# Staking and Zem Yield

Index token owners will be able to earn on their token and generate real yield.

Typical token staking works by generating ponzinomic returns. If you stake their utility-less token for more utility-less tokens, there's tons of token inflation, which in turn creates constant selling pressure on the token long-term crashing the price and eroding any return, making the real staking returns negative. This is the case for 90%+ of tokens which have all dropped in price after introducing staking.&#x20;

If you've read our [ethos](https://zem-finance.gitbook.io/zem-finance-docs/zem-finance-intro) it's easy to understand that we truly believe in building successful financial products. We've generated a roadmap on our long-term plan to always constantly be generating real yield for staking:

**Q1:**

* Yield is paid for by our team funds. The % of token supply distributed to stakers will be bought up by the team on the open market to mitigate any selling pressure created by staking yield. The tokens bought will be used to compensate team members on a 3-year-long vesting cycle, having minimal impact on the market even if they decide to sell.

**Q2 and onwards:**

* When the Zem token launches, the yield for all Zem Finance index tokens will switch to our real yield generation model called "Zem Yield". Zem Yield uses a combination of the small management fee we collect from index tokens, platform fees, and the Zem token's tokenomics to provide yield that will not hurt the price of any Zem Finance assets. This model is the reason for launching the Zem token and will prove to be one of Zem Finance's biggest selling points.

For times of stress, we have also set aside a sizable amount of capital to subsidize any issues with yield generation by simply market-buying assets to mitigate inflation from staking yields.&#x20;
