Internet
apy
What does apy mean?
Annual Percentage Yield expresses the yearly return on a deposit or farm accounting for compounding, commonly advertised on DeFi products.
"That vault is showing a 40% APY, but the reward token is volatile."
Origin
Traditional-finance metric widely used to advertise DeFi returns.
Frequently asked questions
What does APY mean?
APY stands for annual percentage yield, the yearly return on a deposit that factors in compounding.
What is the difference between APY and APR?
APY includes the effect of compounding while APR does not, so for the same rate APY will be the higher, more complete number.
Are high DeFi APYs real?
They can be, but eye-watering APYs are often paid in volatile reward tokens whose price can fall, cutting your actual returns.
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