> ## Documentation Index
> Fetch the complete documentation index at: https://docs.molq.site/llms.txt
> Use this file to discover all available pages before exploring further.

# Yield and APY

> Interpret active projected APY, target scenario APY, funding carry, and realized profit.

MolQ separates live exposure from a hypothetical target allocation.

## Active projected APY

Active projected APY uses the capital and hedge exposure that currently exist:

```text theme={null}
shield contribution = Aave supply APY x actual shield share
hedge contribution  = short funding APY x actual hedge share
active projected APY = shield contribution + hedge contribution
```

When the Bybit hedge is zero, negative funding does not reduce active projected
APY. It only affects the target scenario.

## Target scenario APY

Target scenario APY estimates the current market opportunity if the complete
85% shield and 15% hedge policy were active:

```text theme={null}
target scenario APY =
  (Aave USDe supply APY x 85%) +
  (ETHUSDT short funding APY x 15%)
```

For a short perpetual position:

* Positive funding means longs pay shorts.
* Negative funding means shorts pay longs.

If Aave supply APY is `0.61%` and short funding APY is `-5.71%`, the target
scenario is:

```text theme={null}
(0.61% x 85%) + (-5.71% x 15%) = -0.34%
```

<Warning>
  Projected APY is not realized performance, a promise, or a guaranteed return. Aave rates and
  perpetual funding change continuously. Trading fees, slippage, basis movement, exchange risk,
  and operational costs can reduce returns.
</Warning>

## Realized profit

Realized external profit is only reported after USDe is returned to the vault
through `hardenProfit`. Unrealized exchange PnL is displayed separately and is
not counted as vault profit.