The price fell while your coins were locked. Did you still gain?

Lock for three months at 12% annualised. Three months later the principal and interest come back, the coin count is genuinely 3% higher, and that coin has fallen a fifth. Did you gain or lose? There is no single answer, because it depends which ruler you measure with.

What each ruler measures

Coin-denominated asks: is the number of coins I hold larger? Price movement is noise; only the count matters. People who think this way usually hold a specific conviction — they expect the asset to appreciate long term, so accumulating more of it is the job.

Fiat-denominated asks: has the purchasing power of this holding increased? Coin count is an intermediate variable; everything converts back to the currency you actually spend.

Neither is wrong, but you have to know which you are using and you may not switch mid-calculation. Switching is the most common form of self-consolation: check the fiat figure when things rise, retreat to “I'm coin-denominated anyway” when they fall. Do that and you are permanently winning while the account quietly thins.

The example, worked

Using the opening scenario with numbers (hypothetical, not a real product's terms):

Hypothetical illustration of the two measures. Not a real product's terms or returns.

The comparison people miss is the last row: −20% without the product, −17.6% with it. Subscribing did not cost you anything; it cost you 2.4 percentage points less than doing nothing. What lost you money was the price, and the price did not care whether you subscribed.

So the accurate statement is: the yield was earned in full; it was simply outweighed by a concurrent fall. Merging the two events into one is how people arrive at “savings products lost me money”.

The lock-up is a real risk though

That comparison assumes you would have held anyway. Drop that assumption and the sums change.

Suppose that at some point in those three months you concluded the market was turning and wanted to reduce. Free coins can be sold at $9.50; locked coins watch it go to $8. Now the cost of the lock is not “slightly less interest”, it is a decision you were prevented from making.

You cannot quantify that in advance, because it depends on something that has not happened. You can control it:

• Only lock the portion of funds you are certain you will not want to move;
• Keep the term shorter than your review cycle — if you reassess positions monthly, do not buy a three-month lock;
• Know the early-exit terms before you need them; see what early redemption costs.

When the trade is worth making

1. You were holding this asset long term regardless. Then the lock takes nothing from you and the interest is pure addition.
2. You are coin-denominated and can hold that line. The second half matters — a strategy you abandon during a drawdown is not a strategy.
3. The locked share does not affect your overall liquidity. Even fully frozen, nothing else breaks.
4. You are not relying on this money for emergencies.

Fail any one and the spread is rarely worth it.

A simple stress test

Before locking anything I ask: if this halved during the term, would I regret having locked it? If yes, I don't lock it, or I lock only part.

It is not precise, but it converts an abstract risk question into a concrete constraint test. The relevant discomfort is not merely earning less; it is wanting to act while the product terms prevent an exit.

A third ruler: relative to a benchmark

Coin and fiat are the common two. There is a third, more usual in professional settings: measuring against a benchmark.

It asks: compared with doing nothing, am I better or worse off? The benchmark can be “hold the asset untouched” or “sit in stablecoins”.

Its value is that it strips out what you do not control. Price movement is not your decision; whether to use the product is. Benchmarking measures exactly that decision.

Three rulers, three jobs. They do not conflict; confusion comes from answering one question with another's result.

Back to the opening case: coin-denominated says +3%, fiat says −17.6%, benchmark says 2.4 points better than not subscribing. All three are true, and only the third evaluates your decision.

Why people switch rulers without noticing

Not out of ignorance — because it feels better. The pattern is:

1. Prices rise; you look at the fiat figure and feel good.
2. Prices fall; the fiat figure is ugly, so you say you are coin-denominated.
3. Prices rise again; back to fiat, celebrating the gain.

Run that loop and you are permanently in a winning state while real purchasing power may be shrinking. Nothing about it is crypto-specific; any asset with multiple denominations does it. Crypto's volatility just makes it louder.

The sneakier variant is selective benchmarking: sold too early, “I'm a long-term holder”; stuck in a loss, “at least it's a quality asset”. A benchmark chosen after the fact is not a benchmark.

The only reliable antidote is declaring in advance — write down, at the moment of the decision, which ruler will judge it. Changing your mind later means arguing with your own handwriting.

The more useful question: what is this money for?

There is a way to route around the theory entirely: ask where the money is ultimately going.

• If it will eventually be spent as currency — a house, living costs, a debt — then whatever you say out loud, your real ruler is fiat. Comforting yourself in coin terms only delays the reckoning.
• If it is the portion you intend never to touch, and you have genuinely accepted it could go to zero, then coin-denominated is coherent.
• If you cannot say which — very common — the thing needing attention is not the denomination, it is the plan.

One workable approach is to cut funds explicitly in two: money that will be spent eventually, managed in fiat terms and kept in liquid, clearly-priced products; and long-term holdings, managed in coin terms with locks and volatility explicitly accepted.

Splitting it dissolves most of the agonising, because the agonising usually comes from one pot carrying two incompatible expectations. How to layer by purpose is worked through in can one balance join several programmes.