When most people think about tracking their DeFi yield, they look at one number: APY. It is the figure protocols display front and centre, and it is often the first thing users compare when deciding where to deposit.
But APY has a problem. It is a projection, not a measurement. It tells you what your returns might look like if current conditions hold, not what you have actually earned. And in DeFi, conditions rarely hold for long.
There is a more honest, more reliable way to track yield. It is called Price Per Share (PPS), and it is the model used by Altura to reflect earnings in a way that is transparent, verifiable, and directly tied to real performance.
This post explains exactly how PPS works, why it is a better measure than displayed APY, and what it means for you as a depositor.
The Problem With APY as a Metric
APY, or Annual Percentage Yield, is calculated by taking a current yield rate and projecting it forward over a full year. The calculation assumes that conditions today will remain constant for the next 365 days.
In practice, this assumption almost never holds. Yield rates in DeFi change constantly based on market activity, liquidity, demand, and strategy performance. A protocol showing 40% APY today might show 12% next week if market conditions shift.
There are also protocols that inflate their displayed APY by including inflationary token rewards in the calculation. These rewards are paid out in freshly minted tokens that may decline in value over time. The headline number looks attractive, but the actual value delivered to depositors can be significantly lower.
For a depositor trying to understand what they have actually earned, APY offers very little clarity. It is a forecast, not a record.
What Is Price Per Share?
Price Per Share (PPS) is a straightforward concept borrowed from traditional finance, specifically from how mutual funds and ETFs track value.
Here is how it works:
When you deposit into a yield vault, you receive vault shares that represent your proportional ownership of the total assets in the vault. These shares have a price, expressed in terms of the underlying asset. For example, if the vault holds USDT0 and your shares are worth 1.00 USDT0 each at the time of deposit, the initial PPS is 1.00.
As the vault generates yield through its strategies, the total assets in the vault grow. Because the number of shares outstanding stays the same, the value of each share increases. If the vault grows from 1,000,000 USDT0 to 1,050,000 USDT0, the PPS rises from 1.00 to 1.05.
Your share count has not changed. But each share is now worth more. That increase in PPS is your yield.
A Simple Example
Suppose you deposit 1,000 USDT0 into the Altura vault when PPS is 1.00. You receive 1,000 vault shares.
Three months later, the vault has generated yield, and PPS has risen to 1.08.
Your 1,000 shares are now worth 1,080 USDT0. You have earned 80 USDT0, or 8%, over three months, without doing anything. No rebalancing. No claiming. No compounding manually.
The PPS rise is the complete, honest record of what the vault earned. There is no projection involved. There is no token inflation included. It is simply the value of the vault divided by the number of shares, updated on-chain as yield accrues.
Why PPS Is a More Reliable Measure Than APY
It Reflects Actual Performance
PPS is a historical record of what the vault has earned. APY is a forecast of what it might earn. When you look at PPS over time, you see exactly how the vault has performed across different market conditions, not a projection of what it might do if those conditions continue.
It cannot Be Inflated by Token Rewards
Because PPS measures the growth in underlying asset value, it excludes any inflationary token rewards that are not backed by real economic activity. A vault that pays out token incentives might show a high APY, but its PPS will only rise if the underlying strategies are actually generating returns. PPS keeps the measure honest.
It Compounds Automatically
In many DeFi protocols, users need to manually claim and reinvest their yield to benefit from compounding. With a PPS model, compounding happens automatically. As the vault generates yield, the PPS rises, and the full value of your position grows without any action required on your part.
It Is Transparent and Verifiable
Because PPS is updated on-chain, anyone can verify it independently. You do not need to trust a dashboard number or a protocol's marketing claims. You can query the contract directly and see exactly what the current PPS is, what it was at any point in the past, and how it has moved over time.
How Altura Uses PPS
At Altura, PPS is the core mechanism for reflecting yield to depositors. The vault accepts USDT0 deposits, issues vault shares, and updates PPS on-chain as strategies generate returns.
The strategies generating that yield are:
• Funding Rate and Basis Arbitrage: Capturing yield from inefficiencies between perpetual and spot markets through hedged positions.
• Market Making and Liquidity Provision: Earning spread income while maintaining neutral market exposure.
• Real-World Asset (RWA) Strategies: Allocating capital to asset-backed strategies, including gold-focused positions.
As these strategies generate returns, the value of the vault's total assets increases. That increase flows directly into a rising PPS. There are no token emissions involved. No yield is manufactured. The PPS rise reflects real economic activity, and nothing else.
PPS updates are managed through an on-chain oracle with safeguards including movement limits, freshness checks, timestamp validation, and authorised reporters. This means PPS cannot be manipulated or updated arbitrarily. Every change is controlled and verifiable.
What You Can Verify as a Depositor
One of the key principles behind Altura's design is that depositors should never have to take the protocol's word for anything. Everything that matters is verifiable on-chain.
For PPS specifically, this means you can independently verify:
• The current PPS and how it has changed since your deposit
• Historical PPS updates and when they occurred
• Your share count and the current value of your position
• The total assets in the vault and how they have moved over time
This level of transparency is not common in DeFi yield protocols. Many operate as black boxes where users see a dashboard number and have no way to verify the underlying activity. Altura's on-chain PPS model removes that opacity entirely.
PPS vs APY: Which Should You Focus On?
Both metrics have their place, but they serve different purposes.
APY is useful for comparing the potential yield of different protocols before you deposit. It gives you a rough sense of scale, even if the actual number will change.
PPS is useful for understanding what a vault has actually delivered. If you want to know whether a protocol is performing as advertised, look at how PPS has moved over time. A consistently rising PPS across different market conditions tells you the strategies are working. A flat or declining PPS tells you they are not.
The smartest approach is to use APY for initial discovery and PPS as your ongoing measure of real performance. Over time, PPS tells the full story.
The Bottom Line
Price Per Share is a simpler, more honest, and more reliable way to track yield than displayed APY. It reflects actual performance, compounds automatically, excludes inflated token incentives, and is fully verifiable on-chain.
For any serious depositor, understanding PPS is not optional. It is the metric that separates protocols generating real value from those manufacturing headline numbers.
If you want to see PPS in action with a vault built around sustainable, non-directional yield strategies, visit altura.trade and explore how the Yield Engine works.
