APY vs APR in Crypto: The Difference That Changes What a "20% Yield" Actually Pays
Two acronyms that look interchangeable and aren't. Knowing which one a platform is quoting changes what you'll actually receive.
By Firoz Khan|1 September 2026|Updated 20 September 2026|6 min read
APY and APR get used almost interchangeably in crypto marketing, and the gap between them widens the more frequently returns compound. On a headline yield figure, that gap can be the difference between a return that looks realistic and one that's been dressed up to look bigger than it is.
APR: the simple, non-compounding number
Annual Percentage Rate is the straightforward annual return with no compounding factored in. A 10% APR on £1,000 returns £100 over a year, full stop, regardless of how often interest is calculated or paid out along the way.
APY: the number that includes compounding
Annual Percentage Yield includes the effect of reinvesting returns as they're earned. The more frequently compounding happens, daily rather than annually, for instance, the bigger the gap between the APR feeding into it and the resulting APY becomes. A platform can quote the more flattering APY figure while the underlying rate is meaningfully lower.
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Why crypto platforms lean on whichever number looks bigger
Because APY structurally produces a higher headline figure than the APR it's derived from, and platforms competing for deposits have an obvious incentive to lead with it. Two platforms offering genuinely identical underlying returns can display very different headline numbers depending purely on which measure they choose to advertise.
What to actually check before depositing
Confirm which figure is being quoted, and whether it's fixed or variable, since crypto yields in particular can and do change without much warning as market conditions shift. A high APY on a lending or staking product is also frequently compensation for real risk sitting underneath it, smart contract risk, counterparty risk, or the underlying asset's own volatility, not a free lunch.
A reminder
The FCA risk warning still applies to higher-risk crypto content. Always assess how much risk you are willing to take before buying.
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