Unit 3 · Level 3 · Stablecoins & yield
Staking, farming, 'real yield'
Crypto marketing loves three words. 'Staking': locking coins to help secure a proof-of-stake chain, earning issuance plus transaction fees. 'Yield farming': hopping between pools that shower deposits with token emissions. 'Real yield': the newer badge meaning rewards paid from actual protocol revenue, often in ETH or stablecoins. The label says 'yield' on all three, but what's inside the tin is completely different.
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What you get asked
Decode the marketing terms:
The label tells you the activity; only the source tells you the quality. Always translate the buzzword back to fees, interest, or emissions.
What's usually behind a farm advertising 300% APY?
The 300% is denominated in a token being printed at full speed. Farmers harvest and dump it daily, so the real return is usually a fraction of the sticker, sometimes negative after the token bleeds.
'Real yield' means rewards paid from protocol ___, not from printing tokens.
The term became a badge of honor after 2022's farm collapses. It signals 'we pay you from money we actually earned'.
Staking rewards on a proof-of-stake chain like Ethereum come from…
Part real (users' fees), part print (issuance that dilutes non-stakers). Honest yield analysis means seeing both halves at once.
The classic 'farm and dump' cycle ends how?
Print-to-pay attracts mercenary money that farms, dumps, and leaves. When the music slows, the APY and the token price usually dive together. Spot the cycle early, or better yet, watch it from the outside. 🐜
The rest of this unit
Every APY has a source: fees, borrowers, or freshly printed tokens.