YIELDS & RETURNS
APR (Annual Percentage Rate)
Definition
Annual Percentage Rate (APR) represents the simple annual interest rate without compounding effects. In DeFi, APR shows the base yield before considering compound interest.
Example
Example
A lending pool offering 10% APR means you earn 10% per year in simple interest.
Risks to Consider
Risks
- Inflation eroding real returns
- Protocol risk
- Rate changes
