RiskIntermediate5 min

Reward APY vs. Base APY

Core question

How much of the displayed yield comes from real economic activity?

A pool's total APY often combines two sources: base APY (e.g. interest from borrowers or trading fees — yield from real protocol usage) and reward APY (extra protocol tokens as an incentive). A high reward share means: the yield depends heavily on the value and continued issuance of those tokens — not on the underlying economic activity.

A real example with a high reward share

Reported today

Of which without incentives

Base APY
Reward APY

Left the reported APY, right the same market with its reward share dashed: that part depends on incentives whose program can end. Not a forecast. Source DeFiLlama.

USDS · SparkLend

5.08%

Total APY

Base APY–

Reward APY5.08%

TVL at least 50M USD
Chain Ethereum is on the SKN3X reference list of established chains
Listed as a stablecoin, single exposure, no IL risk per DeFiLlama
Rewards above 50% of APY
Protocol sparklend is on the SKN3X reference list (allowlist)
Incomplete data — apyBase or apyPct30D missing

Quick check

The yield is 100% backed by trading fees.The reward tokens are worthless.Most of the yield depends on protocol token incentives — if the token's value falls or the program ends, the real yield drops.The APY is guaranteed stable.

View real pools in the report