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  "id": "realized-vs-projected-yield",
  "canonical": "https://degreesofsatoshi.com/encyclopedia/realized-vs-projected-yield/",
  "collection": "defi",
  "title": "Projected and realized yield: measuring what actually happened",
  "description": "Separate a displayed yield estimate from an actual holding-period outcome, including reinvestment, reward prices, fees and cash flows.",
  "aliases": [],
  "dates": {
    "published": "2026-10-02",
    "modified": "2026-10-02",
    "verified": "2026-10-02T18:15:18.493Z",
    "dataAsOf": "2026-10-02"
  },
  "authorship": {
    "publisher": "Degrees of Satoshi editorial project",
    "process": "AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied."
  },
  "quickAnswer": {
    "text": "Projected yield estimates a future or annualized outcome using assumptions. Realized return measures what happened over a defined holding period after accounting for relevant cash flows and costs. A position can earn more token units while losing value in dollars, so the unit of measurement must be explicit.",
    "claimId": "realized-vs-projected-yield-quick-answer",
    "sourceIds": [
      "investor-compound",
      "defillama-tvl",
      "aave-reserve"
    ]
  },
  "keyFacts": [
    {
      "label": "Compounding inputs",
      "value": "Principal, interest rate and compounding frequency determine the illustrated compound-interest calculation.",
      "sourceIds": [
        "investor-compound"
      ],
      "id": "compounding-inputs",
      "claimId": "realized-vs-projected-yield-fact-compounding-inputs"
    },
    {
      "label": "Currency",
      "value": "Token units and their market-valued amount are separate quantities.",
      "sourceIds": [
        "erc20",
        "defillama-tvl"
      ],
      "id": "currency",
      "claimId": "realized-vs-projected-yield-fact-currency"
    },
    {
      "label": "Rate changes",
      "value": "Aave reserve rates can change with utilization and governance parameters.",
      "sourceIds": [
        "aave-reserve"
      ],
      "id": "rate-changes",
      "claimId": "realized-vs-projected-yield-fact-rate-changes"
    }
  ],
  "prerequisites": [
    "apr-vs-apy"
  ],
  "sections": [
    {
      "id": "example",
      "heading": "More tokens can still mean less dollar value",
      "sourceIds": [
        "erc20"
      ],
      "paragraphs": [
        "Suppose a position starts with 100 tokens valued at $2 each and ends with 105 tokens valued at $1.50 each. Token units rose 5%, but the ending value is $157.50 against $200 initially, before costs and other cash flows.",
        "The example shows denomination risk, not a forecast. Report both the asset-unit change and the valuation basis."
      ]
    },
    {
      "id": "cashflows",
      "heading": "Deposits and withdrawals are not investment earnings",
      "sourceIds": [
        "eip4626"
      ],
      "paragraphs": [
        "If more assets were added during the period, a larger ending balance does not by itself measure return. Keep contributions, withdrawals, claimed rewards and remaining shares separate.",
        "A reproducible report specifies its method and dates. Comparing wallets with different cash-flow timing requires more care than subtracting two balances."
      ]
    },
    {
      "id": "projection",
      "heading": "Expose the assumptions behind an annual rate",
      "sourceIds": [
        "investor-compound",
        "defillama-tvl"
      ],
      "paragraphs": [
        "State whether the rate extrapolates a recent window, assumes compounding or values future incentive tokens at today’s price. Include costs that affect the holder’s outcome.",
        "An annualized display can be useful for comparison when methods match. It should not be labeled a verified future return."
      ]
    }
  ],
  "faq": [
    {
      "question": "Is an unclaimed reward automatically realized profit?",
      "answer": "No. It may remain an asset exposure with uncertain sale value and claim costs. Define whether the report measures accrued token rewards, claimed units or net proceeds in a chosen currency.",
      "sourceIds": [
        "defillama-tvl",
        "erc20"
      ]
    }
  ],
  "claims": [
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      "id": "realized-vs-projected-yield-quick-answer",
      "articleSlug": "realized-vs-projected-yield",
      "statement": "Projected yield estimates a future or annualized outcome using assumptions. Realized return measures what happened over a defined holding period after accounting for relevant cash flows and costs. A position can earn more token units while losing value in dollars, so the unit of measurement must be explicit.",
      "sourceIds": [
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      ],
      "sourceLocators": [
        {
          "sourceId": "source-f6fab0de28f98515",
          "locator": "Compound interest; Examples"
        },
        {
          "sourceId": "source-3649ada489ba8078",
          "locator": "Total Value Locked"
        },
        {
          "sourceId": "source-15989fc372ee02a4",
          "locator": "Key Reserve Parameters; Dynamic Parameters and Governance"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
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        "checkedAt": "2026-10-02T18:15:18.493Z",
        "reviewer": "automated independent verification — DeFi expansion reviewer",
        "notes": [
          "Recomputed token units 100 to 105 (+5%) and valuation 100*2=200 versus 105*1.5=157.50. These are illustrative quantities, not live return observations.",
          "Replaced weakly sourced generic time-evidence key fact with CFPB-documented principal/rate/compounding inputs. ERC4626 deposit and withdrawal accounting supports separating cash flows; DefiLlama distinguishes accrued fees, claimed amounts and market valuation."
