Unrealistic yield is one of the hallmarks of a ponzi scheme. The DeFi yield opportunities require more money to flow in than to flow out.
Apple stock, for example, pays a dividend that is not dependent on more people buying Apple stock but on the company profits for the next quarter.
Not exactly. In DeFi they just give you newly printed tokens. That's the "yield". Why wait for money to flow in when you can instead print it at will.
How exactly do cryptocurrencies finance their DeFi yields to their investors? The only way I can think of is with the money of future investors, but that is a pretty blatant Ponzi scheme.
These DeFi yields must be funded in other ways than just loans.
aka obfuscated
does the yield come from anywhere other than funds deposited by new users?
The 2 sources I mentioned above are essentially flows that accrue during the bull markets. It's not magic, when people want to long assets they borrow stables. If you lend into these markets you'll get the yield. With liquidity pools you can get some transaction fees even during market volatility and draw-downs, in the short term at least.
"stable" coins... yes, that's been an interesting ecosystem lately.
> access to DeFi yield opportunities with much better "passive" interest than bank deposits or treasuries
Not to mention much greater risk of losing everything.
