APY vs APR in Crypto
One letter makes a big difference to your actual returns. Here's how to compare rates honestly.
Updated April 2026
Every staking pool, lending platform, and yield farm advertises a percentage return. Some label it APR. Others label it APY. The two numbers can look almost identical, but they measure very different things. Understanding the difference protects you from inflated expectations.
What Is APR?
APR stands for Annual Percentage Rate. It is the simple, flat interest rate you earn over one year without compounding. If a pool advertises 10% APR and you deposit $1,000, you earn $100 after one year. No more, no less.
What Is APY?
APY stands for Annual Percentage Yield. It includes the effect of compounding — earning interest on your interest. If a pool pays rewards daily and you reinvest them automatically, your effective return at the end of the year will be higher than the headline APR.
For example, a 10% APR paid daily compounds to roughly 10.5% APY. The more frequently rewards are paid and reinvested, the larger the gap between APR and APY.
A Simple Example
| Metric | Value |
|---|---|
| Deposit | $1,000 |
| Headline rate | 10% APR |
| Reward frequency | Daily |
| Return after 1 year (no compounding) | $1,100 |
| Return after 1 year (with compounding) | ~$1,105 |
Why Do Platforms Use APY?
APY looks bigger, so it is better marketing. A platform can advertise 12% APY even though the underlying APR is only 11.3%. Both numbers are technically correct, but APY inflates the perceived return.
The honest way to compare two pools is to convert both numbers to the same unit — either APR-to-APR or APY-to-APY. We normalise everything to a single comparable figure so you don't have to do the math.
Watch Out for Variable Rates
Both APR and APY assume the rate stays constant for a full year. In crypto, rates change daily based on how many people are staking, what the network inflation is, and how demand shifts. A pool that advertises 20% APY today might pay 8% next month. Treat advertised rates as snapshots, not guarantees.
Bottom Line
APR is the simple rate. APY is the compounded rate. When comparing platforms, always use the same metric. And remember — in crypto, the rate you see today is almost never the rate you will earn for a full year.
Top yields right now
Filtered for sane TVL. The headline rate is what each platform advertises today — not a forward guarantee.
Frequently asked questions
If I see APY of 12%, am I guaranteed 12% in a year?
No. Both APY and APR assume the rate stays constant for a full year — and that's almost never true in crypto. Rates move with network usage, inflation schedules, and how much capital is competing for the same pool. Treat advertised rates as snapshots.
How is APY calculated from APR?
APY = (1 + APR/n)^n − 1, where n is the number of times rewards compound per year. Daily compounding gives n = 365. A 10% APR compounded daily is roughly 10.52% APY. The shorter the compounding period, the bigger the gap.
Do staking rewards auto-compound?
On most native staking, yes — your stake grows with each reward and the next reward calculates on the higher base. On manual claiming flows (some L1s, some DeFi pools), you must claim and redeposit yourself. Check the pool details page.
Why does the same pool show different rates on different sites?
Different sites pull data at different cadences and apply different filters. We refresh hourly and exclude pools with very low TVL or implausible APYs. If a number on another site looks wildly different, it's likely a stale snapshot or an unfiltered headline.
Should I prefer pools quoting APR or APY?
Either is fine if you compare like-for-like. The trap is when one site shows APR and another shows APY for the same pool and you compare them directly. Convert both to the same unit before deciding.