Many people think the difference between APR and APY is simple, but this is where it’s easy to get confused:
For the same APR, the more often 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 using their current price. If the price of a reward token falls, your actual returns will be lower.
Check which currency the returns are denominated in: annualized returns denominated in a project token can’t be directly compared with those denominated in a stablecoin.
$CAKE is PancakeSwap’s native token. DeFi products like this often display annualized returns on their pages. Current price: 1.622.
For the same APR, the more often 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 using their current price. If the price of a reward token falls, your actual returns will be lower.
Check which currency the returns are denominated in: annualized returns denominated in a project token can’t be directly compared with those denominated in a stablecoin.
$CAKE is PancakeSwap’s native token. DeFi products like this often display annualized returns on their pages. Current price: 1.622.
