Kinesis Yields: Where Does the Money Come From?

In order to reward users of the Kinesis Monetary System for taking part in a monetary system that uses sound money as currency, more than 50% of Kinesis earnings is returned to users through a series of yield mechanisms. Unlike traditional financial products that rely on interest payments, lending, or the creation of new money, Kinesis distributes a share of the fees generated by activity within its ecosystem.

Kinesis Yields

On the Kinesis blockchain—currently based on a fork of the Stellar Network—each currency transfer incurs a transaction fee of either 0.45% or 0.22% of the total transaction value, depending on the type of transaction. These fees represent the primary source of revenue generated by activity within the network.

Every transaction fee is collected and deposited into a fund known as the Master Fee Pool (MFP), which would be a perfect name for the Bond villain in the next sequel. The Master Fee Pool serves as the source from which Kinesis yields are paid to eligible participants.

Because the pool is funded by real transactional activity, the amount available for distribution varies over time. As network usage increases, the Master Fee Pool grows, allowing for larger yield distributions. Conversely, periods of lower activity result in smaller distributions.

How the Yield Model Works

The amount of Kinesis yields paid out monthly is proportional to the transactional volume within the system.

This means:

• It depends on money velocity rather than on capital inflows. In other words, rewards are generated by economic activity instead of requiring new participants to fund existing ones. Consequently, the Kinesis yield model is fundamentally different from a Ponzi scheme.
• It depends on financial and economic growth rather than on financial obligations or debt creation. Revenue is generated through transactions instead of borrowing or interest payments.
• Rather than being a promotional incentive designed solely to attract new users, the Kinesis yield mechanism is intended to encourage the circulation of sound money. It aims to promote the use of gold and silver not only as stores of value (i.e. as an investment) but also as practical media of exchange (i.e. as money) in everyday commerce.

Why Transaction Volume Matters

The sustainability of the Kinesis yield model depends on continued economic activity within the ecosystem. Every transfer, payment, exchange, or settlement contributes to the Master Fee Pool. As businesses and individuals increasingly use the platform for real-world transactions, the fee pool expands naturally.

This creates a feedback loop:

• Greater network adoption leads to higher transaction volumes.
• Higher transaction volumes generate more transaction fees.
• More fees increase the amount available for monthly yield distributions.
• Attractive yield opportunities encourage continued participation and liquidity within the ecosystem.

Unlike systems that require constant external investment, the Kinesis model seeks to align user incentives with actual network usage.