A stablecoin pool offering 123% APY sounds like it should be too good to be true — and that instinct is worth listening to.

There's a real pool on Curve DEX, on Ethereum, holding a mix of three interest-bearing stablecoins (IDAI, IUSDC, and IUSDT). At the time of writing, it shows an APY (Annual Percentage Yield — the annualised rate of return including compounding) of 123.2%. Its TVL (Total Value Locked — the total amount of money deposited in the pool) sits at roughly $1.65 million.

Both numbers deserve a closer look.

Where Does a 123% APY Come From?

With stablecoin pools, the underlying assets don't swing wildly in price, so that yield isn't coming from trading volatility. More likely, it's driven by reward-token emissions — the protocol handing out its own governance or incentive tokens to attract liquidity. Those tokens have their own price, and that price can fall. If the reward token drops 50% while you're earning it, your real return drops with it. The headline APY doesn't adjust for that automatically.

High APYs can also reflect thin liquidity. A pool with $1.65M TVL is relatively small. For context, some of the most battle-tested Curve pools hold hundreds of millions. A smaller pool has had less time in the market, less scrutiny from security researchers, and can be more sensitive to sudden withdrawals that shift the yield dramatically.

What to Check Before You Trust a High Yield

A few questions are worth asking:

  • What makes up the APY? Is it trading fees, or mostly reward tokens? Fees tend to be more stable.
  • What is the reward token, and is it liquid? A token you can't easily sell isn't really income yet.
  • What's the depeg risk? These assets are "interest-bearing" versions of stablecoins. If the underlying protocol has a problem, the peg can break — and your "stable" deposit isn't stable anymore.
  • How long has this pool existed? A newer pool with less TVL means less real-world testing.

TVL is a rough proxy for how established a pool is — bigger generally attracts more scrutiny — but it is never a safety guarantee on its own.

Before putting any money to work, comparing multiple pools side by side helps you see whether a yield stands out for good reasons or suspicious ones. The comparison table lets you filter by chain, protocol, and asset type to do exactly that. What you do with that information is your call to make.