Yield
The return earned on deposited or lent cryptocurrency, expressed as an interest rate.
When you deposit USDC into a lending protocol or savings product, you earn yield. This works similarly to earning interest at a bank, but the rates are often higher.
Yield comes from borrowers paying interest. On platforms like Aave, people borrow USDC and pay interest, which gets distributed to lenders. Supply and demand determine the rate. When lots of people want to borrow USDC, rates go up.
Yield can range from 2-5% on major lending platforms to higher rates on newer or riskier protocols. Always consider the source of yield. If you can't identify where the returns come from, the risk is probably higher than it appears.
Related Terms
APY (Annual Percentage Yield)
The total return on a deposit over one year, including compound interest.
DeFi (Decentralized Finance)
Financial services built on blockchain smart contracts that operate without traditional intermediaries like banks.
Liquidity
How easily an asset can be bought or sold without significantly affecting its price.
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This definition is provided for educational purposes. USDC.org is an independent resource and is not affiliated with Circle Internet Financial.