APY

Annual Percentage Yield (APY) refers to the real rate of return earned on an investment over a one-year period, taking into account the effect of compounding interest. Unlike APR (Annual Percentage Rate), which measures simple interest without compounding, APY reflects the total growth of an investment by including interest earned on both the initial principal and the accumulated interest from prior periods.

APY is often used to express the yearly return that investors can expect from providing liquidity, staking, yield farming, or lending assets. For example, if a pool advertises a 10% APY with monthly compounding, the actual return will be slightly higher than 10% because rewards are periodically reinvested, increasing the principal that earns future interest.

APY is a vital metric for investors because it offers a clearer picture of potential earnings compared to APR. However, it's important to note that in crypto markets the APY can often fluctuate due to variable rewards, changing interest rates, or other protocol-specific factors. Understanding APY enables investors to better compare various crypto investment opportunities that have differing compounding frequencies and reward structures.

Bidask APY

Bidask Protocol boosts users' APY by automatically reinvesting pool fees into the liquidity pools.