Yield Mode
What is Tangem Yield Mode?
Tangem Yield Mode is a built-in feature in the Tangem app that allows you to earn yield on your crypto directly from your self-custodial wallet.
It integrates with the Aave decentralized finance (DeFi) protocol, enabling you to lend assets and earn interest while retaining complete control over your private keys.
How does Tangem Yield Mode work?
When you want to generate yield on an asset, you enable Yield mode for that token on the desired network, grant permission for the smart contract to manage that token, and it initiates the first token supply to Aave.
After that, every time you receive or add this token to your wallet, Tangem’s smart contract automatically supplies it to Aave so it can continue generating yield.
Are my funds locked when generating yield?
No. One of the biggest advantages of Tangem Yield Mode is complete liquidity. You can withdraw your assets and any accumulated yield at any time. You can also send, swap, or sell tokens instantly anytime you want while your assets are in Yield Mode.
Aave’s liquidity pools are designed for instant access, and Tangem’s integration ensures immediate withdrawals whenever you choose to exit.
Note: If Yield Mode is enabled for a token, some decentralized exchange (DEX) providers may be unavailable for that token. You can still swap it through supported centralized exchange (CEX) providers and DEX providers.
Who is Aave and why is it used in Tangem Yield Mode?
Aave is one of the most reputable and secure DeFi protocols in the crypto ecosystem. Founded in 2017, it operates as an open-source, non-custodial liquidity platform built on Ethereum. Aave manages deposits and loans through smart contracts, allowing anyone to lend or borrow assets transparently and safely.
Today, Aave secures billions of dollars in total value locked (TVL) and is a trusted platform across the DeFi ecosystem.
In Tangem Yield Mode, Aave is the primary yield-generating protocol. When you enable the mode, your chosen assets are supplied directly to Aave’s liquidity pools. From there, they generate yield based on Aave’s variable interest rates, which are determined algorithmically by real-time supply and demand.
Tangem integrates Aave natively, so users don’t have to navigate decentralized apps or manage complex transactions themselves through WalletConnect. Everything happens within the familiar Tangem app interface.
What assets are supported in Tangem Yield Mode?
Tangem Yield Mode supports stablecoins and select tokens compatible with Aave, including USDT, USDC, and DAI, with more assets planned for future updates.
Where can I see all tokens available for Yield Mode and their reward rates?
To view the full list of tokens available for Yield Mode and their reward rates:
- Open the Tangem app and log in to your wallet.
- Tap or swipe up on the Crypto, news and more search bar at the bottom of the home screen.
- Open the Earn tab.
- In the All types filter, select Yield Mode.
You'll see the complete list of tokens available for Yield Mode, along with their APY (annual percentage yield).
How secure is Tangem Yield Mode?
Like Aave's contracts, Tangem’s smart contract has been audited and is designed for maximum transparency and safety. Read the audit report: Tangem Security Analysis by Pessimistic.
Tangem’s smart contract acts as a transparent bridge between the Tangem Wallet and Aave. It manages:
- Asset routing
- Yield calculation and distribution
- Withdrawal execution
The audit ensures that:
- No one can access or redirect user funds without explicit authorization from the wallet owner.
- All actions on the blockchain are transparent and verifiable, from supplying liquidity to claiming yield.
You can view the smart contract’s source code and compare it with the audited code published in our repository: https://github.com/tangem/tangem-yield-module-contracts.
How do I start earning yield?
To start generating yield on your assets in Tangem:
- Open the Tangem app.
- On the homepage, select a supported token (e.g., USDT, USDC, DAI, or other) and tap Learn more.
- Review the APY (Annual Percentage Yield) and tap Continue.
- Review the network fee. If you don't have enough native coins, you can pay the fee with the token you're supplying.
- Tap Supply assets.
- Confirm the transaction to sign it. For more details, see
How to confirm actions in your wallet. - Your tokens will be supplied to Aave to begin the yield generation process.
Once your assets are supplied, you’ll see a live section showing your accumulated yield. Your balance (e.g., USDT, USDC, or DAI) will show your assets converted into aTokens (e.g., aUSDT, aUSDC, or aDAI), which automatically accrue interest.
Note: If you pay the network fee with the token you're supplying, the fee is deducted from the amount supplied to Aave. For example, if you supply 100 USDC and the fee is 0.5 USDC, 99.5 USDC is supplied.
What is APY?
APY (Annual Percentage Yield) is the rate of return you generate on your crypto over a year, including the effect of compounding. In other words, interest is calculated not only on the initial amount but also on the interest already earned, allowing your balance to grow faster than with simple interest.
For example, a 5% APY means an asset could earn approximately 5% over a year if the rate remained unchanged, before any applicable fees.
Base APY is always variable and is calculated automatically by Aave's smart contract based on real-time supply and demand.
For assets with additional incentives, the app displays Current APY, which combines:
- Base APY: the yield rate from supplying your asset to Aave.
- Incentivised APY: the estimated annualized value of additional reward tokens distributed through Merkl.
Both components can change, so the APY shown for these assets is an estimate, not a guaranteed return.
Incentives are paid in a separate reward token rather than added to your supplied asset. Incentive programs are time-limited, and the estimated incentives APY depends on the reward token's price.
