Yield, APY, collateral and the risks that sit outside ordinary purchase cashback.
Topic definitions
Definitions in this topic
23
Advertised vs observed APY
Also seen as advertised APY · current APY · 7-day mean · 30-day mean · live vault APY
Advertised APY is a provider's promoted or stated rate, while observed APY describes a current or historical measurement from the product or strategy. The two values can use different periods and assumptions.
Practical explanation
Why it matters
A headline ceiling may not reflect what users recently earned or can access now. Comparing the evidence type and observation window prevents a marketing number from appearing more certain than it is.
How we treat it
cryptocard.guide labels the rate type and observation date when approved evidence permits. Advertised, current and historical APY values are not substituted for one another or presented as guaranteed returns.
Also seen as Annual Percentage Yield · advertised APY · variable APY · up to APY
Annual Percentage Yield is an annualized expression of a yield rate that can reflect compounding assumptions. It helps compare rates, but an advertised or variable APY is not a promise of future return or principal protection.
Practical explanation
Why it matters
APY can change and may apply only to a separate balance, tier, asset, or strategy. The number alone does not show access to funds, fees, or the risk of loss.
How we treat it
cryptocard.guide labels whether an APY is advertised, current, variable, or capped by conditions when approved evidence allows it. APY remains an Earn field, is never rewritten as cashback, and carries visible risk and access context.
Also seen as collateral-backed borrowing · crypto-backed credit · secured crypto credit · Borrow Mode
A credit arrangement where assets are pledged to support borrowing used for card spending or another balance. The user creates debt, may pay interest, and can face restrictions or liquidation if collateral conditions worsen.
Practical explanation
Why it matters
The purchase may not sell the pledged asset immediately, but it creates repayment and collateral risk. This is economically different from spending a prepaid or provider-account balance.
How we treat it
cryptocard.guide identifies collateral-backed borrowing as a payment or credit model, not a reward or free-liquidity feature. Approved borrowing, repayment, collateral, custody, interest, and liquidation facts remain visible before suitability language or scoring explanations.
Also seen as loan-to-value · LTV · approximate borrow ratio · collateral ratio
Borrow ratio or loan-to-value compares the debt amount with the value of pledged collateral. The ratio influences borrowing capacity and how close the position may be to a liquidation threshold.
Practical explanation
Why it matters
A ratio published on one date may change with product rules or market prices. Users should not treat an illustrative example as a permanent maximum or safe operating level.
How we treat it
cryptocard.guide labels the approved ratio's date, scope and status when available. It does not infer a current borrowing limit or safe threshold from a stale example or marketing illustration.
Also seen as borrowed USDC · debt asset · card funding asset · loan currency
The borrowed asset is the unit in which debt is created; the funding asset is the balance or currency that ultimately supports card spending. They may differ when conversion occurs before payment.
Practical explanation
Why it matters
Debt cost, repayment exposure and spending value depend on which asset is owed and which asset reaches the card flow. Treating them as identical can hide conversion and peg risk.
How we treat it
cryptocard.guide identifies both assets and any approved conversion step. A collateral ticker, loan ticker or spendable balance is not substituted for another merely because the same product mentions all three.
Also seen as variable borrow rate · interest rate · repayment rules · loan repayment
A borrowing rate is the cost charged on outstanding debt, while repayment rules define when and how the debt must be reduced. Both are separate from card purchase, conversion and network fees.
Practical explanation
Why it matters
A card can advertise low transaction fees while the borrowing balance accrues material interest. Variable rates, minimum payments and repayment assets can change the total cost after purchase.
How we treat it
cryptocard.guide shows approved borrowing costs and repayment conditions as credit terms, not ordinary card fees. Unknown or variable terms remain qualified and can create explicit cost and risk caveats.
Also seen as crypto collateral · yield-bearing collateral · pledged asset
Collateral is an asset pledged to secure borrowing or another obligation. While pledged, it may be locked, subject to valuation rules and available for sale if the required risk threshold is breached.
Practical explanation
Why it matters
The borrower can retain market exposure while losing immediate access to the asset. Price changes can reduce borrowing capacity or trigger liquidation even when card purchases themselves are repaid.
How we treat it
cryptocard.guide records the approved collateral asset, control boundary and applicable liquidation conditions. Collateral value is not treated as available card balance unless the product flow explicitly makes it spendable.
Also seen as keeps earning · yield-bearing collateral · locked until repaid · earning while pledged
Collateral may continue generating yield while securing debt, yet remain unavailable for withdrawal until repayment or release. Continued earnings do not remove borrowing costs, price exposure or liquidation rules.
