Unit 3 · Level 3 · Stablecoins & yield
Unit review: follow the yield
Every DeFi yield comes from trading fees, borrow interest, or token emissions. The first two are earned; the third is printed. 'Staking', 'farming', and 'real yield' are labels; the source is what matters. veTokenomics showed that yield often flows to whoever controls emissions, bribes included. And the checklist stands guard: source, token, dilution, costs, sizing. Terra's ~$40B lesson in one question: where does it come from?
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What you get asked
The only three real sources of DeFi yield are:
Every APY decomposes into those three. Anything that can't be traced to them is either hidden risk or hidden lies.
Yield paid from token ___ dilutes holders instead of earning revenue.
Printing isn't earning. Emissions can bootstrap a young protocol, but as a permanent yield source they're a slow leak dressed as a fountain.
Match the unit's big ideas:
Yield quality runs from earned to printed to politically captured, and the label on the vault rarely tells you which.
Anchor's 20% on UST was ultimately revealed to be:
The yield was real until the subsidy pot wasn't. Roughly $40B evaporated in a week in May 2022. It was the most expensive skipped 'where does it come from?' in history.
You find a vault paying 15% on stablecoins. Your FIRST move:
Fifteen percent on 'stable' money means someone is paying premium rent or someone is printing. Find out which before a single euro moves. That habit is the whole unit. 🐜
The rest of this unit
Every APY has a source: fees, borrowers, or freshly printed tokens.