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APY is the annualized rate of return on an investment, including the effect of compounding interest over the year.
APY, or Annual Percentage Yield, expresses the yearly return on an investment as a single percentage, factoring in compounding — the effect of earning interest on previously earned interest. The companion metric, APR (Annual Percentage Rate), is the simple yearly rate without compounding.
In crypto, APY is the headline number you see on staking, lending, and liquidity-pool products. A 10% APY means a $1,000 deposit grows to roughly $1,100 over a year, assuming the rate stays constant and rewards are compounded back into the principal. In DeFi, compounding often happens daily or even per-block, which is why APY can be meaningfully higher than APR.
Two warnings. First, in crypto the APY is usually denominated in the protocol's own token, so a 100% APY paid in a token whose price halves delivers no real return. Second, rates float — the APY quoted today is a snapshot, not a guarantee. Always translate headline APY into expected dollar return before comparing options.
APY (Annual Percentage Yield) is the yearly rate of return on a staking, lending, or liquidity-pool position, including the effect of compounding. A 10% APY means your deposit grows by roughly 10% over a year if the rate holds and rewards are reinvested.
APR is the simple yearly interest rate without compounding. APY includes the effect of compounding — earning interest on interest — over the year. For the same nominal rate, APY is equal to or higher than APR, with the gap widening as compounding frequency increases.
No. Most crypto APYs float with market conditions and protocol incentives, and many are paid in volatile tokens whose value can drop. A 100% APY in a token that loses 80% of its value is a net loss. Always evaluate APY in the token you actually want to hold and assume rates will change.
Staking is the act of locking up cryptocurrency to help secure a proof-of-stake network in exchange for periodic rewards, analogous to earning interest.
Yield farming is the practice of moving crypto capital between DeFi protocols to maximize returns from staking, lending, and liquidity-provision incentives.
A liquidity pool is a smart-contract vault of paired tokens that decentralized exchanges use to enable automated, peer-to-contract trading without an order book.
Real-time charts, portfolio tracking, whale alerts, and AI insights — built for traders who use terms like this every day.