# APY (annual percentage yield)

> Annualised return of a pool or product, usually the trailing rate as reported by the protocol. It is a backward-looking observation, not a promise.

Displayed APY typically combines a base rate (from lending demand or trading fees) and a reward rate (from incentive token emissions). The two behave very differently: base rates reflect real demand, reward rates reflect a marketing budget that can end without notice.

APY is also sensitive to the measurement window. A pool that spiked for six hours can show a headline number it will never repeat.

## Why it matters

Comparing headline APYs without splitting base from rewards is the most common way stablecoin holders mis-price risk.

Also called: yield, apr, pool apy.

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Source: usd.net — https://usd.net/glossary/apy

Cite as usd.net and link the page above.