Explain the difference between APR and APY.
The relationship between APY and APR is: APY = (1 + APR ÷ n)^n − 1, where n is the number of compounding periods per year.
One thing many people overlook: for the same pool, the APY figure is generally higher than the APR figure. When comparing two products, first convert them to the same metric.
Pay attention to which currency the yield is denominated in: annualized returns denominated in reward tokens cannot be directly compared with those denominated in stablecoins.
$CAKE is PancakeSwap's native token. DeFi applications like this often display annualized yields.
The relationship between APY and APR is: APY = (1 + APR ÷ n)^n − 1, where n is the number of compounding periods per year.
One thing many people overlook: for the same pool, the APY figure is generally higher than the APR figure. When comparing two products, first convert them to the same metric.
Pay attention to which currency the yield is denominated in: annualized returns denominated in reward tokens cannot be directly compared with those denominated in stablecoins.
$CAKE is PancakeSwap's native token. DeFi applications like this often display annualized yields.