APR vs APY in Crypto: What's the Difference and Which Should You Compare?
Staking platforms, lending protocols and savings products often quote rates as either APR or APY. They sound similar but measure different things. Comparing an APR on one platform with an APY on another can make a worse deal look better.
The definitions
- APR (annual percentage rate): the simple yearly rate, without compounding. Rewards are not assumed to be reinvested.
- APY (annual percentage yield): the effective yearly return including compounding, assuming rewards are reinvested at the same rate.
For the same underlying rate, APY is always equal to or higher than APR.
Run your own numbers with the free calculator: Staking APY Calculator
Open calculator →The conversion formulas
APY = (1 + APR ÷ n)ⁿ − 1
APR = n × ((1 + APY)^(1/n) − 1)
Where n is the number of compounding periods per year — 365 for daily, 52 for weekly, 12 for monthly.
How compounding frequency changes APY
| APR | Yearly | Monthly | Weekly | Daily |
|---|---|---|---|---|
| 5% | 5.00% | 5.12% | 5.12% | 5.13% |
| 10% | 10.00% | 10.47% | 10.51% | 10.52% |
| 20% | 20.00% | 21.94% | 22.09% | 22.13% |
| 50% | 50.00% | 63.21% | 64.48% | 64.82% |
At low rates, the difference is small. At high rates, compounding makes a big difference — which is why platforms offering high yields often advertise APY.
Why the difference matters
- Comparing offers. A 10% APR with daily compounding beats a 10.4% APY. Convert both to the same measure before choosing.
- Compounding is not automatic. APY assumes rewards are reinvested. If you have to claim and restake manually, and you do not, your real return is closer to the APR.
- Claiming costs money. On some networks, each claim costs a transaction fee. If those fees are large relative to your rewards, compounding frequently can lower your net return.
Variable rates
Most staking and DeFi rates are not fixed. Staking rewards change with network participation, and lending rates change with demand. An APY is a snapshot projection, not a promise. Treat any rate as an estimate of the current pace, not a guaranteed outcome.
Fees and commissions
Validators and platforms usually take a commission from rewards. A quoted 8% APR with a 10% commission leaves you a 7.2% net APR. Check whether the rate you see is before or after fees.
Rewards are paid in tokens
A 10% APY means 10% more tokens, not 10% more dollars. If the token's price falls 30%, your dollar value falls even with the rewards. Model price changes separately.
Convert and project
The staking APY calculator lets you enter either APR or APY, choose the compounding frequency, apply a commission, and see the net APR, effective APY and projected balance.
CryptoMathly provides educational estimates only and is not financial, investment or tax advice. Crypto assets are volatile and you can lose money. Always verify figures with a qualified professional.