Yield in DeFi Is Easy to See, But Harder to Understand
One of the reasons decentralized finance became popular so quickly is how visible everything is. Open a DeFi dashboard and you immediately see the most attractive number: APY. It’s simple, clear, and easy to compare. Users naturally move their capital toward the highest percentage. But while yield in DeFi is easy to see, it is often much harder to truly understand. Behind every yield number is a structure of strategies, risks, and market mechanisms that determine whether that return can actua...
Yield in DeFi Is Easy to See, But Harder to Understand
One of the reasons decentralized finance became popular so quickly is how visible everything is. Open a DeFi dashboard and you immediately see the most attractive number: APY. It’s simple, clear, and easy to compare. Users naturally move their capital toward the highest percentage. But while yield in DeFi is easy to see, it is often much harder to truly understand. Behind every yield number is a structure of strategies, risks, and market mechanisms that determine whether that return can actua...
The APY Trap: Why DeFi’s Favorite Metric Can Be Misleading
In decentralized finance, APY has long been the number everyone watches. Protocols display it prominently on dashboards, influencers highlight it on social media, and users often move capital toward whichever opportunity shows the highest yield. At first glance, this behavior seems logical. If one strategy offers 20% APY and another offers 8%, the higher number appears to be the better opportunity. But experienced participants in institutional DeFi understand something important: headline APY...
The APY Trap: Why DeFi’s Favorite Metric Can Be Misleading
In decentralized finance, APY has long been the number everyone watches. Protocols display it prominently on dashboards, influencers highlight it on social media, and users often move capital toward whichever opportunity shows the highest yield. At first glance, this behavior seems logical. If one strategy offers 20% APY and another offers 8%, the higher number appears to be the better opportunity. But experienced participants in institutional DeFi understand something important: headline APY...