All APY values shown in the app, including incentives, are gross rates before Tangem's 15% service fee. Your net yield is about 85% of the displayed rate (for example, 5% APY ~ 4.25% net).
What are the fees?
Network fee
The network fee is a standard blockchain transaction fee that the user pays when enabling or disabling Yield Mode. This is a regular fee set by the blockchain itself, not by Tangem. The funds are sent directly to network validators, just like with any other transaction.
If you don't have enough native coins, you can pay the network fee with the token you're supplying. The fee is deducted from the amount supplied to Aave.
If incentives are about to expire, Tangem claims them for you automatically and covers the network fee.
Top-up network fee
The top-up network fee is deducted from the amount being supplied to Aave to cover the network costs that Tangem pays upfront on the user’s behalf.
When a user tops up the balance of a supported token in their wallet, the system automatically supplies the funds to Aave. During this process, Tangem pays the network transaction fee (for example, in ETH) in advance so the transaction can be executed.
After that, the paid network fee is converted into the same currency the user is supplying (for example, USDT), and the equivalent amount is deducted from the supplied funds.
Example
- A user tops up USDT on the Ethereum network.
- To supply these funds to Aave, Tangem must pay a transaction fee in ETH.
- Tangem pays this ETH fee upfront.
- When the USDT is supplied to Aave, Tangem deducts an amount of USDT equivalent to the ETH fee paid.
- This deducted amount is the top-up fee.
Maximum fee
The maximum fee is a protection mechanism during periods of high network congestion. Funds will only be supplied to Aave when the network fee falls below the specified limit.
Service fee
Tangem charges a 15% service fee on the yield and incentives you earn. The fee is automatically deducted from the generated yield and from incentives when they’re claimed. For example, if you’ve earned 10 reward tokens, you’ll receive 8.5. Your principal balance is never affected. The APY displayed in the app does not include this fee.
What is the minimum top-up?
The system dynamically calculates the minimum top-up amount. If your deposit exceeds the minimum top-up, it will be automatically supplied to Aave. If it’s below the threshold, it won’t be supplied until you add more funds.
Tangem automatically calculates the minimum top-up amount to keep network fees below approximately 4% of the transaction.
This ensures yield generation remains profitable within about one year. On high-fee networks (like Ethereum), making larger top-ups helps reduce the relative cost of fees.
What are incentives in Yield Mode?
Incentives are additional token rewards available for some assets supplied to Aave through Yield Mode. They are distributed through Merkl and earned alongside your base Aave yield.
Incentives are paid in the reward token specified for the incentive program, which may differ from the asset you supplied to Aave. Availability depends on the asset, network, and active incentive program. Not every asset in Yield Mode offers incentives.
How do I claim my incentives?
To claim your incentives:
- Open the Tangem app.
- On the homepage, select the token you supplied to Yield Mode.
- In the Yield mode block, tap Details.
- In the rewards banner, tap Claim.
- Review the claim details: the amount you'll receive, where the rewards will be sent, the network fee, and the 15% service fee. All available reward tokens are claimed at once.
- Tap Claim.
- Confirm the transaction to sign it. For more details, see How to confirm actions in your wallet.
Once the transaction is confirmed, the reward tokens appear in your wallet, and the claim appears in your transaction history as Incentive rewards claimed. It may take a few minutes for your incentives balance to update.
Note:
- You pay the network fee in the network's native coin (for example, ETH). If your balance doesn't cover it, the Claim button stays inactive until you top up.
- Very small amounts can't be claimed right away. Tangem claims them for you automatically before they expire and covers the network fee, so they won't be lost.
Can I withdraw my funds anytime?
Yes, you can disable Yield Mode in the Tangem app at any time.
Your funds always remain accessible, even while they are participating in Yield Mode. You can send, swap, or sell your tokens without disabling the mode — yield generation does not restrict how you use your assets.
To stop generating yield:
- Open the Tangem app.
- On the homepage, select a token (e.g., USDT, USDC, DAI, or other)
- Tap Yield mode.
- Tap Disabling yield mode.
- Tap Confirm.
- Confirm the transaction to sign it. For more details, see
How to confirm actions in your wallet.
Your assets will instantly return to your Tangem balance, and yield generation will stop.
What is the Yield Mode v3 upgrade?
Tangem is upgrading the smart contract behind Yield Mode to version 3. The upgrade adds several new features at once.
When will my module be upgraded?
Starting with Tangem app version 6.7, the upgrade will be applied when you next complete a transaction in the app.
What the upgrade includes
- Claim Merkl incentives. Some assets you lend on Aave through Yield Mode earn extra token incentives distributed through Merkl (a platform that distributes reward tokens). With this upgrade, you can claim these incentives in the app. For step-by-step instructions, see How do I claim my incentives?
- Wrap and unwrap ETH. You can convert ETH to Wrapped ETH (WETH) and back in the app. This prepares Yield Mode for ETH lending on Aave, which we plan to add soon.
- Liquidity Monitoring (coming later). This is an optional feature designed to temporarily withdraw funds from Aave pools when liquidity is extremely low and automatically supply them again when liquidity recovers. The feature is not available in this release. Liquidity Monitoring will require you to enable it separately when it becomes available.
Is the upgrade audited?
Yes. You can read the audit report here: Tangem Yield Module Security Analysis by Pessimistic.
