Top 5 Yield Myths Debunked.
1. A liquid yield-bearing asset is a safer one.
Not necessarily.
Liquidity is an important part of safety. Being able to exit a position quickly reduces risk, while limited liquidity can make even a relatively safe investment more vulnerable under stress.
But liquidity alone doesn't tell you how safe an asset is. You still need to understand what's backing it and the risks involved.
A liquid asset isn't automatically a safe one.
2. More positions mean more diversification.
Not necessarily.
If several positions ultimately depend on the same market conditions, adding more of them doesn’t meaningfully diversify the risk. What matters is whether the underlying exposures behave differently when markets come under stress.
3. APY is the best way to compare yield-bearing stablecoins.
Quite the opposite.
APY is the output of the structure, not a description of it. The same 7% can come from fundamentally different economic activity, with very different risk underneath.
If you compare the rates before understanding the balance sheets producing them, you’re starting at the wrong end.
4. If the underlying assets are safe, the product is safe.
Not quite.
The assets are only part of the risk structure. What also matters is what happens when an allocation underperforms.
This is something we think about a lot building
@OseroHQ on top of Sky. Capital requirements, first-loss capital and protocol-level reserves create different layers of protection between an individual allocation and the broader system.
The structure around the assets matters too.
5. Stablecoin yield is becoming a commodity.
Only if you think the yield is the product.
A 6% rate can be replicated. The balance sheet producing it is much harder to replicate.
That’s where the real differentiation sits: not in the headline APY, but in how efficiently you can generate it at scale without changing the risk profile.
The difference between 6% and 6.5% is 50 bps. The difference in how they got there can be an entirely different risk profile.