APR vs APY in Crypto: Why the Bigger Number Can Mislead You

Beginner's Guide

By: WEEX|10/15/2026 04:00:00

Key Takeaway

APR is the simple yearly rate. APY is the same rate after compounding. A 10% APR compounded daily equals about 10.52% APY. But APY only applies if your rewards are actually reinvested.

What Is the Difference Between APR and APY?

APR, or annual percentage rate, is the yearly rate without compounding. APY, or annual percentage yield, assumes your earnings are added back and start earning too. For the same product, APY is always equal to or higher than APR.

The formula is APY = (1 + APR/n)^n - 1, where n is how many times a year rewards compound. With daily compounding, n is 365.

3.5% APR -> about 3.56% APY
5% APR -> about 5.13% APY
10% APR -> about 10.52% APY
20% APR -> about 22.13% APY

The gap is small at low rates and grows as rates rise.

APY Only Counts If Your Rewards Compound

APY is only real if your rewards are reinvested on schedule. If rewards sit in a separate balance, you earn the APR, not the APY. This is the most common reason people earn less than an advertised APY.

WEEX Staking pays rewards daily into your Funding Account. They do not join your staked position, so they do not compound unless you subscribe them again.

Example: 10 SOL in flexible staking at 7% APR for one year.

Never restake: you earn 7% (0.700 SOL).
Restake monthly: you earn about 7.23% (0.723 SOL).
The 7.25% daily-compounding APY: only reachable if you restake every day.

-- Price

How to Compare Two Rates Fairly

To compare two crypto earn products, convert both to the same basis first. An APY next to an APR always looks better, even when it is not. Use APR for products that do not auto-compound.

To turn an APY back into a daily-compounding APR:

5% APY -> about 4.88% APR
10% APY -> about 9.53% APR
20% APY -> about 18.24% APR

Then ask three questions:

Does the reward compound automatically? If not, compare APRs.
How often does it compound? Daily beats monthly, but only slightly.
Is the rate fixed or variable? Most crypto rates change, so a yearly figure is only an estimate.

What Neither Number Tells You

APR and APY both describe rewards, not total return. Neither one includes price changes. For volatile coins, the price move almost always matters more than the APR vs APY gap.

Example: 10 SOL at 7% APR grows to 10.7 SOL in a year. If SOL falls 10%, the position is worth about 3.7% less than when you started.

FAQ

Is APY always higher than APR?
APY is equal to or higher than APR for the same product, because it assumes compounding. The gap grows at higher rates.
Should I look at APR or APY for WEEX Staking?
Look at APR. WEEX Staking rewards do not restake automatically, so APR reflects what you earn without extra steps.
How do I convert APR to APY?
Use APY = (1 + APR ÷ n)^n − 1, where n is compounding periods per year. A 10% APR compounded daily is about 10.52% APY.
Do APR and APY include crypto price changes?
No. APR and APY only describe rewards. Your total return also depends on the coin's price.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.