When a yield number looks too good to be true, the honest question isn't "how do I get in?" — it's "what's making this so high, and who's paying for it?"

Take a real example from the comparison data: an AAVE-USDC pool on Uniswap v4 (Ethereum) showing a 62.6% APY with a TVL (Total Value Locked — the total amount of money deposited in the pool) of $1.67 million. That's a meaningful yield on a pair that includes a stablecoin. So what's actually going on?

What Could Be Driving a 62% APY

There are a few plausible explanations, and they carry very different risk levels.

Trading fees are the cleanest source of yield in a liquidity pool (where you deposit two assets so others can trade between them). If a pool is small but sees heavy trading volume, fee income per dollar deposited can run high. That's the best-case scenario.

But a 62% figure often has reward-token emissions mixed in — where a protocol hands out its own tokens as extra incentive to attract deposits. These rewards can look generous today and evaporate tomorrow if the protocol reduces emissions or if the reward token itself falls in price. You're not earning stable income; you're earning tokens whose value isn't guaranteed.

The TVL Signal — Useful, But Limited

At $1.67 million, this is a relatively small pool. TVL is a rough proxy for size and how much scrutiny a pool has received — a multi-billion-dollar protocol has been stress-tested by more users, more auditors, and more market conditions. A $1.67M pool hasn't. That doesn't make it a scam, but it does mean fewer eyes have checked it.

Smaller pools also carry liquidity risk: if you need to exit quickly, there may not be enough depth to do so without moving the price against yourself.

One More Thing: Both Assets Move

AAVE is not a stablecoin. In a two-asset pool, if AAVE's price shifts significantly relative to USDC, you can experience impermanent loss — a reduction in the dollar value of your position that the APY may not fully offset. The yield percentage and your actual profit are two different things.

Before trusting any high-APY pool, it's worth checking what's actually generating the yield, how stable the reward source is, and whether the pool size matches your comfort level. The comparison table lets you see multiple pools side by side so you can ask those questions across the board — not just for one eye-catching number.