Just opened a 6-figure position in $eHYUSD (@hylo_so's yield-bearing asset) 20%+ APY, and imo the best risk/reward on @solana right now. I spent hours reading the docs & talking to the team to understand the yield and what could go wrong. Here are my personal notes ⤵️ 1) Quick recap about Hylo Hylo is best known for its leveraged tokens: xSOL, xHYPE and xBTC. They give you roughly 2–3x exposure without liquidations. So if SOL goes up 10%, xSOL would gain around 20–30%, depending on its leverage at the time. That works both ways: losses are amplified too. 2) What's $eHYUSD and where does the yield come from? You can stake hyUSD, Hylo's stablecoin, and receive eHYUSD to earn a share of the yield generated by the protocol basically: • xSOL holders give up the staking rewards on the SOL backing their positions in exchange for leverage. • xBTC and xHYPE holders pay borrow charges for theirs. • xSOL holders might also pay extra borrow charges, specifically when liquidity is needed (which is the case right now) Those revenues are shared with eHYUSD holders and compound automatically. 3) APY was around 9%, why has it recently jumped to 20%+? As SOL and BTC went up, xSOL and xBTC holders made money, but the leverage on their positions came down. They're now at 2.20x and 2.48x, both below Hylo's 2.54x lower boundary. To bring that leverage back up, Hylo needs to buy more SOL and BTC, which means attracting more stablecoin deposits. So holders pay more for their leverage, and part of that goes to eHYUSD holders. For example, xSOL holders currently pay ~5% in borrow charges while also giving up the staking yield on the SOL behind their positions. Those staking rewards and extra borrow charges flow into the Earn Pool alongside revenue from the other markets, bringing the yield we receive on eHYUSD to ~21% APY. Once leverage is back in range, those extra charges come down. I'd expect APY to move closer to 10–15%, depending on deposits and market conditions. 4) What could go wrong? In V1, the Stability Pool could convert your hyUSD into xSOL during a selloff, leaving you exposed to further SOL losses. V2 instead starts selling collateral into USDC when leverage goes above ~3.86x, reducing exposure as the market falls. But if prices crash faster than the protocol can rebalance and a pool becomes under collateralized, the Earn Pool can be used to cover the shortfall. That means losing part of your deposit, even if hyUSD keeps its peg. There are also smart contract and oracle risks of course. 5) What to do with your $eHYUSD? - Hold it in your wallet and let the yield compound. $eHYUSD started at $1 and is now worth ~$1.48 as interest has built up. - Explore tranching markets on @ExponentFinance. I put a small amount into jrEHYUSD, currently yielding ~28%, but it takes losses first if eHYUSD drops, so the downside is much bigger too. - Loop it on @kamino (soon). Let me know if you have any questions, I'll be more than happy to answer Note: I'm a seed investor in @hylo_so