How Does Toby Produce Yield?
Understanding Yield on Toby Network
Last updated
Understanding Yield on Toby Network
Last updated
The platform generates yield by using two key components: Staking Rewards and MEV Opportunities. When users stake their SOL (the native token on Solana) on the Toby Network, they receive a liquid staking token called tSOL. This tSOL can be used elsewhere while still earning staking rewards, making your capital work in more places at once.
What are MEV rewards?
MEV (Maximum Extractable Value) is the extra profit that can be made by reordering, including, or excluding transactions in a block. Essentially, it’s the value validators and searchers can extract from optimizing how transactions are arranged.
In Toby’s case, it uses a component called the Block Chef to optimize the way transactions are processed, maximizing the rewards that can be earned on top of the regular staking rewards.
Toby Network simplifies staking for you. Here’s how it works:
Stake SOL and Get tSOL: When you stake your SOL on Toby, you receive tSOL, which represents your stake and keeps earning rewards.
Validator Optimization: Toby automatically delegates your SOL to a pool of validators, choosing the ones that will give the best performance. Validators are ranked based on real-time performance data to maximize yield.
MEV Strategy: The platform also taps into MEV by optimizing the transactions using Toby's Relayers and Block Chef systems, which extract extra profits from the way transactions are ordered and included in blocks.
So, your yield comes from both regular staking rewards and additional profits from MEV, all without you having to manage anything manually.
There are three types of earnings to look at:
Staking Yield: This is your standard reward for staking SOL. It’s earned based on the validator’s performance that Toby optimizes for you.
MEV Rewards: These come from Toby’s ability to capture extra value (MEV) from the transaction flow. By optimizing transaction orders, Toby secures additional profits, which are added to your rewards.
Total APY (Annual Percentage Yield): This is a combination of both staking yield and MEV rewards, showing you the full picture of your potential earnings.
Toby Network doesn’t just stop at earning yield; it also auto-compounds your rewards. This means that the rewards you earn (both staking and MEV) are automatically reinvested, which allows your earnings to grow faster without any extra effort on your part.
Toby Network is designed to be both simple and powerful. For you, this means:
Passive Earnings: Just stake your SOL, and Toby handles the rest—ensuring you get both regular staking rewards and the extra MEV profit.
Liquidity with tSOL: While earning rewards, you can still use your tSOL in other DeFi applications, giving you more flexibility.
Maximized Returns: By using advanced MEV strategies and validator optimization, Toby helps ensure that you’re earning as much as possible.
The Toby Network aims to unlock the full potential of your staked SOL by combining the reliability of traditional staking with the profitability of MEV extraction. With over $45 billion in staked SOL (and only a small portion of that in liquid staking tokens), there’s a huge opportunity to earn more by using liquid staking solutions like Toby.
Toby's combination of staking and MEV rewards provides higher returns compared to standard staking alone, and with the power of auto-compounding, your earnings will continue to grow efficiently over time.
