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APR - APY
It could refer to the simple interest accrued on an investment over a period of 1 year.
APY more accurately reflects an investment's annual returns. refers to the yield generated from Vault and Strategies.
Learn About Simple Interest and Compound Interest
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APY is the annual percentage yield offered by a particular investment, in this case as an example DarkMatter LP, This takes compound interest into account, giving you an accurate idea of your returns compared to simple interest.
Large APYs in the thousands percent are possible with investments that provide daily returns of 1% or more. Because the rewards of your liquidity pool are constantly being harvested and reinvested, the interest accumulates in increasing amounts.
Example: Your LP tokens are used to farm DMD in DarkMatter Farms, DMD is converted into more LP tokens wich are reinvested into the Liquidity pool, These new LP tokens are reinvested in the Farm, making their investment grow through autocompund.
Most will wonder why it shows two different data and why it does not agree with the farm.
The earnings of Dark Matters vaults can be estimated through the APR and APY value displayed on their respective vault page, that apr and apy is respective to the vaults, it is not associated with the farms.
Last modified 1yr ago