One thing I’ve noticed in DeFi is how people get carried away by big APYs. You log into a protocol, it flashes 50%, 100%, even 200% yield, and immediately it feels like you’ve struck gold. But the question nobody really asks is: where’s that money coming from?

In most cases, it’s not magic. It’s just more tokens being printed and distributed to keep people around. Basically, dilution, but packaged nicely as “rewards.” And we’ve already seen how that ends. Anchor Protocol on Terra is the perfect example. They promised 20% “stable” yield on UST, and it sounded too good to be true. Turns out it was. They were just subsidizing payouts until the whole thing collapsed, and when it did, billions disappeared with it.

Even now, plenty of liquidity mining programs run the same playbook. Curve pays out CRV, Balancer does the same with BAL. People farm the rewards, dump them on the market, and move on. When emissions slow down, liquidity dries up. It’s a cycle we’ve seen too many times.

Now compare that to what I’d call real yield. Look at GMX, stakers actually get a share of trading fees from the platform. If more traders come in, rewards go up. MakerDAO too, they’ve started earning revenue from U.S. Treasuries and real-world assets, and that income strengthens DAI and MKR. Even lending platforms like Aave and Compound are closer to sustainable because the yields come from people genuinely borrowing and paying interest, not just endless token printing.

The thing is, flashy APYs will always get more attention because they look exciting. But if the “yield” is just freshly minted tokens, you’re not really earning, you’re simply front-running inflation. When it stops, the exit is always ugly.

For me, anytime I see crazy yields in DeFi, I ask: is this real revenue, or just dilution disguised as rewards? The difference is what separates something that can last years from something that burns out in months.