Annuity

Annuity refers to a series of equal payments made at regular intervals over a specified period. In finance, this structure is used to value fixed payment streams, such as regular interest payouts from a bond or a series of yield rewards from a protocol.

Calculating the present value of an annuity is a standard procedure for determining the worth of these recurring cash flows. In the context of crypto, this could apply to fixed-term staking contracts or certain types of derivative products that offer periodic payouts.

Understanding the mechanics of annuities allows investors to compare different income-generating assets on a consistent basis. It simplifies the valuation of complex streams of income into a single present value figure.