Picking Up $100s in Front of a Steamroller: Leveraged Yield

Captain Ethereum Stage

Defi, NFTs & Gaming

BUIDLHub

Feb 26, 2025

1:45 PM

Yield farming, carry trades, leveraged yields, yield boosting, points, interest rates, staking, re-staking, leveraged re-staking, etc - DeFi (and all of finance really) is a system built on risk, and ways to get exposed to that risk, and earning some reward in return. In the current market, the risk has been levered up to the gills - with the rewards to go along with it. We're seeing some insane returns on what normally would be thought of as "non-risky trades", such as >100% APYs on Ethena's carry trade, or simply lending USDC in a secure lending protocol earning almost 50% APY. All of this is before leverage even gets factored in. These rewards & yields don't come for free - but to the unknowing eye, they just look like an attractive way to earn more on their dollars, without being able to see the risk bubbling under the surface. Throw into that the temptation to 2, 3, 5, or even 10x the leverage on that position, and those risks quickly become explosive, not only to the end investor, but to the system as a whole. The question is - what do we do about it?

speakers

Lee Mount - Euler Labs

Moderator

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