> For the complete documentation index, see [llms.txt](https://sovavault.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://sovavault.gitbook.io/docs/sova-for-users/strategies/bitcoin-yield-by-mosaic.md).

# Bitcoin Yield by Mosaic

### Overview

Sova's **premier strategy** - developed in partnership with [**Mosaic Capital**](https://msc.xyz) - brings predictable Bitcoin-denominated yield to crypto holders without requiring them to become miners or exit the BTC ecosystem.

It's a simple, **institutional-grade approach** to earning BTC yield backed by the most essential input in Bitcoin production: **hashrate**.

***

## How It Works

This strategy is powered by a financial structure called a **Physically-Backed Forward (PBF)** - a contract that allows Sova (via Mosaic) to finance Bitcoin miners in exchange for discounted future BTC delivery.

### Flow of Capital

#### 1. Deposit

**You deposit BTC or USDC** into the Mosaic Bitcoin Yield vault

#### 2. Hashrate Purchase

**Mosaic purchases future hashrate** from public and top-tier miners at a discount

#### 3. BTC Delivery

**BTC is delivered back over time** as the hashrate is mined and settled

#### 4. Value Accrual

**Your tRWA token value increases** based on the discounted BTC you're entitled to

#### 5. Redemption

**You redeem your position** and receive BTC or USDC (your choice), net of fees

***

## Why This Strategy Stands Out

| **Feature**                    | **Value Proposition**                                |
| ------------------------------ | ---------------------------------------------------- |
| **Bitcoin-native yield**       | Earn BTC-denominated returns from real mining output |
| **Fully structured & audited** | Institutional-grade contracts, no operational risk   |
| **Miner diversification**      | Mosaic sources from multiple miners to reduce risk   |
| **Vault transparency**         | On-chain NAV updates + off-chain position reports    |
| **Non-custodial + compliant**  | KYC required, assets secured via regulated partners  |

> 💡 **Perfect for HODLers**
>
> This strategy is ideal for long-term BTC holders looking to **compound BTC rather than sell it**.

***

## Example Scenario

| **Action**                      | **Outcome**                                 |
| ------------------------------- | ------------------------------------------- |
| **Deposit 1 BTC**               | Allocated into discounted forward contracts |
| **BTC price at entry: $30,000** | Value locked into discounted hashrate       |
| **After 6 months: NAV +8%**     | tRWA token reflects 1.08 BTC in value       |
| **Redeem in BTC or USDC**       | Choose payout form at redemption time       |

***

## Key Parameters

| **Parameter**        | **Details**                           |
| -------------------- | ------------------------------------- |
| **Target Yield**     | **6%–12%** annually (BTC-denominated) |
| **Redemption Cycle** | **Monthly**                           |
| **Lock-Up Period**   | **90 days**                           |

***

## Who Should Use This Vault

This strategy is **best suited for**:

🧡 **Bitcoin holders** who want passive income without becoming miners

🏢 **Crypto treasuries** looking for BTC-native yield

⏰ **Users comfortable** with moderate lock-up periods in exchange for higher returns

🏛️ **Institutions** seeking structured BTC exposure with transparent execution

> 🚀 **Bottom Line**
>
> Turn your Bitcoin into a yield-generating asset while staying true to the BTC ecosystem.