Annual Percentage Yield

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1. | basic

The rate of return expected over the course of a year, taking into account compound interest.

2. | caution

Often projects - especially in DeFi - advertise extremely high APY rates which are unrealistic. Sometimes in the hundreds of %, sometimes in the thousands of %.

One common way is by calculating the APY based on a very short time-frame, timed with special early interest rates, and present that rate at the APY.

As soon as the special event ends, or more investors add liquidity, the APY usually corrects to more realistic numbers. Always do your own research.

* All terms and definitions will change as the Cryptionary improves