# Yield Generation Mechanisms

City Protocol dynamically allocates capital across various yield-generating opportunities:

{% tabs %}
{% tab title="DeFi Liquidity Incentives" %} <mark style="color:$primary;">**DeFi Liquidity Incentives**</mark>

Vault strategies route a portion of assets into liquidity pools (Uniswap, Aerodrome) or lending markets (AAVE, Compound), capturing swap fees, gauge rewards, and interest.
{% endtab %}

{% tab title="Protocol Native Incentives" %} <mark style="color:$primary;">**Protocol Native Incentives**</mark>

Vaults integrate directly with incentive programs, depositing into newly launched yield-bearing tokens or participating in loyalty point systems, unlocking bonus distributions from governance or ecosystem grants.
{% endtab %}

{% tab title="Restaking Rewards" %} <mark style="color:$primary;">**Restaking Rewards**</mark>

Through restaking protocols, stakers accept additional slashing conditions on their staked assets in exchange for rewards from protocols whose state is secured by stakers' assets.
{% endtab %}
{% endtabs %}


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