Tassat secured a U.S. patent for its “Yield-in-Transit” (YIT) technology, a development aimed at removing idle capital during settlement. The patent underpins Lynq, a permissioned settlement network that began operations in July 2025, positioning YIT as a mechanism to generate continuous yield while transfers complete on-chain.
The patent protects a method that allows assets to accrue yield while they move between parties during the settlement period, where settlement is the final transfer and legal recording of an asset between counterparties. YIT embeds yield-generating logic into the transit phase so that value is produced before settlement finality is reached, aligning economic incentives with the time assets spend in motion.
Lynq implements this approach on a high-throughput layer-1 blockchain, where trades and transfers are paired with on-chain yield opportunities tied to short-duration instruments. Lynq operates as a permissioned network built on the Avalanche blockchain and integrates regulated market infrastructure, launching with a consortium that includes a regulated broker-dealer services arm, institutional asset managers, banks, and trading firms—specifically entities such as tZERO, Arca Labs, U.S. Bank, FalconX, Galaxy, Crypto.com and Wintermute.
The network targets institutional workflows by combining custody and broker-dealer capabilities with tokenized instruments, including U.S. Treasury fund shares, to deliver yield during settlement without exposing participants to unchecked public-chain risk. Regulated, permissioned access is a core design choice intended to align the product with existing compliance frameworks, routing authoritative custody and execution services through regulated entities while leveraging on-chain execution for settlement finality and continuous yield calculation.
Regulatory landscape, market implications, and workflow impact
The YIT patent crystallizes an operational pattern that regulators and compliance teams must evaluate, as on-chain yield during transit raises questions about custody, interest attribution, and settlement finality. The network’s reliance on regulated participants provides a compliance pathway, though broader adoption will likely require clarified rules on how on-chain yield is classified, reported, and supervised, with expected dialogue around registration, custody obligations, and the accounting treatment of yield earned mid-transfer.
By converting settlement latency into productive yield, YIT intends to reduce the opportunity cost of traditional multi-day settlement cycles and deepen liquidity in tokenized cash-like instruments and real-world assets. For product and operations teams, that implies changes to treasury strategies, reconciliation processes and counterparty risk models, while compliance groups must update controls to monitor yield attribution and ensure KYC/AML and custody responsibilities remain intact as assets earn while in motion.
Stakeholders will watch uptake among regulated broker-dealers and the development of supervisory guidance on on-chain yield attribution as the next test of the concept’s operational and regulatory viability.
The patent for Yield-in-Transit formalizes a technical approach to capture yield during settlement and integrates it within a permissioned, institution-focused network. Its commercial rollout via Lynq and the involvement of regulated market participants create a replicable model, underscoring that regulators and institutional adopters must reconcile on-chain yield mechanics with existing custody and settlement rules.
