Recently I’ve been looking at the APY of yield aggregators and thinking it looks pretty attractive, but my first reaction isn’t “how much I can earn”—it’s “where does this yield actually come from.” To put it simply, a lot of it is just moving your money back and forth across several contracts: one layer of deposit and borrowing, a second layer of hedging/incentives, and then stacking automatic reinvestment. On-chain, it shows one number, but behind the scenes it’s really a string of permissions, upgrade switches, external protocols, and liquidation lines.

Lately, I’m not the type to stop at comparing on-chain yield products with RWA and U.S. Treasury yields—I look at those too—but what I care more about is “who the counterparty is”: is it based on the rules of government bonds, or is some multi-signature + upgradeable contract propping it up? In any case, my own approach is that if the APY is high, I first treat it as unstable, then check whether the contract can be upgraded, where the funds are flowing, and where the maximum exposure is. I add more only after I can understand it a bit; if I can’t, then I just pass.

I don’t need to be understood—I just want to draw the boundaries clearly: it’s okay if the yield is a little lower, as long as I can sleep soundly. If I’m wrong, I’ll admit it too, but don’t let me blow up somewhere I didn’t even see coming.