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Stablecoin yield risks and withdrawal checklist
By Yielro · Updated
Stablecoin yield can involve loss of principal. Important risks include the stablecoin losing its reference value, smart-contract failures, lending losses, insufficient withdrawal liquidity, provider disruption and currency movements. A high APY does not measure safety. Read the selected strategy and withdrawal conditions before depositing.
Different layers of risk
- Stablecoin risk: the token can lose value relative to its reference currency.
- Smart-contract and lending risk: code failures, bad debt or market events can cause losses.
- Liquidity risk: an on-chain position may not be immediately withdrawable.
- Provider and operational risk: a wallet, network, conversion or banking dependency can be disrupted.
- Currency risk: USDC returns measured in euros also depend on EUR/USD movements.
Requesting a withdrawal and receiving euros are different steps
A withdrawal can require a vault redemption, a currency conversion and a bank payout. Each step has its own availability and processing dependencies. The ability to request a withdrawal does not guarantee an immediate payout or an unchanged conversion price.
Before choosing
Identify the token, strategy, fees, data timestamp and provider dependencies. Check what happens during market stress, what you authorise and what recovery information is available if a step is delayed. Keep the confirmation information for any action you approve.
Protection and product status
A stablecoin lending position is not a covered bank savings deposit. Do not infer a Yielro licence, a guarantee or approval of a strategy from a provider’s or token issuer’s status. Public product explanations also do not establish that onboarding is available for your circumstances.