Practical explanation
Why it matters
Marketing can emphasize ongoing yield while omitting that the asset is encumbered. Users need both the earning status and the conditions for regaining unrestricted access.
How we treat it
cryptocard.guide shows earning and lock conditions as separate approved facts. Yield on pledged assets receives no assumption that it offsets interest expense or protects against liquidation.
Also seen as FDIC insured · deposit protection · protection limit · not insured
Deposit insurance is a specific legal protection for eligible deposits held by a covered institution, subject to jurisdiction, account ownership, currency and coverage limits. It does not automatically cover crypto assets or vault positions.
Practical explanation
Why it matters
A banking partner or fiat label alone does not prove coverage. Users need to know the insured entity, eligible balance type, beneficiary and limit before treating the protection as relevant.
How we treat it
cryptocard.guide publishes insurance status only from applicable approved evidence and preserves its scope and limit. Missing coverage information is not converted into either insured or definitely uninsured.
Also seen as smart-contract risk · protocol risk · liquidity risk · counterparty risk · oracle risk · strategy risk
Earn risk factors are distinct ways an interest, vault or credit feature can fail or lose value, including market, liquidity, counterparty, custody, protocol, smart-contract, peg, oracle, regulatory and strategy risks.
Practical explanation
Why it matters
A single “high risk” label hides which event could harm the user and whether it affects access, principal or rate stability. Named risk paths make product trade-offs more actionable.
How we treat it
cryptocard.guide presents documented risk paths as separate caveats and does not transform protocol names or high APY into a safety conclusion. Earn utility remains bounded by liquidity and principal-risk evidence.
Also seen as Earn and rewards · yield versus cashback · purchase rewards versus yield
Cashback is a purchase-linked reward earned on eligible card spending. Earn is a separate balance or investment feature that may generate yield without a purchase and can introduce liquidity, market, custody, or protocol risk.
Practical explanation
Why it matters
Putting both percentages under rewards can make unlike benefits look interchangeable. Cashback depends on eligible purchases and caps; Earn depends on deposited or held value, access rules, and investment risk.
How we treat it
cryptocard.guide keeps purchase rewards and Earn in separate content and fact groups. An advertised Earn rate is not counted or described as cashback, and its access model and risks remain visible alongside any utility.
Also seen as fixed APY · variable APY · tiered APY · tier ceiling · non-guaranteed rate
Fixed APY is documented as unchanged for a stated period under stated conditions; variable APY can change; tiered APY depends on balance bands, status or another threshold.
Practical explanation
Why it matters
The same displayed percentage can have very different predictability and access requirements. A top tier or temporary fixed period should not be mistaken for the rate on every balance.
How we treat it
cryptocard.guide preserves the approved rate structure, qualifying conditions and effective date. It does not shorten a variable, tiered or temporary yield into an unqualified fixed return.
Also seen as liquidation · collateral liquidation · forced collateral sale · liquidation exposure
The risk that pledged collateral is sold or otherwise taken to reduce debt when required collateral conditions are breached. It can turn a card-spending decision into a loss of assets, even if the purchase succeeds.
Practical explanation
Why it matters
Collateral value, debt, and product thresholds can change independently of the card transaction. A user may therefore face asset loss or forced repayment after the original purchase.
How we treat it
cryptocard.guide treats liquidation risk as a material credit and collateral trade-off, not as a card fee. When supported by approved facts, it stays visible in the payment model, Earn or Trust context, Pros & Cons, and score explanations.
Also seen as separate Earn deposit · separate yield balance · optional vault · vault-only yield
Optional vault yield requires moving value into a separate Earn product, vault or investment position. That value is not automatically available for card spending and may need redemption first.
Practical explanation
Why it matters
A high vault rate can look like a card benefit even when it is operationally separate from purchases. Liquidity, fees and risk must be assessed before counting the feature as practical utility.
How we treat it
cryptocard.guide displays optional vaults separately from the card's spendable balance. Any limited Rewards-category treatment is risk-capped, while Cashback scenario scoring receives no Earn or vault credit.
Also seen as principal can fall · loss risk · loss of principal · not guaranteed
Principal risk is the possibility that the amount placed into an Earn, vault, collateral or investment position loses value, becomes inaccessible or cannot be returned in full.
Practical explanation
Why it matters
Yield percentages describe potential return, not protection of the starting amount. Even a positive APY can be outweighed by asset losses, defaults, liquidation or a failed redemption route.
How we treat it
cryptocard.guide keeps material principal-loss conditions visible and prevents yield language from implying guaranteed preservation. Identified risk can limit scoring utility and create explicit trade-offs.
