> For the complete documentation index, see [llms.txt](https://the-fedz.gitbook.io/the-fedz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://the-fedz.gitbook.io/the-fedz/the-fedz-elements-rules-and-tokenomics/where-does-the-yield-come-from.md).
# Where Does the Yield Come From?
The Fedz generates yield by **issuing tokens and operating markets**.
That’s it.
There is no external yield source, no emissions, and no hidden leverage.\
Revenue comes from **real usage of The Fedz markets**.
The Fedz issues tokens such as $FUSD and FStocks and provides liquidity for them through public and **Private Liquidity Pools**. These pools allow users to trade, enter, exit, and hold these tokens with predictable liquidity.
This activity generates **fees and spreads**.\
In crypto terms, this is the system’s *yield*.
#### Who Pays?
The people who pay are the **end users of the system**:
* **Traders**, who pay trading fees when swapping tokens
* **Token holders**, who rely on deep liquidity and stable markets
Markets and tokens are the **service**.\
Trading and holding are the **consumption**.
The Fedz earns revenue because people choose to use these markets.
***
#### What Does The Fedz Provide?
The Fedz provides:
* Continuous liquidity
* Issuance and redemption of tokens
* Orderly entry and exit
* Protection against chaotic bank-run dynamics
Without this structure:
* liquidity would disappear under stress
* prices would gap
* exits would become unstable
Preventing that is the core service The Fedz provides.
***
#### Why This Can Generate Meaningful Yield
Operating this system involves **real risk**, especially **bank-run risk**.
The Fedz stands in the middle of flows:
* when others rush to exit,
* when liquidity is scarce,
* when markets are stressed.
In traditional finance, institutions that absorb this risk, like banks, clearinghouses, and exchanges, are structurally profitable.
High systemic risk **can and should** be matched with high returns.
***
#### Capital Efficiency Amplifies Revenue
The Fedz is capital-efficient by design.
Because it does not require full collateral at all times:
* each unit of capital supports **more liquidity**
* more liquidity enables **higher trading volume**
* higher volume produces **more fees**
This is the same logic behind fractional-reserve systems.
For every unit of capital The Fedz commits, the system enables multiple units of economic activity.
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