THE BIGGEST APY IS NOT THE WHOLE STORY
A headline APY is a starting point for questions, not a promise.
APR measures an annual rate without compounding. APY includes compounding assumptions. A variable rate can change, and actual reinvestment may involve fees or extra steps.
Ask where the return comes from: fees, borrowing demand or newly issued reward tokens. A high token payout can still disappoint if the reward token loses value.
Read the exit conditions. Lockups, withdrawal queues, limited liquidity and fees can affect what you actually receive. Contract risk remains even when the rate looks attractive.
What is the first question you ask when you see a huge APY?
#DeFi #YieldFarming #CryptoEducation #APY
A headline APY is a starting point for questions, not a promise.
APR measures an annual rate without compounding. APY includes compounding assumptions. A variable rate can change, and actual reinvestment may involve fees or extra steps.
Ask where the return comes from: fees, borrowing demand or newly issued reward tokens. A high token payout can still disappoint if the reward token loses value.
Read the exit conditions. Lockups, withdrawal queues, limited liquidity and fees can affect what you actually receive. Contract risk remains even when the rate looks attractive.
What is the first question you ask when you see a huge APY?
#DeFi #YieldFarming #CryptoEducation #APY
