DeFi yields and trust scores

What a DeFi yield actually is

Every number on this page is someone paying you to take a risk. The question is never whether the yield is real, because it usually is. The question is what you are being paid for, and whether the payment is worth it.

There are only three places a DeFi yield comes from. Interest, where a borrower pays to use your asset, which is the lending markets. Fees, where traders pay to use the liquidity you supplied, which is the pools. And emissions, where a protocol prints its own token and hands it to you for showing up. The first two are revenue. The third is marketing, and it stops when the budget does.

The score below cares a great deal about which of the three you are looking at.

How the score is built

Six components, scored out of 100, every one of them a number rather than an opinion. Hover any score in the table and it will show you its own breakdown.

Component	What it measures	Weight
Depth	Pool TVL, on a log scale from $1M to $10B. Depth is not safety, but a shallow pool is easier to move and easier to leave.	22
Track record	How many days the pool has actually run, and how long the protocol has been listed. Survivorship is the cheapest evidence there is.	22
Yield quality	Whether the number is plausible: its level, how much is emissions rather than revenue, how volatile it has been, and whether it agrees with its own 30-day mean.	20
Audit status	Whether an audit is on record at the source. Not a judgement of the audit, only of whether one exists.	13
Chain	The TVL of the chain settling the position, on a log scale. A yield is only as good as the chain underneath it.	13
Exposure	Single-asset, a stable pair, or a volatile pair carrying impermanent loss.	10

The caps

Some facts should hold a score down no matter how well a pool does elsewhere, so after the six parts are totalled a ceiling applies:

• Pays over 100% holds the score to 44, and over 50% holds it to 54, below the line of 55 the header tiles use. A yield that high is not a better version of a normal yield, it is a different thing.
• Flagged an outlier by the source holds it to 54.
• Impermanent loss holds it to 74, so no volatile liquidity pool reaches the Strong tier however large it is.
• No audit on record holds it to 64.

The number is shown with a plain tier beside it, so the table can be read at a glance:

How to read the scores

The four figures in the header are the highest APY on each asset that scores 55 or more, pays for a single-asset deposit rather than a liquidity pair, and holds at least $10M. Higher numbers exist further down the table; they are further down for a reason.

Sort the table by score and the pattern is the whole page in one move: APY rises steadily as the score falls, which is exactly what it should do. That gap is the risk premium, and it is the price of everything the score is measuring.

What it means in practice is that a yield well above its score's median is not a bargain anyone else has missed. It is a pool being paid more because something about it is worse, and the useful question is which of the six components knows why. Hover the score and find out.

Leveraged yield farming

Leveraged yield farming means borrowing against a deposit and putting the loan into the same pool. The pool then pays on more money than you own. Switch the table to 2x or 3x and every pool that can be levered shows what it earns once the loan is paid for.

Here is $1,000 at 3x. You put up $1,000 and borrow $2,000, so $3,000 sits in the pool. If the pool pays 5%, that is $150 a year. If the loan costs 3%, that is $60 a year. You keep $90, which is 9% on your $1,000.

• When it helps: Only while the pool pays more than the loan costs. When the borrow rate is higher, each step up in leverage makes the yield worse, and the table shows it in red.
• Which loan: The plain coin the pool's token tracks, such as ETH against staked ETH or USDC against a dollar savings token. The page picks the cheapest audited lending market on the same chain with at least $1M free to lend.
• Which pools: Single-coin pools whose token a lending market takes as collateral. That covers lending deposits, staking tokens, dollar savings tokens and tokenised treasuries. Pools of two coins that move are left out, because their liquidation depends on two prices at once.

The three risks

• Liquidation: The lending market sells your collateral if its value falls too far against the loan. The Liquidated after column shows how far. When you owe the same coin you put up, a price move cannot trigger it.
• Rates move: The pool's APY and the borrow rate both change all the time. A loan that costs 2% today can cost 8% next week, and at 3x you pay it on twice your own money.
• A slip between two coins: Staked ETH usually trades close to ETH, and a dollar token close to a dollar. When one slips, a position borrowed in the other can be liquidated while the wider market barely moves.

For a leveraged trade on an exchange, the liquidation price calculator works out the price where it closes.

What this cannot tell you

This is the important section, and it is longer than the one above it on purpose.

• It does not measure smart-contract risk: Nothing here reads the code. The failures that have cost people the most money in DeFi were code failures in large, audited, deeply liquid protocols, and every one of them would have scored well on this page the day before.
• It does not measure admin keys or governance: Who can upgrade the contract, who can pause it, and who can drain it are the questions that matter most, and none of them is a number in a feed.
• It does not measure oracle design, which is the single most common attack surface in lending markets.
• An audit on record is not a clean bill of health: The score knows only that a document exists. It has not read it, and neither has it checked whether the code deployed today is the code that was audited.
• Depeg risk is not scored: A stablecoin pool is marked as one, but nothing here estimates the chance the stablecoin stops being stable.
• An APY is a snapshot, not a promise: It is the current rate annualised. Rates move continuously, and the 30-day column is there to show you how much this one has.
• A score is relative, not absolute: A score in the 90s means the best-measuring pool in a market that is young, largely unregulated and has lost users billions. It does not mean safe.
• Leverage figures are a model: They assume you can post the token at the market's listed loan-to-value and borrow at today's rate. Some markets cap how much of one coin can be borrowed, and some lend more against coins that track each other. Check the market itself before you open a position.