Note that anyone considering this (as I am) also has to consider, outside of the fact that this person might be accidentally wrong, the fact that this person might be deliberately running a pump and dump scam (although LW does seem a weird place to target for this).

Do you understand how e.g. Rari's USDC pool makes 20% APY?

• Lending would require someone to be borrowing at rates higher than 20%, but why do that when you can borrow USDC at much lower rates? Or maybe the last marginal borrower is actually willing to take that rate? Then why does Aave give such low rates?
• Providing liquidity would require an enormous amount of trades that I don't expect to be happening, but maybe I'm wrong

The only thing that my limited imagination can come up with is 'pyramid scheme', where you also get paid a small fraction of the money that other people are putting into the pool. So as long as the pool keeps growing, you get great returns. But the last half of the pool gets small (or negative) returns.

I'd love to get a better sense of this, maybe you could point me to your favorite writeup?