What is the difference between APR and APY?

This is something I only learned fairly recently, for a long time I thought it was the same thing.

APR is Annual Percentage Rate and APY is Annual Percentage Yield.

APR is the interest generated over a year without compounding the interest.

APY is what you get when you compound interest earned with the current APR over the course of a year.

Here is a website dedicated to calculating this: APRTOAPY.COM

You can see with the calculator on this website that compounding daily makes quite a big difference from compounding weekly or monthly.

In conclusion, it is important to make the distinction between APR and APY when looking for a staking pool/liquidity pool, a lower APR may give you bigger rewards than a higher APY pool. It can make a huge difference. Compounding daily vs weekly/monthly can also make a big difference. Daily seems to be the way to go, but twice a day or more than that probably doesn't make a big difference.

207 views0 comments

Recent Posts

See All

https://sifchain-dex.forbole.com/#/rewards Use the link above to reach Sifchain DEX without a VPN. This is great and will allow US investors to use this wonderful exchange.

Currently the LP rate for several pools on Sifchain are 300% APR fixed, that comes out to over 2,000% APY if compounding daily or weekly. The team plans to allow daily rewards claiming soon and that