Resource Notes
Use, understand, and apply the model
Key takeaway
DeFi yields range from 3.5% (ETH staking) to 40%+ (high-risk AMM LP positions). Lending protocol stablecoin yields: 4-9% APY. Risk-adjusted comparison: Aave USDC at 6% with 0.98 risk factor = 5.88% risk-adjusted APY; new protocol at 25% with 0.60 risk factor = 15% risk-adjusted APY. Compounding matters: $10,000 at 6% APY compounded daily for 2 years = $11,275.
Yield Reference (as of Mid-2025)
Lending Protocol Yields (Stablecoin Deposits)
Reference Table
| Protocol | Chain | Current Range | Risk Profile |
|---|---|---|---|
| Aave V3 (USDC) | Arbitrum | 4–8% APY | Low (blue chip) |
| Compound V3 (USDC) | Ethereum | 4–7% APY | Low (blue chip) |
| Morpho (USDC) | Ethereum | 5–9% APY | Low-medium |
| Spark Protocol (DAI) | Ethereum | 5–8% APY | Low (MakerDAO) |
AMM LP Yields (ETH/USDC)
Reference Table
| Protocol | Fee Tier | Typical APY | Impermanent Loss Risk |
|---|---|---|---|
| Uniswap V3 (narrow range) | 0.05% | 15–40% | High |
| Uniswap V3 (wide range) | 0.30% | 5–15% | Medium |
| Curve (stablecoin pair) | 0.04% | 3–8% | Very Low |
Liquid Staking Yields
Reference Table
| Protocol | Asset | Current APY | Risk |
|---|---|---|---|
| Lido (stETH) | ETH | ~3.5% | Low (consensus layer) |
| Rocket Pool (rETH) | ETH | ~3.8% | Low (decentralized) |
Compound Interest Calculator
Formula: Final Amount = Principal × (1 + APY/n)^(n×t). Where n = compounding frequency per year, t = time in years. Example: $10,000 in Aave at 6% APY, compounding daily (n=365), 2 years = $10,000 × (1 + 0.06/365)^(365×2) = $10,000 × 1.1275 = $11,275.
Risk-Adjusted Yield Comparison
Reference Table
| Strategy | Nominal APY | Risk Factor | Risk-Adjusted APY |
|---|---|---|---|
| Aave USDC (Arbitrum) | 6% | 0.98 (audited, 2yr history) | 5.88% |
| New protocol USDC | 25% | 0.60 (unaudited, <6mo old) | 15% |
| ETH staking | 3.5% | 0.99 (protocol consensus) | 3.47% |
| Uniswap V3 ETH/USDC | 20% | 0.85 (IL risk + protocol risk) | 17% |