Analyst Insight

By analysing the on-chain metrics for PYUSD on Aave V3, our risk model classifies this as a standard market performer, aligning with the broader Ethereum lending average.

The current APY of 2.35% is supported by a Total Value Locked (TVL) of $373,864,880. Data indicates this pool is currently outperforming the broader PYUSD market by 17.5%. This alpha may be driven by incentivised rewards.

Risk Context: With a Safety Score of 75/100, this liquidity pool is positioned for active yield farmers monitoring daily volatility.

Yield Mechanics: How It Works

Understanding the underlying system is vital for assessing sustainability. The 2.35% APY displayed for PYUSD is primarily derived from interest paid by borrowers on the Aave V3 protocol.

Supply & Demand

When you deposit PYUSD, you become a liquidity provider. Borrowers pledge collateral (like ETH or BTC) to take out loans. The interest rate fluctuates based on the Utilisation Rate (currently %). With moderate utilisation, rates remain stable, ensuring liquidity is available for withdrawals.

Risk Strategy & Management

While Aave V3 is a reputable protocol, no yield is without risk. Based on the current Safety Score of 75/100, the following approac may suit (DYOR):

• Smart Contract Risk: Ensure you are comfortable with the audit history of Aave V3.
• Liquidity Risk: With a TVL of $373,864,880, slippage is minimal for standard trade sizes.
• Strategy: Monitor weekly. Consider diversifying across multiple chains to mitigate protocol-specific risks.

Frequently Asked Questions

Advanced Tools

Enhance your stablecoin yield data analysis with our suite of tools:

• Profit Calculator: Forecast compound interest earnings.
• Safety Audit: Deep dive into the risk factors.
• Liquidity Depth: Analyse market dominance and slippage.