How to get double - digit yield on the S&P 500
The SPDR S&P 500 ETF ($SPY) is the world’s largest and most liquid ETF, giving investors exposure to 500 leading U.S. companies. It does pay dividends, typically around 1.2% to 1.5% annually , but for many investors, that payout is too small to matter - and notably below its long term trend rate of 3-5% as higher stock values have compressed the yield.
Tokenized finance opens a new door.
On Solana, liquidity pools allow investors to earn yield through trading fees and emissions while compounding returns in a way that traditional markets simply can’t offer.
For retail users, this becomes one of the easiest ways to enhance passive SPY returns without complex trading strategies or derivatives.
SPY tends to be one of the more stable tokenized assets on-chain as a benchmark composite index, making it attractive for conservative investors seeking low-friction yield.
Below are the top pools by liquidity for $SPY on Solana (tokenized by xStocks as $SPYx).
SPYx paired with Stablecoins
/ USDC
/ USDC
NOTE: *Orca APRs are based on 365 days of fees, Raydium APRs are calculated from the past 30 days of fees, while PancakeSwap APRs are based on fees generated in the last 24 hours at the time of writing.
How to take advantage of these yields
The process is straightforward, even for newcomers to Solana:
1. Set up a Phantom wallet - the default wallet for Solana users.
2. Fund it with USDC - via CEX deposit, on-ramp, or bridge.
3. Swap half into tokenized SPY - widely traded across Solana DEXs.
4. Deposit USDC + SPY into a Raydium pool - start earning yield instantly.
5. Monitor + compound rewards to boost returns.
�You’ve effectively transformed a broad-market ETF into a yield-bearing position.
Why you’d want to earn yield on SPY
SPY’s dividend yield is modest. DeFi can increase this dramatically by adding:
● LP trading fees
● Emissions
● Compounding mechanisms
You still retain diversified exposure to the U.S. market - just with added onchain income.
TradFi Alternatives: Covered Calls (sell calls while holding the underlying shares or index) / Wheel Strategies (sell puts to enter a position then calls to exit)
✅ Pros:
● Generates a steady premium income
● Works well in sideways markets
● Supplements existing dividends
❌ Cons:
● Requires constant rolling and active management
● Risk of assignment
● Caps your upside if SPY rallies
● More complex than simply providing liquidity
For retail investors, managed DeFi liquidity pools offer passive access to yieldwithoutactivetrading.
Risks to be aware of
Even with blue-chip exposure like $SPYx, yield always comes with risk:
● Impermanent Loss - if $SPYx diverges from its exchange price
● Market Risk - tokenized $SPYx reflects S&P 500 volatility
● Smart Contract Risk - stick to verified pools and audited protocols
● Liquidity Risk - SPY pairs currently have limited liquidity onchain
Yield is not free money - it is compensation for taking on these risks.
About Demether:
Demether provides frictionless access to yield opportunities on real world assets. We are backed by Web3 native investors and founded by a team hailing from JPMorgan, Goldman Sachs, Bank of America-Merill Lynch, Animoca Brands, HSBC, Rocket Internet and Google.
Our webapp and native mobile apps will be launching soon. Sign up for our waitlist at https//:demether.io and follow us on X.com/DemetherDefi for the latest news.
⚠ Disclaimer: Thisarticleispurelyforeducationalpurposesonlyanddoes notconstitutefinancial,legalorinvestmentadvice.Pleaseseektheadvice ofaqualifiedprofessional,doyourownresearchandunderstandtherisks beforemakinginvestmentdecisions.