Every return has a source
Staking helps operate a proof-of-stake network. Rewards may include newly issued tokens and transaction-related payments. Delegating or using a pooled service adds a provider or contract to the arrangement. Withdrawal queues, penalties and slashing rules differ by network and product.
Lending returns come from borrowers and sometimes promotional incentives. A quoted lending rate can change with demand and available funds. Collateral and liquidation rules do not remove every bad-debt or smart-contract risk.
Pools and incentives
Liquidity providers can receive trading fees and token incentives. Their asset mix changes as others trade against the pool. Depending on prices and design, providing liquidity can produce a worse outcome than simply holding the original assets, even before other risks and costs.
High token incentives can attract deposits while also increasing the supply that recipients may sell. A reward paid in tokens is not a guaranteed return in pounds or dollars.
Read APR and APY carefully
APR describes an annualised rate without compounding. APY includes a compounding assumption. They are only comparable when the period, fees, reward asset and reinvestment assumptions are understood. A short-lived rate extrapolated over a year is not a promise for the next twelve months.
Ask whether a quoted figure includes incentives, whether reinvestment is practical after fees, and what happens if the reward token falls in price.
Plan the exit
Check lockups, unbonding periods, queues, liquidity and the ability to withdraw during stress. Consider the network, provider, contract and collateral separately.
Takeaway: before looking at how large a yield is, establish who pays it, what you receive and what could prevent you leaving.
Further reading
Provider documentation explains particular designs. It is not a product endorsement.