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The Velocity Yield – Earning a Yield for Using Sound Money
The Velocity Yield is designed to support the circulation of sound money within the KMS. It addresses the tendency, sometimes linked to Gresham’s Law, for people to hold onto higher-value money while spending lower-value forms. This pattern has historically been noticeable with precious metals. The yield provides a return based on active use—spending or trading—rather than only on holding balances, that’s why I call it the user‘s yield.
How the Velocity Yield Works
Users become eligible for the Velocity Yield when they spend or trade Kinesis gold (KAU) and silver (KAG) on the platform. The yield consists of 10% of the global transaction fees collected in the Kinesis Master Fee Pool for the month. These fees are then distributed to participants according to their qualifying activity.
The approach focuses on economic participation—spending and exchanging the metals—rather than passive storage alone. This structure aims to support liquidity in the system by tying returns to actual movement of value between users, merchants, and traders.
Benefits of the Velocity Yield Program
When users make purchases with the Kinesis card using KAU or KAG, they can receive additional gold or silver through the yield. Similarly, transactions on the Kinesis Exchange involving gold and silver pairs contribute to eligibility, resulting in distributions of precious metals based on activity.
The yield applies to situations where gold and silver are used in transactions rather than kept solely as long-term holdings. This means that spending and trading are treated differently from simple storage, which is the main distinction from the Holder’s Yield. Higher levels of spending and trading can lead to greater overall transaction volume, which in turn affects the size of the fee pool available for distribution across all yield categories.
Over time, regular use of KAU and KAG for payments or trades can slowly add to a user’s metal balances through the monthly yield payments. This accumulation happens using funds already involved in normal financial activity, which means it does not require additional capital beyond what the user is already spending or trading.
How is the velocity yield calculated and distributed
The Velocity Yield is distributed according to each participant’s level of activity within the Kinesis system.
Monthly Payments: Calculations are performed each month, with payments issued in Kinesis gold (KAU) for gold-related activity and Kinesis silver (KAG) for silver-related activity.
Proportional Reward: The share a user receives depends on how much they contribute to transaction activity relative to other participants. Higher personal usage generally results in a larger portion of the available yield.
Activity-Based Allocation: The distribution is tied directly to the volume and type of qualifying transactions each user completes, aligning rewards with the actual economic activity they generate on the platform.
Paid in Precious Metals: All distributions are credited directly as additional KAU or KAG, which adds to the user’s existing holdings of allocated bullion.
Encouraging Economic Growth and the Importance of Monetary Velocity
Kinesis allocates 10% of the Master Fee Pool to the Velocity Yield. This portion is distributed to users based on their spending and trading of gold and silver, with the aim of supporting the role of these metals as circulating currencies rather than assets held only for storage.
Monetary velocity describes how quickly money moves through an economy—how often the same unit changes hands over a given period. The Velocity Yield is one mechanism intended to influence this dynamic within the Kinesis Monetary System by linking returns to the frequency of use. Similar ideas appear in other areas of everyday finance. Cashback programs on credit cards return a portion of spending to the cardholder, lowering the effective cost of purchases. Frequent-flyer schemes in aviation award points or miles for travel, which can be used for future trips or upgrades. In both cases, routine activity generates additional value for the participant. The main difference with the Velocity Yield is that it draws from a pool of transaction fees generated across the Kinesis platform, rather than from merchant fees or separate marketing allocations.