Curriculum·G105 Protocol Financial Statements·about 31 min

Where the yield actually comes from

By the end of this lesson you can

→Separate the three sources of a yield: revenue, a reserve subsidy, and token emissions
→Explain how OlympusDAO's very high APY was funded by emissions and diluted stakers who did not compound perfectly
→Compute why an emissions yield paid in newly minted tokens is dilution, not return
→Read a protocol's emissions schedule to see whether a yield is earned or printed

Graduate · enrolled learners

This lesson opens with OlympusDAO, 2021 to 2022.

What happened: OlympusDAO launched in 2021 around a token, OHM, and a staking program that advertised an enormous annual percentage yield, at times in the thousands of percent, promoted with the slogan (3,3) to encourage everyone to stake and hold. The yield was not revenue. It was paid in newly minted OHM, so a staker's balance grew in tokens while the tokens themselves were being diluted by the same emissions that paid the reward. As long as new buyers pushed the price up faster than emissions diluted it, holders felt rich; the whole thing was reflexive. When buying slowed, the price fell, and OHM dropped roughly 99 percent from its peak of over a thousand dollars. No contract was hacked and no reserve was drained in the Anchor sense; the yield was inflation dressed as return, and the emissions schedule that generated it was public on-chain the entire time.
The decision point: Anchor's yield was a reserve subsidy; OlympusDAO's was emissions, and the difference matters because they fail differently and both are readable. A yield has exactly three possible sources. Revenue is earned income from users and is sustainable. A reserve subsidy pays from a finite pool and lasts until the pool runs out. Emissions pay in newly minted tokens, so the yield is dilution: your token count rises while each token's claim on the protocol falls, and unless the price rises fast enough to outpace the dilution, a high emissions APY is a number that describes inflation rather than gain. Reading where a yield comes from is reading the emissions schedule and the revenue against the payout, and OlympusDAO is the case where a thousands-of-percent headline was, in the on-chain numbers, a printing press. A staker who read the emissions saw dilution; a staker who read the APY saw a fortune.

What you will be able to answer

→How was OlympusDAO's high APY funded?
→What are the three sources of a yield?
→Why is an emissions yield not real return?
→How do you test whether a token yield is sustainable?

Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.

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Terms used here

Staking

Sources and review

Confidence medium·Volatility high·Reviewed 2026-09-15·Owner unassigned

Contested

OlympusDAO's peak OHM price (over a thousand dollars) and the subsequent ~99 percent decline are widely reported; exact figures depend on the date. OHM was backed by a treasury, so it was not valueless, but the headline staking APY was emissions-funded dilution, which is this lesson's point.

Defenders argue the treasury backing and later reforms changed the model; the lesson uses the 2021 to 2022 period to teach emissions-versus-revenue reading, not to judge the protocol's current state.

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