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I almost decided not to publish today as nothing interesting seemed to come through. Usually when this happens I go back to the basics - studying blockchain all over again.

Then it hit me, the topic for today had to be “yield”. Personally, I've had a lot to deal within the past 2 years that has heavily affected my crypto investments, so I've largely exited yield bearing assets and have struggled to maintain a healthy portfolio overall, by my judgment.

Thankfully, I've been able to secure some external investments with real world ties that should hopefully start paying off this year, or next. This will effectively enable me to build my crypto portfolio back.

Having all these thoughts run through my head then I suddenly settled on “yield”. This brought back memories of “sustainable finance”, something I've preached on countless notes over my past years on Hive. This is the ultimate goal, to build portfolios that are self-sustaining, and if you've followed most of my articles, you'd probably come across instances where I've talked about crypto to be a self-sustaining tech, by design.

So, this ecosystem is the long term goal. 

That said, there's a limit to these things, if the ecosystem finds that more projects are being launched and there is no significant user growth alongside, then the system is bound to flip onto owing more debt than being sustainable.

### Zero Yield Centralizes Wealth

If you look closely at crypto, there's no project with a blockchain network that has no “yield protocol”. At the very fundamental, validators' incentives is a yield protocol.

How?

Being a validator comes with its monetary risk, by actuality, this is an investment into a network as it will remain locked for the said validator to function as supposed.

That said, when validators validate transactions passed onto the network and add more blocks to the chain, they earn rewards typically called “block rewards” in addition to transaction fees for some networks.

This is yield on the monetary risk they've taken to become a validator on the said network so the blockchain is directly paying “dividends” in a sense, to the network protectors.

When we come over to stocks, many companies do not pay dividends. Now before you try to sell me that “revenue is used to build more value for the company” speech, I'm aware yet I still disagree with the practice.

These companies are by this business model, zero yield investments, or maybe we can call it “zero direct(income) yield investments” as I believe you might wish to talk about “capital gains” at this point. 

I get it. The capital gains speech is famous, but the most valuable company in the world in terms of marketcap still pays dividends. 

Although this is relatively small, about 0.51% APR for a stock price of $188 per share, it's still an important development which is reported to grow overtime.

With these non-dividends-paying companies, all I see is centralization of wealth.

When investments bear yields, it allows for wealth to be further spread. Think about it. If I choose to dump a couple of $$ into HBD savings, I get 20% a year, that's 20% that could be invested in something outside Hive, whilst I still hold Hive-debt. 

At the end of the day, I've supported two ecosystems, hence, spreading wealth. If such a system is otherwise, not in place, I'm locked into one ecosystem, giving it all the flexibility there is to enrich itself, and maybe me, in the long run but “wealth” is vastly centralized in the process.

This is something crypto should build against, and given the core designs of our ecosystem, I'd say that we are on the right blueprint.

I know, the big question is: is it really sustainable?

Of course, it is, why? The people invested just have to be willing to hold their debts, create more liquidity through strategic developments and value lost to yield distribution will never be a problem. 


Posted Using [InLeo Alpha](https://inleo.io/@badbitch/zero-yield-centralizes-wealth-crypto-needs-more-sustainable-yield-protocols)