APR (Annual Percentage Rate)
The annualized rate of return on an investment, not accounting for compounding.
Explained Simply
APR represents simple annual interest without compounding. If a protocol offers 10% APR, you earn 10% of your deposit over a year with no reinvestment of earnings. APR is always lower than APY for the same rate because APY includes the effect of compounding. In crypto, APR is commonly used for lending protocols and some staking programs. When comparing yields across protocols, make sure you are comparing APR to APR or APY to APY — mixing the two gives misleading results.
Example
10% APR on $10,000 earns $1,000 per year. The same rate expressed as APY (with daily compounding) would be about 10.52%, earning $1,052.
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