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Base vs reward APY

Yield & returns

Base APY comes from organic borrowing demand or trading fees. Reward APY comes from token emissions and is contingent on the incentive programme continuing.

Base yield is what survives when incentives stop. It is the honest floor of a pool's return.

Reward yield is real income while it lasts, but it is paid in a token whose price you must sell into — and emissions schedules are typically finite and revocable.

A 14% pool that is 2% base and 12% rewards is a different instrument from a 6% pool that is entirely base.

Why it matters

Sizing a position off reward APY is how holders end up locked into a pool that yields 1% next quarter.

See it in action

Related terms

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