Recently, I’ve been looking at the APY of yield aggregators, and someone asked in the group, "Is it just put in and automatically compound to earn passively?"

When I was a beginner, I really thought so too: the contract is smart, and the money grows on its own.
My current understanding is that APY is actually the result of many layers of contracts + routing, with intermediary risks like lending pools, swaps, and re-staking involved.
To put it simply, it’s not “earnings,” but “outsourcing your risk to a series of people and code.”

When I analyze projects, I’m most afraid of seeing just a big number with strategy paths briefly mentioned underneath, especially when market fluctuations or liquidity withdrawals cause the returns to suddenly change.
The same logic applies to blockchain games with inflation + studios + coin price spirals collapsing:
It looks great on the surface, but behind the scenes, it all depends on continuous new buyers and the system not breaking down.
Anyway, I now prefer to first map out the cash flow and dependencies, clearly see “who owes whom,” and then decide whether to get in.