Interesting.🤔
Did some quick Googling.
Like most yield products counterparty risk is present (not the end of the world but would have to trust the mechanism they use to generate yield).
Because the yield generation relies on lending capital out to third-party platforms and institutional borrowers, holding yXLM carries counterparty (borrower) risk. If a platform or institutional borrower defaults, or if the managing anchor faces operational failure, the 1-to-1 peg to native XLM could be at risk. It functions similarly to depositing funds into a centralized crypto savings account, but with the asset tracked and traded natively as a token on the Stellar blockchain.
This is the same reason I don’t “lend” my XRP through services like FXRP that allow for impermanent loss (which often becomes permanent despite the name😅).
At one layer or another they both represent counterparty risk.
AMM pool is different. They take fees and put them right back into the pool. The only “real” risk here is catastrophic network bugs (very low probability after so much time in operation).
Lower interest (and depends on how much the pools is used) but much higher probability of funds being “SAFU”.😁
At higher prices they encourage prices stability too. So depositing at high prices encourage the price being stable at these high levels.
@jfgrissom@madave_lui@The_DTCC@StellarOrg Yea 1.6% isnt great unless price appreciates tremendously other than that still could earn easy XLM its defi right in Lobstr Wallet
@realcryptokween He dont understand they been stealing from the tax payers lol? I mean did he not see what DOGE found? It's funny how people try to look at the small problems like its gonna be a resolution to the bigger issue, education should be free imo