Why Do You Earn More Money in a Vault?

“Why am I earning more just for parking money in the vault?” That is the right question. The answer is the same economic idea as a money-market fund or savings account — but with blockchain transparency and without a bank sitting in the middle.

Where the yield comes from

When you deposit USDC into the Mercato DeFindex vault, the vault allocates that liquidity to approved DeFi lending strategies on Stellar. Borrowers pay interest to access that liquidity. A portion of that interest flows back to vault depositors — that is your yield.

1. You deposit USDC and receive dfTokens (your share of the pool).
2. The vault deploys pooled USDC into lending markets via DeFindex strategies.
3. Borrowers pay interest; the vault balance grows over time.
4. Your dfTokens represent a larger USDC value when you withdraw.

Why APY goes up and down

The displayed APY (Annual Percentage Yield) is an estimate based on recent strategy performance. It is not a guaranteed fixed rate like a CD. When demand to borrow USDC rises, rates tend to rise; when markets are quiet, rates fall. Mercato shows the current vault APY so you can compare idle cash vs. deal investments.

What about risk?

No yield product is risk-free. Vault strategies carry smart-contract risk, market liquidity risk, and strategy-specific risk. DeFindex vaults use audited contracts and diversified strategies, but you should treat vault yield as incremental return on cash you already hold in USDC — not as a substitute for due diligence on deal investments.