APY vs APR in Crypto : What’s the Difference?

When exploring crypto investments, you’ll often see APY (Annual Percentage Yield) and APR (Annual Percentage Rate). They look similar but mean very different things. Understanding the difference can help you choose the right opportunities and grow your portfolio more effectively.

Key Takeaways

• APY shows total annual returns with compounding interest — ideal for measuring potential earnings.

• APR shows the simple annual interest rate without compounding — mostly used to indicate basic costs in traditional finance.

• In crypto, APY highlights earning potential, while APR is more common in loans or credit cards.

• For investors: a higher APY means faster compounding and better returns.
  
  

What Is APY?

APY reflects how much you can earn in a year after compounding. This means you earn interest not only on your initial investment, but also on the rewards you’ve already accumulated — like a snowball rolling downhill, picking up more snow as it grows.

👉 Example: If you stake $1,000 at 10% APY with monthly compounding, you’ll end up with slightly more than $1,100 after one year, thanks to “interest on interest.”

In crypto, APYs are often advertised to show higher potential returns, but not all platforms actually compound rewards automatically.

What Is APR?

APR is the basic annual interest rate without considering compounding. It’s a straightforward figure often used in traditional finance for loans, mortgages, and credit cards. In crypto, APR is widely used for staking products, especially when rewards are paid out but not auto-compounded. This makes APR the more transparent metric for investors when compounding is not built in.

APY vs APR at a Glance

Final Thoughts

In the crypto space, it’s important to know whether rewards are compounded (APY) or not compounded (APR).

At Hata, we focus on helping Malaysians grow their portfolios safely and effectively. That’s why we display staking APRs, since rewards are not compounded automatically. For example, we offer 5.95% APR on SOL staking, one of the most competitive rates among regulated exchanges in Malaysia.

👉 Put your crypto to work today - sign up with Hata and start growing your portfolio with Hata Staking.

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The information provided here is presented "as is'' and is intended for general informational and educational purposes only. It does not come with any representation or warranty of any kind. This content should not be interpreted as financial, legal, or other professional advice, and it is not intended to endorse or recommend the purchase of any specific product or service. It is advisable to consult with appropriate professional advisors for personalized guidance. In cases where the article is contributed by a third-party author, please note that the expressed views belong to the author alone and may not necessarily reflect the opinions of Hata. For further details, we encourage you to read our complete disclaimer. Please be aware that the prices of digital assets can be highly volatile. The value of your investment may increase or decrease, and there is a risk that you may not recover the full amount invested. You are solely responsible for making your own investment decisions, and Hata cannot be held liable for any losses you may incur. This material is not to be construed as financial, legal, or other professional advice. For more information, please refer to Hata’s Terms of Use and Risk Warning.