Asked: What exactly is the difference between APR and APY?
My answer: For the same APR, the more frequently interest is compounded, the higher the APY—but the increase gets smaller and smaller, with an upper limit. Annualized figures often include rewards paid in tokens, calculated at the current token price; if the reward token's price falls, the actual yield will shrink.
$CAKE 1.907 (-1.35%)
What topic would you like to see next? DeFi or something else?
My answer: For the same APR, the more frequently interest is compounded, the higher the APY—but the increase gets smaller and smaller, with an upper limit. Annualized figures often include rewards paid in tokens, calculated at the current token price; if the reward token's price falls, the actual yield will shrink.
$CAKE 1.907 (-1.35%)
What topic would you like to see next? DeFi or something else?