DeFi Yield Types

Introduction to DeFi Yields

In the DeFi space, yields can be broadly categorized into two types: real yield and emission yield. Real yield refers to the actual return on investment generated by the underlying assets or protocols, whereas emission yield is the return generated by the distribution of new tokens or assets.

According to CryptoReportKit's DataLab, the total value locked (TVL) in DeFi protocols has grown from $10 billion in 2020 to over $200 billion in 2026, with yields playing a significant role in this growth.

Investors need to understand the difference between real yield and emission yield to make informed decisions and identify sustainable DeFi returns.

• Real yield: return on investment from underlying assets or protocols
• Emission yield: return generated by distribution of new tokens or assets
• TVL in DeFi protocols has grown from $10 billion to over $200 billion in 6 years

Identifying Sustainable Returns

To identify sustainable DeFi returns, investors should focus on protocols with strong underlying assets, stable revenue streams, and a clear tokenomics model. CryptoReportKit's Live Dashboards provide real-time data on DeFi protocols, enabling investors to track key metrics such as TVL, revenue, and yield.

For example, protocols like Aave and Compound have generated significant real yields through lending and borrowing activities, with Aave's TVL reaching $10 billion and Compound's TVL reaching $5 billion.

In contrast, emission yields are often associated with newer protocols that distribute tokens to incentivize participation, but these yields may not be sustainable in the long term.

• Strong underlying assets
• Stable revenue streams
• Clear tokenomics model
• Track key metrics with CryptoReportKit's Live Dashboards

Case Studies and Examples

A case study of the DeFi protocol, Yearn.finance, illustrates the importance of understanding real yield and emission yield. Yearn.finance generated significant emission yields in its early stages, but as the protocol matured, the emission yields decreased, and the real yields became more prominent.

According to CryptoReportKit's Sentiment tool, the sentiment around Yearn.finance has remained positive, with 80% of investors expressing confidence in the protocol's long-term sustainability.

This example highlights the need for investors to look beyond emission yields and focus on the underlying fundamentals of a DeFi protocol to identify sustainable returns.