Also seen as redemption terms · withdraw anytime · withdrawal terms · exit from vault
Redemption is the process of converting or withdrawing a yield position, token or claim back into a usable balance. It can involve waiting periods, queues, fees, limits or changing exchange values.
Practical explanation
Why it matters
A position may show attractive returns while restricting access to principal. Redemption conditions determine whether funds can reach the card balance when the user actually needs them.
How we treat it
cryptocard.guide records approved exit timing, fees, limits and destination separately from the APY. “Withdraw anytime” is not published unless the evidence establishes what can be withdrawn and under which conditions.
Also seen as Earn on spending balance · yield on card balance · yield balance can fund card spend
Spendable-balance yield is a return applied to value that can also support card spending under the product's documented flow. Access may still require conversion, authorization or a particular account state.
Practical explanation
Why it matters
This setup can be more usable than a separate vault, but the balance may retain market, custody or liquidity risk. Earning yield does not prove instant or unrestricted card access.
How we treat it
cryptocard.guide records whether the yielding balance can genuinely fund card spending and under what steps. Any scoring contribution remains small and risk-capped, and it never backfills purchase cashback.
Also seen as Treasury bills · T-bill yield · treasury-backed return · tokenized treasury yield
Treasury-backed yield comes from a structure linked to government treasury instruments or their income. Users may hold a token, claim or account interest rather than the treasury bill directly.
Practical explanation
Why it matters
The underlying instrument may be comparatively familiar while the wrapper adds issuer, custody, redemption, jurisdiction and token-market risks. “Treasury-backed” does not mean insured or immediately redeemable.
How we treat it
cryptocard.guide describes the approved legal and product structure without treating the label as a safety guarantee. Token, custody, redemption and access conditions remain visible alongside the yield source.
Also seen as protocol · DeFi protocol · external protocol · smart-contract protocol
An underlying protocol is the external blockchain system or smart-contract application that performs part of an Earn, vault, lending or credit strategy behind the user-facing card product.
Practical explanation
Why it matters
The card brand may not control every component of the protocol. Bugs, governance changes, liquidity problems or protocol restrictions can affect value even when the card application continues operating.
How we treat it
cryptocard.guide names an underlying protocol only where approved evidence establishes its applicable role. Protocol reputation or source count does not become an automatic safety or scoring bonus.
Also seen as Earn vault · yield position · DeFi vault · strategy vault
A vault is a separate balance or position that follows a defined yield strategy, sometimes through smart contracts or an external protocol. It is not automatically a bank deposit or guaranteed savings account.
Practical explanation
Why it matters
Moving funds into a vault can change custody, liquidity, counterparty and smart-contract exposure. The displayed APY alone does not explain how quickly or safely the principal can return.
How we treat it
cryptocard.guide describes the approved strategy, access terms, underlying protocol and risk factors independently. A vault is never presented as card-spendable unless the documented flow supports that claim.
Also seen as return · earnings · balance yield · vault yield · Earn return
The return generated by holding or deploying value in a balance, lending product, vault, or strategy. Yield is not guaranteed cashback; its rate, access, source, liquidity, and risk can change.
Practical explanation
Why it matters
A visible rate does not explain where the return comes from or whether the balance remains spendable. Users need the mechanism, withdrawal terms, and principal risks before comparing it with card rewards.
How we treat it
cryptocard.guide shows yield only from approved Earn facts and separates the advertised rate from the mechanism, access model, assets, withdrawal terms, and risks. Unknown yield data receives no positive treatment.
Also seen as treasury bills · lending pool · liquidity provision · staking · return mechanism
A yield mechanism is the operational process used to generate returns, such as lending assets, staking, holding treasury exposure or providing liquidity. One product can combine several mechanisms.
Practical explanation
Why it matters
The mechanism shapes liquidity, counterparty, market and smart-contract risks even when the headline APY is identical. It also determines what events can interrupt or reduce the return.
How we treat it
cryptocard.guide separates the documented mechanism from the advertised rate and provider brand. Unknown mechanisms remain unknown rather than being inferred from product names or marketing language.
Also seen as source of yield · yield paid by · economic source of return
Yield source identifies the economic activity or cash flow from which a return is funded, such as borrower interest, staking rewards, treasury income, trading activity or token incentives.
Practical explanation
Why it matters
Two products with the same APY can rely on sources with very different durability. Understanding where returns originate helps reveal whether the rate depends on credit demand, market activity or subsidies.
How we treat it
cryptocard.guide records a yield source only when approved evidence identifies it. An unexplained advertised return remains a disclosure gap and does not receive an assumed low-risk interpretation.