APR
APR is the simple annual rate of return or cost, shown before compounding, often used to compare staking, lending, and borrowing yields.
APR stands for annual percentage rate. In crypto, it most commonly describes the simple yearly rate a user may earn from staking, lending, or providing liquidity, before considering compounding. It can also describe the yearly cost of borrowing. APR matters because it gives a standardized way to compare opportunities that may pay rewards at different intervals, such as daily, weekly, or per block. However, it is usually an estimate, and actual returns can change with network rewards, validator performance, fees, token price movements, and protocol rules.
The key difference between APR and APY is compounding. APR does not assume you reinvest rewards, while APY includes the effect of earning returns on previously earned rewards. For example, a staking pool showing 12% APR suggests that staking 100 tokens for a full year would earn about 12 tokens before fees and other variables, if the rate stayed constant. If those rewards were regularly restaked, the effective annual return could be higher and would be closer to an APY figure.
Other terms in Staking & Yield
APY
APY is the annualized percentage rate showing how much a crypto yield position could earn in one year, including compounding.
Delegation (Staking)
Delegation is assigning your tokens’ staking power to a validator so they can help secure a proof-of-stake network and share rewards with you.
Lockup APR
The annualized reward rate offered for staking, lending, or depositing crypto when funds must stay locked for a set period.
Slash Risk
The chance that staked crypto is penalized or partly confiscated because a validator breaks network rules or fails to perform correctly.