APY
APY is the annualized percentage rate showing how much a crypto yield position could earn in one year, including compounding.
APY, or annual percentage yield, is a way to express the potential yearly return from a yield-generating crypto activity, such as staking, lending, or providing liquidity. Unlike a simple interest rate, APY includes compounding, meaning it assumes rewards are periodically added back to the principal and can earn additional rewards. This makes APY useful for comparing offers that pay rewards at different intervals, such as daily, weekly, or monthly.
In crypto, APY helps users estimate how much they might earn from locking, staking, or depositing tokens, but it is not a guarantee. Actual returns can change because reward rates, token prices, validator performance, protocol rules, fees, and liquidity conditions may vary. For example, a staking pool showing 10% APY suggests that 100 tokens could become about 110 tokens after one year if the rate stays constant and rewards compound as assumed. A higher APY may also come with higher risks, so it should be viewed as a comparison metric rather than a promise.
Other terms in Staking & Yield
APR
APR is the simple annual rate of return or cost, shown before compounding, often used to compare staking, lending, and borrowing yields.
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.