The table below is an APY calculator for your daily, weekly, monthly and yearly crypto staking rewards.
This APY calculator is built to calculate compounding interest for crypto yield farmers who regularly stake and compound their tokens.
Crypto Staking Calculator Formula
The formula we used to build this Crypto Staking Calculator was "APY=(1 + r/n )n–1". This formula represents the rate earned on an investment from staking per year, compounding once per year.
Why are APY Staking Rewards so High in Crypto?
APY staking rewards in cryptocurrency are very high due to the fact that they generally pay out in inflationary governance tokens. This means that a cryptocurrency protocol like Stargate Finance will allow users to deposit USD stable coins, and will reward them 20% APY paid out in Stargate Finance (STG) tokens.
This creates a 'farm and dump' mechanic where mercenary crypto farmers will move their USD around to high yielding protocols to farm and sell tokens every day. This maximises their rewards and reduces their risk of holding onto an inflationary coin.
What is APY in Crypto?
Annual Percentage Yield, or "APY" is a very common term that is used to explain what the interest on a certain asset will be, over a fixed period of time. With respect to cryptocurrency, APY generally refers to what income you will receive for staking your Cryptocurrency over a period of time.
For example, you can stake your Ethereum (ETH) on Lido Finance and earn 8% APY. If you compound your yield, this means you will earn over 8% of your initial investment for staking your ETH for one year.
APY vs APR Crypto Staking
APY means interest that is compounded vs APR which means the interest is not compounded. The higher the frequency of interest compounds makes the spread between APY and APR larger.
Put simply, APR is interest that is not compounded and APY is interest that is compounded over any fixed period of time.