In the ever-changing world of crypto assets, understanding APY (Annual Percentage Yield) has become an essential skill for achieving stable growth. Whether you're a seasoned investor or a newcomer just getting started, mastering the core logic of APY in crypto can help you make smarter investment decisions. This guide will start with basic concepts and gradually delve into how to calculate crypto APY, its practical applications, and the underlying economic principles.
Unveiling APY: Why This Number Affects Your Returns
APY (Annual Percentage Yield) is a key indicator of investment returns. Simply put, it answers the question: If you leave your money on a platform for a year without touching it, how much profit will you end up with?
But here’s a crucial point: APY takes into account the effect of compounding. Compounding means that the interest you earn will continue to generate new interest—principal