What Is Apy In Crypto

Making Money, or in other words, creating assets has become quite easy with the rising popularity of cryptocurrency but with a risky proportion. And now that you are in the right place now, you will get a step-by-step guide on how to start buying and trading cryptos.

So, Let’s deep dive in the world of cryptocurrency and get the answers to the most common questions – What Is Apy In Crypto

What does APY mean in finance?

The APY refers to the projected rate of annual return gained on a deposit after accounting for compound interest. Compounding interest is the interest that a particular user earns from their principal (the original amount of investment made in an asset) and the interest earned from the initial deposit.

How does APY work in crypto?

How does APY work in Crypto? In the cryptocurrency world, APY works the same way. Users can earn compounding interest on their cryptocurrency by keeping them in savings accounts, staking the tokens, and yield farming by providing liquidity to liquidity pools.

What is the difference between simple interest rate and APY?

In traditional finance, a savings account usually has both a simple interest rate and an Annual Percentage Yield (APY). Annual Percentage Yield (APY) is the annual return from the principal and accumulated interest from investments or savings. The simple interest rate is the amount of interest earned on the deposit.

How much APY can you earn by depositing crypto?

Typically, the APY earned by depositing crypto is much higher than that of the savings accounts in traditional finance. Most cryptocurrency projects offer an APY of over 1%. For example, users that deposit Tether ( USDT) on Phemex will receive an estimated APY of 7% without even needing to lock in the funds for a fixed period.