Which Yields Are Real and Which Are Printed (APY vs Emissions)

Example: GMX-style LP position (illustrative numbers)

  Position: $10,000 deposited as GLP
  Reported APR: 35%

  Where does the 35% come from?

  Real yield (actual revenue from protocol fees):
    Trading fees:           8.5% APR  ← real users paying for service
    Swap fees:              1.5% APR
    Borrow fees from longs: 3.0% APR
    ────────────────────────────────
    Total real yield:       13.0% APR
    Paid in: ETH (the actual fees collected)

  Emissions yield (protocol prints its own token):
    esGMX rewards:          22% APR
    Paid in: esGMX (escrowed GMX, must vest 1 year)

  Implications:
    Real yield: actual income; sustainable as long as volume holds
    Emissions:  protocol dilution; sustainable only as long as emissions print
    When emissions end: APR drops to ~13%, often a >50% TVL exodus

How to evaluate any DeFi yield:

  1. Strip emissions:
     reported_apy - emissions_apy = real_apy

  2. Check the source of real yield:
     - Trading fees? Need volume to sustain.
     - Lending interest? Need borrow demand.
     - MEV/protocol-owned? Sticky but small.
     - Token taxes? Often a Ponzi marker.

  3. Sustainability test:
     If emissions go to 0 tomorrow, what's the residual yield?
     If <2-3%, the product is an emission scheme, not a yield product.

Watching TVL:
  TVL alone is misleading — protocols inflate via emissions
  Better: TVL × utilization (how much is actually USED)
  Or: protocol revenue divided by TVL = real yield rate