APY
Annual percentage yield: an annualized measure that includes the stated effect of compounding.
In more detail
APY accounts for earning on earlier earnings under the calculation's assumptions. A DeFi display may assume reinvestment and particular reward rates, so comparing two numbers means checking how each was calculated. If rates change or rewards are not reinvested as assumed, the actual result can differ from the displayed projection.
How you might use it
"Why is the APY higher than the APR?" This display assumes each periodic earning is reinvested and earns more too.
- Written out
- Annual percentage yield
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