The yield provenance spectrum: asserted, attested, verifiable
The yield provenance spectrum: asserted, attested, verifiable
Every yield comes from somewhere. Someone, somewhere, is paying it: a borrower paying interest, a trader paying funding, a protocol paying incentives out of its own token supply. The first question about any yield isn't "how much?" It's "who is paying, and how do I know?"
Call the answer to the second half of that question the yield's provenance. It sits on a spectrum with three broad stages.
Asserted
The yield is described by whoever is offering it, and the description is all you get. A dashboard shows a number. A pitch deck explains the strategy. There's no independent evidence that the strategy is being run as described or that the payments come from where they're said to come from.
Asserted yield isn't necessarily fake. Plenty of honest operators work this way. But you're relying entirely on their word, and when an asserted yield fails, the explanation usually arrives after the losses.
Warning signs: yield that stays smooth regardless of market conditions, strategies described in general terms ("market-neutral", "arbitrage") without specifics, and returns paid from sources nobody outside can see.
Attested
A third party, usually an accounting firm, has checked a specific claim at a specific time and reported on it. Reserves were confirmed at month-end. A sample of loans was matched to documents at onboarding.
Attested yield is a real step up. Someone independent has looked. But an attestation covers a defined claim at a defined moment (see Audit vs attestation vs verification). Between attestations, you're back to assertion.
Questions to ask: what exactly was checked, as of what date, at what level of assurance, and what's happened since?
Verifiable
The data behind the yield is checked against primary sources on an ongoing basis, and the results are recorded so that anyone with access can confirm them without relying on the operator. Payments are matched to bank transactions. Collateral is matched to custodian records. Each update is fingerprinted and anchored so it can't be quietly revised (see Hash-then-anchor).
Verifiable doesn't mean risk-free. A borrower can still default. Collateral can still fall in value. What it means is that when those things happen, you'll see them as they happen, from the source, rather than from a quarterly letter.
Why it matters
Two investments can show the same yield and sit at opposite ends of this spectrum. The number doesn't tell you which is which.
It also changes what the yield represents. Asserted yield often carries a hidden premium for risks you can't see. Verifiable yield from well-secured, short-duration credit is closer to an efficiency and access premium, not a risk premium: you're paid for capital reaching borrowers that traditional lenders serve slowly or not at all, not for bearing risks nobody disclosed.
How to place a yield on the spectrum
Ask four questions:
- Who pays it? Name the actual payer: borrowers, traders, token emissions.
- What's the evidence? The operator's word, a periodic third-party report, or a source-level check you can see?
- How fresh is it? Today, last month, last year?
- Can it be changed after the fact? Is the record anchored, or can it be edited?
If the answers to two and three are "the operator's word" and "unclear", the yield is asserted, whatever the marketing calls it.