DeFi APY from APR Calculator

Decentralized Finance (DeFi)

Updated Apr 2026 • Has calculator

Converts a DeFi protocol's quoted APR into the effective Annual Percentage Yield, accounting for how often returns are compounded.

Calculate DeFi APY

APR (%)

Annual Percentage Rate as quoted by the protocol

Compoundings Per Year

365 = daily, 8760 = hourly, 52 = weekly, 12 = monthly, 1 = annual

APY

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Not investment advice.

What is DeFi APY?

DeFi protocols typically quote yields as an Annual Percentage Rate (APR) — a simple, non-compounded annualized rate. The actual Annual Percentage Yield (APY) is higher because most DeFi strategies auto-compound rewards: interest earned in each period is reinvested, generating returns on itself. The difference between APR and APY grows with both the rate and the compounding frequency. Daily compounding (n=365) is standard in yield-farming protocols, while some perpetual protocols compound every block (n=8,760+ per year). Understanding the distinction prevents yield comparisons across protocols from being misleading.

Formula

APY (%) = ((1 + APR / n)ⁿ − 1) × 100

Worked Example

2024 (approximate supply rate)

Step 1 Protocol-quoted APR: 4.80%

Step 2 Compounding frequency: daily (n = 365)

Step 3 APY = (1 + 0.048 / 365)³⁶⁵ − 1 = 4.92%

Step 4 → Daily compounding adds 0.12 percentage points above quoted APR

Step 5 → Over 1 year on $10,000: $492 vs. $480 at simple APR

Source: Aave Protocol Documentation (2024-01-01)

How to Interpret DeFi APY

< 5

Low Yield — comparable to TradFi savings accounts

5 – 20

Moderate Yield — typical for established DeFi lending

20 – 100

High Yield — likely includes token incentives; check risk

> 100

Very High Yield — likely unsustainable; significant risk

📚 DeFi Basics — Complete the path

Sources