Private Yield
Private Yield lets users put their assets in private balances to work to generate yield. Funds move from a user's private Merces account into a vault that accrues yield over time — without exposing positions, amounts, or counterparty relationships onchain.
Merces is TACEO's confidential token transfer system. Balances are held as secret shares across a network of MPC operators, with state transitions verified onchain via CoSNARKs. See Private Payments for the full picture.
Why this is hard today
Public DeFi yield broadcasts every position. Anyone can read a wallet's allocations, infer strategy, copy or front-run trades, and reconstruct counterparty graphs. For institutions, treasuries, and any user that values strategic privacy, that exposure is one of the reasons they aren't onchain at all.
The two existing paths each fail in their own way:
- Move to a private chain. Forces migration off to a new chain and away from the assets, liquidity, and integrations that matter.
- Use a privacy mixer. Obscures flows but doesn't compose with regulated counterparties or give institutions a defensible compliance story.
How Private Yield addresses this
Private Yield adds a vault layer on top of Merces private balances. The vault is an ERC-4626 contract whose internal balances are held as secret shares across the TACEO MPC network, exactly like private transfer balances. No balance and yield accrual is ever written in plaintext to the chain.
A user's position is represented as vault shares (vUSDT). Those shares increase in value over time as yield is added to the vault, but the share count and its underlying value remain private.
What it looks like in practice
- A user holds private USDT in their Merces account.
- They deposit into the private vault: their private USDT balance decreases, their private vUSDT share balance increases.
- Over time, the vault accumulates yield. The redemption value of each vUSDT share grows.
- When the user redeems, their vUSDT shares are burned and USDT is credited back to their private Merces balance — including any accrued yield.
At no point is a plaintext balance or share count visible onchain or to any single party.
Current yield model
The vault currently simulates yield by periodically adding assets to the vault pool, resulting in a fixed 7.5% APY for all depositors. Share value grows uniformly — users earn proportionally to their private share of the total vault.
Components
| Component | Description |
|---|---|
| Private balance | Standard Merces private account — funds before and after yield |
| Vault contract | ERC-4626 contract that issues vUSDT shares and holds the yield pool |
| MPC network | Holds vault balances as secret shares across three operators |
| Gateway | Accepts vault deposit/withdraw requests and coordinates the MPC network |
Where to go next
| Goal | Start here |
|---|---|
| Integration and usage of Private Yield | Quickstart |
| Understand the deposit and withdrawal flow | How it works |