The Difference between APR & APY

APR & APY? What’s the difference?

You’ll see them everywhere in DeFi, but you could be losing out on some juicy extra passive income if you don’t know the difference! So in this article, we will quickly cover the differences between the two, so you know what to look out for on your journey.

It is quite simple, really, so let’s start with APR (Annual Percentage Rate);

APR can just be considered the basic interest. It is a simple fixed percentage amount that you will receive in a whole year. So if you staked $1,000 in our fabulous LICO-BNB pool currently offering 208% APR, after an entire year you would have $2,080. *Calculated based on current rates.

Annual Percentage Yield or, APY, factors in compounding this daily interest, this is when interest is reinvested back into the original stake. This can lead to much larger gains. For example, 208% APR compounded 1x daily will amount to 659% APY. Around triple the original APR.* So you can see, it’s worth looking at the displayed figure and making sure you know how to maximize your portfolio’s possible returns.

* All figures are estimates provided for your convenience only and by no means represent guaranteed returns.

We hope this helped you and you’re now better equipped for your exciting venture into DeFi.

Thanks for reading, until next time.

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