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Yield has always been one of the biggest attractions in DeFi. From lending protocols to liquidity pools, opportunities to earn returns on digital assets are everywhere. But for most of DeFi’s history, users have evaluated these opportunities using a single metric: APY. The logic has been simple. Higher APY means better returns. Dashboards rank protocols by yield. Projects compete to advertise the biggest percentages. Liquidity quickly flows toward the highest numbers. However, this way of thi...

In early DeFi, APY was revolutionary. It was transparent. It was onchain. It was measurable in real time. But over time, APY stopped being a signal — and became a trap. Because when every protocol competes on one visible number, the system begins to optimize for the number… not for capital durability. And that’s where things break.APY Is an Output, Not a Risk ModelAPY tells you the projected annualized return based on current conditions. It does not tell you:How that yield is generatedHow sta...