Annual Percentage Yield(APY)
The annualized return on an investment accounting for compound interest.
In-Depth Explanation
APY includes the effect of compounding—earning returns on your returns. A 10% APR compounded daily equals ~10.52% APY. DeFi often quotes APY, which looks higher than APR. When comparing yields, ensure you're comparing APY to APY or APR to APR.
Related Terms
More in Yield
View all →Mercenary Capital
Capital that moves between protocols purely to chase the highest incentives, with no loyalty or long-term commitment.
Annual Percentage Rate
APRThe annualized return on an investment without accounting for compounding.
Real Yield
Yield derived from actual protocol revenue and economic activity, not token emissions or inflation.
Impermanent Loss
ILThe loss in value compared to simply holding assets, caused by providing liquidity to an AMM as prices diverge.