Yield
How token incentives affect yield
Separate organic return from tokens the protocol printed.
- 01Organic interest or fees
- 02Emitted token
- 03Sell pressure
- 04Net of both
A subsidy has a schedule
Incentive tokens are paid to attract deposits. They are not the same as borrower interest or trading fees. When the schedule ends, the rate that included them ends with it. Points that might become a token later are even less like cash.
Supply and exit
If every depositor is paid in the same token, the exit is into a market that those depositors may all want to sell. The vault can look liquid in the deposit asset and illiquid in the thing that made the APY large.
Presentation rule
Show incentive contribution separately, or mark it unknown. Do not fold it into a single green number.
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