Yield in Digital Assets: Where It Comes From

Staking rewards, lending spreads and market-neutral strategies - and the risk behind each source of return.

Every yield has a payer

Ask who funds the return. Staking is paid by protocol issuance and fees. Lending yield is paid by borrowers. Market-neutral yield is paid by the spread between related instruments.

Unsustainable sources

Yield funded by token emissions alone dilutes holders and typically decays. Treat headline rates above prevailing market levels as a risk signal.

Risk-adjusted comparison

Compare yields only after adjusting for lock-up, counterparty exposure, smart contract risk and the liquidity of the underlying collateral.

Key takeaways

• Every yield has a payer: Ask who funds the return.
• Unsustainable sources: Yield funded by token emissions alone dilutes holders and typically decays.
• Risk-adjusted comparison: Compare yields only after adjusting for lock-up, counterparty exposure, smart contract risk and the liquidity of the underlying collateral.

Risk disclosure

This article is educational content published by Vaultero Capital and is not investment advice, a recommendation, or an offer to buy or sell any asset. Digital assets are highly volatile and you may lose some or all of the capital you commit. Projected or historical returns are not a reliable indicator of future performance. Consider your objectives, time horizon and tolerance for loss, and seek independent professional advice where appropriate. Full terms are set out in our risk disclosure.