Staking APR vs APY: How Compounding Changes Yield
Convert staking APR to net APY after platform fees and compare the impact of different compounding frequencies.
The concept in plain English
A staking APY calculator converts a simple annual percentage rate into an effective annual yield when rewards are reinvested. It can subtract validator or platform fees before applying the selected compounding frequency.
Open Staking APY vs APR CalculatorAn advertised APY may already include compounding
Enter a simple APR, not an APY that has already compounded the rewards. Then check whether the provider's advertised number is before or after commission to avoid deducting it twice. Monthly reinvestment assumes rewards are available and can be restaked on that schedule. Real protocols can have variable issuance, withdrawal queues, network fees and penalties. This comparison models token units only, so positive rewards can coexist with a loss in currency value.
Compounding after a reward commission
1,000 tokens, 12% APR, a 10% fee on rewards and monthly reinvestment for one year.
Net APR = 12% × (1 − 10%) = 10.8%. APY = (1 + 0.108/12)^12 − 1, about 11.35%.
About 1,113.51 tokens after compounding versus 1,108 tokens without reinvestment.
The fee is a share of rewards, not ten percentage points of APR. Token-price changes and transaction fees are excluded.
Calculation method
Net APR = quoted APR × (1 − fee share of rewards). APY = (1 + net APR ÷ compounding periods per year) raised to those periods, minus one. APR and fee share are decimals in the formula.
| Input | Purpose |
|---|---|
| Quoted APR | Simple annual reward-rate assumption. |
| Platform fee | Reduces rewards retained by the user. |
| Compounding frequency | Sets how often rewards are reinvested. |
| Principal | Converts percentage yield into token amount. |
Step-by-step workflow
- Enter the quoted APR and validator or platform fee.
- Choose the realistic reward reinvestment frequency.
- Compare net APR, APY and annual token rewards while considering token-price and custody risk.
Practical benefits
- Separates quoted APR from fee-adjusted yield.
- Quantifies the incremental effect of compounding.
- Makes staking offers easier to compare.
Questions about Staking APY vs APR Calculator
What is the difference between APR and APY?
APR is a simple annual rate. APY includes the effect of reinvesting periodic rewards during the year.
Does more frequent compounding always help?
It increases effective yield when rewards can be reinvested without extra cost, but network fees and lockups can offset the benefit.
Does APY include token price changes?
No. APY describes token-denominated reward growth. The fiat value can still rise or fall with the token price.
Sources and further reading
Examples are hypothetical and exclude costs unless stated. This is educational material, not individualized investment or tax advice. Read our methodology and risk disclosure.