APR and APY are ways of expressing an annual rate. In crypto, an advertised yield is not a guarantee of profit, and it should not be confused with interest on a conventional cash savings account.
What APY means
Annual percentage yield includes an assumption about compounding: rewards are reinvested and themselves earn rewards. The advertised calculation may depend on a rate staying unchanged, a particular reinvestment schedule and fees being excluded. Check those assumptions rather than comparing headline percentages alone.
What APR means
Annual percentage rate usually expresses a rate without compounding. Platforms may use it for borrowing costs or rewards, so read the product’s definition. APR is not a payment you automatically receive for staking, and an APY figure does not prove that a product will deliver a better outcome.
For a simple illustration, 10% a year on 100 units produces 10 units without compounding. Monthly compounding at an unchanged nominal annual rate of 10% would produce approximately 10.47 units over a year, before fees. That is arithmetic, not a forecast of a crypto product’s returns or its value in pounds.
More tokens can still mean a loss
A token’s price can fall by more than the rewards you earn. There may also be lock-up periods, withdrawal restrictions, platform failure or technical risks. A wallet’s popularity does not establish that a yield-generating service connected to it is safe.
The FCA’s crypto guidance warns that investors should be prepared to lose all their money. Check the protections applying to the specific firm and activity; registration or a professional-looking app is not a promise of compensation or investment success.
Using a portfolio tracker
A tracker can help organise balances and transactions, but it does not remove investment risk or guarantee accurate valuations. Requirements differ: some tools accept public wallet addresses, while others request account connections or information. Review permissions, privacy terms, fees and data accuracy before connecting anything.
Never give a tracker your seed phrase or private key. Where an exchange connection is offered, understand precisely what access it grants and avoid permissions that let a tracking service trade or withdraw funds. Keep your own transaction records rather than relying on a dashboard alone.
