Concept

Joint yield refers to a strategy where a group of market participants cooperate by pooling their resources/ assets/ investments to make excess profits or maximize returns from yield farming or staking (see also: joint staking). Cooperation amongst participants allow them to avail opportunities carrying better returns that would otherwise be not individually accessible or attainable. Combining resources result in a better scale and a larger market exposure given the size of the pool. Larger investments can gain better rates or rewards from other market players who seek liquidity. In addition to higher return potential, a joint yield strategy can also help participants to manager their individual risks as part of the overall risk pooling, spreading the risk among the community and reducing the burden of potential losses on an individual participant.

Methodology

In practice, joint yield strategy is implemented by utilizing decentralized finance (DeFi) platforms where community members can stake or post their digital assets to a common pool. The process yields them returns in the form of tokens, in proportion to their respective share in the pool yield. Joint staking is a process whereby a sort of joint yield can be achieved to the best interest of all participants involved. Staking is the process whereby network participants can earn rewards (or returns) by locking their cryptoassets and other digital assets in wallets. Decentralized finance (DeFi) applications and protocols require a certain level of liquidity to ensure transactions are carried out in a smooth and efficient manner.

By joint staking, multiple participants pool their resources to lock up assets in a blockchain network, combining their staking power over the lock-up period and increasing the potential of earning rewards (and more rewards). With combined resources minimum staking requirements can be comfortably met. Furthermore, this strategy can reduce the risk embedded with staking smaller sizes. In short, individual investors can follow this strategy to achieve a scale that only larger players in the market can provide for.