Back in peak DeFi farming days you’d think about APY as how many days it would take to recoup principal with the yield. That’s how risky it felt and that same rigor should be applied when thinking about interacting onchain today. Yes, not all farms/vaults are created equal. Not all strategies carry the same risk. But you have to factor in the nonzero chance of total or meaningful principal loss. I get asked constantly what is enough yield to come onchain. I think it’s at least 18% today. Anything below that is not worth the hassle or the risk. I won’t do formal math but here is my mental model: smart contract risk + opsec risk (yours) + opsec risk (any protocol you’re interacting with). These are ever-evolving risks. The more protocols you interact with the more risk blows out exponentially. There are also things you can’t control. Anthropic’s latest model just found vulnerabilities in codebases from some of the most resourced and established companies in the world. If you think DeFi protocols (written faster and audited lighter) are a harder target, think again. I say this as a DeFi bull. Onchain rates are low because there is no demand for assets. That is not the same as risk being priced correctly. What’s the solution? Demand higher yield onchain. And we desperately need better insurance products at the point of sale. I talked about it today on @theempirepod roundup coming out tomorrow

I think this is starting to make sense to more onchain investors. As a result of similar reflecting, we've been getting more interested in new yield-bearing tokens paying out STRC yield on Ethereum. For example, 17% here because of a two-token model (like sfrxETH vs frxETH). app.saturn.credit/insights/sat...…