# Mechanics **How does Solido Grow generate yield?** Solido Grow earns yield primarily through the liquidation of under-collateralized Troves within the Solido Cash protocol. When such a Trove is liquidated, the protocol captures a portion of the liquidated collateral, converts it into $CASH, and distributes it to $bCASH holders, increasing the exchange rate between $bCASH and $CASH. **How is the yield distributed to $bCASH holders?** Yield is reflected in an increasing exchange rate between $bCASH and $CASH. This means your $bCASH balance stays constant, but its value in terms of redeemable $CASH grows over time. This non-rebasing model avoids gas costs and ensures seamless compounding. **What determines the amount of yield I can earn?** Yield depends on: * **Frequency of liquidations** – more frequent liquidations generate more protocol income. * **Size of liquidations** – larger Troves being liquidated result in more collateral captured and distributed. * **Market conditions** – volatility may increase the likelihood of under-collateralized Troves and liquidation events. **How and why does yield fluctuate?** Since yield depends on liquidation events, it is variable and cannot be predicted. In volatile markets, liquidation frequency and size typically increase, leading to higher APY for $bCASH holders. During calm market periods with fewer liquidations, yield may decrease. Users should understand this is not a fixed-income product, and returns will vary based on ecosystem activity. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://solido-money.gitbook.io/solido/grow-protocol/mechanics.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.