Staking APY

Staking Annual Percentage Yield represents the projected yearly return on assets locked in a proof-of-stake blockchain network to support consensus. This metric accounts for the effect of compounding interest, assuming that earned rewards are reinvested over the course of the year.

The yield is typically derived from newly minted tokens distributed as rewards and, in some cases, a portion of network transaction fees. Staking APY can fluctuate based on the total amount of assets staked across the network; as more participants join, the reward per staker generally decreases.

Investors must analyze the inflation rate of the token, as high nominal APY may be diluted by the expansion of the circulating supply.