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Knowledge

The reference layer behind every Pennyworth read: the traps annotated on exchange earn products, and the mechanics that decide what an on-chain yield stablecoin actually pays.

Product traps10

Direct loss of principal or interest2 Realized yield runs below the headline5 No direct cash impact, but reshapes the read3

Yield stablecoin terms11

Foundations2 Yield mechanics4 Exit costs3 Risk readings2

Product traps10

Pennyworth annotates each product with traps: the facts marketing pages do not surface, rates that look higher than they pay, terms that look simpler than they are. Every trap type currently in use, ordered by direct cash impact.

Direct loss of principal or interest2

Early-exit penaltyEarly redemption triggers a real charge against principal or accrued interest, not a delay. The penalty can take the form of a principal haircut, forfeited interest, or tiered fees by exit timing.
Silent auto-renewalThe product auto-renews on maturity. The renewed terms (rate, lockup, penalty) can differ from the original, and the opt-out window is brief.

Realized yield runs below the headline5

Promo APRThe headline APR is a windowed promotional rate. Outside the window, the product pays a baseline that is typically materially lower.
Tiered yield capThe headline APR applies only to a small balance tier. Anything above that tier accrues at a materially lower rate, and the weighted realized yield runs well below the headline.
Mismatched reward currencyPrincipal is held in a stablecoin while rewards are paid in a different asset, often a newly listed project token. The headline APR depends on a reference price set by the exchange itself.
Disguised lockupThe product is labelled Flexible or "any-time withdrawal," but redemption carries a notice period or settlement lag, leaving actual liquidity well short of the label.
Conflicting source valuesThe same field carries different values across the exchange’s API, web UI, announcements, and terms and conditions, leaving its own disclosures internally inconsistent.

No direct cash impact, but reshapes the read3

Mismatched categoryThe product’s marketing category and underlying mechanics belong to different product types: it is sold as one thing while its terms carry the defining constraints of another.
Capacity exhaustedThe product’s capacity is exhausted or near exhaustion, and the headline APR is not currently transactable.
Potential limitsThe product appears on the catalog but may be closed to some users by region restrictions, KYC tier requirements, or new-user-only rules; visibility does not equal access.

Yield stablecoin terms11

These mechanics are shared by every yield stablecoin on the board. With them, every field on a detail page has a meaning.

Foundations2

What is a yield stablecoin?A dollar token issued by an on-chain protocol that generates yield automatically.
Share appreciation vs balance growthThe two ways yield reaches your wallet — and why one of them prices above $1 on purpose.

Yield mechanics4

Floating APYA headline APY is a snapshot, not a promise — read the range, not the number.
The four kinds of yield sourcesBasis trading, protocol savings rates, real-world interest, lending — each fails differently.
Incentives vs real cashflowSubsidies end; cashflow persists. Ask what survives when the incentive budget runs out.
Risk premiumThe spread between a product’s APY and the risk-free anchor — the price of the risks you carry.

Exit costs3

SlippageSelling on a DEX trades immediacy for price — the bigger the order, the worse the fill.
Cooldown periodsOfficial redemptions queue behind days or weeks of waiting — usually earning nothing.
Gas costsEvery on-chain action pays network gas — a fixed toll that hits small positions hardest.

Risk readings2

DepegWhen a $1-anchored token stops trading at $1 — the headline risk of every stablecoin.
Reading TVLTotal value locked measures scale and exit room — but only if you know which TVL you are reading.

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