Staking: APR vs APY vs Real Yield Explained

[Chawla Solutions]

Many beginners see “200% APY” on a staking dashboard and think they’ve struck gold. The reality is far more complex. To understand what you’ll actually earn, you need to separate APR, APY, and real yield.

APR (Annual Percentage Rate):
A flat rate without compounding. If a protocol shows 200% APR, it assumes you never reinvest rewards.

APY (Annual Percentage Yield):
These factors in compounding — meaning your rewards are restaked at intervals. APY will always appear higher than APR.

Real Yield:
This is the only metric that matters. It reflects your actual earnings in stable terms (USDT, USDC, or fiat equivalent).

Example of Misleading APR:
A protocol offers 300% APR paid in its own token. After one month, the token’s price drops 4x. On paper, you earned more tokens. In reality, your USD return is negative.

How to Calculate Real Yield:
• Always check the token’s price chart.
• Factor in token inflation.
• Confirm there’s enough liquidity to exit safely.
• Forecast where the token’s price may be in 30–90 days.

Takeaway:
High APRs are marketing bait. Real yield is what you can actually withdraw into stablecoins. Always measure returns in dollars, not tokens. In DeFi, sustainability beats flashy numbers every time.