Backed yield refers to the interest or return gained from assets that are supported or secured by other assets. In the realm of cryptocurrencies, this often involves projects that offer a yield or reward for holding a particular token while using other assets as collateral.

For example, a user might deposit a cryptocurrency into a lending protocol, where their assets are utilized to provide loans to other users. In return, the lender earns interest on their deposited assets.

This creates a yield backed by the underlying value and activity of the collateralized assets. The concept is attractive to investors seeking passive income, as it allows them to maximize their returns without actively trading.

However, it’s essential to consider the risks involved, such as market volatility and the potential for loss if the underlying assets decrease in value. As with any investment, thorough research and understanding are crucial before participating.