DeFi & Yield

What is the difference between APR and APY in crypto yield?

APR (annual percentage rate) is the yearly return without compounding, while APY (annual percentage yield) includes the effect of reinvesting returns over the year. APY is therefore higher than APR for the same underlying rate, because it assumes earnings are added back and themselves earn more. For example, a 10 percent APR compounded daily becomes roughly 10.5 percent APY. When comparing crypto yields, check which figure is quoted, since protocols may advertise the larger APY while the realised return depends on how often compounding actually occurs.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.