Don't fall into the trap of high APY 💸
Higher returns = higher risk. In crypto, people often get misled by the manipulation of APY %
Rule of thumb:
🟢 APY > 15% = very high, probably high risk.
🟡 APY > 25% = likely very unsustainable.
🔴 APY > 40% = probably a scam.
When seeing high returns on staking, farming, or lending tokens in crypto, you should pay attention to these things:
🚩 Is there a time lock on your deposit?
🚩 Where does the yield come from?
🚩 In which form/token rewards getting paid out?
🚩 How the return rate is calculated?
Bad situation you don't want to be in:
Crypto newbie sees 50% APY and deposits $1000 of XYZ tokens. But it turned out that:
• The crypto platform locked XYZ investment for 6 months.
• Newbie getting yield from XYZ inflation, which causes the token to drop in price by more than 50% a year.
• In one month, 50% APY dropped to 8% because returns were calculated based on a 7-day average.
Result = 💀
📌 Don't be this newbie. Save and share with a friend
