Yield generation

This section explains how yield generation works and where it comes from.

The USDC collateral deposited is routed into Aave V3 Optimism lending markets, which generate yield based on APY (Annual Percentage Yield). This yield is accumulated by the protocol over time and is later distributed to active cohort members.

Example: The obUSD treasury holds 500,000 USDC in Aave. Over the course of a month, the protocol earns 10,000 USDC in yield. This 10,000 USDC is recorded by the protocol and set aside for monthly distribution to active cohort members.