Understanding the Risks

Every DeFi protocol relies on smart contracts — code deployed on-chain that handles your funds. If a smart contract has a vulnerability, it could potentially be exploited. This has happened to even well-known protocols in crypto's history.

APY rates fluctuate based on market conditions, protocol usage, and token prices. The interest you see when you deposit is not guaranteed — it can go up or down. During market stress, rates often compress as users withdraw liquidity.

In lending protocols, if utilization is very high (most deposited funds are being borrowed), you may experience delays withdrawing. This is uncommon in well-managed pools but can happen during high-demand periods.

When swapping tokens (e.g., SOL to USDC), the actual price you receive may differ from the quoted price. Larger swaps on less liquid pairs are more susceptible.

Many DeFi lending positions involve stablecoins (USDC, USDT). While major stablecoins are designed to maintain their peg, temporary or permanent depeg events have occurred. If a stablecoin loses its peg, the value of your position could decrease.

Tokenized stocks are designed to track the underlying share, whose price can rise or fall. If you convert interest into a stock and the stock drops, your position is worth less than the dollars you converted.

apys does not issue tokenized stocks or hold the underlying securities. Supported products include xStocks, issued by Backed Assets (JE) Limited, and tokenized securities issued through Backpack. Both providers describe their products as backed 1:1 by underlying securities held through custody arrangements. The rights attached to a token depend on its issuer and product terms and can differ from holding shares in a brokerage account.

These products depend on their issuers, brokers, and custodians. Failures or disruptions can affect token value, trading, or redemption. Direct redemption is subject to eligibility, identity verification, and product terms. xStocks documents segregated collateral and an independent security agent that may recover assets following issuer default, subject to its prospectus.

Tokenized stock trades onchain around the clock, while the stock market it tracks does not. When the market is closed, or when onchain liquidity for a given ticker is thin, the token's price can drift from the share's price, and a large conversion can move it further.

What happens if apys itself goes down? Because apys is non-custodial and uses direct protocol interactions, your funds are never held by apys. They sit in the protocol's smart contracts, not ours.