How Do I Spot a DeFi High-Yield Scam?

Short answer

The single best predictor of a DeFi yield scheme being a scam: it advertises a yield significantly higher than the prevailing market rate for similar risk. In 2026, US Treasury bills yield 4-5%, Aave USDC supply yields 3-5%, Curve stablecoin LP yields 5-12%. Anything advertising 50%+ APY is either taking enormous undisclosed risk or is a Ponzi. The Anchor Protocol's 19.5% UST yield was the canonical 2022 example; the same pattern repeats annually with different brand names.

The math gives them away

Sustainable yield comes from genuine value creation: trading fees, interest from lending, MEV capture, staking rewards. Each of these has a market-rate ceiling:

Trading fees on AMMs: 0.05-1% per trade × volume × your share of the pool. Realistic for a top USDC-ETH pool: 5-15% APY.
Lending: borrower demand × interest rate. Realistic for stablecoin lending: 3-8% in normal conditions, 10-15% in high-demand periods.
Staking: protocol-issued rewards. For ETH: 3-4% APY. For most PoS chains: 5-12% APY (often diluted by token inflation).

Anything promising 50%+ APY consistently is either: (a) paying you in newly-minted tokens that will dump in value, (b) using your deposit to fund withdrawal of earlier depositors (Ponzi), or (c) taking a hidden risk (leveraged exposure, smart-contract bug, single-key custody).

The recurring patterns

Anchor / Terra (2022). 19.5% APY on UST. The yield came from a reserve fund that was emptied by April 2022. UST depegged in May 2022; LUNA collapsed; depositors lost everything.

Celsius / BlockFi (2022). 8-15% APY on USDC and BTC. Yield came from re-hypothecating customer deposits to leveraged trading desks (3AC). Customers lost most of their funds when 3AC collapsed.

Various 2024-2026 mini-Ponzis. Yield aggregators promising 40-200% APY on stablecoins, structured as "auto-compounding strategies." Most last 3-6 months before either rug-pulling or quietly winding down with depositor losses.

Yields that are real

Aave USDC supply. 3-5% in 2026, smart-contract risk only, audited for 7+ years, $10B+ TVL.

Curve 3pool LP. 5-12% historically. Smart-contract risk, impermanent loss negligible for stable pools.

Lido stETH. 3-4% from ETH staking rewards. Smart-contract + slashing risk, $30B+ TVL.

Coinbase Staking. 3-4% from ETH staking, regulated US entity. For US holders, lowest risk path.

The discipline

For most US holders, treating crypto yield as "comparable to T-bills + 0-5% premium for crypto-specific risk" is the right mental model. Anything significantly above this number is either a sophisticated structured product (read the docs carefully) or a scam (most cases).