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The Moneda Earnings Account allows you to earn passive income by depositing fiat currency, which is converted into stablecoins and supplied to Morpho, a third-party decentralised financial (DeFi) lending platform. On Morpho, borrowers pay interest on their loans, and this interest generates the returns you earn on your deposits.

Your balance grows automatically through real-time, auto-compound interest, and you can withdraw your funds and earnings at any time. The Moneda Earnings Account provides a clear view of your deposits, accrued interest, and average APY in real time.

While the Smart Earnings Account is a great way to earn high yields, it is not risk-free. It involves DeFi protocols and smart contracts, so you should be aware of the key risks before investing. Here are some important considerations:

Smart Contract & Protocol Risk: The Smart Earnings strategy relies on smart contracts – both those of YO and of the many DeFi protocols it invests in. Any bug or exploit in these contracts could potentially lead to a loss of funds. Likewise, if any underlying protocol fails or is hacked, the portion of funds allocated there could be affected. YO mitigates this by using audited contracts and a curated whitelist of reputable pools, but no contract is 100% safe.
Liquidity Risk: Because your funds are invested across various platforms, there’s a possibility of encountering liquidity issues. For example, if many users withdraw at once or if an underlying pool suddenly has low liquidity, it might become temporarily hard to pull funds out quickly. YO attempts to minimize this with its liquidity buffer and FIFO withdrawal queue (so most withdrawals are instant and large ones are queued in an orderly way) Still, in extreme market conditions, access to funds could be delayed or, in a worst-case scenario, a portion of funds might not be immediately retrievable until markets normalize.
Stablecoin Risk: The Smart Earnings Account uses stablecoins (USDC for USD, EURC for Euros) as the currency of investment. These are intended to hold a 1:1 peg with fiat currency, but there’s a risk that a stablecoin could de-peg. For instance, if USDC or another underlying stablecoin were to significantly lose its value or redeemability, it would directly impact the value of deposits. While USDC and EURC are among the more trusted stablecoins (fully reserved and regulated), this risk is not zero.
Cross-Chain and Integration Risk: YO operates across multiple blockchains and DeFi protocols. This means it sometimes uses bridges or cross-chain liquidity to move assets to where yields are highest. Cross-chain operations carry the risk of bridge vulnerabilities. If a bridge used by YO is exploited, funds in transit or on other chains could suffer losses. Additionally, the more protocols involved, the more points of failure can exist (from price oracles to governance attacks on those protocols). YO’s approach of continuous risk monitoring and using only vetted strategies helps reduce exposure to problematic platforms, but it can’t eliminate the complexity risk entirely.
Market & Interest Rate Risk: The yield you earn is variable, not fixed. If market conditions change (for example, a DeFi yield opportunity dries up or rates drop because lots of capital floods into the same strategy), your APY will go down. In extreme cases, certain strategies could even yield negative returns momentarily (though YO would likely rotate out of those). Also, extreme volatility or events in crypto markets might indirectly affect your earnings or temporarily the value of reward tokens that contribute to your yield.

How YO mitigates risk: The YO Protocol is built with several safety-oriented features. Its contracts have been independently audited, and it operates under conservative governance (secured by multi-signature controls and an active bug bounty program). YO also uses Exponential.fi’s risk ratings to evaluate each pool it invests in; if a particular strategy’s risk score worsens (due to a hack, instability, etc.), YO can automatically reduce or halt exposure to it. The vault is diversified across many strategies, so not all your eggs are in one basket. These measures significantly reduce the overall risk compared to chasing high yields on your own. In fact, since launch YO’s yoUSD vault has delivered ~8.6% annualized returns with near-zero volatility and no negative months recorded – a testament to its balanced, risk-aware approach. However, it’s important to understand that no system is entirely without risk. You should only invest an amount you’re comfortable with and consider your own risk tolerance. Moneda will continue to monitor the Smart Earnings Account’s performance and the underlying protocols to help keep your funds as secure as possible, but ultimately, higher yield DeFi products do carry higher risk than a savings account.

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