Overnight Yield refers to the return earned on an investment held for a very short duration, typically from one trading day to the next. In traditional finance, this often applies to short-term loans or money market instruments. In the digital asset space, it can refer to the interest or rewards generated by holding certain cryptocurrencies in lending protocols or staking mechanisms for a brief period. It reflects short-term liquidity premiums.
Context
Crypto news frequently reports on Overnight Yields available in decentralized finance protocols, highlighting opportunities for liquidity providers and stakers. These yields are often subject to significant volatility and are closely watched by market participants seeking short-term returns. Regulatory bodies are increasingly scrutinizing the mechanisms generating these yields, particularly concerning investor protection and market stability.
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