I'm a sucker for passive income so I really like the theme here.

Because I'm pretty newish to the space, take this for what it's worth, but my thought is that huge APRs are only possible because the tokens are being diluted, which should put massive downward pressure on the price. Except, that demand has outpaced that increase in supply so it "funds" the dilution.

Once dilution (token issuance) stops, it would be impossible for those high APRs to sustain themselves long term, unless the platform itself is a massive cash flow machine. But then again, if those platforms become massive cash flow machines, investment dollars will follow them (just like they do in the stock market), and the high yields will be arbitraged away as investors pile in. It would be like buying Microsoft in 1995-- today you're making a killing on your initial cost basis, and have a huge Yield on Cost (or "APR on cost" if you like)-- but everybody knows Microsoft is king now and your yield if you bought today is less than 1%.

It's hard to differentiate which projects are in that cash flowing state versus which are just benefiting from demand outpacing the increasingly supply, at least right now. Personally I hope web3 moves towards more disclosure and even financial oversight so investors can feel more confident that there's real cash flow behind the tokens they invest in.

By the way, I think suggesting diversification is a very wise take, and you shouldn't apologize for doing so. Any community that's so religious to throw common sense out the window is not one to be apart of.

With interest rates on the rise now, risk-on assets are taking a beating and that trend doesn't seem that it will abate anytime soon.

It's just a classic market cycle, and good investors should be diversified not only inside of web3 but outside it as well-- even if they are extremely bullish on the technology. There's alot to learn from the dot com boom; so many similarities.