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DeFi Yields Are a Lie—Here’s What You’re Really Earning
- The article addresses the inaccuracies in reported DeFi yields and emphasizes the importance of understanding actual yields over stated yields.
- The author offers a mini-course outlining various aspects of DeFi, discussing liquidity pools, lending, staking, farming, cross-chain DeFi, derivatives, security, investments, and more.
- The article highlights the unreliability of sources like on-chain aggregators, dApp websites, and influencers for DeFi yield data due to potential manipulations and biases.
- It explains the significance of considering actual Annual Percentage Rate (APR) over Annual Percentage Yield (APY) in DeFi for accurate profit and loss calculations, especially in volatile token scenarios.
- The author presents three different approaches to managing DeFi rewards: investment approach, diversification approach, and stabilization approach, each with its own risks and benefits.
- Insights are shared on typical APR ranges for conservative, moderately aggressive, and aggressive DeFi strategies, emphasizing the importance of balancing risk and yield.
- The article includes yield analysis findings for stablecoins and native tokens, illustrating actual yields compared to reported high yields in the market.
- Various DeFi platforms such as staking pools, lending platforms, and yield aggregators are mentioned to provide examples of different yield rates in the market.
- Factors affecting yield fluctuations in DeFi are discussed, including network novelty, token wrapping, market cycles, and cross-chain operations.
- The article touches on why many people believe in high DeFi yields, highlighting reasons such as newcomers to crypto, project promotions, and influencer practices.
- Lastly, the Risk Ladder concept is introduced as a guide for understanding different risk levels in DeFi strategies and the importance of mastering basic concepts before advancing to higher-risk tactics.
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