Curriculum·S207 Investing Frameworks (Unleveraged)·about 31 min
Yield without leverage
By the end of this lesson you can
- →Trace any advertised yield to the party paying it and the risk they are paying you to take
- →Distinguish yield that is a fee, a subsidy, a spread on somebody else's risk, or dilution
- →Identify hidden leverage in a product that describes itself as unleveraged
- →Compute whether a yield compensates the risk, and act on the answer
Sophomore · enrolled learners
This lesson opens with Stablegains, 2022.
- What happened
- Stablegains was a startup offering US users a 15 percent yield on stablecoin deposits, marketing itself as a simple and safe way to benefit from advances in financial technology, with documentation reported to assure users that the value of their deposited assets would remain stable regardless of whether crypto markets were soaring or crashing. The yield was generated by placing a majority of customer funds into Anchor, the Terra protocol paying around 19 to 20 percent, which F102-04 establishes was a subsidy from a depleting reserve rather than an earned return. When UST collapsed in May 2022, approximately $42M belonging to about 4,878 customers was lost, and a class action followed alleging that users had not been told where their money was.
- The decision point
- The product's yield was a spread. Customers were paid 15 percent to take a risk the operator was taking at 19 to 20 percent, and the difference between those numbers was the operator's revenue for standing in the middle. Nothing about the arrangement was disclosed in the marketing, and the underlying risk had a computable end date that F102-04 puts at roughly 85 days from published figures.
- Recorded loss
- $42,000,000
What you will be able to answer
- →What is the first question about any yield?
- →Name the four sources of yield.
- →How do you spot hidden leverage?
- →What was the Stablegains spread?
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.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://protos.com/ycombinator-crypto-defi-startup-stablegains-lost-42m-in-anchor-protocol/
- https://cryptoslate.com/stablegains-in-hot-water-after-losing-more-than-40m-due-to-terras-collapse/
- https://cointelegraph.com/news/terra-injects-450m-ust-into-anchor-reserve-days-before-protocol-depletion
- https://www.arnoldporter.com/en/perspectives/advisories/2023/01/read-before-you-click-accept
Confidence medium·Volatility high·Reviewed 2026-08-06·Owner unassigned
Contested
The Stablegains allegations were made in a class action and in contemporaneous reporting. The loss figure and the Anchor exposure are consistently reported; characterisations of what users were told are drawn from the complaint and from reporting rather than from an adjudicated finding. Attribute rather than assert.
J305 owns the full treatment of yield-bearing strategies and their mechanics. This lesson covers only how to interrogate a yield within an unleveraged framework, and must not be expanded into strategy content.