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Yield Calculator: LUSD

Protocol on Arbitrum
Conservative
2.21%
Active APR

ROI Forecast

2.21% ACTIVE RATE
Low Tier
32.6 Years
Time to Double Investment
Rule of 72 Calculation

Earnings Breakdown

Projections based on a $10,000 deposit
Daily Earnings+$0.61
Monthly Income+$18.42
Annual Return+$221.00
Real Yield (Inflation Adj.) -0.79%

Compound Interest Matrix

Investment Daily Profit Monthly Profit Yearly Forecast
$1,000 $0.06 $1.84 $22.10
$5,000 $0.30 $9.21 $110.50
$25,000 $1.51 $46.04 $552.50
$50,000 $3.03 $92.08 $1,105.00

* Projections assume APY remains constant and do not account for gas fees.

Strategic Analysis

Investing in LUSD via Aave V3 currently provides a return that prioritises capital preservation over aggressive growth.

Asset Class & Exposure

As LUSD is a pegged asset, this yield of 2.21% represents 'pure yield' with minimal price exposure risk, barring any black-swan de-pegging events.

Compounding Strategy

To maximise your crypto-asset earnings on Aave V3, frequency matters. With current daily earnings of ~$0.61 (per $10k), manual reinvestment should be weighed against gas costs.

Network Context: Arbitrum

The Arbitrum ecosystem supports micro-transactions efficiently. Consequently, manual reinvestment of your LUSD earnings is economically viable on a daily basis, helping you reach the 'Double Investment' target of 32.6 Years faster.

DeFi Yield Guide

Understanding how yield is generated is critical for any DeFi investor. The returns displayed in this LUSD APY Calculator differ from traditional finance in several ways.

Where does the yield come from?

In the ecosystem, yield is not printed out of thin air. It is typically generated from two verifiable on-chain sources:

  • Swap Fees: Every time a trader exchanges tokens against this liquidity pool, a fee (e.g., 0.3%) is collected and distributed pro-rata to liquidity providers.
  • Incentives: The protocol may distribute governance tokens to attract liquidity, effectively subsidising the APR to boost depth.

Risk Assessment

While a projected return of 2.21% is attractive, distinct risks exist in Decentralised Finance (DeFi):

  • Impermanent Loss (IL): If the ratio of assets in the pool changes due to price divergence, you may end up with less value than if you had simply held the tokens in a wallet.
  • Smart Contract Risk: Code is law, but code can have bugs. Ensure you trust the audit history of .
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