Many people lack a first line of defense when screening investment projects. In fact, just by measuring with the risk-free rate as a benchmark, you can instantly eliminate most garbage projects.

Let's first talk about what the risk-free rate is—it's the return you get when you bear virtually no risk, no fuss needed, and the market automatically provides you with that small yield. This thing is the passing line for all investment decisions; if it's below this line, taking on risk is just nonsense.

Currently, the typical risk-free rate looks like this: the 10-year U.S. Treasury yields around 4%-5%, and the actual returns on high-quality stablecoins are roughly 4%-6%. This is the baseline that the market openly states.

Let me ask you a question: if a project’s long-term return is around 5%, why would you gamble on its volatility, exit risk, liquidation risk, or regulatory risk? This calculation simply doesn’t add up.

Looking back at 2021 to 2022, DeFi projects flooded the market promising APYs of 50%, 100%, even 300%. People were thrilled. But what’s the reality? These promises came from token inflation—massive token issuance—while real cash flow was nearly zero. When token prices fell, those high yields vanished instantly. After accounting for inflation, investors might have actually lost -20%, -50%, or even -90%. These projects didn’t even come close to the risk-free rate.

Later, these players changed their story, claiming "stable 8%-12% returns." Celsius and BlockFi were just such scams. And what happened in the end? They all went bankrupt.

Here’s the painful truth: when the market’s risk-free rate is only 3%, what reason do you have to promise me a stable 10%? The math simply doesn’t add up.

So the simplest and most straightforward screening method is: any project must beat the risk-free rate first. If it can’t pass this hurdle, then no matter how good the story sounds later, it’s all nonsense. Those projects promising returns even lower than government bonds but with terrifying risks—what exactly are they selling?