Yield farming rewards are not magic — every dollar of yield is funded by one of four sources. Understanding the source tells you whether the yield is sustainable or subsidized.

Trading fees — paid by swappers, split pro-rata to LPs. Sustainable.
Token emissions — protocol mints new governance tokens to LPs. Dilutive and usually temporary.
Borrower interest — paid by leveraged traders and short sellers. Sustainable if demand persists.
External subsidies — a foundation or partner protocol pays to bootstrap liquidity. Ends when the grant ends.

Source	Who pays	Sustainability
Trading fees	Swappers	High
Token emissions	Future holders (dilution)	Low
Borrower interest	Leveraged traders	Medium-High
External subsidies	Protocol treasury	Time-limited