How the yield works
A pool has one source of income: the premium traders pay. Everything else on the pool page is bookkeeping about when that premium is earned and what it is at risk against.
Premium is the only income
When a trader opens a position, what they pay goes to the pool that backs it, less a 5% share for the Isometric treasury. The pool does not lend, stake, or farm. It sells exposure to traders and keeps what they paid.
Premium is earned over the life of the trade
The pool receives the premium at open but does not count it as earned straight away. It is released into the pool's share value evenly, hour by hour, until the position settles. A seven-day position's premium takes seven days to be fully earned.
The delay stops someone depositing before a big premium lands and withdrawing after it. It also smooths the pool's return: what you see accruing today is the sum of every open position's premium, spread across its remaining life.
Utilisation is what is working
Utilisation is the share of the pool locked against open positions. That locked money is what earns the premium, and it is also what pays winners. Money that is not locked earns nothing but is available to withdraw.
Each pool has a utilisation cap. Above it the protocol refuses new positions. The cap keeps most of the pool free, so that a run of winning trades cannot hollow it out and withdrawals stay possible. A pool near its cap is earning at its highest rate and has the most at stake.
Why the pool has an edge
The pool is not taking a coin flip. Each position is priced from live volatility with a margin built in:
- Volatility is priced above what the pool measures.
- The opening price is nudged 0.1% against the trader.
- When the pool is busy, new positions are priced more conservatively, moving the trader's target further away.
Over many trades this margin is the pool's return. Over any single stretch it can be swamped by a strong trend: the short pool loses in a crash, the long pool loses in a rally. The margin is an edge, not a guarantee.
Reading the 30-day APY
The pool page shows a 30d APY: how much the share value changed over the last 30 days, annualised. It is measured from the share price, so it includes payouts to winners as well as premium collected.
It is a record of what happened, and only that. A pool that returned 20% annualised last month can return less, or lose, next month. Pools with fewer than 30 days of history show Not enough history rather than a number.
What moves your balance
| Event | Effect on share value |
| A position opens | None yet. Premium starts accruing |
| Time passes on open positions | Rises, as premium is earned |
| The market moves against open positions | Falls, as the pool's expected payout rises |
| The market moves in the pool's favour | Rises, as the expected payout falls |
| A position settles worthless | Rises. The last of its premium is earned and its collateral is freed |
| A position settles in the money | Falls by the payout. The collateral behind it leaves the pool |
Between open and settlement the pool marks its open positions at their current expected payout, so your balance reflects the market before settlement makes it final.
The long pool's balance is in the market's asset
A long pool holds the market's own asset, cbBTC for Bitcoin, and pays winners from it. Your balance in that pool is measured in cbBTC. Its dollar value follows the Bitcoin price whatever the pool earns. Depositing there is a bet on Bitcoin plus a share of the premium, not a dollar yield.