A staking platform shows you a number. Is that the return you'll actually get? It depends on three letters you might be skimming past: APY or APR.

The Core Difference

APR (Annual Percentage Rate) is simple interest. If you stake some tokens at 10% APR, you earn 10% of your original amount over the year. Straightforward.

APY (Annual Percentage Yield) includes compounding — the process of earning rewards on top of rewards you've already earned. Reinvest your rewards frequently enough, and by year-end you've earned slightly more than the raw rate suggests, because each batch of rewards starts generating its own rewards immediately.

Here's a plain example without inventing real figures. Say two protocols both advertise "10%." One means APR. The other means APY, with daily compounding. The APY protocol is telling you the result after compounding is already baked in. The APR protocol is telling you the base rate before compounding. If you manually reinvest your APR rewards daily, you'd end up close to the APY number. If you never reinvest, you stay at the APR number. Same headline rate — different real-world outcome.

Why Platforms Don't Always Make This Clear

Some protocols display APR. Some display APY. Some switch between them depending on which looks bigger. A protocol that compounds continuously will show a higher APY than its underlying APR — and there's nothing dishonest about that, as long as the label is correct. The problem is when labels are missing or swapped, and you're comparing a 12% APY on one platform against a 12% APR on another without realising they're different measures.

What to Actually Check

Before you take any number at face value, ask: is this APR or APY? How often does compounding occur — daily, weekly, on every block? And critically: are rewards paid in the same token you staked, or in a separate reward token whose price can fall?

That last point matters because APY is not the same as profit. A strong compounding rate on a token that drops in value can still leave you down overall.

When you use the comparison table, check which metric each protocol is showing — it's often the first thing that makes two seemingly identical yields look very different.