When I first encountered decentralized finance (DeFi), I was fascinated by its speed of innovation and its ambition to recreate and often reimagine many of the functions of traditional finance. Lending, trading, derivatives, structured products: all of these appeared within a few short years, accessible to anyone with an internet connection and without centralized intermediaries.
At the same time, it became clear to me how difficult it was to make sense of DeFi yields. Headline figures often looked attractive, sometimes spectacular, but understanding what was truly sustainable and what was only temporary or incentive-driven required a different kind of analysis.
Over the past years, I have worked as a portfolio manager in hedge fund environments, focused entirely on DeFi strategies. During that time, I learned that managing DeFi yield is as much about asking the right questions as it is about finding the right answers. How reliable are the cash flows? How should risks be measured when the protocols themselves are still evolving? And how can frameworks from traditional finance, like duration or present value, be adapted to a world of liquidity pools, staking derivatives, and governance tokens?
This book is my attempt to share what I have learned so far. It is not an academic textbook, and it is not a step-by-step practical guide. Instead, it is a collection of ideas, frameworks, and examples that I have found useful in navigating the complexity of DeFi yield. Some of these come directly from traditional fixed-income theory, while others are specific to decentralized markets and their unique dynamics.
My aim is not to provide definitive answers, but to offer tools and perspectives that may help readers think more clearly about DeFi yield. The field is still young, and much will change in the years ahead. What I hope to contribute is a way of approaching DeFi yield that balances opportunity with caution, and innovation with risk awareness.
If this book succeeds, it will not be because it offers a perfect framework, but because it encourages portfolio managers, investors, and researchers to engage critically with DeFi yields to move beyond nominal numbers and consider what lies beneath them.
This book is written for a broad audience of practitioners and observers of decentralized finance. Portfolio managers and analysts may find in it a set of frameworks for evaluating and comparing yield opportunities. Developers and protocol designers may discover how their mechanisms are perceived from an investment perspective. Researchers and students interested in the intersection of finance and blockchain may use it as a bridge between established theory and emerging practice. Finally, individual investors curious about DeFi yield may find it a guide for asking better questions, even if not all the answers are fully settled.
What this book is not is equally important to state. It is not a trading manual, and it does not provide step-by-step instructions for implementing strategies. Nor is it an academic textbook built on formal proofs or exhaustive mathematical models. The field of DeFi is too dynamic, and its mechanisms too diverse, for any single volume to offer a definitive or permanent map. Instead, this book aims to share perspectives, highlight connections with traditional finance, and suggest ways of thinking about yield and risk. Readers seeking prescriptive strategies or guaranteed formulas will not find them here. What they will find are ideas, examples, and analytical tools intended to support their own judgment as they navigate the evolving landscape of decentralized finance.
DeFi is still in its early stages, and much of what we see today will evolve, disappear, or be reshaped in the years ahead. For that reason, the ideas presented in this book should be read as a contribution to an ongoing conversation rather than a definitive framework. My goal is not to provide certainty, but to offer perspectives and tools that make it easier to approach DeFi yield with discipline and clarity. If these pages help readers to frame better questions, recognize risks more quickly, or compare opportunities more consistently, then the book will have served its purpose.