APR & APY

Every vault shows a headline yield number. Here's what it means and why it moves.

APR vs APY

• APR (Annual Percentage Rate) — Simple yearly rate, no compounding. 1% per month held as separate rewards = 11.61% APR.
• APY (Annual Percentage Yield) — Effective rate after compounding. Those same monthly rewards reinvested every month = ~12.31% APY.

AlphaFi vaults compound multiple times a day, so the number you see is APY. It's what your principal actually grows to in a year, assuming today's rates hold.

APR Sources

A vault's underlying APR comes from a mix of sources:

Trading Fees. CLMM vaults earn a cut of every trade in their LP range. Narrower range + higher volume = more fees.

Lending Interest. Lending vaults earn the supply-side interest paid by borrowers. Driven by utilization (see LEND → Interest Rates).

Staking Yield. LST vaults inherit the underlying staking APR (~3-5% on Sui), plus DeFi yield on top.

Reward Emissions. Underlying protocols pay incentive tokens — Cetus pays CETUS and SUI, Navi pays NAVX, and so on. These get swapped into the vault's asset and folded into APY.

ALPHA Incentives. AlphaFi pays ALPHA emissions in select vaults. These don't auto-compound — you claim them via Collect.

How APY is calculated

Formula

Standard APR-to-APY conversion:

APY = (1 + APR / n)^n − 1

where n is the number of compounding periods per year.

For a vault compounding every 2 hours: n = 12 × 365 = 4,380.

Example: APR to APY

Say a vault has a 50% combined underlying APR, compounding every 2 hours:

APY = (1 + 0.50 / 4380)^4380 − 1
    ≈ 1.6487 − 1
    ≈ 64.87%

So 50% APR → ~64.87% APY at this compounding rate. Then the 20% performance fee gets applied (see Fees), and you see the net number on the vault page.

Why displayed APY can change

APY changes because of:

• Trading volume on the underlying DEX (CLMM). More volume = more fees.
• Lending utilization on the underlying protocol. Higher utilization = higher supply APR.
• Reward emission rates. Protocols change their incentive programs;
• Token prices. Rewards are valued in the underlying asset. If CETUS price drops, CETUS rewards are worth less.
• Vault TVL. More capital in the same vault = the same rewards split more ways = lower per-share yield.
• Rebalance events. CLMM vaults briefly pause earning during a rebalance. (Few seconds)

For a stabler read of what the vault has actually delivered, look at the 7d or 30d APY.