Table Of Contents
The Master Fee Pool: Its Structure and Rationale
Every transaction on the Kinesis network incurs a fee, typically ranging from 0.22 to 0.45 percent depending on the transaction type. Rather than being retained entirely by the platform operator, these fees are aggregated into a single central fund, referred to as the Master Fee Pool. A portion of this pool is then redistributed monthly to participants across several categories, based on their activity or holdings within the system.
Additional contributions to the pool come from programs such as Metalback, which add incremental fees when users make purchases with associated payment cards. The pool is therefore variable in size, expanding or contracting in direct proportion to overall network usage.
This structure operates on a straightforward principle: the system collects revenue from transactional activity and returns a significant share of that revenue to the users who generate it. The intent is to create a self-sustaining cycle where participation is incentivized without relying on external subsidies or interest-based lending.
Allocation Categories: Participant Types and Their Returns
The Master Fee Pool is divided among six distinct yield categories, each targeting a different form of user engagement. The allocation percentages are fixed, though the actual payout amounts fluctuate with the total size of the pool.
Minter’s Yield
This category compensates entities that deposit physical gold or silver into custody and mint corresponding digital tokens. The payout is recurring and based on the quantity of metal minted and maintained in circulation. This yield supports the supply side of the system by encouraging the conversion of physical bullion into digital form.
Holder’s Yield
Distributed to users who maintain a balance of digital gold or silver in their accounts without transacting. The yield is proportional to both the amount held and the duration of holding during a given month. No active trading or spending is required to qualify.
Velocity Yield
Awarded to users based on the volume of their transactional activity, including trades, peer-to-peer transfers, and card payments. This yield is designed to reward circulation and usage, as opposed to passive storage.
Referrer’s Yield
This category compensates existing users for introducing new participants to the network. The referrer receives a share of the fees generated by the referred user’s activity, creating a direct incentive for network expansion through personal referrals.
KVT Yield
The Kinesis Velocity Token (KVT) is a fixed-supply token, with 300,000 units issued. Holders of KVT receive the largest single allocation from the fee pool—20 percent—distributed monthly in gold and silver. This yield is not contingent on the holder’s transactional behavior or metal balances; it is a function of token ownership alone. In 2025, the token was migrated to the Stellar blockchain, increasing its divisibility and facilitating secondary market trading.
Partner’s Yield
Designed for institutional users, merchant acquirers, or larger affiliates who integrate the platform into their existing operations. Depending on the partnership tier, partners may receive up to 25 percent of the fees generated by the users they introduce.
Economic Rationale: Addressing Gresham’s Law
The design of the yield system reflects a specific economic concern known as Gresham’s Law, which is often summarized as “bad money drives out good money.” In practice, this means that when two forms of currency circulate simultaneously, people tend to spend the currency they perceive as less valuable and hoard the one they perceive as more reliable.
Historical examples are numerous. In ancient Rome, as emperors progressively debased silver coinage by reducing its precious metal content, citizens began to set aside older, purer coins and spend the newer, debased ones. Similarly, in 16th-century England, Sir Thomas Gresham observed that merchants would preferentially spend worn or clipped coins while retaining full-weight coins for savings. In both cases, the “good” money—the one with higher intrinsic value—withdrew from circulation, leaving only the less valuable money to facilitate everyday transactions.
For a monetary system based on precious metals, this presents a structural problem. Gold and silver have historically been viewed as reliable stores of value, which creates a natural incentive to hoard them. That incentive works against their use as a medium of exchange, reducing overall monetary velocity.
The yield system attempts to counter this dynamic by altering the cost-benefit calculation. If holding gold-backed tokens generates a passive return (Holder’s Yield), the opportunity cost of saving is reduced. If spending those tokens also generates a return (Velocity Yield), the penalty for using “good” money is diminished. In theory, this dual incentive structure encourages both saving and spending, rather than favoring one at the expense of the other.