[Webinar] The Search for Sustainable On-Chain Yield
An APY is a number. It is not a source. The gap between those two things is most of what stands between on-chain yield products and institutional allocation.
Ask where a return comes from and the answers vary more than the headline rate suggests. Borrower demand in a lending market. Basis captured across venues. Cash flows from an asset that exists off-chain. A token emission that funds itself until it stops. Each carries a different reason to expect the return to persist, and only some of those reasons survive a cycle.
The underwriting problem follows from that. A net return is what is left after fees, hedging, execution costs, expected losses and any temporary incentives. Compare that figure to the closest off-chain benchmark and the remainder is the risk premium an allocator is being paid. Most product marketing never gets far enough to show that number, which leaves the buyer to reconstruct it.
Three questions tend to decide whether a product clears an institutional committee, and none of them are about yield.
What limits are actually enforceable? A mandate written on paper is a policy. A mandate expressed as pre-approved on-chain permissions is a constraint. Translating one into the other, without removing the discretion a manager needs to handle a fast market, is a design problem that vault operators are solving in public right now.
What happens under redemption stress? Liquidity buffers are sized against an assumption. The useful question is what the assumption is, and what the process looks like when requests exceed it, or when a custody or cross-chain rail becomes unavailable at the same time.
What can be monitored, not just attested? Proof of reserves shows collateral. It says less about liabilities, hedge exposure, venue concentration and whether redemption coverage holds. Institutions increasingly want the second set.
On August 19 we are putting these to three people who run yield products and have to answer for them.
- David Markley from YieldPoint
- Mike De Melo from RAAC
- Philippe Engels from Avantgarde Finance
Jackson Weinreb from The Tie moderates.
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This webinar will also be live streamed on LinkedIn and X.
This session is for informational purposes only and is not investment, legal, tax, or financial advice.