs with safety and efficiency in mind through automated strategies that handle complex DeFi operations.

INDX primarily uses Beefy’s CLM vaults for yield earning. CLM stands for “cowcentrated liquidity manager” and represents Beefy’s sophisticated solution for accessing concentrated liquidity opportunities.

Optimal Route Protection

If the ‘best path’ calculation would result in too much slippage, the vault automatically reverts that attempt and uses a fallback method to ETH allocation. This is a safety feature, not an error. Your deposit completed successfully through an alternative route.

What makes CLM vaults special?

Concentrated Liquidity Made Simple Concentrated liquidity pools offer significantly higher yields than traditional liquidity pools by allowing providers to focus their liquidity within specific price ranges. Instead of providing liquidity across all possible prices (like Uniswap V2), concentrated liquidity lets you earn a greater share of trading fees by targeting the price ranges where actual trading occurs. The tradeoff is complexity, these positions require constant monitoring and rebalancing as prices move.

Automated Range Management This is where Beefy’s CLM technology shines. CLM automates the complex process of managing concentrated liquidity positions, including:

• Optimal range setting: Smart contracts automatically determine the best price ranges for maximum fee generation
• Active rebalancing: Positions are continuously adjusted to stay “in-range” and earning fees
• Impermanent loss minimization: Strategic range management helps reduce IL risks compared to manual management
• Gas optimization: Aggregated management across users reduces individual transaction costs

Seamless Token Experience When you interact with CLM vaults through INDX, you benefit from Beefy’s token system:

• CowTokens: ERC-20 tokens representing your share in the concentrated liquidity position
• mooBeefy tokens: When CLM positions are further optimized with Beefy’s autocompounding vaults, you receive these tokens that automatically compound all rewards and fees back into the position

Portfolio-Level Benefits By including Beefy CLM vault positions in yield earning indexes, INDX provides:

• Higher capital efficiency: Your liquidity works harder in the most active trading ranges
• Professional management: Benefit from Beefy’s expertise in managing complex DeFi positions
• Diversified exposure: Access to multiple concentrated liquidity strategies without individual management
• Automated compounding: All fees and rewards are automatically reinvested for exponential growth

The combination of concentrated liquidity’s superior yields and Beefy’s automated management creates a powerful yield-generating component for INDX’s diversified approach to crypto investing.

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.

Similarly, Beefy CLM vaults handle the complex aspects of concentrated liquidity management: monitoring price movements, adjusting ranges for optimal fee capture, managing impermanent loss risks, and compounding all earnings back into your position.

The beauty of this system is that both Yo Protocol and Beefy handle all the complex aspects of yield farming and liquidity management. 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 and Beefy 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, stablecoins, or concentrated liquidity positions, Yield Earning CTFs let you capture optimized yields across all major cryptocurrency categories and strategies simultaneously. Each component asset continues to benefit from 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
• Concentrated liquidity exposure with Beefy CLM vault optimization

Portfolio-Level Risk Management

This bundled approach provides superior risk management. While one asset class or strategy 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, tokens, and strategies, 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
• Hold Beefy CLM positions separately: Manage concentrated liquidity complexity individually
• Result: Four separate positions to manage, sector concentration risk, high complexity

Yield Earning CTF Approach:

• Single position containing yoBTC, yoETH, yoUSD, and Beefy CLM tokens
• Earn combined yield from all asset categories and strategies
• Automatic rebalancing and diversification
• Professional management of complex positions
• Result: Portfolio-level yield optimization with reduced risk and complexity

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

• 25% yoBTC earning optimized Bitcoin yields
• 30% yoETH earning optimized Ethereum yields
• 25% yoUSD earning optimized stablecoin yields
• 20% Beefy CLM positions earning concentrated liquidity fees

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 or concentrated liquidity management, 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 Beefy’s CLM vaults, 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, concentrated liquidity optimization, 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.