A stablecoin can target a stable price while its lending yield keeps changing.
Those are different mechanisms. The token aims to track a reference value; a lending pool’s interest rate responds to borrowing demand and available supply. Ethereum.org explicitly notes that these rates fluctuate with market activity.
That means today’s advertised APY is not a promise of what you will earn over the next year. A stable token price does not turn a variable lending rate into a fixed one.
Before comparing offers, check whether the rate is variable and where the yield comes from. The practical risk: income can fall even if the token stays near its peg. The peg itself is also a target, not a guarantee.
Source: Ethereum.org — https://ethereum.org/en/stablecoins/
#Stablecoins #DeFi #CryptoEducation #Lending #RiskManagement
Those are different mechanisms. The token aims to track a reference value; a lending pool’s interest rate responds to borrowing demand and available supply. Ethereum.org explicitly notes that these rates fluctuate with market activity.
That means today’s advertised APY is not a promise of what you will earn over the next year. A stable token price does not turn a variable lending rate into a fixed one.
Before comparing offers, check whether the rate is variable and where the yield comes from. The practical risk: income can fall even if the token stays near its peg. The peg itself is also a target, not a guarantee.
Source: Ethereum.org — https://ethereum.org/en/stablecoins/
#Stablecoins #DeFi #CryptoEducation #Lending #RiskManagement