Articles on: Yield

Where exactly does the money for the yield come from?

When the ROY is introduced and sold, the vast majority of the proceeds is locked for the yield payments. As a provider, we promise to return you the yield within the minimum and maximum thresholds. Some talents will end up paying less yield than the initial ROY price, while others will pay out more, hence turning out to be profitable. How are you paying that profit, you might ask? Since we manage the risk of all talent ROYs, we are able to pay out over performing ROY yields from the proceeds of the ROYs that underperformed.

Ultimately, Royaltiz creates the market for you to pick and choose your set of talents that you think have the best chance of returning profit. Some people will end up earning profit, while others won’t. As the issuer of the ROYs , we aim to value and price ROYs as accurately as possible, which, in the light of launching many talents, allows us to be indifferent about one single talent’s performance and the risk associated with the yield.

In other words, the more talents we launch, the more accurate our statistical models and algorithms can perform and ensure that we can always pay out the promised yields as per the contract and valuation method used.

Updated on: 23/01/2023

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