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  1. Home
  2. /Glossary
  3. /Annual Percentage Yield (APY)
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defi

Annual Percentage Yield (APY)

The real rate of return on an investment over a year, accounting for compound interest.

Definition

The real rate of return on an investment over a year, accounting for compound interest. Unlike APR, APY shows what you'd actually earn if gains are reinvested. In DeFi, you'll see APYs ranging from 2% to thousands of percent, though sky-high numbers usually don't last.

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Interest calculated on both the initial principal and accumulated interest from previous periods.

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