APY

APY stands for Annual Percentage Yield. It is a measure that expresses, on an annual basis, the return of an activity while taking compounding into account, that is, the periodic reinvestment of the amounts accrued. This is the main difference from APR, which does not consider compounding.

In the context of crypto-assets, APY is often used to describe the parameters of programmes such as staking. It indicates a theoretical annual value: rewards are not guaranteed interest but variable amounts that depend on the protocol’s rules, overall participation, and network conditions.

Disclaimer: APY enables comparison of different programmes in a standardised way, but it is not a forecast of returns or a guarantee of income. Before committing resources to an investment, it is important to review the full terms and related risks.