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When you deposit assets into Tapioca, your funds are put to work in on-chain DeFi protocols deployed on Base — the same battle-tested protocols used by advanced DeFi participants, but accessed through an interface that handles all the complexity for you. Yield is generated by these underlying protocols through mechanisms like lending interest, liquidity provision fees, and protocol incentives, then credited continuously to your Tapioca balance. You don’t need to claim it, reinvest it, or take any action — it accrues automatically and compounds over time.

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Where yield comes from

Tapioca routes your deposits to audited DeFi protocols on Base. Each protocol generates returns in different ways:

Lending markets

Your assets are lent to borrowers on-chain. Borrowers pay interest, which flows back to depositors like you.

Liquidity provision

Your assets provide liquidity to decentralized exchanges. Trading fees generated by that liquidity are distributed to providers.

Protocol incentives

Some protocols distribute their native tokens to liquidity providers as an additional incentive on top of base yield.

Yield optimization

Tapioca automatically rebalances between strategies to pursue the best available yield, without you needing to monitor or move funds manually.

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How APY is calculated

APY (Annual Percentage Yield) reflects your expected return over one year, accounting for compounding. Because your yield compounds continuously — meaning accrued yield is automatically reinvested into your position — even small daily rates add up meaningfully over time. For example, a 10% APY means that if you deposit 1,000 USDC today and the rate holds for a full year, your balance would grow to approximately 1,105 USDC. The compounding effect means you earn yield on your yield, not just your original deposit.
APY rates are variable and depend on current market conditions, protocol utilization, and on-chain liquidity. Past yield rates do not guarantee future returns. Always consider the variable nature of DeFi yield when planning your deposits.

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When yield accrues

Yield accrues continuously, in real time, from the moment your deposit is confirmed on-chain. There is no waiting period, vesting schedule, or minimum hold time. You can see your accrued yield updating in the Tapioca app dashboard — the balance shown reflects your principal plus all earnings to date.

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Viewing your accrued yield

Your current balance, including accrued yield, is always visible on the Portfolio page in the Tapioca app. The dashboard shows:
  • Total balance — your principal plus all accrued yield
  • Earnings to date — the total yield earned since your first deposit
  • Current APY — the live rate being applied to your position
  • Yield history — a breakdown of earnings over time

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Withdrawing your funds

You can withdraw your principal and all accrued yield at any time. There are no lock-up periods, minimum holding requirements, or withdrawal penalties. When you initiate a withdrawal:
  1. Your position is unwound from the underlying protocol.
  2. Your principal and accrued yield are returned to your Tapioca smart account.
  3. From there, you can send the funds to any address or keep them in your smart account.
Withdrawals are processed on-chain and typically settle within a few seconds on Base. Gas fees for withdrawals are sponsored by Tapioca — you pay nothing out of pocket.
In rare cases of extreme protocol congestion or liquidity constraints on the underlying DeFi protocol, withdrawal times may be slightly longer. Tapioca surfaces any such delays in the app at the time of your withdrawal request.

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Frequently asked questions

Yield accrues automatically and is reflected in your balance in real time. You do not need to claim, harvest, or take any action to collect your earnings. When you withdraw, you receive your full balance — principal plus all accrued yield — in a single transaction.
APY is determined by the underlying DeFi protocols and fluctuates based on market conditions. Key factors include borrower demand in lending markets, trading volume for liquidity positions, and changes in protocol incentive programs. Tapioca monitors rates continuously and rebalances your position to pursue the best available yield, but the rate shown is always a real-time snapshot, not a guarantee.
Supported assets are listed on the deposit page in the Tapioca app and in the deposit guide. The asset list may expand over time as Tapioca integrates additional protocols and strategies.
Tapioca does not impose a platform-level minimum, but the underlying DeFi protocols may have their own minimum deposit thresholds. Any applicable minimums are shown on the deposit screen before you confirm your transaction.