What it is
A pool advertising an unusually high APY relative to its own liquidity: yield running hot while the capital that should chase it stays thin.
Why it matters
In a calm market, yield and depth move together: a good rate pulls in liquidity until the rate cools. When a high yield persists on a shallow pool, the market is telling you something the headline number is not. Either the crowd does not believe the yield will last, the risk is higher than it looks, or most of the payout is incentives rather than organic fees. A distortion is the gap between what is paid and what the depth has answered.
How we read it
We read each pool's live APY against its dollar depth, holding deeper pools to a higher bar before a yield reads as hot (a billion-dollar pool paying 6% is ordinary; a twenty-million-dollar pool paying 40% with no matching inflow is the thing worth a look). Where the payout is mostly reward tokens rather than base yield, we say so. The reading links to the protocol so you can check the pool yourself.
What it cannot tell you
A high APY is not free money: it usually prices a risk, impermanent loss, smart-contract exposure, a token that can fall faster than the yield pays, or a rate that resets the moment liquidity arrives. We flag the gap; we never tell you to farm it. Reward-led APYs in particular can evaporate when the incentive program ends.