Don’t Get Catfished by DeFi Yields

In DeFi, “APY” (annual percentage yield) can be a confusing metric and sometimes outright deceiving. 

Let’s take an example: A vault might advertise a 30% APY, but after you deposit and go to withdraw months later, you realize you earned about 1/4 of that. What happened? 

At vaults.fyi, we've built our reputation by using onchain data to close the gap between advertised APY and reality..

The Mirage of Current APYs

Most DeFi frontends display current APY—a snapshot of the yield at this exact moment (the last Ethereum block). It’s an eye-catching, but often unreliable, number. 

When platforms show these numbers without context, they're not lying, but they're also not giving you a complete picture of past performance.

For example, as pointed out in an X thread by Gauntlet’s Nick Cannon (@inkymaze):

• A user might borrow roughly $135–$145 million in USDC from Aave at midnight UTC on weekdays, then send the funds between wallets to boost supply rates temporarily—this creates an APY spike that doesn’t reflect actual long-term yield.
• Another user looking at the vault’s interface could see an inflated current APY based on a single block snapshot (e.g. the last block of the previous day). Still, when you annualize the actual 7-day returns, the effective APY may be significantly lower.
• Similar to high rewards that get diluted as TVL grows, these artificial borrowing patterns can mislead yield optimization algorithms, resulting in discrepancies between the displayed rates and the realistic returns users would earn.

At vaults.fyi we take a different approach, rooted in historical, verifiable blockchain data.

Real Money Deserves Real Data

We believe lending and staking decisions should be based on what actually happens, not what might happen in ideal conditions. That's why we've built our platform on the simple principle that onchain data doesn't lie.

Instead of chasing fleeting APY spikes, we provide something more valuable – verifiable historical performance across multiple timeframes:

- 1-day APY – Tracks recent performance but can be volatile.

- 7-day APY – A more stable, realistic indicator of yield.

- 30-day APY – Shows long-term trends, smoothing out short-term noise.

A Transparent, Data-Driven Approach

We continuously query blockchain data to track vault share prices over time, applying a methodology that prioritizes accuracy over hype:

1. Continuous Data Collection – Every hour, we capture each vault’s share price, total assets, and supply.
2. Conservative Weighting for TVL Fluctuations – As low TVL vaults grow, yields are typically diluted. We adjust for changes in TVL and exclude temporary TVL spikes that might otherwise skew the average. 
3. Comprehensive Yield Breakdown – We track all components of yield separately, including:
   1. Base yields earned from lending or staking activity
   2. Reward yields, earned in reward tokens (e.g. MORPHO, COMP)

This approach provides deeper insights on past performance, giving more information on  how sustainable and reliable earnings actually are.

Real Example: The Difference Between Flashy and Honest APY

Let’s say a vault is currently displaying 30% APY based on recent performance. Our methodology might reveal:

- 1-day APY: 30% (spiked due to short-term conditions)

- 7-day APY: 12% (smoothing out volatile swings)

- 30-day APY: 8% (long-term sustainable yield)

Which number is the most useful for making DeFi decisions? For someone not reallocating their tokens every day, the 7-day or 30-day APY is likely most useful — these rates reflect actual, sustained performance, not just a fleeting moment of high returns.

Why Our APYs Stand Apart

Vaults.fyi APYs are different because they are:

- Onchain Verified – No external assumptions; every data point is sourced directly from the blockchain.

- Historically Grounded – Calculated using past performance, not speculation about future rewards.

- Conservatively Weighted – Designed to prevent misleading yield inflation.

- Transparent & Traceable – We show exactly where yield comes from, whether it’s trading fees, lending interest, or incentives.

DeFi Yield Shouldn’t Be a Guessing Game

At Vaults.fyi, our mission isn’t to lure users in with exaggerated APYs—we aim to provide the most realistic, sustainable yield insights in DeFi. We empower users to make informed, confident DeFi decisions by prioritizing transparency, integrity, and data accuracy.

When you see an APY on Vaults.fyi, you can trust that it reflects real performance—not marketing hype.

Want DeFi yields you can trust? Check out Vaults.fyi.