        ]
      }
    },
    {
      "id": "realized-vs-projected-yield-fact-compounding-inputs",
      "articleSlug": "realized-vs-projected-yield",
      "statement": "Compounding inputs: Principal, interest rate and compounding frequency determine the illustrated compound-interest calculation.",
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          "locator": "Compound interest; Examples"
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        "reviewer": "automated independent verification — DeFi expansion reviewer",
        "notes": [
          "Recomputed token units 100 to 105 (+5%) and valuation 100*2=200 versus 105*1.5=157.50. These are illustrative quantities, not live return observations.",
          "Replaced weakly sourced generic time-evidence key fact with CFPB-documented principal/rate/compounding inputs. ERC4626 deposit and withdrawal accounting supports separating cash flows; DefiLlama distinguishes accrued fees, claimed amounts and market valuation."
        ]
      }
    },
    {
      "id": "realized-vs-projected-yield-fact-currency",
      "articleSlug": "realized-vs-projected-yield",
      "statement": "Currency: Token units and their market-valued amount are separate quantities.",
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      ],
      "sourceLocators": [
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          "locator": "totalSupply; balanceOf; transfer; decimals; approve; allowance; transferFrom; Transfer"
        },
        {
          "sourceId": "source-3649ada489ba8078",
          "locator": "Total Value Locked"
        }
      ],
      "scope": {
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      "evidenceStatus": "documented",
      "verification": {
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        "checkedAt": "2026-10-02T18:15:18.493Z",
        "reviewer": "automated independent verification — DeFi expansion reviewer",
        "notes": [
          "Recomputed token units 100 to 105 (+5%) and valuation 100*2=200 versus 105*1.5=157.50. These are illustrative quantities, not live return observations.",
          "Replaced weakly sourced generic time-evidence key fact with CFPB-documented principal/rate/compounding inputs. ERC4626 deposit and withdrawal accounting supports separating cash flows; DefiLlama distinguishes accrued fees, claimed amounts and market valuation."
        ]
      }
    },
    {
      "id": "realized-vs-projected-yield-fact-rate-changes",
      "articleSlug": "realized-vs-projected-yield",
      "statement": "Rate changes: Aave reserve rates can change with utilization and governance parameters.",
      "sourceIds": [
        "source-15989fc372ee02a4"
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      "sourceLocators": [
        {
          "sourceId": "source-15989fc372ee02a4",
          "locator": "Key Reserve Parameters; Dynamic Parameters and Governance"
        }
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        "notes": [
          "Recomputed token units 100 to 105 (+5%) and valuation 100*2=200 versus 105*1.5=157.50. These are illustrative quantities, not live return observations.",
          "Replaced weakly sourced generic time-evidence key fact with CFPB-documented principal/rate/compounding inputs. ERC4626 deposit and withdrawal accounting supports separating cash flows; DefiLlama distinguishes accrued fees, claimed amounts and market valuation."
        ]
      }
    }
  ],
  "sources": [
    {
      "id": "investor-compound",
      "label": "How does compound interest work?",
      "publisher": "Consumer Financial Protection Bureau",
      "url": "https://www.consumerfinance.gov/ask-cfpb/how-does-compound-interest-work-en-1683/",
      "locator": "Compound interest; Examples",
      "note": "The arithmetic effect of compounding at a stated hypothetical rate.",
      "version": null,
      "checkedAt": "2026-10-02T17:21:46.950Z",
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    {
      "id": "defillama-tvl",
      "label": "DefiLlama: How we calculate TVL",
      "publisher": "DefiLlama",
      "url": "https://docs.llama.fi/analysts/data-definitions",
      "locator": "Total Value Locked",
      "note": "Provider-specific valuation scope and TVL methodology.",
      "version": null,
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    {
      "id": "aave-reserve",
      "label": "Reserve",
      "publisher": "Aave",
      "url": "https://www.aave.com/docs/aave-v3/concepts/reserve",
      "locator": "Key Reserve Parameters; Dynamic Parameters and Governance",
      "note": "Reserve LTV, liquidation threshold, borrow availability, caps and rate parameters.",
      "version": "Aave V3 documentation",
      "checkedAt": "2026-10-02T17:03:44.647Z",
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      "recordId": "source-15989fc372ee02a4"
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    {
      "id": "erc20",
      "label": "ERC-20 Token Standard",
      "publisher": "Ethereum Improvement Proposals",
      "url": "https://eips.ethereum.org/EIPS/eip-20",
      "locator": "totalSupply; balanceOf; transfer; decimals; approve; allowance; transferFrom; Transfer",
      "note": "Token supply, displayed units and balance accounting.",
      "version": "ERC-20",
      "checkedAt": "2026-10-02T17:03:45.826Z",
      "contentSha256": "98bda5e4707841a68684879878c4c165fdaa47d89ed69ebf232ab9be06ff050e",
      "recordId": "source-ac4ad503a55127bb"
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    {
      "id": "eip4626",
      "label": "Tokenized Vaults",
      "publisher": "Ethereum Improvement Proposals",
      "url": "https://eips.ethereum.org/EIPS/eip-4626",
      "locator": "Specification; Security Considerations",
      "note": "Assets, shares, deposits, withdrawals, limits and preview rounding.",
      "version": "EIP/ERC-4626; retrieved document hash recorded",
      "checkedAt": "2026-10-02T17:03:42.366Z",
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  "related": {
    "articles": [
      "apr-vs-apy",
      "vault-share-price",
      "stablecoin-yield-sources"
    ],
    "dossiers": [],
    "wallets": []
  },
  "revisionHistory": [
    {
      "date": "2026-10-02",
      "kind": "published",
      "summary": "First publication after primary-source research and independent automated verification."
    }
  ],
  "citation": "Degrees of Satoshi editorial project. “Projected and realized yield: measuring what actually happened.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/realized-vs-projected-yield/"
}