Yield

The sTAO yield is generated by the Taofu Protocol by delegating TAO from its custody wallet(s) to validators participating in the Taofu ecosystem, including its own validator. As the validators employ the TAO to generate validator yield, 91% of this yield goes back to the Taofu custody wallet(s). The increasing quantity of TAO in said wallet(s) increases the value of sTAO denominated in TAO, as sTAO is not minted when TAO is earned from the yield distribution.

In addition, the Taofu Protocol Revenue can be used to further increase the yield potential of sTAO, as chosen by the protocol’s internal governance mechanisms.