A yield above 40% on a Bitcoin-linked pool is the kind of number that makes you stop scrolling. But before you read it as "free money," it's worth understanding what's actually producing it.
What You're Looking At
The pool in question pairs BTC.B (a bridged version of Bitcoin on Avalanche) with WAVAX (wrapped AVAX, Avalanche's native token) on a protocol called Pharaoh V3. The current APY — Annual Percentage Yield, the annualised return including compounding — sits at 40.6%, with a TVL of $1.56 million.
TVL, or Total Value Locked, is the total amount of money sitting in a pool. At $1.56M, this is a relatively small pool. That matters for two reasons: smaller pools tend to have less liquidity (meaning large withdrawals can move prices), and they've typically faced less scrutiny than multi-billion-dollar protocols that have been stress-tested over years.
Why Is the APY So High?
A few things can push a yield this far above average — and none of them are guaranteed to last.
Reward-token emissions are the most common driver. Protocols often hand out their own tokens as incentives to attract depositors. Those tokens inflate the displayed APY, but if the token's price falls, so does your real return. The yield you see today may look very different in a month.
Low liquidity also plays a role. Smaller pools sometimes show high APYs because the rewards are spread across fewer dollars — but that same thinness makes the pool more vulnerable to price swings and sudden exits.
Impermanent loss is another factor unique to paired pools like this one. When you deposit two assets and their prices move apart — say, AVAX drops while BTC holds steady — you can end up with less value than if you'd simply held both assets separately. A 40% APY doesn't automatically cover that gap.
Finally, both assets here carry their own risks. BTC.B is a bridged token, which adds smart-contract and bridge risk on top of standard market volatility.
One Question to Ask First
Before treating any high APY as income, ask: what is actually generating this yield, and will it still exist in three months?
Check what portion comes from trading fees versus reward tokens, how long the emissions are scheduled to run, and whether the pool has enough liquidity for your position size. The comparison table lets you view multiple pools side by side so you can weigh yield against size and protocol track record yourself.
High APY is information, not a promise.