Introduction - Why High Yield Isn’t Always Good News

Yield is not a reward.

It is a signal.

Most people encounter yield as a number - an APY glowing beside a pool, a vault, a strategy. The number feels like an invitation. Higher numbers suggest efficiency, opportunity, advantage. The interface frames yield as something offered, something earned, something that belongs to the participant who arrives in time.

That framing is convenient.
It is also incomplete.

Yield does not exist to make you money. It exists to make a system function under specific conditions. When a protocol pays, it is not expressing generosity. It is expressing need.

A system that does not require participation does not need to pay for it.

This is the first distinction that matters.

In DeFi, yield appears wherever coordination would otherwise fail. Capital must be available before demand arrives. Liquidity must exist before volume forms. Security must be maintained before trust is earned. Yield is how systems pull those conditions into place ahead of time.

It is not a bonus.
It is compensation for imbalance.

Once you see yield this way, the question changes. It is no longer how much does this pay? It becomes what behavior is this system trying to buy - and why now?

High yield is rarely a sign of health. It is a sign of urgency.

Urgency can come from growth.
It can also come from fragility.

The number does not tell you which.

That ambiguity is not accidental. It is structural.

Yield collapses many variables into a single figure: time, risk, dilution, volatility, opportunity cost. Interfaces flatten those dimensions into something comparable. That comparison creates the illusion of choice - as if all yield were the same thing, differentiated only by size.

It is not.

Two identical APYs can reflect completely different realities. One may be funded by organic demand for execution. Another may be funded by inflation pushed into the future. One may compensate for absorbed volatility. Another may compensate for being early in a system that cannot yet support itself.

The number does not explain this.
The system does.

This course exists to separate signal from seduction.

Not to convince you that yield is dangerous.
Not to tell you to avoid it.

But to make it legible.

Because once yield is legible, it stops feeling like opportunity and starts feeling like pressure applied in a specific direction. You begin to see who benefits if you participate, who pays if you don’t, and where the cost ultimately settles when conditions change.

This is not about morality.
It is about mechanics.

Every yield stream has a source.
Every source has a cost.
Every cost is borne by someone - immediately or later.

If you cannot name that chain, you are standing inside it without knowing where it leads.

In the sections that follow, I will not teach you how to earn yield. I will show you why it exists, how it is manufactured, when it aligns with real demand, and when it functions as a warning rather than a promise.

We begin with the simplest separation - one that dissolves most illusions on its own:

fees versus emissions.

Because once you understand the difference, the numbers stop speaking softly.

They start telling the truth.